The Free Trade League
February 19, 1904. Free Trade Hall, Manchester
This speech, which lasted for more than one and a half hours, was described by The Times as "one of the most powerful and brilliant he has made.” —RRJ
We are met to consider a very momentous question - whether the name of the great Free-trade Hall is to be altered, and whether the statue of Sir Robert Peel is to be pulled down and replaced by the statue of Sir Howard Vincent. [Laughter.] All last week the House of Commons was engaged in discussing this matter, and although our debate was robbed of some of its animation through the regrettable absence of the two principal protagonists of Protection, I do not think any Free-trader can feel much dissatisfaction either with the course of the debate or with its result. [Cheers.] Only a month ago the Chancellor of the Exchequer [laughter], I think it more complimentary if I allude to him by his title than by his name [laughter], told the electors of Stalybridge that although the Unionist Free-traders might make a great splash in the autumn campaign in the country they would be put in their proper places as soon as Parliament met. But what happened! We went to Parliament to find the great Protectionist party-the party that was sweeping the country, only the country did not know it [laughter], and what did we find! We found that Tariff Reformers whose eloquence had been so much praised, whose rhetoric was so convincing, were such powerful orators that when they rose to address the House of Commons the members hurried out of the Chamber by the nearest way.[Laughter.]
We found a number of very respectable gentlemen, with unsettled convictions [laughter] and still more unsettled constituencies [great laughter and cheers], looking extremely foolish, and extremely ashamed of themselves and of the Government [laughter], but perfectly prepared to back the Government up through thick and thin. We found Ministers alternately prostrating themselves before the opposing deities of Free Trade and Protection, at one moment proudly and even arrogantly demanding a mandate for tariff reform in the name of the Empire, and the next moment trying to wheedle a few Unionist Free-traders into their lobby by explaining, after all, that all they wanted to do was to resume our liberty of negotiation subject to the consent of the House of Commons in each particular case.
Well, Mr. Chairman, it would not be at all surprising if there were a good many people who, having read those debates last week, came to the conclusion that the battle was already won [hear, hear], and I dare say there are some here tonight who will wonder whether it is really worth while for us to call into being the formidable political machinery of the Free Trade League. I confess that I am myself not able to share in this optimism. [Hear, hear.] It is quite true that so far as verbal assurances are concerned the Government have pitched Mr. Chamberlain and his policy overboard. But I am bound to say I find it difficult to believe in the honesty of His Majesty's Government. [Cheers.] I think we have got to look at the signs of the weather for ourselves. I observe that the Chamberlainite press - that powerful press, that well-organised, well-drilled organisation of newspapers - appears perfectly content with the Government attitude. I notice that Mr. Chaplin gives the Government his vote. I notice that the tariff reformers walk about the House of Commons trying to look like the accomplished whist players the "Times" says they are, and I don't forget - I don't think any of us can forget – the manœvres, not to use a harsher word, by which the Free Trade Ministers were ejected from the Government. We cannot forget that Mr. Austen Chamberlain is still at the Exchequer, and that Mr. Walter Long is still at the Local Government Board.
Although we are told that the Government is opposed to Protection, to preferential tariffs, to food taxes, to a 10 per cent duty, and to retaliation except with the consent of Parliament - although we are told all this, I notice that this same Government is using the whole force of its organization to procure the return for South Birmingham of Lord Morpeth, who has declared himself in favour of all these things to which the Government say that they are opposed. [Cheers.] Our duty as Free-traders is plain. We are not concerned with the shifts and manœuvres of an embarrassed Administration. We do not believe that our principles are safe in the hands of the present Administration [hear, hear], and we feel that the time has come when we have got to make our own arrangements for defending those principles. [Cheers.] The Free Trade League, which is inaugurating its campaign to-night, is the lineal successor of the famous Anti-Corn Law League. [Hear, hear.]
