The Return to Protection

A rise in prices will induce the return to wheat growing here, with the result that when, in time, prices fall again, our farmers will be caught as they were sixty years ago.

As was said, the scheme of Preferential Tariffs is not intended to protect any of our industries. It has, indeed, been admitted that, incidentally, it might do so, and, without much thought, the suggestion may have been accepted that, if it did, no great harm would be done. But what if the incidental Protection does harm to the very industry protected?

According to the proposal, we are to give a financial inducement to the Colonies to send us wheat. It is always the first step that costs, and the first step is the breaking in of new land. We give a bounty to the Colonies to enable them to take this first step, and the land afterwards is as good, say, as our best land. Foot by foot the Canadian acreage grows, till in time the Canadian exports overtake the American exports.

One thing, however, has been forgotten. It is that the American wheat grower is not suffering. He is not, indeed, getting the 2s. extra like the colonial, but he is getting as good a price for his wheat as he does now—paying 2s. duty and getting 2s. more price. Will the American supply stop? Why should it? Will the mere fact that the Canadian is getting 2s. more, induce the American farmer to grow less?

But as the Canadian import increases, while, at the same time, there is no diminution of the foreign import, there comes the inevitable effect of an increase of supply, a fall in prices.1

Is there no harm in this? Does it only mean, after all, that our Colonies meanwhile have been paid a bounty, and that our agricultural people have got an extra price? It means much more. The cost of raising colonial wheat, perhaps, will fall; but the cost of raising British wheat will not. It is entirely different with us from what it is with our Colonies. They have millions of acres of virgin soil that only requires to be brought under the plough to make it permanently productive land. But we have no such surplus soil. Just now, all the wheat lands that pay are under wheat. If the inducement of 2s. a qr. extends our wheat fields, it must be by growing wheat on lands more costly to cultivate than the present. This pays so long as the price keeps up, but what happens when it comes down again? Why, the fall catches our farmers just where the withdrawal of Protection caught them sixty years ago.

Before that time, wheat growing, under the inducement of protective prices, was the staple of farming. An East Coast farmer once told me that, if he had been advised to grow potatoes then, he would have answered that he was not a gardener. Not only were lands entirely unsuitable for wheat put under the plough, but the old pastures, rich in animal and vegetable remains—literally capital accumulated in the course of centuries—were broken up. Then came the withdrawal of the artificial price. In many places, the sweet, short herbage, so suitable for sheep, was gone for ever. But, once a farmer, always a farmer; and our people found there were other crops that would pay, at anyrate if cultivated on a large enough scale. Rents fell, and the landowner has never ceased to sigh for the good old times when rents were £5 an acre, even if the labourers got Only 7s. or 8s. a week, and lived on barley meal and Swedish turnips boiled together. But farmers have found a living in pasture and dairy farming, in growing early potatoes, turnips, celery, cabbage, mustard, peas, beans, flowers, and fruit. It was becoming recognised that the function of agriculture in this country was to grow things that could be better and more cheaply grown at home than abroad; that, as the cities extended their areas, the province of the home farm was to provide them with produce that must be supplied fresh every day; that the farmer was an employer of labour, and, like other employers, must find his profit by perpetual struggle after better methods, cheaper production, larger results; that the men with small capital and less brains must be left behind; that the farmer—like the professional man—must accept the “fine life” as part of his real wage. On the whole, it was a beneficent revolution.

And now farming is to be attracted back again into a channel that is artificial, and depends for its continuance on the continuance of high prices. Then this high price goes—and where are our farmers? They will have to take their capital out of wheat growing, and go through the long process of depression and loss over again.2

3This is recognised and welcomed. The confident expectation of Sir Gilbert Parker, for instance, is that, under this inducement, prices will rise in the first instance, then steadily begin to fall, and, ultimately, come below the present level. When it is confidently prophesied that Preferential Tariffs will lead to the cultivation of our derelict land and empty the slums, this should be remembered.

4Of course, it will be answered, and very reasonably, that a protection of 2s. will not do much to induce wheat growing at home. I merely give the above as a statement of tendency—not unneeded, perhaps, in face of Mr. Chamberlain’s own words about other nations: “They began perhaps with a low tariff. They continued it so long as it was successful. If they found it ceased to do what it was wanted to do, they increased it.” For there is a danger in the very futility of these proposals. If the 2s. is found to give the Colonies either no advantage or this trifling one, is it likely that a tariff of this amount will be continued when it is obviously futile, or an experiment of this magnitude abandoned for want of trying the “little more” that might transform it into a success? Now, as always, it is the first step that costs.

• 1“When, on Pike’s Peak in Colorado, the thermometer is down to 12° or 13°, and, in the North-west is only a few degrees above freezing point, in New England it will be moderately cool—say 43°; in the Mississippi valley it will be comparatively warm—say 52°; and in Florida it will be at summer heat—75°.”—Lawson, American Industrial Problems, p. 43.
• 2The above figures of Imports and Exports, taken from the Statistical Abstract 1903, do not include Bullion and Specie, of which we imported, in 1902, £21,629,000 of gold (£8 millions from South Africa, £3¼ millions from India, £5 millions from Australia), and £9,764,000 of silver (£8 millions from the United States), and exported £15,409,000 of gold and £10,716,000 of silver. Nor do they include, either as imports, exports, or re-exports, excisable foreign merchandise transhipped under Bond, (£13,683,000). To the imports should be added £5,380,000 of diamonds from the Cape, not declared to the Customs. It may be noted that fish of British take, landed in the United Kingdom, are not included among imports. The value of these in 1901 was £9,000,000.
• 3IT would be rather short-sighted to gauge the importance to us of foreign trade by the fact that it is perhaps only one tenth or one eighth of our total trade. If the United States were to shut herself up inside a prohibitive wall of tariffs, she would still be almost self-sufficient. But we lie between 50 and 60 degrees north latitude; ours is a very small country at best, with a dense population; and we have, besides, sunk much of our capital and specialised much of our labour in industries which depend on other countries for their material and for their market. It seems, too, as if we were destined by nature to be ocean carriers.
• 4Our foreign trade, then, altogether amounts to £877,000,000; made up of £528,000,000 of Imports, and £349,000,000 of Exports (£65,000,000 of these being re-exports). These are values of solid Commodities brought in and taken out over British seas; and—partly as reflex and consequence—of the 32,000,000 gross tons of shipping in the world, we own the half.