V.—: Balfourian Retaliation.

Mr. Balfour has loaded Mr. Chamberlain with flowers, but never accepted his programme. One point alone he has accepted and worked out—retaliation. “We are unarmed,” said Mr. Balfour. As a matter of fact nothing prevented Sir Michael Hicks-Beach from using countervailing duties to ensure the success of the Brussels Convention, which proves that the Ministry is not unarmed. But, on the other hand, would Parliament ever grant a general mandate for the use of retaliatory measures?

In the Economic Notes on Insular Free Trade, which Mr. Balfour addressed to his colleagues in the Ministry, published in September, 1903, apparently logical deductions are put together with consummate skill; but it is all really a mere card-house.

In regard to France, Mr. Balfour is mistaken on a matter of fact. He estimates that English imports pay on an average 30 per cent.: here he is confusing the maximum and minimum tariffs. In return for her policy of the open door England receives most favoured nation treatment; and in 1902, the year which Mr. Balfour takes as the basis of his calculations, our exports to France were assessed by the English Customs House at £15,587,000, and by the French at £22,680,000—the duty amounted to 9 per cent. on the English and less than 61/2 per cent. on the French assessment.

Stripping Mr. Balfour’s arguments of their somewhat pedantic dogmatism, they amount to this: Other countries shut their door; let us shut ours, so that the others may be forced to knock at it if they want to get in their goods. It is the policy of the shut against the open door. This sort of tit for tat is hardly the policy one would expect from a philosopher like Mr. Balfour; one can understand it coming from a manufacturer who, according to Mr. Balfour, sees his goods kept out by 130 per cent. duties in Russia, 72 per cent. in the United States, 32 per cent. in Austria, 27 per cent. in Italy, 25 per cent. in Germany, 16 per cent. in Canada, 13 per cent. in Belgium. But this manufacturer, before he can sell any of his products, is a consumer of plant and raw material, and, through his workmen, of goods, and his consumption is in proportion to the importance of his factory. Every turnstile at the frontier raises the price of the goods which he needs, either directly or indirectly, and consequently his cost of production. Since dearness either restricts or closes the market, to punish other countries for not opening the door to his goods he begins by himself diminishing their sale.

Supposing that England were to try this policy against the United States, what class of goods would be chosen for the experiment: the 117 million dollars’ worth of cotton imported in 1902; the 86 million dollars’ worth of corn and meal; the 120 million dollars’ worth of live stock; the 22 million dollars’ worth of petrol; the 11 million dollars’ worth of copper, or the 16 million dollars’ worth of leather? Mr. Balfour has always declared a tax on food to be out of the question. He must, therefore, intend to obtain a reduction of duties by attacking manufacturers—the 2 million dollars’ worth of boots and shoes!

Tariff wars are most dangerous to the nations with the most highly developed trade and shipping. England can best preserve “the product of the areas valid for export” by leaving the door open: the shut door prevents going out as much as coming in, and the open door if it allows coming in also allows going out. Commercial activity is not encouraged by the methods of the gaol.