IV JOSEPH CHAMBERLAIN'S 'SQUALID ARGUMENT'
apparently desire, to reduce by a stroke of the pen the British-Empire to the dimensions of the United Kingdom, half at least of our population would be starved.'4 4
Not only the industrial midlands but cotton-manufacturing Lancashire had united behind the Unionists in their effort to keep the markets of Ireland.
The midlands, however, were in a much more awkward position than Lancashire. Birmingham, formerly unrivalled as the iron and steel, the metal-goods centre of the world, was losing out to foreign, especially to German competition. Delegates of the Birmingham Chamber of Commerce told this story to a Commission of Inquiry into the causes of the decline of British commerce as early as 1885:
'We are being ruined. We work as hard now as ever but without profit. . . . In the past we supplied the entire world with arms. Governments and private individuals always used to apply to us. . . . To-day the greater proportion of these governments manufacture for themselves, and America has popularized her arms from Springfield and Winchester; in fact, America obtained the orders for the Carlist and Turkish Wars. . . . We used to enjoy a monopoly for screws and nails. Protective tariffs have closed the civilized markets to us. . . . Under the shelter of tariffs, Germany and America have developed their factories, and making their profit out of home sales, the Germans throw the surplus on our markets at absurdly low prices. Time was when the Asiatic and Oceanian East purchased our nails. To-day German nails actually compete here on our own market of Birmingham. Buttons, which we used to sell to the whole of Europe, now come to us from Germany instead. German iron wire is now sold in our Birmingham shops.'
Other midlands cities had similar stories to tell. What remedy was there? The answer to the Birmingham Chamber of Commerce in 1885 had been clear: 'Commercial union with our Colonies. A Customs Union comparable to the German Zollverein should be established between them and the home country.' 5
Birmingham had looked to Chamberlain to maintain the integrity of the Empire against the threat of Home Rule and Chamberlain had not failed his city. Now Birmingham looked to Chamberlain to defend it against foreign competition. It
was more difficult for the former Radical Mayor of Birmingham to espouse the protectionist heresy, a doctrine especially obnoxious to many, including the manufacturers of Lancashire, who had supported him on Home Rule. The McKinley Tariff of 1891 hit the midlands especially hard and revived agitation for 'fair trade.' In 1896, Chamberlain hesitantly and most cautiously appeared to endorse the movement for protection but, doubtlessly feeling that the moment was not right, did not launch a campaign. By the end of the Boer War, Chamberlain had begun to feel that the moment had come, that enough Britons had come to feel the pinch of foreign competition for his proposal of an imperial Zollverein to receive a sympathetic hearing.
The economic 'facts' were drawn upon by both Free Traders and protectionists in the course of the debate which followed the initiation of Chamberlain's campaign. At the beginning of the twentieth century, Great Britain could have looked back over fifty years of commercial and industrial superiority under Free Trade. During the preceding half-century, the United Kingdom had led the globe in almost every area of production, and the City of London had been and still was the chief financial and commercial centre of the world. The parliament at Westminster governed the largest and most populous empire history had ever recorded. Britain's position appeared impregnable. It was a shock and surprise to many when the Secretary of State for the Colonies proclaimed that Great Britain could not hope to survive as a power of the first class unless she made drastic revisions in her trade policy. British exports had been declining because of foreign competition, Chamberlain asserted. Without a tariff to exclude foreign goods from the home market, without preference needed to hold and improve her position in colonial markets, Britain's economy and power would disintegrate. Wages would go down; many more thousands would be unemployed. However, Chamberlain's prophecy of impending doom was pitted against the determined opposition of a united Liberalism, a working class intent upon keeping the cheap loaf, and even Unionists who were doctrinaire Free Traders. The Free Traders replied to Chamberlain's challenge with the 'facts.' Board of Trade statistics revealed that, at the time of Chamberlain's pro-
After a period of some stagnation, trade was improving; this was an important aspect of the Free Traders' argument. Trade, indeed, continued to improve until the coming of the war, a circumstance which no doubt played a part in Chamberlain's ultimate defeat. In 1913, British exports reached a total of £525,245,000 in value, an increase of 80% over 1900. 6
During the last thirty years of the nineteenth century, however, a profound change had occurred in Britain's industrial and trade position -- and it was this which was central to Cham-
berlain's supporters. On the continent, Germany had begun the construction of a huge industrial machine which was causing concern to certain British manufacturers by the end of the century. Across the Atlantic, the United States had emerged as a serious industrial competitor. Across the channel, the French Republic showed signs of industrial competence and of a desire to resume the centuries' old rivalry with her neighbour. All three had begun to reach out for colonies to supply raw materials for their factories and to buy the finished goods of the mother country. All three had set up high tariff walls to exclude the produce of rivals. The German tariff became frankly protectionist in 1879 and even more so in 1885; France dug in behind the tariff of 1882; the United States found itself well sheltered by the McKinley tariff of 1891 and the Dingley tariff of 1897. Other European nations -- Italy, Austro-Hungary, Russia-followed the example of the protectionist powers. As a result of the growth of rival industrial powers sheltered behind tariff walls, Britain had suffered a decline in the rate of expansion of her foreign trade which seemed serious when it was compared with the booming expansion of German, American, and even French trade. The same observation could have been made in important fields of production such as steel manufacturing and in exports of British manufactured goods. Only in the export of raw materials did the rate of British expansion keep pace with the German, a sad fate for the 'workshop of the world.' British manufacturers were not only deprived of continental and American markets by tariffs, they were compelled to meet the competition of these industrial rivals in their colonies and in the open home market as well.
