Free Trade

FREE TRADE, the term commonly reserved for the policy of trade regulation that makes no discrimination between imported and domestic products. It does not exclude the possibility of im port duties, but restricts them to the purpose of raising revenue, and supplements them by a countervailing excise duty in cases in which the commodity taxed is produced in the country as well as imported. In the past the term was applied with different sig nifications, varying with the circumstances and controversies of the time. In the 1 7th century it was used to describe their policy by the opponents of the monopolistic privileges of trading com panies, such as the Merchant Adventurers. The free trade bills of 1604 were designed, not to establish freedom of trade in the modern sense, but to throw open the companies, to which was re served the trade with different regions, and to check the practice of restricting entry, and so making of them monopolistic corpora tions. Later in the century the same description was applied to the claim that individuals should be free to engage in the different branches of foreign trade without being members of any company. In the 18th century the term was popularly used as a euphemism for smuggling. Its present signification may be dated from the gen eration following the publication of Adam Smith's Wealth of Nations in 1776.

The Wealth of Nations, by its patient and detailed examination of the actual effects of existing commercial restrictions, destroyed the authority of the theories on which those restrictions had been based, and so closed an epoch; by demonstrating the true nature of international trade and showing the falsity of the traditional view that the commercial prosperity of one country is at the expense of, and incompatible with, that of another, it prepared the way for the freer trade and more liberal regulations of the modern age. The advantages of exchange, the necessity of freedom if these advantages were to be secured and the evils of restrictions, particularly upon the corn trade, had been urged for a generation by the French economists or Physiocrats (q.v.), and other writers associated with that school. Condillac formulated the new theory of commerce even more succinctly than Adam Smith in the sen tence "every nation in its exchanges wants to have the whole of the profit of the trade; they do not see that by the very nature of the exchange there is bound to be some profit on both sides, since each on his side gives less than he receives"; while Mercier and Le Trosne anticipated the crucial doctrine that free trade would benefit a country even if other countries did not follow its example. No other work, however, had the influence of the Wealth of Nations.

The Free Trade Movement.

The first important achieve ment of the free trade movement was Pitt's commercial treaty with France in 1786, which removed many of the prohibitions and duties that had previously obstructed legitimate trade between the two countries. Further progress was checked by war. The circum stances of the generation that followed the Napoleonic War were, however, in England not unfavourable to the new movement. The growth of population created a demand for imported foodstuffs, and at the same time the new manufactures favoured the freeing of trade as likely to assist them in finding export markets. The reform of the old tariff was begun by Huskisson in 1823. In 1837 an anti-corn law association was formed, reconstituted as the National Anti-Corn Law League in 1839, which, under the leader ship of Cobden and Bright, organized an active propaganda against the protection of agriculture. Sir Robert Peel took further the reform of the tariff in his budgets of 1842 and 1845, and in r846 carried the repeal of the corn laws. Gladstone completed the work of simplifying the customs tariff and eliminating from it any pro tectionist element in the budgets of 18J3 and 186o, the latter giving effect to the British undertakings in the negotiation of a commercial treaty with France by Cobden. A new protectionist movement was launched by Joseph Chamberlain in 1903, which, however, was without legislative effect before the war. During and after the war, a protectionist element was introduced into the British tariff, particularly by the Safeguarding of Industries Acts (1921 and 1925).

In other countries the circumstances were not so favourable as in England ; the Free Trade movement was, however, not with out effect. In Germany the influence of Adam Smith was shown in the reform of the Prussian tariff in 1818. Free trade ideas com bined with the nationalist economic propaganda of Friedrich List the practical exigencies of trade to form the German zollverein in 1833, by which freedom of trade was established between seven teen German states, a number subsequently increased. In the mid dle of the century an active free trade movement developed, particularly in northern Germany, influenced by the writings of Prince Smith; and during the period of Bismarck's co-operation with the Liberal Party, Prussia and Germany moved rapidly in the direction of free trade. A network of commercial treaties brought protectionist duties lower and lower, and the tariff law of 1873 approached complete free trade. However, before it came into force, a combination of circumstances brought about a re action. A commercial crisis in 1873 was followed by a long period of trade depression ; the high protection of the United States pro voked a desire to retaliate ; with improvement in transport, first Russian and then American competition began to affect agricul ture, which had hitherto been sympathetic to free trade; the war of 1870 excited nationalist feeling and put a strain on national finance ; finally Bismarck broke with his Liberal allies.

