I.

IN FOREIGN trade, seRVICE

5

expected to realise that he is making part of his own kitchen table.

But, in trade between nations, it is the Service that catches the eye rather than the Struggle. For the chief phenomenon here is that countries supplement each other. Almost no modern civilised life can be supported, no breakfast table covered, by anything less than the co-operation of goods and services from all the world we know. Nations send to each other what they alone can grow, or dig, or make; or what they can grow, or dig, or make better and cheaper than other nations. In this view, the type of mutual service is, say, an exchange of oatmeal from Scotland for claret from France, or, better perhaps, an exchange of steam coal from Wales for hematite ore from Spain.

The Struggle does emerge, and, in late years, it has become very bitter. It was scarcely noticed so long as each country had the "natural protection" of distance, and accordingly exported only products for which it had obvious natural advantages-in days when France sent wines, and America maize, and Norway timber. We do not grow these things, and we had to pay heavy freights, and so a heavy price, if we wanted them. But now, when America sends wheat, and France woollens, and Norway butter, the Service they render becomes somewhat obscured by the Struggle which ensues with our own producers. We sell cheap ships to Germany and cut the feet from under her own builders. She sells cheap steel to us, and our steel makers cry out.

6 SERVICE THROUGH COMPETITION CH. I.

That is to say, as nations become drawn together by steam, and electricity, and international postage, and international banking, and as sea carriage becomes cheaper than railway carriage, the struggle to serve becomes almost as keen between Britain and Germany as between Lancashire and Glasgow; and we British makers do not like it, any more than Glasgow weavers like Lancashire competition. But, seen from above, it is just the same old struggle to serve on the larger scale-Germans and Englishmen competing to serve Germany, and Englishmen and Germans competing to serve England.

There are, of course, many who speak against Competition as in itself a bad thing. So it would be, if it were that kind of struggle in which nations blow each other to pieces. But when industrial competition is clearly seen to be the struggle to provide you and me with Abundance, the matter puts on another aspect. If we ever get that all-sided Free Trade which everybody seems to think so desirable, there will be a struggle to serve such as we have never seen before, and one only hopes that England may be able to hold her own in it. Anyhow, international trade is, on a large scale, what home trade is on a more restricted one-the Struggle to Serve. If we shut out foreign competition, we shut out foreign service. These things will come out pretty clearly when we go on to ask what our Foreign Trade consists of.

CHAPTER II.

OUR FOREIGN TRADE.

A glance at our Imports and Exports shows, as we should expect, the special importance to us of foreign trade. In essence, it is an extension of home trade—an exchange of goods; similar in its motive and conduct; similar, too, in its method of payment, for, as gold does not pass, the values of goods either way are put in contraaccount, and we may expect to find that Exports balance Imports.

IT would be rather short-sighted to gauge the importance to us of our foreign trade by the fact that it is perhaps only one-tenth or one-eighth of our total trade. If the United States were to shut herself up inside a prohibitive wall of tariffs, she would still be almost self-sufficient.1 But we lie between 50 and 60 degrees north latitude; ours is a very small country at best, with a dense population; and we have, besides, sunk much of our capital and specialised much of our labour in industries which depend on other countries both

1"When, on Pike's Peak in Colorado, the thermometer is down to 12° or 13°, and, in the North-west is only a few degrees above freezing point, in New England it will be moderately cool-say 43°; in the Mississippi valley it will be comparatively warm-say 52°; and in Florida it will be at summer heat-75°.”—Lawson, American Industrial Problems, p. 43.

8

THE IMPORTANCE TO US

for their material and for their market.

CHAP.

It seems,

too, as if we were destined by nature to be ocean carriers.

Take one short excerpt of our Imports for the last fiscal year. It comprises, in round figures, £5 millions of Wines, £5 millions of Petroleum, £5 millions of Tobacco, £6 millions of Caoutchouc and Gum, £8 millions of Leather, £8 millions of Tea, £11 millions of Maize, £14 millions of Sugar, £25 millions of Timber, £41 millions of Raw Cotton. It is needless to say that we require all these things for immediate consumption and as materials for our industries, and that we must, for the most part, import them.

Another excerpt of our Imports comprises £6 millions of Eggs, £61 millions of Cheese, £12 millions of Barley and Oats, £17 millions of Bacon and Hams, £20 millions of Wool, £20 millions of Butter, £27 millions of Meat living and dead, £36 millions of Wheat and Wheat Flour. These, indeed, are all products which we could raise or make at home, but we could scarcely provide the whole of them without encroaching seriously on our provision of other things.

Take, again, a few of our Exports. There are £5 millions of Linen Manufactures, £5 millions of Ships, £61 millions of Apparel and Slops, £17 millions of Machinery, £21 millions of Woollen Manufactures and Yarn, £26 millions of Coal, £29 millions of Iron and Steel, £65 millions of Cotton Manufactures and Yarn. These figures suggest how much we have specialised in making

II.

OF FOREIGN TRADE

9

But a more gratify

goods for foreign countries. ing feature is that the long list of our exports shows that, in addition to these great staples, we are exporters of all sorts of "odds and ends": it indicates a healthy state of things that there is scarcely an industry one could name which does not export something.

Our foreign trade, then, altogether amounts, for 1902, to £877,000,000; made up of £528,000,000 of Imports, and £349,000,000 of Exports (£65,000,000 of these being re-exports).1 These are values of solid Commodities brought in and taken out over British seas; and-partly as reflex and consequence of the 32,000,000 gross tons of shipping in the world, we own the half.2

1 The corresponding figures for 1903 are: Total Trade, £902,000,000; made up of £542,000,000 of Imports and £360,000,000 of Exports (£69,000,000 being re-exports). The figures for 1904 are: Total Trade, £922,000,000, made up of £551,000,000 of Imports and £371,000,000 of Exports (£70,000,000 being re-exports). The figures for 1905 are: Total Trade, £972,000,000, made up of £565,000,000 of Imports and £407,000,000 of Exports (£77,900,000 being re-exports). For the first three months of 1906, the Imports are £154,000,000 and the Exports £113,000,000, as compared with £139,000,000 and £98,000,000 in 1905-an enormous increase which promises to carry our total foreign trade well over £1,000,000,000 for 1906.

2 The above figures of Imports and Exports, taken from the Statistical Abstract 1903, do not include Bullion and Specie, of which we imported, in 1902, £21,629,000 of gold (£8 millions from South Africa, £34 millions from India, £5 millions from Australia), and £9,764,000 of silver (£8 millions from the United States), and exported £15,409,000 of gold and £10,716,000 of silver. Nor do they include, either as imports, exports, or reexports, excisable foreign merchandise transhipped under Bond, (£13,683,000). To the imports should be added £5,380,000 of