Although British exports were indeed increasing at a rapid rate during the first decade of the twentieth century, the pinch continued to be felt -- as in the 'eighties -- by the British iron and steel industry of the midlands. For iron and steel, the dumping of German goods in the home market and the attempts of the U.S. to purloin the Canadian market were not a potential but an immediate threat to profitable existence. As late as 1890, Great Britain had been the largest steel producer in Europe. Ten years later, in 1900, the results of the lag in Britain's rate of expansion were very visible: British production had in-
These 'facts' of Britain's relative industrial decline -- especially in the metals industries -- were welded into a political argument-a finely wrapped social-imperial 'package' to be sold to the British electorate -- by Birmingham's M.P., Joseph Chamberlain. Chamberlain was a sincere imperialist from his earliest years, even while Radical Mayor of Birmingham, as his biographer has told us, to the end of his days. In 1886, he had quarrelled with Gladstone over the question of Home Rule for Ireland and had led a group of Liberal-Unionists into the political merger with Salisbury's Conservatives -- certainly proof of his attachment to imperialism. In 1895, he requested and received the post of Colonial Secretary in the Unionist government which took office that year. His many accomplishments in this post and his activities in South Africa before and during the Boer War are too well known to bear repetition. 8 Chamberlain, however, was more than an imperialist. He was a social reformer as well. 9 Before his break with the Liberals, he was regarded as the most dangerous of the Radical social reformers by the men of property. His programme of 'municipal socialism,' while he was Mayor of Birmingham, a programme of municipal ownership of the city's
utilities and transportation facilities, had made the propertied tremble. Had he not, further, grimly suggested that the wealthy owed a 'ransom' to the poor in return for which they would be permitted to retain their riches? Chamberlain's 'ransom' speech, in 1885, had shocked the propertied classes.
Chamberlain continued to display this strong interest in social reform even after his withdrawal from the Liberal party. When the idea of old-age pensions received intense public interest, on the occasion of Charles Booths' paper on the subject in 1891, Joseph Chamberlain became the first politician to adopt the proposal, and he presented a pension scheme the following year. Responding to Chamberlain's repeated urgings, the Unionist government had appointed a committee to investigate the question in 1896. Two years later, true, the committee had issued a report labelling the scheme impracticable, but another inquiry into the question had been instigated by Chamberlain in 1899. This time, the committee offered a plan by which five shillings a week would be distributed to the 'deserving poor' over sixty-five. The huge expenses of the South African War made it impossible to proceed further and little was heard of the subject until 1903 when Chamberlain returned to it during the tariff controversy. Chamberlain also interested himself in the question of workmen's compensation. There had been attempts to deal with this problem when H. H. Asquith, Home Secretary of the Rosebery Government of 1894 to 1895 had introduced an Employers' Liability Bill. However, House of Lords' amendments caused the Liberals to drop this bill. In 1897, the Unionists, spurred again by Chamberlain, did enact legislation to provide for payment by industry for all accidents, excluding from coverage only such categories of workers as seamen and agricultural labourers. 10
After he left the Liberal party, Chamberlain tried to distinguish between his kind of social reform and the social reform ideas of his opponents. One scholar has recently declared that Chamberlain's municipal socialism and that of the Webbs, for example, were entirely different: the Webbs, W.