The French Treaty, 1860.

In France there was a strong in tellectual movement in favour of free trade, which produced in Frederic Bastiat one of the foremost propagandists of that policy. The only considerable reform was, however, due to Napoleon III., who used his administrative powers to reduce the tariff, and in 186o negotiated a commercial treaty with England. The influence of this treaty was extensive, since, by making a distinction between the "autonomous" tariff, which was imposed in the absence of special agreement, and the "conventional" tariff, which was granted by special agreement, or in accordance with a general agreement to accord a country "most favoured nation" treatment, it led to the negotiation of a net-work of commercial treaties, covering most of the countries of Europe, and to the establishment of "con ventional" tariffs, much lower than the nominal tariffs. After 187o, however, influences the same as, or similar to, those which brought about a change in Germany produced a protectionist reaction in France. In the United States also, there has always been a strong intellectual movement in favour of free trade, which at times (e.g., in Secretary of the Treasury Walker's Report of 1845) found official expression. Moreover, sentiment in the South was in fa vour of free trade, and tended to counteract the protectionist claims of the North until the Civil War. The high taxation on im ports, imposed to meet the expenses of that struggle, was, however, continued when that reason for them no longer held, and the United States was highly protectionist in its policy until the end of the century. Outside the United Kingdom and the smaller maritime countries with a large transit trade, commercial policy was increas ingly protectionist after the '7os of the last century. The gains of the reforming decade that followed Cobden's commercial Treaty with France were not lost ; but the growth of international com merce, which the cheapening of transport and the development of manufacturing technique made inevitable, was hampered and qual ified by a new growth of restrictions and obstructions. There was, as yet, no return to the absolute prohibitions of import that were normal before the free trade reforms ; but an interference with the freedom of exchange that in itself was slight might have grave effects in the new circumstances of commerce. The improvements in transport not only increased the volume of trade, but reduced the margins of profit on which trade was conducted ; a very small addition to costs by a protective duty or other interference might, therefore, have a very large influence. As has been indicated, this improvement in transport, by exposing new interests, and particularly European agriculture, to foreign competition, and the growth of nationalist feeling produced a reaction after 1871. It was the counterpart in the field of commercial policy of the growth of armaments in the field of military policy. The United Kingdom escaped it, in part because the political influence of agriculturalists was less than in Continental countries, in part because an established system of direct taxation of incomes provided an alternative source of revenue from which expendi ture on armaments could be financed. For a time the reaction was obstructed by the commercial treaties negotiated before 1871 ; these, however, served not so much to check the pro tectionist tendency as to turn it into other directions. If duties could not be raised during the currency of a treaty other methods of protecting the home produce could be devised.

Protection is defined by Grdnzel as "the totality of those meas ures by which the national economy seeks to promote its interests in the world economy field," and its end as "the securing of the domestic market to the business of a country by political means." Tariffs are not the only means by which this end can be secured. Freight rates in nationalized railway systems were manipulated to favour the domestic and to hamper the foreign producer ; not only were they used to provide protection against imports, but also to give a concealed bounty on exports. Other bounties became common, particularly on sugar and shipping, originating in draw backs designed to compensate native producers in their export trade for the increase in their costs imposed by protective duties on their materials. The difficulty of varying tariff laws led to other forms of administrative protection ; sanitary provisions were used to stop the import of live stock and so protect the native grazier ; food inspection was perverted to the same end. The practice of confining public contracts to native contractors, and seeking to influence the governments of dependencies to confine their con tracts to firms of the mother country, was an effective substitute for a tariff in certain industries. Restrictions on immigration, es pecially the prohibition by the United States of America of the immigration of contract labour, were inspired by the same eco nomic philosophy, and sought to reconcile the manual working class to a protectionist regime. The Congress of the United States introduced a further complication by providing for special duties on the imports of countries that levied "unfair taxes" on American goods and giving the President power to vary rates of duty, or suspend free entry, by administrative act in certain cases.

Free Trade and the War.

