The aBleeding to Death" Hypothesis.— Further, English Free Traders hold that there is no necessity to be anxious as to whether the imports into a country are greater in value than the exports out of it. They hold that the rela tions between the imports and exports must necessarily adjust and equalize themselves. Human nature, they contend, has passed an or dinance to the effect that "he that will not buy. neither shall he sell' Thus, instead of fearing that imports, even of goods which can be made in England, will reduce the amount of labor, and so injure home trade, they regard all im ports into Britain as orders for Britishto be produced and paid in exchange for those ports. Imports are physical orders for goods, and so for the labor that is employed to make the goods. And they have this advantage: the payment arrives with the order.
At one time the general British public, it must be admitted, was not so confident as it is now in regard to the propositions just set forth. The opponents of Free Trade declared that Englishmen were living in a fool's paradise when they supposed that trade could look after itself, and that imports and exports must really be balancing though the statistics seemed to show that many millions' worth more goods came into England every year than went out of it. Nobody, they argued, will give something for nothing, and therefore if your imports ex ceed your exports by, say, a hundred millions a year, you must be paying the difference in some way or other. "There is only one way in which you can be paying it,* ran the argument, 'and that is by sending away the capital accumulated in years of better trade. In fact you are living on your capital and bleeding to death. Because you have been very rich in the past, the process may take a long time to work out, but some day you will find that you have no more blood left in your veins, and that you have reached the point of economic extinction." That line of argument was first used in the "Fair Trade" agitation in the years 1882-1835, and was re vived in 1903. The simplest answer is found in the fact that if exchanges do not balance and if the British people have been in truth living on their capital and bleeding to death, they ought by now to be a trebly ruined nation. In the course of the last 35 years imports have ap parently been so much in excess of exports that the loss in that period must have been nearly J2,000,000,000 of capital. But it is notorious that we have suffered no such loss. Though statistics as regards the accumulation of capital, both in home and foreign investments, are by no means complete or satisfactory, it is manifest that instead of bleeding to death the nation has become more, not less, full blooded from the capitalist point of view and that the total cap ital, instead of diminishing, has vastly increased in the course of the last quarter of a century. Instead of having i2,000,000,000 less capital, we have many hundreds of millions more and are a very much richer people. In other words, experience has shown that the bleeding to death theory will not bear examination, and that whether on other grounds or not protection may be a good thing, free trade is certainly not driving Britain to bankruptcy or reducing her capital resources. In fact, regarded as a means
for increasing and maintaining the material wealth of the nation. Free Trade must be ad mitted to hold the field.
The Imperial Though there is no doubt a great deal of difference of opinion in regard to the best way in which to maintain and develop the British Empire, the nation is virtually unanimous on one point. It is for the benefit — moral, political and economic — of the peoples who compose it that the British Empire shall be maintained. It is asserted on the Pro tectionist side, however, that the Empire cannot be maintained under a Free Trade system, and that unless that system is changed the Empire will fall. That argument has hitherto not made any impression upon the masses of the British people. Instead of accepting the formula "No Preference, no Empire" they are much more inclined to accept the opposite dictum, "No Free Trade, no Empire" and to hold the opinion that the Empire as it exists to-day is the gift of Free Trade. Up to 70 yearsago there was a system of preferential trade within the Empire almost exactly like that which it is now pro posed to re-establish. On the one hand the British colonies were required to give a pref erence to British manufactured goods and to supply their needs in the British market, and on the other, the British people gave a very large advantage to the products of the various parts of the British Empire in their markets. Yet, strange as it may seem, the result of these attempts to interfere with exchanges on political grounds did not produce a greater sense of loyalty in the inhabitants of the colonies or of better feeling toward the scattered parts of the empire in the United Kingdom. The epoch of colonial preference was the epoch in which there grew up in England a school of thought and a political party which believed that the connection between the outiving parts of the empire and the United Kingdom was injurious to both and that it would be to her advantage if Britain got rid of her colonies and depen dencies as rapidly as possible. Even so im perialistic a statesman as Lord Beaconsfield was affected by these views in middle life. He actually described the colonies as "millstones round our neck) and looked forward to the time when they would all be independent. The abolition of colonial preference and the adoption of the principle of "tariff for revenue only' may be said to have been accomplished by the end of the first half of the 19th century. It was after 1850 and so in the Free Trade epoch that the sentiment in regard to the em pire now existing, both in the colonies and at home grew up. No one now looks forward, as men constantly looked forward during the preferential epoch, to the time when the col onies would one by one leave the empire. This being so, many of the most far-seeing and the most steadfast imperialists in England regard Free Trade as essential to the mainte nance of the empire.