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02/26/2010

Winston Churchill on Free Trade, Part I

A few weeks ago I was watching CBS’ “Sunday Morning” program and they had a segment on a bookstore in New York that specializes in books on Winston Churchill. The owner pulled out what he said was the most expensive one, an original from the early 1900s that Churchill wrote on the topic of free trade, saying it was valued at over $3,000. So I went to Amazon.com and found a copy for considerably less and thought I’d get some columns out of it.

It’s titled, “For Free Trade: A Collection of Speeches delivered at Manchester or in the House of Commons during the Fiscal controversy preceding the late General Election,” with Churchill, then a member of parliament, putting it out in 1906. [The publisher was Arthur L. Humphreys on Piccadilly West, to be accurate.] While some of it is dense, at least by our literary standards of today, it’s amazing how little has changed in the debate over free trade through the centuries.

This first selection is from a Birmingham Town Hall meeting, November 11, 1903. [Fifteen years later, Nov. 11 would be a rather important date in world history.]

I have edited the following only very slightly, mostly with the punctuation.

[Excerpts]

But I have not come down to Birmingham to talk to you about food taxes. So far they seem to me to be more popular with editors than with electors. I will wait till I see some Parliamentary candidate come forward in their support, and that is a thing I have not seen yet. I want you to face the question of free imports plainly, whether they consist of food or not. Again our Free Trade plan is quite simple. We say that every Englishman shall have the right to buy whatever he wants, wherever he chooses, at his own good pleasure, without restriction or discouragement from the State. That is our plan; we have followed it for sixty years, and, whatever they say, we are not quite ruined yet. In pursuance of this simple plan there came last year into England, from every land and people under the sun, five hundred and twenty-eight millions’ worth of merchandise, so marvelously varied in its character that a whole volume could scarcely describe it. How did it come? It came for the most part in ships which fly the Union Jack, and the profits of its transportation were for the most part the rewards of British capital and British labor. Why did it come? Was it to crush us, or to conquer us, or to starve us, or was it to nourish and enrich our country? It is a sober fact that every single item, however inconsiderable, in all that vast catalogue of commodities came to our shores because some Englishman desired it, paid for it, and meant to turn it to his comfort or his profit. And in return for this service, towards which every nation, every race, every tribe of men contributed, and for the sake of which the remotest nooks and corners of the earth were searched, we gave what? Our money? No. Our accumulated capital? No. Yet we paid for every pennyworth.   Our manufactures, made out of these very imports, our mining, and our shipbuilding paid for two hundred and eighty-three millions; our merchant shipping, which, though possessed only by the forty millions of people in these islands, is nearly equal to that of the whole of the rest of the shipping of the world, paid for ninety millions. Certainly not less than twenty millions, probably a great deal more, was in consideration of the banking, broking, commission, and insurance business, which falls to us in an unusual measure, because for some strange reason – I wonder why? – we happen to be the commercial center of the world; and the rest of these imports, excepting what came here only to be sent away again, was the interest on those foreign and colonial investments which have paid us so well in the past, which are the legitimate children of imports and labor, and which, in spite of all this talk of our living on our capital and bleeding to death, we are healthily and steadily increasing.

Now, Free-traders declare that both the selling and the buying of these things were profitable to us; that what we sold, we sold at a good profit, for a natural and sufficient return; that what we bought, we bought because we thought it worth our while to buy, and thought we could turn it to advantage. And in this way commerce is utterly different from war, so that the ideas and the phraseology of the one should never be applied to the other; for in war both sides lose whoever wins the victory, but the transactions of trade, like the quality of mercy, are twice blessed, and confer a benefit on both parties. Furthermore, the fact that this great trade exists between nations binds them together in spite of themselves, and has in the last thirty years done more to preserve the peace of the world than all the Ambassadors, Prime Ministers, and Foreign Secretaries and Colonial Secretaries put together.

