THE RESOURCES OF MODERN COUNTRIES.*

Mn. 1VILSON very fairly describes the matter of these volumes as essays towards an estimate of the economic position of nations and the prospects of British trade. He expressly disclaims the intention and the credit of an exhaustive treatment, knowing very well how vast is the extent of the mine that he has been working, and that a full exploration is hopelessly beyond the energies of any one man. He justly claims, however, to have struck the most important lodes, and to have followed them up perseveringly. The leaden hand of depression has been laid, with impartial and increasing heaviness, upon all departments of business and upon all the nations of the world. There has been a decided check upon the universal haste and hurry to get rich, and not a few of the runners in the race for wealth, not giving sufficient heed to their steps, have been tripped up rather ignominiously. Blame must be laid upon something or somebody ; disastrous results must have causes assigned them, true or false, deep or superficial ; de- ficient crops, unsatisfactory relations between capital and labour, political uncertainty, the disorganisation of war, and so forth. But admitting the force of the causes thus alleged, we want to know further what are the causes of these in turn ; and it is obvious, on a little reflection, that all of them—even including the capricious veering of the political weather-cocks—are of com- paratively limited operation ; they do not adequately account for the wide-spread and prolonged slackness of trade. Mr. Wilson, it seems to us, has undertaken an investigation equally important and arduous, when he sets himself to examine the available data, and to separate from the shifting phenomena, those permanent forces that govern the tendencies of events. It is well to criticise the economic condition of the nations, and to forecast on solid grounds the future of international trade, and especially of the trade of England.

In order to lay a firm foundation, Mr. Wilson recapitulates the main steps in the commercial and industrial progress of Britain. We must resist the attractions of the romantic story, and content ourselves with the conclusion he arrives at. The unparalleled prosperity of the country, if too rapid not to turn many a man's head and induce very great recklessness, is still on a sound foot- ing :—" There has been an unprecedented increase of the material wealth and resources of the country, such as, looked at by itself, leads us clearly to the inference that the present trade depression is, so far as we alone are concerned, merely an ebb of the tide." "So far as we alone are concerned ;" and this means that the cause is not in ourselves, but in our foreign customers, that our trade has been languishing. These have more or less spent their native wealth, as well as loans raised here and else- where, or they have been attempting to supply their own needs, or on other grounds have seen fit not to enter our markets so much as formerly. Assuming a trade revival, will these countries be found too poor to buy from us, or from anybody else, or will our credits be found, not to have led them to their ruin, but to have enabled them to establish a victorious competition against us ?

The chapter on India is the boldest chapter in the book ; some readers will call it rash, or perhaps by a worse name ; hardly a single point connected with the financial or political management of our Indian Empire but rouses Mr. Wilson's indignation and scorn. We are wholly unable to agree with it, but it is a forcible statement of the pessimist side of the case. Vast sums of money have been expended with the view of open- ing up and developing the resources of the country, but the results have been most seriously disappointing. In con- nection with the generally unsatisfactory condition of the Rail- ways, Mr. Wilson supports the argument that the reckless felling of timber for making and working the lines has had much to do in bringing on those terrible famines. The gross revenue of some fifty millions is double what it was thirty years ago, but in the face of this, Mr. Wilson maintains that the produc- tiveness of the country has been almost stationary. The explanation is that new States have been absorbed, and taxes have been heightened ; so that he admits an increase of only five or six millions,—not on the old territories alone, it must be noted, but on old and new together. On the whole, Mr. Wilson sees no sign that, apart from artificial

* The Resources of Modern Countries: Essays towards an Estimate of the Economic Position of Nations, and British Trade Prospects. By Alexander Johnstone Wilson. 2 vols. London: Longmane and Co. 1878.

stimulation, such as the slight protective tariff that has vexed Lancashire so much, Indian trade is at all likely to come 'to much good. He uses strong words to condemn the official unwisdom and extravagance, and he affirms deliber- ately that "if we do not want to lose, not merely our Indian trade, but India itself, we shall have to alter radically her whole financial administration."