A. Robson has pointed out, wished municipally-owned utilities to be self-supporting while Chamberlain wished them to earn a profit which could be used to lower general municipal tax rates. 11 This anticipated his later views on tax policy. Chamberlain's social-imperialism of the future was anticipated in a speech before the Edgbaston Conservative Club in January, 1894, where he confessed his dislike of the Radicalism of the Harcourt wing of the Liberal party not only in the foreign but also in the domestic field:
'They have ceased to pursue the old object of Radicals -- the greatest happiness of the greatest number. They are never satisfied with making anybody happy now unless at the same time they can make somebody else unhappy. . . . Their advocacy of compensation to workmen is tempered by their desire to do some injury to the employer. . . .'
Chamberlain, on this occasion, called for the formation of a National Party 'that will put country before the interests of any faction.' Only such a party, he had asserted, could deal with such social problems as 'the condition of the poor, the distribution of wealth, the relations between capital and labour' and yet still 'protect our interests in connexion with our foreign relations.' 12
It was on May 15, 1903, that Chamberlain first proclaimed his adherence to the programme of Tariff Reform and imperial preference -- and, perhaps, commenced his drive to construct such a national party. In a later speech he outlined his proposals in detail: a duty of 2s. a quarter upon all imported foreign grain except maize and a similar duty upon imported flour; a duty of 5% upon foreign meat and dairy products except imported bacon; an average duty of about 10% upon foreign manufactured articles. The products of the colonies were to be exempted from all these duties. The programme showed the combined influence of the imperialists, who wished to favour colonial food imports and bind the empire by means of a preferential system, and the manufacturers who wished to protect their products. The industrial protectionist aspects of the programme were a political necessity, it was felt, if
widespread support were to be aroused, but Chamberlain preferred, at first, to regard his proposals as exclusively imperial in scope. For almost six months, Chamberlain made no references to any 'social' issue in the course of his pronouncements on preference. He maintained the high tone of imperial idealism. It was first on October 6, 1903, at Glasgow, that he gingerly, almost apologetically, broached the social-imperial theme which was to dominate not only all his subsequent addresses but the whole Tariff Reform campaign.
'Your colonial trade,' Chamberlain began, 'as it stands at present with the prospective advantage of a preference against the foreigner means employment and fair wages for threequarters of a million of workmen, and subsistence for nearly four millions of our population.' The leader of the Opposition would, he feared, describe this statement as 'a squalid argument.' 'A squalid argument,' Chamberlain retorted, 'I have appealed to your interests. . . . I have appealed to the employers and the employed alike in this great city. I have endeavoured to point out to them that their trade, their wages, all depend on the maintenance of this colonial trade, of which some of my opponents speak with such contempt.' 13
Chamberlain had announced that the conversion of the working class to Tariff Reform was his prime political objective. Now he had his principal argument -- one, we have seen, he had broached at least fifteen years earlier -- the 'squalid argument.' At the time of the repeal of the corn laws, labour had not the vote with which to oppose the end of protection for the producer, Chamberlain declared. Now, however, the workers comprised the majority of the electorate. 'Unless I have the support of the working people,' he asserted, 'clearly my movement is already condemned and utterly a failure.' 14 It was as a self-styled representative of the working class that Chamberlain set out to undermine its confidence in Cobdenism; he was not a Labour representative, however, in a 'narrow and selfish sense': 'I represent Labour . . . which thinks not of itself as a class, opposed to any other class in the community,
but as responsible for the obligations of the country and the Empire to which it belongs. . . .' 15
During the previous half-century, Chamberlain warned labour, Free Trade had been destroying the British economy. It had already ruined agriculture. 'Sugar has gone; silk has gone; iron is threatened; wool is threatened; cotton will go! How long are you going to stand it?' he asked. 'At the present moment these industries, and the working men who depend upon them, are like sheep in a field. One by one they allow themselves to be led out to slaughter.' Chamberlain posed these questions: 'Do you think, if you belong at the present time to a prosperous industry, that your prosperity will be allowed to continue? Do you think that the same causes which have destroyed some of our industries, and which are in the course of destroying others, will not be equally applicable to you when your turn comes?' 16 Free Trade was good for the foreigner but was bad for the English workman. 'I admit that I am not cosmopolitan enough to wish to see the happiness, success, or prosperity of American workmen secured by the starvation and misery and suffering of British workmen.' 17
