Protection

The German measures could not be carried through without social reorganisation and mainly under the influence of the Ger man Centre Party and their arrangement with Bismarck a whole code of new social laws was evolved. To enlarge still further the economic borders and to bring fresh markets on the continent within their ambit, the Germany treaty system was developed. Later on in order to meet the economic pressure which followed from their rapid development, Germany pushed into a colonial policy and the exigencies of diplomacy, quite apart from the neces sities of defence, forced Germany into a naval policy, and the German navy was established. Thus the German empire was gradually forced to adopt in a modern form all the leading char acteristics of the old English national system, and the instrument by which these changes were brought about was the German tariff.

This immense constructive movement, the greatest example we have of modern economic nationalism, obviously cannot be de scribed as simple protection. It was a great scheme of organisation in which for one purpose or another the German tariff had to be used as an instrument.

Modern Attitude to Protection.

A certain practical atti tude to the question of protection characterises the policy of all countries in modern times. It is recognised that every case has to be examined on its merits. No two tariff systems are the same, nor can it be decided which is more protectionist than another without the most careful examination not only for the actual rates of duty, but of all surrounding circumstances. (See TAR IFFS.) French and German policies have been in their main fea tures singularly permanent during the nineteenth century. The broad lines of policy have remained and are likely to remain as long as these countries subsist. There are no signs of any considerable modification. French policy, it may be said, is certain, since the acquisition of Alsace and Lorraine, to become more nationalist in character and the features which have marked successive tariffs for many years are more likely to be emphasised than abandoned. Italy is showing all the signs of a nationalist regime, and she will proceed along much the same path as Germany and France. The new states which have been formed since the World War all show the marks of strong nationalism and this has found expres sion in the high tariffs they have one and all imposed. Under the pressure of modern economic conditions which are unfavour able to the existence of small States, many of them, while they may retain their political independence, will be forced by cir cumstances into economic combination, and the course of develop ment followed by the German empire will be repeated in the eco nomic sphere.

In the Far East the same movement is making rapid progress. It is many years since Japan embarked upon her own national policy. The development there is not in the least likely to be checked, still less will there be any return to the stage from which it was the departure. The old economic regime in China is at an end. Whether politically that huge country settles down to internal peace or not, it is certain that there will be an effective tariff in China organised for the purpose of Chinese industrial development and not as it has been, a revenue tariff while the Chinese market provided the means of disposing of the produce of European states. India is pursuing the same course, a fact

of the utmost significance to Great Britain, because the Indian market as the Lancashire exporter has known it, is diminishing in importance; and the effect of this development upon the cotton trade and all the other 4o industries bound up in the cotton trade is of the greatest political and economic importance to Great Britain and the whole of the British empire. Egypt is following the same course. Within three years the conventions come to an end. Egypt will then have ready a new tariff. Every one of the British dominions is following the same course of develop ment on national lines, and there is no sign that any other course, preference within the empire excepted, will be seriously con sidered. Great Britain, no longer the economic mistress of the world, one amongst many great nations at least as well equipped as she is, all pursuing with conviction the policy which they be lieve made the British empire, has abandoned her free trade atti tude. There are now thousands of import duties in the British tariff. There is nothing between the present piecemeal applica tion of protection and the working out of a tariff on a scale suited to domestic and imperial needs except transitory influences and questions of immediate expediency.

It seems therefore that both protection and free trade in the academic sense of loyalty to a particular theory in which these words were used, have ceased to cover in any way the develop ments of policy in the world as we know it. There is a reversion all the world over to a conception of policy similar to that which inspired the earlier national policy of England under which pro tective tariffs are used or not used on the grounds of pure ex pediency to assist the aims of modern nationalism or imperial ism, and this modern nationalism or imperialism is not a policy based upon the exploitation of any country or race, but the due adjustment of the economic relations of countries in such a man ner as to secure their autonomous development and the efficiency of production. (W. A. S. H.) The Civil War divides the protection policy of the United States into two distinct periods of approximately equal length. During the first 7o years there was a quarter-century (1789-1816) during which tariff making was governed primarily by revenue considerations ; this was followed by a period of vigorous protec tion to rising young manufactures (1816-32), a period which was succeeded in turn by a quarter-century of declining protective du ties (1833-60). With the CivilWar, new forces came into operation, and since 1862 the United States has followed a rigid and con sistent protective policy, interrupted thus far only by the rela tively moderate Wilson and Underwood tariffs of 1894 and 1913.