The United States, with which our trade relations ought to be pre-eminently satisfactory, afford Mr. Wilson an opportunity of saying his mind, once for all, on the follies of Protection. With an unlimited expanse of virgin soil, acquired in fee-simple at ex- tremely low prices, the States might have been expected to give their energies, in the first place, mainly to agriculture, the grand possibilities of their situation being indicated in their sharp com- petition with even Hungary and Australia in European grain- markets. But a jealous craze for greatness in manufactures led them astray ; so they digged and manufactured, and wove and span, their exertions being aided by the exclusion of the foreigner, except he submitted to a heavy Customs tariff,—a fine economic stroke, to pay the war-bill out of the pocket of the foreigner ! This precious tariff, "framed on a combination of mistaken economic principles and clamorous private interests," Mr. Wilson characterises as "a singular monument of the ingenuity of human folly." It strikes particularly at foreign manufacture :—

" A crude or raw article will ho admitted at a low duty, or perhaps free, but let that article bear the least indication of manufacture, of labour spent upon it, and a duty, more or less heavy, is instantly im- posed To such an outrageous and unreasoning extent has the theory been carried, that after a rather minute study of the tariff, I should say that I am within the mark in estimating that there must be about 1,000 articles at least on which the total annual yield of the duty cannot, on the average, pay for collection and trouble Taken -over all, the duties levied according to this tariff represent, it is com- puted, a fine of about 34 per cent., but taken according to the real in- cidence, they represent one of at least 50 per cent., and probably of 60 per cent."

This may serve to render anything but astounding the fall of our exports to the United States to half what they were some six years ago. No doubt the tariff has fostered the home industries of the States to a considerable expansion, which, however, is wholly artificial and precarious. The exports, too, have increased, but Mr. Wilson is careful to show that Protection has extremely little to do with this result. China and Japan take American in preference to English cotton, simply because it is of better quality ; and American machines find a ready market, because of their in- genious construction. And the increase, after all, is very limited, and very uncertain. The other important points of United States finance are fully discussed by Mr. Wilson, and he assures us that the obstacles in the way of a revival are purely artificial. At the same time, the temper of Congress forbids the prudent to be over-sanguine that our friends across the water have learned wisdom from the painful consequences of their fast living.

Further examples of the mischievous results of a protective policy are found in the examination of the condition of most Continental countries, from the fierce exclusiveness of Russia to the compromising " compensationism " of the economists of France. The disastrous influences of abundant paper-money and the inpour of foreign capital also find illustration in Europe, no less than in the United States ; and the political uneasiness and partial or temporary resettlement form considerable factors in the question of economic soundness and probable development. Referring to the book for the detailed discussion, we extract Mr. Wilson's summing-up of the position of Russia, which may be found interesting and instructive at the present juncture :—

" Had she abstained from going to war, and had this country -continued to lend her m ney, she would have held her head up for yet a few years, but for all that, she was going towards ultimate bankruptcy. 'Once having plunged into a huge war, that bankruptcy is near and certain. No fiscal regulations can prevent it ; they only bring out more clearly her incapacity to raise a largo revenue. Her trade cannot avert it, for her trade is not large enough to enable her to recover even from her fearful losses at home, and bankruptcy therefore approaches apace. The truth of the matter is that the Government of Russia was practically bankrupt at home, when it began the march of improvement on which it has spent so much. It was unable to make good its promises to pay to its own subjects, and had been so for generations. Yet on this rickety foundation a huge foreign debt has been raised, a show of solvency maintained, and great public works executed. Russia has borrowed abroad what her own people were utterly incapable of supplying, and has called it progress."

The full bloom of successful financial juggling is displayed in the marvellous borrowing of Turkey and Egypt. Mr. Wilson devotes a chapter to this, and returns to it in a lengthy appendix. There is almost insuperable difficulty in getting at the real figures, but he is able to correct a popular misconception as to the Turkish -bonds+, and to formulate this general result :— "In any ease, it is therefore impossible to say that this country, as a country, has lost very heavily by the Turkish Debt. There has been a great deal of shifting of money from the pockets of the many who are not rich to the few who are, bat of absolute loss to the country there is very little. Turkey itself has been the one greater loser. Its Govern- ment has been deluded by the golden shower into the indulgence of all manner of objectless extravagances ; and, as the pressure of these and of the incontinent borrowings became greater, it has striven to shift its troubles on to the shoulders of the population. Taxes and extortion of all kinds have ground the population of Turkey to the dust, and by the misery thus caused have contributed not a little to foment and give pretexts for the rebellions which now threaten the empire with disso- lution. It is not a pleasing picture, but this is, after all and in plain terms, the net result of the financing of banks and syndicates in Turkey for the last twenty years."

And as with Turkey, so with Egypt

There is no material difference in the case of Egypt, unless it be that the oppression of the Turkish charlatans and such speculators who rule there has been more systematic and refined than that of the Sultan. The fellaheen of Egypt have been reduced to the most abject poverty by the schemes of the Khedive, and at the present time gangs of them are working at his sugar factories and on his Soudan railway—under English mastership, too—as slaves have seldom been compelled to work...... All testimony worth citing concurs in this, that the oppression of the lower orders of Egypt is terrible to behold People of this country have been misled about Turkey and Egypt, just as they are about India, and cannot divest themselves of the idea that they are full of stores of mysterious wealth It may seem cruel to say so, but it is strictly within the facts, that the beat thing that could happen to Egypt, and the beat thing for our future trade with Egypt, would he the cessation of all payment on the Debt, and of all responsibility for it."

