Imperialism and social reform english Social-Imperial Thought 1895-1914



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THE 'INTERESTS'


Which were the economic interests devoted to Free Trade? British ship-builders, for one group, found their product still welcomed in protected continental markets, as well as, of course, in the home market. There was a good demand for British ships not only because of the skill of experienced British builders, but because their price was substantially lower than those of other ship-builders. Taking advantage of British Free Trade, German manufacturers 'dumped' steel at prices lower than German prices. The availability of cheap steel and ship-building skill helped to make it possible for Britain to reap full advantage of her position as an international entrepôt and facilitated the development of a huge mercantile navy which served as a common carrier for the trade of all nations. Not only the ship-builders, but the new class of shipowners which had developed had an obvious stake in frustrating the design of the Tariff Reformers to turn inward and throw overboard the profits of the highly developed international common-carrier trade. 8

Lancashire's cotton industry, too, ranged itself on the side

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7

Tyler, op. cit., passim.

8

See, for example, Charles Booth, Jr., Fiscal Policy and British Shipping from the Free Trade Point of View ( Liverpool, 1909). This Booth was not the sociologist.

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of Free Trade. Not that Lancashire had not suffered from the competition of foreign textile mills sheltered behind protective tariff walls; Lancashire had suffered, and had opposed Home Rule for Ireland so as to maintain imperial markets. During the final quarter of the nineteenth century, the consumption of raw cotton by the textile mills of the United States and the Continent nearly tripled. Yet, despite the closing down of continental and American markets for British cotton piece-goods, Lancashire's cotton exports continued to grow. The average annual export of British cotton piece-goods from 1870 to 1874 was 3,446 million yards; it had climbed to 4,975 million yards between 1890 and 1894 and jumped to 5,295 million yards between 1900 and 1904; it reached 6,673 million yards between 1910 and 1913. Lancashire was more and more finding its new markets in China, in India, and in the Near East and continued prosperous. To compete successfully, Lancashire required cheap food and cheap raw materials which it believed tariffs would endanger.

The 'capitalists' -- those who depended on foreign investments -- were largely committed to Free Trade. The nineteenth century had witnessed an increasing rate of British investment abroad -- interrupted briefly in the 'seventies and again in the 'nineties. Between 1886 and 1889, 60 to 80 million pounds annually were invested overseas. A contemporary survey of investments made between July 1, 1908, and June 14, 1909, showed 169 millions invested abroad during this period. Of this sum, well over half was invested not in the colonies but in foreign countries, mostly in the non-British Western Hemisphere, Argentina in particular. 9 The British investor, at the height of the tariff controversy, it appeared, preferred the risk and return of foreign investment to turning inward upon imperial resources. Protection had nothing to offer these recipients of dividends from overseas -- substantially non-imperial -- investments. The 'City' -- the British financial community -- was largely Free Trade. Ship-building, shipping freights, and dividends from investments abroad were only part of the story. Britain built ships and sailed them and British insurance companies prospered by insuring their cargoes. England's position as an entrepôt made profits for her financial institutions as a

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9

Survey results reported in A. D. Webb, New Dictionary of Statistics.

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result of worldwide banking and discount operations. These 'invisible exports' were vital to the British economy. The average annual value of imports from 1902 to 1906, for example, was 559 million pounds. Exports -- other than these services -during this period amounted to 390 million pounds. But for the income from these financial activities -- dividends, interest, premiums, commissions, salaries and pensions -- there would have been an unbridgeable trade gap.

The 'organized' working class -- remembering the stories of the hungry 'forties and cherishing the cheap loaf -- remained loyal to Free Trade. Perhaps the numbers of workers employed by Britain's chief industries partially accounted for working-class support of Free Trade. According to the 1901 Census, the number of workers in the iron and steel industry, the largest industrial grouping which desired protection, was roughly 100,000. The industries committed to FreeTrade, on the other hand, contained the bulk of the working class: in the textile industries were 1,500,000 workers; there were 1,000,000 coal miners (British coal exports were most welcome even in protected marketing areas); 200,000 seamen; 1,000,000 engaged in ship-building; 1,250,000 in various transportation enterprises.