It is outside party; it is above party. We mean to make it worth while for both political parties to be true to Free Trade [cheers], and we mean to make it distinctly not worth while if we can for any candidate who wants to go to the House of Commons, whether Labour or Liberal or Conservative, to go in for Protection. [Cheers.] In directing the operations of the League it will be found that the Unionist party is divided into three parts. First, there are the "whole-hoggers," so-called, I suppose, because they wish to tax everything except bacon. [Loud laughter.] Secondly, there are the Unionist Free-traders, who wish to tax nothing except for revenue. Both these groups are perfectly easy to understand; you know in a moment whether you agree with them or not. [Hear, hear.] And then there is the third part of the party-a much larger part than either of those two I have mentioned, - consisting of gentlemen who say, from various reasons, that they are loyal to the great policy of Sheffield, whatever that may be. I think we may call these people the "Sheffield Shufflers" [loud laughter] be cause it is quite clear that they are ready to support any policy, and to fight and shout for any formula, however meaningless, however dishonest, which they think will put off a general election. [Laughter.] You ought to make it impossible if you can for any candidate within your sphere of influence to be returned to the next House of Commons who is not perfectly clear in his determination to do his best to resist Protection and Protectionist tendencies. [Cheers.] I think you ought to do your best to succour and give cordial support to all those who in their different ways have made exertions and sacrifices for the cause of Free Trade. [Hear, hear.] It is a very remarkable thing that no less than 27 Unionist members, in spite of the confusion into which our politics have been thrown and the uncertainty of the issue, have taken their political existence and fortunes in both hands and given a straight vote on Monday last. [Cheers.] The Liberal party will, I think, make an error in statecraft and in foresight if it compels those gentlemen definitely to change their political character and individuality. [Hear, hear.] I think that the Liberal party should whole heartedly support those who-I am not speaking for myself [laughter], I dare say I shall be all right [renewed laughter and cheers] have made great sacrifices for a principle vital to Liberalism [cheers], just as the Conservative party were ready to take the Liberal
Unionists in 1886, and if that course be followed, other difficulties and differences will in the course of time, by the irresistible pressure of circumstances, be smoothed away, and the cause of Free Trade be greatly strengthened. [Cheers.]
This controversy comes home with particular force to a Lancashire representative. [Hear, hear.] We have only to travel about in a train through the County Palatine and look out at the window to be impressed with the artificial position which it occupies. You see all these crowded cities and townships containing many hundreds and thousands of people, a great multitude crowded together upon a soil not sufficiently fertile to maintain one-tenth of their number. We know that these people are absolutely dependent for the food they eat and the raw material of their industry upon over-sea trade [cheers] the like of which the world has never seen in this or any other country, in this or any other age, and I confess I feel the gravest anxiety when I see the reckless hands of politicians struggling for political mastery, laid upon all that delicate and stupendous structure, of such vast consequences to as many thousands of very poor people. [Cheers.]
Now how will these new proposals affect some of the special interests of Lancashire? Let us take the first one that occurs - shipping. Shipping is the legitimate child of insular position and unrestricted trade. [Hear, hear.] If I may express it in the terms of the sporting
Newspaper - "Rule, Britannia, by Free Imports out of Island, is the pedigree." [Laughter.] The history of British shipping, under the combined influence of free imports here and hostile tariffs abroad, is one of the most marvelous and impressive stories in the commercial history of the world. In thirty years, as the Duke of Devonshire at Liverpool [cheers], well, I am quite prepared to wait while you cheer the name of the Duke of Devonshire [cheers], in thirty years our shipping has doubled, and we now own half the whole shipping in the world. We carry more than one-half of the imports into every country in the world, and we build annually as many ships as all the rest of the world put together. [Cheers.] I submit to you respectfully that the localisation of the shipping trade and the shipbuilding trade in these islands is a factor to be considered not only in our monetary wealth and our commercial prosperity, but is also a factor in our Imperial security.
[Editor's Note: Churchill showed how the multiplication of duties would injure the British shipping industry.] After all, why do so many ships come to our ports? Why are we doing entrepot trade worth nearly sixty millions a year? Why should sixty million pounds worth of goods be brought to this country, unloaded by British labour, warehoused, loaded up again, and sent away in British ships to their final destination? Why should this process take place here? Other harbours are as wide and deep as ours, other climes are just as genial [loud laughter], other skies are just as bright and just as blue [laughter], and why should the world's shipping labour in the chops of the Channel and toil up the dreary reaches of the Mersey? [Laughter.] I think it might happen to be because our harbours are freer than the harbours of any other nation [loud cheers], because the perverted ingenuity of man has not been occupied in obstructing the fair-ways of fiscal stake-nets and tariff mudbars. [Laughter.] That is our one great advantage, and when we have thrown it away what is it that Mr. Chamberlain has got to offer us in its place?