Let us look at these imports more closely. In what do they consist? Two hundred and seven millions were food for the forty millions of people who live in these islands, many of whom would otherwise not be able to live here at all, would perhaps never have seen the light. It is very comforting, to me at any rate, to notice how rapidly our imports of foods have increased during the last fifteen years – the period, let me say, when the guidance of our country was mainly in the hands of Lord Salisbury – and especially is it comforting when we know that in the same period the decline in British agriculture has practically ceased, and that there are even here and there the indications of an upward turn. Let me give you some examples I find on page 92 of the fiftieth Statistical Abstract. The English people ate, in 1902, 3,000,000 cwt. more bacon and ham than in 1887, or nearly double as much. They ate more than three times as much salted and fresh beef. They ate nearly three times as much butter, nearly double as much cheese. They consumed six times as much cocoa or chocolate. In the year 1901 they ate a thousand million eggs more than in the year 1887, or twice as many as in that former year, and twice as many hundredweights of potatoes. I could go on for a quarter of an hour. I like to read these things. I know they prove, beyond all possible dispute, that the inhabitants of England have enjoyed year by year, under Administrations mainly Conservative, a larger and more varied fare. For, observe that in this same period there has been an actual increase in the amount of food produced at home. There is a slight increase in domestic dairy produce, a substantial increase in beef, and some increase both in pork and mutton. So that the figures of food imports prove absolutely that the growing wealth of the country, as measured by the Income-tax, has not merely gone into the pockets of wealthy investors, but that the mass of the people have eaten more. And that again proves that they have had the money to pay for more. What is the good of cheap food which we have not the money to buy? But this is cheap food which we have had the money to buy – have, in fact, bought and paid for and eaten….

The finished product of one trade is the raw material of another. By placing taxes on any of these commodities to raise their price you may indeed for a time help this trade or that trade, but it will only be at the expense of this or that other trade and to the impoverishment of the general consumer. No one can tell whose enterprise will be hindered or whose it will be that will be undermined. You may, by the arbitrary and sterile act of Government – for, remember, Governments create nothing and have nothing to give but what they have first taken away – you may put money in the pocket of one set of Englishmen, but it will be money taken from the pockets of another set of Englishmen, and the greater part will be spilled on the way. Every vote given for Protection is a vote to give Governments the right of robbing Peter to pay Paul, and charging the public a handsome commission on the job.

When this question of Protection was first raised, it was admitted that the burden of proof lay with those who brought it forward. They had to prove three things severally and collectively. Failure to prove any one of the three destroyed their case. First, that we were not a prosperous country; secondly, that they had a remedy which would make us a prosperous country; thirdly, that their remedy was one which they could effectively apply. I submit respectfully that none of these propositions have been made good. I contend, on the contrary, that they have been totally and specifically disproved. First, that England is more prosperous and wealthy than any other country in the world; secondly, that even if it were not so – and we were getting steadily poorer – Protection, so far from arresting that decline, would only accelerate it; thirdly, even if it were proved that we were not prosperous, and that Protection was a policy in itself wise, that the stupidity and expense of Custom House officers, the meddlesome interference of Governments in business, the arbitrary restriction and disturbance of trade, and the corruption of public life and public men would more than destroy any advantage to be gained. Look back a year. Only a year ago we finished the South African War. Only a year ago we freed ourselves from a strain so enormous, so severe, so prolonged, that it might well have bent the back of a powerful country. Only a year ago we were wondering how we had done it, with such apparent ease. Do not underrate that strain. Consider it well. Two hundred and fifty millions of our current capital – of the oil that lubricates the vast machinery of commerce and finance – gone; forty millions a year added in the meanwhile to the ordinary cost of government; 300,000 men for three years creating havoc, not wealth, and thus withdrawn twice over, as it were, from the productive energy of the Empire; thousands more at home making khaki and cannon-balls and other things not wanted in time of peace, now thrown back with the reservists on to the labor market; lastly, the stream of gold from the South African mines, which had so stimulated credit, suddenly cut off, and never since revived to its old strength. How do these facts bear on British Trade? Would it be strange, would it be mysterious, if depression of business and dislocation of industry had followed such astonishing exertion and disturbance?

I supported the war. I do not go back on that. I feared the strain and cost…We are asked to dance from one extreme to the other. The wealth of Great Britain, which only a year ago was bottomless and inexhaustible, is fast draining away. Nothing will save us except a 10 percent duty on manufactured articles. Those gossamer threads of Empire – pliant as elastic, tense as steel – of which we were told so much, those children States who came to aid us in our need, those brave Australians and Canadians by whose side we marched and fought on veldt and kopje in South Africa – all will fall away forever unless Canadian loyalty is purchased at 2s. a quarter and Australian allegiance at 1d. a pound.

To be continued.

Wall Street History returns next week.