International trade before the war in spite of these obstacles continued to grow; moreover, as Griin zel demonstrates statistically (Economic Protectionism, p. it took the form predominantly of exchange between industrialized countries, all of which except England were protectionist in policy, much more than exchange between industrialized and agricultural countries. The policy of free trade was maintained by England in spite of the propaganda launched by Joseph Chamberlain in 1903 and the last tariff revision before the war in the United States, the Underwood tariff of 1913, was a revision downwards in the direction of free trade. The war, however, and the peace that closed it, confirmed the governments of the world in their protectionist tendencies. By exciting nationalist feelings, estab lishing new national frontiers, and creating new fiscal needs, it en couraged a revival of protection that made it impossible to secure a hearing for the coldly rational arguments for international free trade. Even the British Government moved away from the strict free trade position, imposing duties and prohibitions on imports of certain "key industry" products, supposed to be essential in war, providing administrative protection against imports from coun tries with depreciating currencies, continuing the protection afforded during the special circumstances of the war to a miscel laneous group of industries of which motor manufacturing was the most important, and reciprocating the preference accorded to im ports from the United Kingdom by the Dominions. In other countries the tendency was to higher and more elaborate tariffs. The American tariff of 1922,the Fordney Tariff, is described by Professor H. Parker Willis as "both actually and potentially the highest general tariff law ever enacted in the history of protec tion." Absolute prohibitions and duties at a prohibitive height were common in the policies of the succession states constituted out of the Austro-Hungarian empire. Certain incidents of post war trade assisted the same tendency. The instability of the for eign exchanges, due to the vicious currency policies of most Euro pean countries, added a new uncertainty to industry, and cancelled the protection afforded by pre-war tariffs which imposed specific, not ad valorem, duties. The latter difficulty was met in some cases, e.g., France, by a system of "co-efficients," factors by which the duties in the tariffs were to be multiplied, varying with the depre ciation of the local currency; in others, e.g., Germany, by requiring the payment of duties in gold or its equivalent. The war, by ob structing normal interchange of commodities, had led to the estab lishment or expansion of industries serving a local or national market, which demanded and usually obtained protection, when the circumstances that made them necessary passed away. Most serious of all, in the uncertainty it introduced into industry, was the general shortening of the terms for which protective duties were fixed, and the general extension of the practice of varying and extending tariffs by administrative action. Whereas before the World War tariffs were normally enacted by legislation for a term of years, and imposed settled conditions to which industry could accommodate itself, since the war they have been a field of incessant and unpredictable change to which industry has the greatest difficulty in adjusting itself.

The persistence of a war-time psychology prevented both gov ernments and peoples from perceiving that the economic distress caused by the war was general and could be alleviated only by joint action. Gradually, however, a perception of this truth gained ground. The results of the new protection were so serious, in the obstacles it opposed to the economic recovery of Europe, that a new movement for the freeing of trade gathered strength, which found expression in the so-called "Bankers' Manifesto," published on Oct. 20, 1926, and culminated in the international economic conference, convened by the League of Nations in Geneva in May 1927. The words that the President, M. Theunis, prefaced to the report of that conference, if they are the latest statements of the free trade principle, are also an echo of the earliest and classic statement of Adam Smith: "The exchange of products between persons of the same country or of different countries is normally to the advantage of both par ties; the greater the range of exchange of different products be tween those who by their resources and capacities are best fitted to produce them, the greater is the general economic advan tage . . . that international trade is normally and properly not a matter of victory and defeat, of profit of one at the expense of the other, but of mutual benefit, has necessarily been the basis of this international conference." The Free Trade Doctrine.—The basis of free trade is a be lief in the benefits of exchange. International trade is regarded as only one branch of exchange, differing in certain incidentals to it, but not in its essential benefits, from exchange within the limits of a single state; the free trade doctrine, therefore, regards the economic progress of different countries not as conflicting, but as mutually beneficial. The benefits of exchange are, firstly, cheap ness; a country does not import a commodity, unless by so doing it gets it cheaper than it could by producing it for itself ; and, secondly, the most economical distribution of productive re sources among the different industries and services of the country. In Ricardo's words: "Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such em ployments as are most beneficial to each. This pursuit of individ ual advantage is admirably connected with the universal good of the whole. By stimulating industry, by rewarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economic ally; while, by increasing the general mass of productions, it dif fuses general benefit, and binds together, by one common tie of interest and intercourse, the universal society of nations through out the civilized world" (Principles of Political Economy and Taxation, ch. vii. 1817).