Another important source of Lancashire wealth is the manufacture of machinery and the high-grade manufacture of iron and steel of all kinds. You will see for yourselves without any elaboration how necessary a supply of cheap steel is to all those who are engaged in the manufacture of machinery. [Hear, hear.] But Mr. Chamberlain proposes to shut out the cheap steel that comes in from abroad, and mind you, the cheap steel that comes in from abroad not only comes in itself cheap but it reduces the price of the steel at home, and if you shut out the supplies of cheap steel from abroad you cannot fail to hinder our trade in machinery. [Hear, hear.] And observe that in the iron and steel trade much the most profitable part is the trade in machinery, because it is in the complicated manufactures of iron and steel that labour is most generously rewarded and most varied, and it is in the higher-grade industries that it is most important for an old country like ours to obtain and maintain commercial leadership. [[Hear, hear.]
I come to cotton, and I come to cotton with much trepidation, because I know there are sitting on this platform the greatest authorities in the world. I hope they will understand that when I talk about cotton I am not offering them information; I am not presuming to lay down the law to them. I am only doing my best to state the Lancashirecase against Protection. [Hear, hear.] At the beginning of this controversy the representatives of the cotton trade-masters and men alike declared against the new proposals. The representative authority of that meeting has been challenged – I think myself unsuccessfully challenged – [hear, hear], but although its authority has been challenged the wisdom of their declaration has never been impugned. [Cheers.] I take it we all agree that the prosperity of the cotton trade depends upon four main and vital conditions - first, upon an abundant and unfluctuating supply of the raw material [hear, hear]; - second, on the cheapness of production [hear, hear]; - third, on the maintenance of our great Free Trade markets in India and in China; and fourth, on the continuance of industrial peace. ["Hear, hear," and cheers.] As to the first, the supply of raw material might be checked by an import duty, or by an export duty, if the United States were to amend their Constitution - and they have amended it several times-by an export duty on the other side. [Hear, hear.] But no tariff duty, retaliatory, protective, reciprocal, whatever you like, which can be invented will increase the area of ground under cotton, will ensure good harvests, will reduce freights, will protect the cotton crops from the ravages of devastating germs or of Yankee speculators [laughter] and other pestilential vermin. [Laughter and cheers.] All the other conditions on which the cotton trade depends are adversely affected by the new proposals.
Take the case of cheapness of production. That, it is agreed, is vital to our trade, because in the first place the Lancashire trade is exposed to severe and nicely calculated competition in the foreign and neutral markets which it serves. It is vital, in the second place, because our customers in India and China are very poor people, and if the cotton costs more they will buy less. Now, I submit this point to the operatives who are here tonight, that the only basis of cheap production, the only foundation on which it can healthily stand, is the foundation of cheap living and cheap food. Supposing that by putting taxes on food, on clothing, on houses; supposing that by some process of that kind you increase the cost of living, supposing you make a sovereign purchase less than it purchases now, supposing you can only buy for a pound what you can now buy for fifteen shillings, one or two things must follow. Either the operatives live worse or they get a rise of wages.
Now, when wages grow as part of a natural increase and expansion of prosperity, then a rise is a benefit to all. But if wages are suddenly jumped up without any corresponding increase in wealth, a shock might easily be administered to this great industry which might result in disaster. I have consulted with some of those best qualified to give an opinion on this matter, and I am bound to tell you that I see no prospect of any increase in wages coming to the cotton operatives as a result of Mr. Chamberlain's proposals. [Hear, hear.] When Mr. Chamberlain's taxes are in force-if ever they are in force? [Many voices: Never!] Well that depends on you. [Loud cheers.] There must immediately begin an agitation for the rise in wages which has been promised contingent on the increased cost of living. In the majority of cases this agitation would be resisted by the employer, and although I know that Lancashiremen, whether they are masters or whether they are operatives or trade-union leaders, are distinguished in this country for good sense and moderation and fair dealing [hear, hear]; nevertheless we cannot look forward without the gravest anxiety to a prolonged period of industrial agitation and conflict which must inevitably attend every process of trying to make the increase of wages correspond to the increased cost of living. And let me remind any trade unionist who happens to be here of one rather important point. At the very time when the working classes are invited to assume new burdens of a serious character upon the understanding that their wages will be raised, at that very moment the trade unionists, owing to recent judicial decisions, are in many ways under disabilities in regard to those steps which they would naturally wish to take to secure the rise in wages that is promised. [Cheers.]