British working men had combined into trade unions in order to 'secure full employment' and to raise their living standards, Chamberlain argued. 'My proposals have exactly the same object.' The trade unionists were producers first and, like their fellow producers, the manufacturers, they had never benefited from cheapness. 18 'I ask you to say,' he declared, 'that the principle of trade unionism is the more generous principle, and, in the long run, better for the nation as a whole.' 19 'Be Free Traders, if you like,' he told them, 'but you cannot be Free Traders in goods and not be Free Traders in labour.' 20 Just as British trade unions worked to prohibit sweat shops, to limit hours of work, to obtain some measure of security for the working men within Great Britain, so must
they see to it that such conditions were not encouraged abroad. Permitting cheap foreign goods to enter the British home market provided such encouragement. But British working men ought also to bear in mind that advances in labour standards added to the costs of production, which, in turn, undermined the competitive position of the British manufacturer, and inevitably, the economic position of the working class. 21
The industrial question was closely tied up with the imperial one, Chamberlain insisted. The working man must make up his mind whether he was to follow a policy beneficial to the foreigner or one which would help colonials and consolidate the Empire. 'Remember,' declared Chamberlain, 'the colonial does a great deal for you; the foreigner does nothing.' The foreigner, by imposing high tariffs, shuts his door against British goods and helps create British unemployment. For this he ought not be blamed, since he must think first of his own working men. 'On the other hand,' he argued, 'you have the colonial, who tries to increase your trade.' 22 Chamberlain, of course, did not mention that -- like the foreigner -- the colonies, too, had erected tariffs against British goods. The colonial secretary expressed his confidence that the choice between the foreigner and the colonial was not going to be made on selfish grounds. He thanked God that 'the working men are now, as they always have been, patriots.' They were not concerned with a few pennies in their pocket for they 'always put first in their creed the welfare of the kingdom and the welfare of the Empire.' 23 ' England without an empire!' That was beyond conception. ' England in that case would not be the England we love.' 24
Chamberlain employed the 'ransom' argument in reverse: if you wish to maintain your jobs, he told the British working man, you must be prepared to pay a 'ransom' -- in the form
of higher prices for bread, something the average working man dreaded. But there would be many compensations. Chamberlain told of conversations with foreign manufacturers in which he had been assured that, immediately upon the acceptance of Tariff Reform, they would move their factories to England. This would quite obviously be of no advantage to British manufacturers who would have to meet additional competition, but it would provide greater employment. 25 By keeping out cheap foreign goods, Tariff Reform would save British industry; by its preferential aspects, Tariff Reform would save the British Empire; by both these remarkable devices, the Chamberlain programme would maintain high British labour standards and would save jobs for British workmen.
What he aimed at, Chamberlain insisted, was the proper distribution of Britain's growing national wealth. Returning to the slogans of his early Radicalism, he spoke of the necessity of Britain's 'advance toward a great laudable aspiration, the greatest happiness of the greatest number.' This had always been his goal, he declared. He had for many years spoken of a great reform which would come in the future, a reform 'which would do more for you than all these attempts at bettering your condition -- that was the reform which would secure for the masses of the industrial population of this country constant employment, at fair wages.' What he had had in mind during those years, he asserted, had been Tariff Reform. 26
In previous elections, Chamberlain had pledged the electorate that he would secure old-age pensions for them. Chamberlain confessed his previous inability to redeem this pledge because such a programme would have required more money than was available. The tariff revenues, he could now assure them, would more than meet the necessary financial requirement. The foreigner would be made to pay for British old-age pensions, Chamberlain declared. Two years later, in 1905, Chamberlain was compelled to withdraw this pledge of oldage pensions, perhaps because it was logically difficult to ex-
plain how a tariff which succeeded in protecting British industry could successfully raise a huge revenue. Chamberlain's pension promise was replaced by a pledge that tariff levies upon imported flour would be balanced by reductions in the then existing duties upon coffee, tea and cocoa.
After his initial hesitations, Chamberlain used the socialimperial argument quite frequently. On the whole, however, he preferred to omit references to the 'squalid argument' and to keep the empire foremost in his addresses. There were others within the tariff movement to whom the primary responsibility for impressing the 'squalid argument' upon the British working class fell. Most prominent in this connection was the famous Tariff Reform League.
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