EXPORTS. Articles, Machinery and Coal, from the United Kingdom, in Averages of Three 1860 to 1892. $299,491,711 $233.627,361 $227,716,085 $276,264,670 $268,275,942 $287,222,189 $335,025,978 EXPORTS. the United Kingdom, in Averages of Three Years, from 1860 to 1892. Returns of the United Kingdom. $36,314,827 $34,016,788 $37,704,908 $52,615, 121 $50,303,965 $53,615.709 $56,289,007 | 1,023,178 1,049,418 1,265,945 14 5,676,671 6,564,768 15 PART V. PROTECTION TO NATIVE INDUSTRIES IN THE CONTINENTAL AND OTHER COUNTRIES. CHAPTER I. PROTECTION IN THE GERMAN EMPIRE. One thing is clear, that, through the widely open doors of its import trade the German market has become the mere storage-space for the over-production of other countries. We must, therefore, shut our gates and take care that the German market, which is now being monopolized by foreign wares, shall be reserved for native industry. Countries which are enclosed have become great, and those which have remained open have fallen behind. Were the perils of protectionism really so great as sometimes painted, France would long ago have been ruined, instead of which she was more prosperous after paying the five milliards than Germany is to-day. And protectionist Russia, too-look at her marvelous prosperity! . . . The question before us is not a political, but a financial one, and we should put all personal sensibility aside.—Prince Bismarck, speech before the Reichstag, May 2, 1879. The German Empire was organized in 1871, by a political union of Prussia and the German States of Central Europe. By the census of 1890 Population it had a population of 49,428,470. The area of the Empire is 212,000 square miles. It is larger than all of New England, New York, Pennsylvania, New Jersey and Ohio combined. and area. Encouragement of the "Germany," says Frederick List, "owes her first progress in manuhome trade. factures to the revocation of the Edict of Nantes and to the numerous refugees who brought with them the manufactures of woolens, silks, glass, china, gloves, jewelry and many other articles." The Protestant refugees who were driven out of France and Belgium by the religious persecutions of Louis XIV. and the King of Spain, fled not only to England but to various parts of the Continent. In Prussia they were welcomed by the government, and encouraged to set up their industries and given the patronage and support of the king. It was not alone their coming but the conditions under which they remained that made the settlement of these refugee artisans an important event in the commercial history of these countries. The foundations for the present economic policy of the German Empire were laid by Frederick the Great, King of Prussia, in the latter part of the eighteenth century. From 1746 to 1786 Prussia was raised by the military genius and statesmanship of this great ruler, to one of the first places among the nations of the time. The economic policy pursued by Frederick the Great, embraced all the features of the mercantile system, duties were levied on imports, premiums and bounties were given to encourage exports and special privileges were granted to individuals to encourage and promote manufacturing. After his wars of conquest were brought to a close, he turned his attention to the improvement of industries and the amelioration of the condition of the rural population. The landed proprietors, and especially those of Silesia, who had been ruined by the wars, were given assistance in the way of loans from a bank established in 1769, by which they were enabled to provide themselves with agricultural implements, purchase stock and repair their lost fortunes. "The success of this bank," says Mr. Macgregor, "having surpassed all calculations, the inhabitants of other provinces solicited and obtained similar institutions of credit to that of Silesia." Banks were also established for Brandenburg, Pomerania, Western Prussia, Eastern Prussia and the Grand Duchy of Posen. To encourage industry, develop the resources of the country and direct the labor of hist people into various new and profitable occupations, were the chief purposes Frederick had in view. His economic policy differed from that which generally prevailed throughout Germany and in many parts of Europe, in that the import duties and taxes were not imposed for the purpose of revenue so much as to foster and encourage industry. Another writer gives the following description of the economic policy advocated and practiced by Prussian sovereigns: From the earliest times the electors of Brandenburg devoted especial attention to the economic welfare of their people. This is particularly true of the great elector whose wise policy in offering an asylum to the Huguenots greatly promoted industrial prosperity. Frederick the Great was another German sovereign who bestowed much care on the economic condition of his subjects. By all available means he promoted agriculture and fostered trade with most successful results. economic policy of the German States. It was just as the benefits of this policy began to appear in the Early improved and thriving condition of the Prussians that all Europe became involved in the Napoleonic wars, which continued until 1815. It can scarcely be said that the policy pursued by the German States is worthy to be called an economic policy. The numerous small States controlled by despotic forms of government perpetuating the system of feudalism, maintaining their royal household at a great expense, living in constant jealousy and perpetual strife, subjected trade and commerce to a system of taxation through tolls and duties, which having for its purpose more the raising of revenue for the royal treasuries than the encouragement Industrial wars. of industry, gave little opportunity to improvement in industrial pursuits; although in certain localities, such as in the kingdom of Saxony, owing to the settlement of the Huguenots, manufacturing had