Well, there is another way in which the cost of production will be raised. Once you have shut out the foreign stuff, the producers at home will very naturally put their heads together. They will say, "We have got rid of the German and the Frenchman and the American. Don't let us be such fools as to cut each other's throats," and they will make the great combination which inevitably follows in the wake of a high protective tariff. Now we see perfectly well how the Protectionist manufacturer thinks he is going to gain. He sees it very well too. People are shocked when I suggest that these great producers have joined the Tariff Commission because it is their interest to do so. They tell me that the landlords are in favour of Mr. Chamberlain's proposals because they wish to consolidate the Empire at two shillings a quarter [great laughter and cheers], and they say that the Protectionist manufacturers are in favour of Mr. Chamberlain's proposals because they love the working man. [Laughter.] They love the working man, and they love to see him work. [Laughter and cheers.] We are often told that Free-traders talk too much about the consumer and always forget about the producer. Well, it is quite true that the greatest manufacturer is a great producer; but he is also a great consumer. [Hear, hear.] The greater the scale of his business, the greater the scale of his consumption. The bigger the mill he has, the more it costs to run, and I should like anyone who is familiar with the working of some great mill to try and turn over in his mind how much the cost of production in that mill would be increased if everything in the mill - the building, the machinery, the oil, and the can in which the oil is kept [laughter], the lamps by which the building is lighted, the paper on which the accounts are kept, and the spectacles which the senior partner wears [laughter], - if everything big or little from one end of the land to the other that you can think of was increased by 10 per cent, or more than 10 per cent, how much would the cost of production in a mill be increased? I think if all this increased cost of production is to be compensated by the increased profits of the proprietors of the mill, they will have to charge the public a pretty figure merely to get back the extra cost of production, not considering at all any extra profits, as the result of the new duties.
The cotton trade, as everybody knows inside Lancashire - and I hope some of the tariff reformers will find it out soon – [laughter], is mainly an export trade. If you raise the cost of production India and China will not be able to buy so much. Their demand will fall off, and not only will their demand fall off but other inferior kinds of cotton goods will come in to take the place of the more expensive goods we make. And in consequence of this the cotton spinner will have to pay the higher prices which are the result of the protective duties, but will not be able to exact those higher profits which are the compensation for them.
So I say that the manufacturer will lose in three ways, and he will lose in an unmeasured degree. He will lose as a great consumer through having to pay more for all he uses; he will lose as a competitor in neutral markets by not being able to compete so well with his rivals; and he will lose because people at home and abroad will not have so much money to spend on the things he makes. [Hear, hear.] I think there is a fourth way in which he may lose. Here and there no doubt individuals will make great fortunes, and we shall grow a Rockefeller or a Pierpont Morgan on our own. But the small producer is very likely to lose and to be absorbed, as many have been in America and Germany, in some great and greedy combine, and instead of being an independent producer standing on his own legs he will find himself a salaried servant of some great syndicate. [Hear, hear.]
If the small manufacturer is likely to be disturbed how about the working man? At the present when a man has a quarrel with his employer he may go elsewhere. But once your great universal combination is made, like the great steel trust in the United States - when that combination was made any man who quarreled with Charley Schwabe, or whoever was the ruffian in charge [loud laughter], - found every steel-works in the country shut against him. [Hear, hear.] I have often heard it said that the old economists did not foresee modern conditions. Quite true; they did not know how strong their case was, and I say that this danger of great combinations is alone sufficient to make the case for Free Trade today stronger than it ever was.
