product is the very end they are seeking. Mr. Balfour, it may be, can only bring himself to contemplate tariffs as a means for obtaining an enlarged Free Trade-the admission of our exports unhampered, or at least less hampered, into foreign markets. He would not put a duty on American produce in order to handicap Americans as foreigners in the British market, but he would like to be empowered to threaten them with a duty, and so induce them for their own sakes as well as ours to make their markets as free as our own. Where does all this leave room for the great policy of Colonial preference ?

We do not think that Mr. Balfour has ever publicly accepted the root principle of the Tariff Reform Leaguea belief in the evil attaching to unrestricted imports. In his 'Notes on Insular Free Trade' it is the fear lest ultimately there should be no imports at all that weighs with him! We must import, he argues, or starve; but we cannot get imports unless we can create exports to pay for them. How, if our manufactures are ruined by foreign competition, can we export anything but coal, our capital, which is daily diminishing; and which moreover goes to strengthen that very competition of which we are complaining? This is the kind of conundrum dear to the subtle mind of the Prime Minister; but the facts do not seem in the present condition of British trade to present any real danger of that sort. Mr. Balfour in his famous pamphlet again and again declares himself a Free Trader. By means of negotiation and retaliation he would attempt to destroy the barriers which keep our wares out of foreign and colonial markets, and to raise a bulwark against the unfair dumping of commodities upon our shores by the great Trusts that flourish in Protectionist countries. Whilst we fully admit the difference of the standpoints from which Mr. Balfour and Mr. Chamberlain regard the fiscal controversy, it is clear that they are both equally interested in proving that Protectionist countries fight or negotiate their way into other protected markets more successfully than does a Free Trade country, like our own. Does the superiority of the fiscal systems of France and Germany open up to Frenchman and German the markets of the United States from which Free Trade England is excluded? The evidence is all the other way, viz. that English wares penetrate into the American market in greater quantities than the wares of our Protectionist rivals. If retaliation or negotiation did as a matter of fact tend to bring about Free Trade between nations, Mr. Balfour's

and Lord Lansdowne's desire to have recourse to these weapons would deserve some support. But since history and experience show that tariff retaliation, instead of mitigating tariffs, tends to make them more severe, and that tariff wars inflict the most terrible loss on the nations who engage in them, the British people are fully entitled in the meantime to press these statesmen again and again to explain the grounds of the belief on which their policy is founded, and to disclose more specifically the nature of their proposed remedy.

The fiscal agitation has at all events succeeded in making one or two important points in the controversy stand out clear. If Protectionist principles are to be adopted, it is impossible to pick and choose between the industries and interests that have a right to protection. Manufacturers cannot be favoured at the same time that similar favours are refused to agriculture. The medicine of Protection cannot be taken in homoeopathic doses. If it be accepted at all, it must be as a great principle, whose application can be indefinitely extended. Who is to be protected, and how much protection is to be given him, are questions to which no limit can be assigned. It is here that political pressure in Protectionist countries find its opportunity, the ultimate result being a tariff of elaborate minuteness intended to conciliate powerful interests which can muster votes-a tariff which from the financial point of view is the reverse of scientific.'

When we survey the whole field of the fiscal discussion since Mr. Chamberlain started on his crusade, it is impossible to be blind to the marked change that has taken place in the attitude of the general public towards his policy. What promised at one time to be a vigorous popular agitation has fallen very flat, and tariff reformers are themselves complaining of the political lethargy of the times! Even amongst those who are not Free Traders there is a very general feeling that Mr. Chamberlain's proposals will not do, and that if tariff reform is to come at all it must be on different lines. Many manufacturers are ready to welcome a general import duty on manufactures from abroad, and rumour is busy with the anticipation that the next Budget will propose a 5 per cent. or 10 per cent. tax on all commodities landed upon our shores, with the exception of food and raw material. 'Where does agriculture come in ?' Mr. Chamberlain will ask once more; or if he does not, Mr. Chaplin and the agriculturists will know the reason why.

It is difficult to believe that there is any real ground for

anticipating such a startling reversal of the fiscal system upheld by English statesmen for two generations; and we shall not here treat the rumour seriously. It would be a change in the whole direction and tendency of the fiscal developements of recent years. Were 'fiscal reform' of this sort attempted we should hear no more complaints of the 'political lethargy' of the people. Popular interest would be stirred to its depths by proposals so essentially retrograde. Year by year, decade by decade, the tendency has been to raise a greater proportion of the national revenue out of direct taxation, a less proportion out of indirect taxation, including under that term all Customs duties, and the Excise duties on beer and spirits.