It is an important part of the free trade doctrine that the forms under which international trade is carried on obscure the reality. If trade could be carried on on terms of barter, its nature as an exchange between producers would be obvious ; since it takes the form of sales and purchase for money, this reality is not recog nized. Moreover, since the currencies of two or more countries are involved, transactions in foreign exchange are necessary. Either the importer has first to acquire in exchange for currency of his own country currency of the country from which he wishes to import; or the exporter has to accept payment for his export in a currency which he cannot use to meet his ordinary expenses in his own country, and he has to sell this foreign currency. Such exchange transactions do not, however, alter the economic char acter of trade. International trade, like domestic trade, is an ex change of goods and services, which must in the long run balance. Exports create credits in other countries, which are used to pay for imports; imports create debits, which are liquidated by exports. A country's credits and debits in relation with the rest of the world, however, are not exhausted by the imports and exports of mer chandize that are all that customs administrations record ; the balance of indebtedness is affected also by such "invisible exports" as interest on foreign investments, services of shipping and finan cial agencies, services to tourists, and receipt of remittances from emigrants. When everything is taken into account, the debits and credits in any period may still not balance; the difference may be adjusted by a movement of gold, but before this takes place, a temporary difference will be met by short loans or by the transfer of Stock Exchange securities. In the long run they must balance the movement of the exchanges and of gold under the gold stand ard automatically setting forces in motion that will correct any divergence; this statement is, however, subject to one qualifica tion, the effect of the import and export of capital. A country's exports, visible and invisible combined, will exceed its imports if it is lending capital to the rest of the world ; its imports will exceed its exports if it is borrowing capital.

Fundamental Relation of Imports and Exports.—Thus the cost of a country's imports is the cost of the exports with which it buys them ; and the gain from foreign trade is the differ ence between the value to a country of its imports and the value to it of the exports, which it sends to other countries in exchange for those imports. Since imports are paid for by exports, to prevent by protection an import is to reduce by the amount of that import the purchases by foreigners in the country, and there fore to reduce exports. Therefore the expansion of production in a protected trade that follows the grant of protection, is not a net addition to employment and production, but merely a diver sion of resources from other employments in which protection was unnecessary.

This statement requires elaboration by reference to two criti cisms which have been directed against it. The first (urged, e.g., by R. Schuller, Scliutz :oll and Freihandel, 190) is a denial of the proposition that, since imports are paid for by exports, any in crease in imports will give rise to a corresponding increase in ex ports, maintaining production in the aggregate unimpaired or increased. Competitive imports may, it is argued, compel a native industry to close down; the imports will, it is true, have to he paid for by exports, but payment will be made by a diversion to export of a portion of the country's produce previously consumed at home. The result is that imports and exports still balance, but the aggregate of the importing country's production is reduced by the amount of the output of the industry that has been ruined. It is urged that the productive resources of a country are not necessarily exploited to the full; at any moment there may he land under-cultivated, seams of minerals not being worked, capi tal idle, and labour unemployed.

In answer to this objection, free trade doctrine draws a dis tinction between the immediate and temporary effects of a change in fiscal policy, and the ultimate and lasting effects. It may be admitted that the sudden admission of a hitherto excluded export might destroy a native industry, if the native industry was, as its collapse implies, unsuited to the country; but the labour and en terprise so* displaced do not remain permanently unemployed. As the pre-war experience of a country that admitted free imports like the United Kingdom showed, in time the displaced labour finds its way into other occupations, in which it can maintain itself in competition with other countries. The argument depends on isolating the immediate effect upon the industry that suffers and ignoring the indirect effects of the change; free trade doctrine treats both the immediate dislocation and the ultimate benefit as on a par with any other economic improvement. The effect of a new invention may equally be to displace and render obsolete the specialized labour and capital of an industry; equally, therefore, the threatened industry might claim protection—as in the past has been done.

It is true that there always are unemployed, or underemployed, land, labour and capital, not only in free trade but in protectionist countries ; but that condition is not necessarily connected with fiscal policy. Economic production does not consist in the produc tion of material output, irrespective of its cost and its value, but of the production of those commodities and services only the value of which, when produced, exceeds the cost of producing them ; and unemployment, whether of labour or capital occurs under all fiscal systems, and is attributable to causes that operate independently of fiscal systems. Tariff changes, whether in the direction of restricting or enlarging freedom of trade, are likely to cause unemployment, since they cause dislocation of the exist ing adjustment of production to markets; but they do not figure largely in the modern scientific analysis of unemployment.

Harmonious Development and Tariff Policy.