How are we going to find out the point beyond which combination becomes unhealthy? I do not attempt to speak with certainty. I will only tell you my belief. My belief is that no combination or hardly any combination which can grow up in a Free Trade country under natural conditions can be seriously injurious to the public welfare. But the combinations which grow up in great protected countries, where they have bribed the Legislature, obtain the right to fleece the public, to charge their own people what they like. The monopolies and combinations which grow up on an illicit tariff advantage - these are the combinations which are injurious [Cheers.] We have experienced in Lancashire in the last two years the dangers and the vexations of a limited and a localised supply of cotton. We have to get nearly all our cotton from the United States, and when there is a shortage, a bad crop there, all kinds of gamblers and speculators are able to come in and deprive thousands of hard-working people of the legitimate fruits of their industry.
[Editor's Note: Turning to the remedy for this, Churchill continued]: We must vary and multiply the source of cotton supply. When we talk about Empire cotton we are not talking mere sentiment, but common sense as well. A well-considered and thrifty policy of railway development in West Africa and the Soudan would do far more to help Lancashire trade than Mr. Chamberlain's food taxes or Mr. Balfour's tariff wars. [Cheers.]
It is the theory of the Protectionist that imports are an evil. He thinks that if you shut out the foreign imported manufactured goods you will make these goods yourselves, in addition to the goods which you make now, including those goods which we make to exchange for the foreign goods that come in. If a man can believe that he can believe anything. [Laughter.] We Free-traders say it is not true. To think you can make a man richer by putting on a tax is like a man thinking that he can stand in a bucket and lift himself up by the handle. [Laughter and cheers.]
But supposing it were true; what a curious position we should be in. What a mistake it would have been to have built the Manchester Ship Canal. Here is this great work, built what for? To facilitate dumping [cheers], to pour a stream of foreign imports into the heart of industrial Britain. But that is not the only curious reflection that would occur to one if the Protectionists were right in their theory. If it be true that imports are an evil, and that by shutting them out you could acquire great wealth, then I say that is just as true for Ireland as it is for England, for India as it is for Australia. Now, Mr. Chamberlain said at Greenock - I have abbreviated the passage a little, but I have not altered the sense - that since 1882 the imports of foreign manufactures had increased on the balance by 52 millions, and he calculated that if these had been shut out, and made at home instead, we should have gained 26 million in wages alone, provided constant employment at 30s a week for 330,000 people with their families that is, for more than one and a half million persons altogether. It seems easy, doesn't it? [Laughter.] And Mr. Bonar Law [laughter], the Parliamentary Secretary to the Board of Trade in this Free Trade Administration [laughter], went even further, and, as often happens to people who go further, he fared worse. [Laughter.] He said, speaking at the Constitutional Club, that there was an import of 150 millions of manufactured goods, representing a loss in wages of 70 or 80 millions, and he thought "that a large part of that sum could, by a stroke of the pen, be secured to the British workman without any loss at all corresponding to the advantages that the country would gain by the change."
All this is very interesting. Suppose these gentlemen-and they are very distinguished persons, and the whole of this great agitation depends on what they say [laughter], suppose they are right (I admit it is a great effort of imagination), suppose that by a stroke of the pen all this vast wealth can really be secured for Britain, then I say the plan holds good everywhere else too. I say it is just as true for Indiaas for Canada, if it be true that foreign goods displace British labour, it is not less true that British goods displace Indian labour. [Hear, hear.] If it be economically wise for Englandto shut out foreign imported manufactures, it must be economically wise for India to shut out British imported manufactures. [Cheers.]
The condition of India is of vast importance in Lancashire. [Hear, hear.] It is important to us that her markets should be free, and that her people should be prosperous and contented. [Hear, hear.] But that is not all. India, as your chairman has reminded you, is a great trust. We owe a duty to the land and the people of Hindustan. [Hear, hear.] The lives, the liberties, the progress towards civilization - towards a better and a happier state of life of 300,000,000 of human souls, is confided to our care; and the priceless possession of India, with its traditions of immemorial antiquity and its unmeasured possibilities for the future – the possession of India raises the authority of these small islands, more than all our colonies and dependencies, above the level of the greatest empires of the present or the past. [Cheers.]