In 1841-2 the proportion of indirect
to direct was about

73

1853-4

to 27 66 to 34

In recent years Chancellors of the Exchequer have sometimes spoken as if the equality of contribution from direct and indirect taxation which has now been reached was an object to be constantly aimed at. No responsible statesman has yet urged the policy of actually reversing the movement of modern times. A large transfer of burdens from the shoulders of income-taxpayers to those of the general consumer would meet with vehement opposition of a kind which no prudent Ministry would like to encounter. It is doubtless of the highest importance to the Ministerial party to discover a substitute for Mr. Chamberlain's policy, which, though approved by the party caucuses, committees, and newspapers, is most unpopular in the country-a substitute which Mr. Chamberlain could himself accept, not of course as being all he wants, but as affording a position from which he might make further advances. This is the natural aim of the party manager and of the mere political partisan, high or low. But things have gone too far now for party management to save the situation. Free Trade and Protection are incompatible policies. They are as a matter of fact in conflict, however inconvenient this may be to party exigencies, and the nation to whom Mr. Chamberlain has himself appealed will decide the issue.

Still it would be a fatal mistake for Free Traders to rely for victory entirely upon the success they have won in the great fiscal debate of the nation. Organisation and electoral effort are required if effect is to be given to the free trade principles still held by the great majority of Englishmen. In organising a great party on a new political basis Mr. Chamberlain has achieved a success not a little disconcerting to the regular staff, and more faithful of the rank and file, of orthodox Conservatism. As we have seen in the Home Rule controversy, it is very possible for an organisation to include a great majority of a party, and yet, because it is founded on an impossible principle, to fail permanently in winning the general confidence of the people. Mr. Chamberlain has won to his standard the majority of the Conservative party; but he has repelled a very large number of Liberal Unionists, and Liberal or Moderate Conservatives, without whose assistance the Unionist Party would never have held power. That he has gone very far towards constructing a great political party upon the basis of protection we should be the last to deny; but it is a party of which the centre of gravity will not be the same as in that Unionist Party which has virtually governed the country for the last nineteen years. The ultra-Conservatives will have gained the power that the more moderate Conservatives and Liberal Unionists have lost. In the constituencies the latter are fast rejoining their old party under the belief that the Union is no longer in danger, and that this course is the most effective method of defeating Protection. The rally of Unionists, Liberal and Conservative, on December 1 last at Devonshire House to protest against Mr. Chamberlain's policy proved the futility of the assertion that the United Kingdom had no alternative but Home Rule or Protection. It is as absurd to suggest that the statesmen who lead the Unionist Free Traders are indifferent to the maintenance of the Union as to accuse them of Little Englandism.' The Duke of Devonshire, Lord James, Lord Balfour of Burleigh, Lord George Hamilton, Mr. Ritchie, and Lord Hugh Cecil are, for instance, quite as alive as any man in the present ministry to what belongs to the greatness of empire. Lord Goschen and Lord Avebury are surely 'Imperialists' in any rational sense which the words can bear; whilst they have a knowledge and comprehension of the commercial interests of their country as a whole, which Mr. Chamberlain's Tariff Commission may well envy.

Mr. Balfour has continued to maintain silence on the

fiscal topic since the speech in Edinburgh upon which we commented in our last number. He is supported by the followers of Mr. Chamberlain and Mr. Chamberlain himself, on the ground that he practically favours his policy, and by many Unionists attached to Free Trade, on the ground that he is fundamentally opposed to Mr. Chamberlain's policy. The Prime Minister is apparently not unwilling to maintain the ambiguity of his attitude; and it is evident that it could not continue an hour longer than he himself chose. Under these circumstances it would be rash to speculate upon what action he may ultimately take. This however will not affect the political conduct of sincere Free Trade Unionists who are determined to do their utmost in support of a cause which they believe to be of the deepest importance to the United Kingdom and Empire. In the words of the Unionist Free Trade Club Our policy is a 'practical one: viz.-actively to support Free Trade, and 'to oppose Protection in all its forms, and under whatever name it may be submitted to the country.'

No. CCCCXII. will be published in April.