Brian Trumbore



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Wall Street History

02/26/2010

Winston Churchill on Free Trade, Part I

A few weeks ago I was watching CBS’ “Sunday Morning” program and they had a segment on a bookstore in New York that specializes in books on Winston Churchill. The owner pulled out what he said was the most expensive one, an original from the early 1900s that Churchill wrote on the topic of free trade, saying it was valued at over $3,000. So I went to Amazon.com and found a copy for considerably less and thought I’d get some columns out of it.

It’s titled, “For Free Trade: A Collection of Speeches delivered at Manchester or in the House of Commons during the Fiscal controversy preceding the late General Election,” with Churchill, then a member of parliament, putting it out in 1906. [The publisher was Arthur L. Humphreys on Piccadilly West, to be accurate.] While some of it is dense, at least by our literary standards of today, it’s amazing how little has changed in the debate over free trade through the centuries.

This first selection is from a Birmingham Town Hall meeting, November 11, 1903. [Fifteen years later, Nov. 11 would be a rather important date in world history.]

I have edited the following only very slightly, mostly with the punctuation.

[Excerpts]

But I have not come down to Birmingham to talk to you about food taxes. So far they seem to me to be more popular with editors than with electors. I will wait till I see some Parliamentary candidate come forward in their support, and that is a thing I have not seen yet. I want you to face the question of free imports plainly, whether they consist of food or not. Again our Free Trade plan is quite simple. We say that every Englishman shall have the right to buy whatever he wants, wherever he chooses, at his own good pleasure, without restriction or discouragement from the State. That is our plan; we have followed it for sixty years, and, whatever they say, we are not quite ruined yet. In pursuance of this simple plan there came last year into England, from every land and people under the sun, five hundred and twenty-eight millions’ worth of merchandise, so marvelously varied in its character that a whole volume could scarcely describe it. How did it come? It came for the most part in ships which fly the Union Jack, and the profits of its transportation were for the most part the rewards of British capital and British labor. Why did it come? Was it to crush us, or to conquer us, or to starve us, or was it to nourish and enrich our country? It is a sober fact that every single item, however inconsiderable, in all that vast catalogue of commodities came to our shores because some Englishman desired it, paid for it, and meant to turn it to his comfort or his profit. And in return for this service, towards which every nation, every race, every tribe of men contributed, and for the sake of which the remotest nooks and corners of the earth were searched, we gave what? Our money? No. Our accumulated capital? No. Yet we paid for every pennyworth.   Our manufactures, made out of these very imports, our mining, and our shipbuilding paid for two hundred and eighty-three millions; our merchant shipping, which, though possessed only by the forty millions of people in these islands, is nearly equal to that of the whole of the rest of the shipping of the world, paid for ninety millions. Certainly not less than twenty millions, probably a great deal more, was in consideration of the banking, broking, commission, and insurance business, which falls to us in an unusual measure, because for some strange reason – I wonder why? – we happen to be the commercial center of the world; and the rest of these imports, excepting what came here only to be sent away again, was the interest on those foreign and colonial investments which have paid us so well in the past, which are the legitimate children of imports and labor, and which, in spite of all this talk of our living on our capital and bleeding to death, we are healthily and steadily increasing.

Now, Free-traders declare that both the selling and the buying of these things were profitable to us; that what we sold, we sold at a good profit, for a natural and sufficient return; that what we bought, we bought because we thought it worth our while to buy, and thought we could turn it to advantage. And in this way commerce is utterly different from war, so that the ideas and the phraseology of the one should never be applied to the other; for in war both sides lose whoever wins the victory, but the transactions of trade, like the quality of mercy, are twice blessed, and confer a benefit on both parties. Furthermore, the fact that this great trade exists between nations binds them together in spite of themselves, and has in the last thirty years done more to preserve the peace of the world than all the Ambassadors, Prime Ministers, and Foreign Secretaries and Colonial Secretaries put together.