The other criticism to which it is necessary to refer is more fundamental. It may be summed up in the statement that, while the monetary advantage may lie in taking things where they can be got cheapest, in the long run the national advantage lies in the harmonious development of all the country's resources. The advantages of free trade are represented as advantages only on a short view ; the cheapness that is secured at the expense of the sacrifice of national industry may be dear in the long run. As List, who first formulated systematically this criticism, said, "The power of pro ducing wealth is infinitely more important than wealth itself." This is supported by a rather different proposition. Cheapness, it is argued, depends on large-scale production; this in turn is eco nomical only if the industry runs full; protection by giving the native industry a secure home market enables it to run full, and so secures to the consumer the benefits of large-scale production. Since the surplus over home needs on this system are liable to be dumped abroad, protection is also needed against such dumping by other countries.

The answer given by free trade doctrine to this objection is partly practical and partly theoretical. In practice, it is urged, tariff systems seldom show the influence of a balanced and well considered scheme for developing a country's resources ; rather they represent an indiscriminating and unscientific response to the pressure of the interests that seek protection ; a response com monly described as "treating each case upon its merits." The policy that List himself based upon his criticism of free trade was a system of duties that should be moderate in amount, tem porary in character, and confined to manufactures; no protec tionist country has observed these limits. Governments do not, in fact, necessarily take a long view of a country's needs; they are as liable to influence by transient passions, illusions and pe cuniary difficulties, as the individuals who compose them ; so that the free play of economic intercourse is in practice much better calculated to direct a country's activities into the permanent channels in which its natural and social advantages lie than are the shifting and uncertain policies of democratic governments or bureaucrats.

The theoretical objection is that the criticism involves a mis understanding of the nature of production. It is admitted that fiscal policy should take account of the future as well as of the immediate present, that the power of producing wealth should not be sacrificed to a transient cheapness. But it is denied either that the policy of free trade makes the mistake of sacrificing the present to the future, or that protection is any more successful in increasing the power of producing wealth. Under any fiscal system a country will produce some wealth ; under a system of unre stricted trade it will be compelled to concentrate on those branches of production for which it has comparative advantages. A policy of protection may divert a portion of its resources to other channels, and so perhaps widen the range of industrial processes in which the country engages ; but this is not to increase its power of making wealth. The argument that it does is vitiated by the same materialist misconception of production that was noticed above ; not the ability to perform processes or produce material products, but the ability to produce values in excess of the costs of production, in other words, to satisfy human wants with a minimum of real cost, constitutes economic production. A country is not richer, but poorer for the diversion into a variety of fields, in which it has no special advantages, of resources, which under free trade would be employed in the fields in which it has special advantages. A policy of protection will have the advantage over free trade that is assumed for it only if a governmental direction of the development of industry through tariffs can be shown to be successful in discerning a country's comparative advantages and directing industry to them. List attempted an elaborate historical argument to prove this; but subsequently investigation has made it necessary to re-write his history.

The modern argument, that the cheapness that comes from large-scale production is available only if an industry has the home market secured to it, attributes to protection the results of monopoly. A protective tariff may increase the volume of domes tic production in the protected industry; but the increase may just as well take the form of a multiplication of concerns without in crease of scale, as of an increase of scale of existing concerns. Only if the home producers combine will they be able to pursue the policy suggested. Protection merely gives them an additional incentive and opportunity to combine and exploit the home consumer.

Generalizing upon Special Cases.

The effectiveness of the objections to the free trade doctrine just considered is in large measure due to the fact that they generalize special cases, which were recognized by Adam Smith, and have always been recognized since, as exceptions to the rule of free imports. Protection may be necessary to enable an industry, for which a country has the nec essary advantages, to establish itself against the competition of the mature industries of foreign countries ; in that case, the object of free trade, the direction of the country's resources to those ac tivities for which it is best fitted, will be attained by a departure from the rule of free trade. In practice, however, cases are rare, if any exist, in which such infant industries have justified the fore sight of the statesmen who nursed them, by relinquishing protec tion on attaining maturity ; and such examples as the industrial development of the Middle West, and more recently of the South ern States of America, in the face of the competition of the mature industries of the Eastern States, or the parallel and equal develop ment before federation of manufacturing industry in free trade, New South Wales and protectionist Victoria, are cited to show that enterprise and capital, even without protection, will not be lack ing if natural and social conditions favour the establishment of an industry.