Mr. Wilson is against the occupation of Egypt by England, and advises the utmost possible withdrawal from her concerns. "Let the one folly of the purchase of the Suez Canal Shares satisfy us." That is, let us be content with having done what is useless for Egypt and useless for ourselves, and not do what would be in the highest degree useful for both.

Of the remaining countries the chief interest centres in our Colonial Empire, in Canada and South Africa, in A.ustralia and New Zealand. Here Mr. Wilson raises many questions that lead to most suggestive discussions. The newness of the Colonies should restrain us from premature and unqualified self-congratu- lation on our success as colonisers. The previous occupation by other European Powers has established an element of race that must always be allowed for in our calculations. The French Canadians of Quebec, for example, religiously stand on the old paths of their long-dead ancestors, and keep apart the two ends of the country from a united advance on the lines of modern pro- gress. The Dutch Boers at the Cape, similarly, have all along caused us an immense deal of trouble. A cardinal factor in any estimate of Canada is the unfortunate blundering over the settle- ment of her boundaries, in 1842. Mr. Wilson severely censures the surrendering, "without necessity or warrant, vast regions of magnificent territory to the United States," both on the east and on the west. For trade purposes, the finest province, Ontario, is by situation as good as a member of the American Union, and it is to be feared that even Canadian loyalty—which Mr. Wilson irreverently calls "a very mercenary affair "—will not prevent Ontario from sending her affections after her trade. The railway mania has been unfortunate for Canada. The Debt of the Dominion is an imminent danger, owing to the very slight elas- ticity of the country, and the danger is complicated by overgrown local burdens. A roaring trade has been carried on with foreign money, and no solid support has been provided by natural development. The squandering of the land, and the appropria- tion of the proceeds of land sales as ordinary revenue, form a strong indictment against the Colonies generally, and Mr. Wilson's judgment as to the right course deserves attention :—

" The rational and simplest way of dealing with vast territories owned by a State would be to lease them for, to begin with, a nominal rent to tenants for purposes of reclamation, the State retaining the fee-simple, and power to revise rents at stated periods of, say, thirty years. By such a course, every one of our great Colonies would, in course of time, have become possessed of a splendid revenue, which might have taken the place of all other forms of taxation, and the incidence of which would never have been seriously felt, for the increase of rent would probably have fallen far short of the real increment in the value of the land."

But for land sales, Canada would have been on the rocks long ago. Her trade with us is very fair, on the whole, but it has yet to fall to a sound basis from its unhealthy inflation. South Africa seems to possess advantages that promise better things than Canada. She, too, has built unnecessary railways and sold off her land for a few pence an acre, but she has not yet run so overwhelmedly into debt. The Cape is held up by Mr. Wilson, we fear erroneously, as a great land of promise for emigrants, a large inflow of whom, he says, should be encouraged, not only for I their own advantage, but also to give a political preponderance of English, so as to ensure the success of the otherwise more than doubtful experiment of federation.

Between explosive torpedoes and oppressive despotisms, Mr. Wilson finds it bard to predict the future course of trade. A breathing-time of peace would be a good thing to begin with ; and what is next wanted is, that the windy inflation should be pricked out from below business, so that it may repose on a solid basis. This may imply crash upon crash. When the revival does come, we shall find ourselves met in very many quarters by Protection, and in some quarters by a greater preparedness for competition against us, and by a growing determination to dispute our supremacy. But for all that, our supremacy is tolerably well assured ; some foreign nations have let our loans slip through their fingers like water through a sieve, or have spent them to their injury,—not one of them all has drawn such benefit from English money as to establish a solid competition against us. We shall still be supreme, and the wisest course for strengthening our position will be to foster by whatever means we can the growing strength of our colonies.

After all, we have taken up but a few points, which may, how- ever, serve as samples of this very remarkable book, and com- mend it to the study of such as are interested in trade or in politics. We could have wished to add a line or two on the political bearing of economic facts, and especially on the singular earnestness of political conviction that runs through Mr. Wilson's work. There is something, we think, of a different fibre from sentiment in the pleasure of meeting with a financier who never loses sight of the fact that all this manipulation of money and what stands for money is, in the last resort, manipulation of the lives and fortune and happiness of millions of human beings.