The metals 'entrepreneurs' of the midlands -- whose situation we have already discussed -- who had fought to retain the Union of 1801 and their Irish markets now saw their Canadian and Australian markets threatened and turned to protection and preference in order to preserve the imperial union. Their conception of the empire was that of a closely unified, harmoniously operating economic and political system, much like the German Zollverein. They were convinced that unless such a system were constructed, the empire would go to smash and their trade would be ruined. What they saw happening in the colonies gave them considerable cause for concern. For the proposals for a preferential system had originally come from the self-governing colonies which had already turned their backs on Free Trade. The Canadian tariff of 1859 had been based upon the protective principle. In the 'sixties, Victoria, too, had adopted a protective tariff and her example was followed by other parts of Australia. Both Canada and Australia had urged the mother country to inaugurate a preferential

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system. If England refused, would these dominions long remain in the empire? In Canada, the Liberals were the advocates of reciprocal trade with the United States, and when the election of 1896 placed them in office, there were imperial fears that Canada might soon be lost to the United States.

All the self-governing colonies appeared to be vitally concerned about preference. The second colonial conference at Ottawa in 1894 had passed resolutions calling for preference. At the third colonial conference in London, 1897, presided over by Joseph Chamberlain, a resolution was passed that the principle of preferential tariffs, which Canada had put into practice that same year by granting a 12 1/2% preference upon British goods, should be extended. A similar resolution recommending the granting of unilateral preference to British goods was passed by the 1902 conference. The following year, 1903, New Zealand and South Africa put the recommendation into effect; Australia did the same in 1907. In 1907, Canada increased its preference to British goods to about 28%. British Free Trade, however, made it impossible to form a cohesive preferential union or for Britain to act in defence of imperial trade interests. When Germany, for example, angered at Canada's grant of tariff advantages to Britain, retaliated against Canadian goods, a Free Trade Britain was helpless to reply. Incidents such as these caused advocates of preference to believe the empire lost if Free Trade were not speedily abandoned. While the Tariff Reformers exulted over colonial grants of preference, Free Traders wondered why the colonies should impose any tariff at all against British goods; the Chamberlain programme was certainly hampered by the colonial refusal to enter an imperial Zollverein of Free Trade between the various parts of the empire.

Was it realistic to regard the colonial market as the means of saving hard-pressed British manufacturers and restoring employment to thousands, as Chamberlain had suggested? The Fiscal Blue Book of 1903 revealed that the bulk of British exports was still destined for points outside the empire. During the last part of the nineteenth century, however, the colonies were absorbing an ever greater proportion of British exports. During the short period between 1890 and 1902, the value of British exports to the colonies increased by 21.2% at the same

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time exports to foreign countries had declined by 12%. Where in 1890, the colonies accounted for 34.6% of British exports, by 1902, their share was 42.1%. 10 The case of the advocates of preference had a real basis in fact even if their opponents believed their conclusions overly optimistic. But the interests benefiting from Free Trade regarded the adoption of a tariff and preferential system -- the turning inward upon the empire -- equivalent to giving up the great world trade of Great Britain for a mess of imperial pottage. The profits of international banking and discount operations; the interest on foreign loans; the dividends on foreign investments; the premiums of an international insurance network -- all depended on the 'cosmopolitan capitalism' based upon Free Trade under which Britain had prospered for over half a century. These 'capitalists,' the ship-owners, prospering from an international commoncarrying trade, and the Lancashire cotton industry, still thought and acted in terms of the traditional Free Trade imperialism of the nineteenth century, the imperialism of capital export described by J. A. Hobson and N. I. Lenin. It was inevitable that those who were still benefiting from this older imperialism should combat a policy predicated upon the premise that it and all its benefits were irrevocably dead.

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