The argument that imports cause unemployment and reduce na tional production is similarly, in the free trade view, a generaliza tion from an exceptional case. If a competitive import succeeds in displacing a native product—whether in a free trade or a pro tectionist country makes no difference—and owes its success not to any lasting or basic advantage over the native industry, but solely to transient or accidental advantages, or to a policy which it will be impossible for the foreign exporter to persist in, then there is a case on free trade principles for affording temporary protection to the threatened industry. Thus it was not incon sistent with free trade doctrine to afford protection during the war to industries which were prevented by war-time requirements from carrying on their normal activities; or, after the war, to industries that were suffering from abnormal competition from countries with depreciating exchanges. Again, dumping, being essentially a temporary expedient, falls under the head of the same exception : "If the free trade doctrine be regarded as the positive doctrine that commerce and industry should be kept in their natural chan nels and not merely that nothing should be done by legislatures to force them out of their natural channels, it would not merely be invalid to cite the doctrine as opposed to restrictions on dump ing, but it would be valid to argue that it calls for such restric tions" (J. Viner, Dumping: a Problem of International Trade, p. 147, Chicago, 1923). In noting this exception it is, however, necessary to add, that the attitude of free trade partisans to any particular proposal will usually be influenced by the evidence brought forward to prove that the competition, against which provision is to be made, is really abnormal and transient, by the assurances afforded that the protection will, in fact, be only tem porary, and by the form and content of the measure by which the protection will be given.

While the grounds on which the policy of free trade has usually been urged are economic, considerations of a purely political character have played an important part in the movement toward free trade ; and the opposition to it has been motived even more decisively by political considerations. Between the early advocates and opponents of the policy there was a profound cleavage over the functions of Government in relation to industry, which still influences the controversy. Free trade was in its origin a special application of the general principle of laissez-faire. It was, how ever, based also on empirical grounds, and is now dissociated from a policy of non-interference in general, deriving much of its sup port from Socialists, who in general favour the extension of State interference or participation in industry. The political ground, on which the policy of free trade is supported by those who are sup porters neither of laissez-faire nor of Socialism, is the unsuit ability of governments, as at present constituted, for the special work of directing the currents of international trade. In their internal relations they are unsuitable, because they are liable to interested pressure, whatever constitutional form they take ; dis crimination between industries (and therefore between localities) is inevitable in the framing or amendment of a protective tariff, since, unlike factory acts and similar legislation designed to safe guard the conditions of labour, a tariff does not press uniformly on all branches of industry, but inevitably favours certain industries at the expense of others. They are unsuitable in their external relations, since they are merely local authorities in a world econ omy; they represent territories the boundaries of which have in most cases no economic rationale, while the commerce they pro pose to regulate and direct is the commerce of the world. The en couragement of commercial relations that, cutting across political frontiers and establishing international communities of interest, might counteract nationalist jealousies and repair the breaches which diplomacy has failed to prevent, has underlain the advocacy of free trade, even when the arguments put forward have been mainly economic. Towards the end of his argument on the unwis dom of restraints upon trade Adam Smith remarked : "To expect, indeed, that freedom of trade should ever be entirely restored in Great Britain is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but, what is much more unconquerable, the private inter ests of many individuals irresistibly oppose it." The change that has taken place in the fiscal and other regulation of foreign corn merce between his age and the present, not only in Great Britain but in the world as a whole, is a measure of the achievement of the free trade movement, of which he was the father.

BIBLIOGRAPHY.-In

addition to the works to which reference is Bibliography.-In addition to the works to which reference is made in the text, the following may be mentioned:—C. F. Bastable, Commerce of Nations, new edition by T. E. Gregory (1923)—an excellent popular account of the subject ; F. W. Taussig Selected Readings in International Trade and Tariff Problems (Boston, 1921) a very convenient collection of important and representative state ments upon the chief theoretical problems involved in international trade and the chief positions that have been taken up in fiscal policy ; the same author's Tariff History of the United States (8th ed., 1923), Some Aspects of the Tariff Question (2nd ed., 1916), and International Trade (1927), are all important, the last as the most recent and careful restatement of the economic theory underlying fiscal policy ; J. Griinzel Economic Protectionism (1916)—a detailed analysis and description from the protectionist standpoint.

For the post-war situation the documents and reports of the International Economic Conference of 1927 should be consulted; The Economic Consequences of the League (1927) is a good introduction and guide to them.

For the "Free Trade" agitation of the early 17th century, see G. Unwin's Industrial Organization of the 1601 and 17th Centuries (1904) ; and for the error of attributing the growth of English industry to the far-sighted policy of English Governments, the same author's Studies in Economic History (1923) and L. Brentano's Eine Geschichte der wirtschaftlichen Entwicklung Englands, 3 vols. (Jena, 1927) .

(H. CLA.)