Let us look at these imports more closely. In what do they consist? Two hundred and seven millions were food for the forty millions of people who live in these islands, many of whom would otherwise not be able to live here at all, would perhaps never have seen the light. It is very comforting, to me at any rate, to notice how rapidly our imports of foods have increased during the last fifteen years – the period, let me say, when the guidance of our country was mainly in the hands of Lord Salisbury – and especially is it comforting when we know that in the same period the decline in British agriculture has practically ceased, and that there are even here and there the indications of an upward turn. Let me give you some examples I find on page 92 of the fiftieth Statistical Abstract. The English people ate, in 1902, 3,000,000 cwt. more bacon and ham than in 1887, or nearly double as much. They ate more than three times as much salted and fresh beef. They ate nearly three times as much butter, nearly double as much cheese. They consumed six times as much cocoa or chocolate. In the year 1901 they ate a thousand million eggs more than in the year 1887, or twice as many as in that former year, and twice as many hundredweights of potatoes. I could go on for a quarter of an hour. I like to read these things. I know they prove, beyond all possible dispute, that the inhabitants of England have enjoyed year by year, under Administrations mainly Conservative, a larger and more varied fare. For, observe that in this same period there has been an actual increase in the amount of food produced at home. There is a slight increase in domestic dairy produce, a substantial increase in beef, and some increase both in pork and mutton. So that the figures of food imports prove absolutely that the growing wealth of the country, as measured by the Income-tax, has not merely gone into the pockets of wealthy investors, but that the mass of the people have eaten more. And that again proves that they have had the money to pay for more. What is the good of cheap food which we have not the money to buy? But this is cheap food which we have had the money to buy – have, in fact, bought and paid for and eaten….

The finished product of one trade is the raw material of another. By placing taxes on any of these commodities to raise their price you may indeed for a time help this trade or that trade, but it will only be at the expense of this or that other trade and to the impoverishment of the general consumer. No one can tell whose enterprise will be hindered or whose it will be that will be undermined. You may, by the arbitrary and sterile act of Government – for, remember, Governments create nothing and have nothing to give but what they have first taken away – you may put money in the pocket of one set of Englishmen, but it will be money taken from the pockets of another set of Englishmen, and the greater part will be spilled on the way. Every vote given for Protection is a vote to give Governments the right of robbing Peter to pay Paul, and charging the public a handsome commission on the job.

When this question of Protection was first raised, it was admitted that the burden of proof lay with those who brought it forward. They had to prove three things severally and collectively. Failure to prove any one of the three destroyed their case. First, that we were not a prosperous country; secondly, that they had a remedy which would make us a prosperous country; thirdly, that their remedy was one which they could effectively apply. I submit respectfully that none of these propositions have been made good. I contend, on the contrary, that they have been totally and specifically disproved. First, that England is more prosperous and wealthy than any other country in the world; secondly, that even if it were not so – and we were getting steadily poorer – Protection, so far from arresting that decline, would only accelerate it; thirdly, even if it were proved that we were not prosperous, and that Protection was a policy in itself wise, that the stupidity and expense of Custom House officers, the meddlesome interference of Governments in business, the arbitrary restriction and disturbance of trade, and the corruption of public life and public men would more than destroy any advantage to be gained. Look back a year. Only a year ago we finished the South African War. Only a year ago we freed ourselves from a strain so enormous, so severe, so prolonged, that it might well have bent the back of a powerful country. Only a year ago we were wondering how we had done it, with such apparent ease. Do not underrate that strain. Consider it well. Two hundred and fifty millions of our current capital – of the oil that lubricates the vast machinery of commerce and finance – gone; forty millions a year added in the meanwhile to the ordinary cost of government; 300,000 men for three years creating havoc, not wealth, and thus withdrawn twice over, as it were, from the productive energy of the Empire; thousands more at home making khaki and cannon-balls and other things not wanted in time of peace, now thrown back with the reservists on to the labor market; lastly, the stream of gold from the South African mines, which had so stimulated credit, suddenly cut off, and never since revived to its old strength. How do these facts bear on British Trade? Would it be strange, would it be mysterious, if depression of business and dislocation of industry had followed such astonishing exertion and disturbance?

I supported the war. I do not go back on that. I feared the strain and cost…We are asked to dance from one extreme to the other. The wealth of Great Britain, which only a year ago was bottomless and inexhaustible, is fast draining away. Nothing will save us except a 10 percent duty on manufactured articles. Those gossamer threads of Empire – pliant as elastic, tense as steel – of which we were told so much, those children States who came to aid us in our need, those brave Australians and Canadians by whose side we marched and fought on veldt and kopje in South Africa – all will fall away forever unless Canadian loyalty is purchased at 2s. a quarter and Australian allegiance at 1d. a pound.

To be continued.

Wall Street History returns next week.

Brian Trumbore