gained a foothold and made considerable progress. Yet, in the main, the German States, up to the Napoleonic wars, were almost exclusively agricultural regions. Beyond that system of domestic production carried on in the households, and the occupations of smiths and mechanics, and small seats of manufacturing, the fabrication of cloth and working of metals, were carried on to only a small extent. The effect of the Napoleonic wars on the industrial and commercial life of the German States and Prussia was most ruinous. Lying between Napoleonic France, Austria and the Russian frontier, they became the battle-ground during this great struggle, for the contending hosts of Napoleon, Russia and Austria. Through the Continental policy of Napoleon their markets were open to the competition of French goods, while they were compelled to pay tribute to the support of French armies and subjected to the most oppressive and burdensome taxation. Mr. Yeats, after speaking of the industrial depression during these wars, points out that on the final overthrow of Napoleon a busy traffic at once began, but the German producer was seriously impeded by the presence of strong rivals in his former markets. Danger from British competi tion. British manufactures, which had improved in quality and diminished in cost, were the chief source of alarm to the forced manufactures of Germany. English cotton goods, in particular, gave no chance to those of the Germans, but the German woolens were of such good quality that they were better able to withstand competition. Manufactures of metals were wholly unable to hold their own against the influx of hardware and metals from England and Belgium. In the war Prussia had been the chief sufferer, and after the peace her industry was benefited more than that of any other State. There had been no embargo under the French rule upon inland intercourse, and France, commanding the trade of every state, had suffered comparatively little; the embargo was solely upon the ports. The problem for statesmen at this juncture was what policy to pursue to keep up the prosperity of their respective countries in the presence of industries sinking and dying, through the superior facilities of production enjoyed by England.1 Henry C. Carey (in a passage already quoted), speaks of the Continental system of Napoleon as marking "the commencement of the forward progress of every kind of manufacture in Germany." The exclusion of British competition at the close of the war, taking into consideration her pre-eminence in manufacturing and her ability to destroy rival industries on the Continent, was made necessary in order that the home trade of the German States might be preserved and that their industries might live. Mr. Yeats confirms the view taken by protectionist writers, of the effect of British competition on the industries of the country at the close of the 1 Recent and Existing Commerce, pp. 216, 217, 218. war. He concedes that the produce of Germany had been superseded by foreign-made wares and that they had been driven not only out of their home trade, but out of foreign trade as well. Their business relations had been broken up. Although he suggests that notwithstanding that England had monopolized and taken possession of their home market and driven them out of every quarter where they had hitherto traded, yet that Cuba, Hayti, Brazil and the Spanish Republics of South America were left open to them; that is, they had been robbed of their own market, the best which they could possess, and were now offered the markets named. This will remind the reader of the encouragement which free traders to-day are giving American manufacturers in capturing the market of Africa, after surrendering the markets of the United States to British manufacturers. This was the situation which confronted Prussia and the German States after the battle of Waterloo. The superior machinery, abundant capital and vast wealth of England had given her such pre-eminence and such advantages in production, that every effort at building up rival industries in Central Europe under free competition could be suppressed. They must either consent to confine themselves to rural pursuits and the production of a few raw materials and remain poor, or resort to the only measure through which such competition could be resisted and the life of their own industries preserved. Free trade would not only keep them poor in industries, but would constantly drain their country of precious metals and prevent that accumulation of wealth through which the devastation of the war could be repaired and their political and commercial greatness secured. "The balance of trade," says Yeats, "against Germany during the French revolutionary period was considerable. From England alone the imports of the year 1795-97 were at the mean rate of £7,000,000 sterling against £4,250,000 of exports. A disparity of this kind would be rectified by the outflow of specie. Germany, not being a gold-producing country, would have been rapidly impoverished by such a circumstance, and trade would have tended to balance itself by a diminution of imports." contest. Burdened with debt, distracted and impoverished by the long and An unequal disastrous struggle which had just closed, Prussia and the German States entered immediately upon the work of repairing their lost fortunes, and advancing their commercial and industrial interests. This could not be accomplished with open ports. Their industries could not make headway against that inundation of foreign wares which was taking place. The vast quantities of goods which were so suddenly thrust upon them at the close of the Napoleonic wars, proved the superior advantages possessed by England through her new inventions and machinery, and the inefficiency of moderate duties to shield the industries of the country from attack under the new conditions. So long as the system of hand-workmanship prevailed | |