But on what does our rule in India depend? Does it depend on force or terror, or simply on the superior knowledge of the governors whom we place in charge? No, our rule in Indiadoes not depend on thirty thousand civilians and seventy thousand soldiers. It could not endure a day - certainly not a month - unless it were founded on the belief which the people of India have acquired that our motives are lofty and disinterested. [Cheers.] British justice is the foundation of the British domination in India. Destroy that and the whole stately edifice of our power and dominion, which has been built up by the labour and toil of so many generations, will come clattering to the ground. We have prevented India from imposing tariffs against us. When, a few years ago, Indiadesired to put a revenue duty upon cotton, Lancashire insisted that there should be a countervailing Excise. Every Lancashire member was pledged to work and speak for it. Every constituency, or almost every constituency, passed resolutions in favour of that. We were told it was the keystone of our Free Trade policy, that if no Excise duty had been put on the English producer would have reaped a protective advantage. And we showed that we were sincere, because we practised at home what we preached abroad. Where will British justice be if in the days when Mr. Bonar Law's theory is proved right, when it is proved that by a stroke of the pen India could get wealth, when it is proved that by shutting out twenty millions of imported Lancashire manufactured goods India could save ten millions a year in wages - which would keep goodness knows how many Indian families [laughter], what are we to say in those days, and where will British justice be, if while we protect ourselves and admit that Protection is right for ourselves, we refuse to allow India to employ the advantages of this new theory?
Ever since I have had anything to do with Lancashire it has been impressed upon me by my constituents, by my friends in Oldham [laughter], by my friends on the Conservative committees in Oldham, that it was my duty to work for two things - the removal of duties upon our imports of cotton into India and the preservation of "the open door" in China. I was able to work for that because I was a Free-trader and believed it was good for all parties - for the Indian as well as for us, for the Chinese as well as for us. [(Hear, hear.] Very well, but now it turns out that a great many of those gentlemen who were urging me to do this were lifelong Protectionists, and they agree with Mr. Bonar Law, and all the time that they were urging their representative to vote for making India Free Trade they knew Free Trade was a very bad thing for India, depriving India of goodness knows how much in wages and employment for I don't know how many starving hundreds, and all the time they were fighting for the open door in China secretly in their hearts they were longing for the shut door here. Can anybody wonder that Lord George Hamilton [cheers], who has been responsible for imposing these Free-trade principles upon India, refused to become a party to such cynical humbug as that [cheers], and withdrew with dignity and honour to a private station.
Here we are, in the dawn of the twentieth century, in spite of the drain of a costly war, in spite of our easy-going methods, in spite of the profuse and profligate expenditure, in spite of the luxury of our wealthy classes [hear, hear], here we are in the dawn of the twentieth century not inferior in wealth, power, contentment, and in fame to any nation on the face of the globe. [Cheers.] But what is the conclusion to which these reflections lead us? Surely it is full of encouragement and inspiration. Large views always triumph over small ideas. Broad economic principles always in the end defeat the sharp devices of expediency; science is better than sleight of hand; justice outwits intrigues; free imports can contend with hostile tariffs; honesty is, in fact, the policy that pays the best. [Cheers.] It is the fashion nowadays to sneer at the Manchester school; and no abuse, however ribald, is considered bad enough for Mr. Cobden. But I dare say there are some people tonight who will think that it is about time that the philanthropic, peaceful, progressive, socialising doctrines which were prescribed by Mr. Cobden and Mr. Bright [cheers] were a little more considered by the statesmen who govern our land. ["Hear, hear" and cheers.] No one will pretend that these doctrines were a complete revelation of human policy; but it was Mr. Cobden's work to lay a great and valuable stone in the long stairway of human achievement. [Cheers.] We may differ widely - we probably do – in this great hall tonight as to how far, how fast, or in what direction our next advance is to be made, but on one point we are all united - we are not going back one inch. [Cheers.]
I move "That this meeting affirms its unshaken belief in the principles of Free Trade adopted more than fifty years ago, and expresses its conviction that Free Trade is now more than ever necessary for the well-being of the United Kingdom."