England, and which is calculated to win over even the cannon ball Protectionist,' as Cobden used to call him. Such a Treaty would proceed from the point of view of the Protectionist and would at the same time secure the support of Free Traders.

"An agreement on these lines should possess the elements of durability. Reconciling divergent fiscal views, it might well precipitate a revolution in fiscal policy, and bring to an end a deadlock in economic theorising which has for generations been the despair of the political philosopher. The new departure therefore deserves, as it will certainly receive, the good-will of all who desire the prosperity of the two countries."

CHAPTER VI

A TARIFF-MONGERING ERA

THE Treaty of Commerce negotiations in 1877 broke down. Those in 1881 conducted by my late friends Sir Charles Dilke and Mr. (afterwards Sir) C. M. Kennedy, whose acquaintance I made on that occasion, had the same fate.

C. M. Kennedy was the ideal official who followed his instructions to the letter, and, unlike Sir Louis Mallet, who had views of his own, seems never to have influenced his "superiors."

I think even Dilke had to yield, in this particular case, to instructions reflecting the convictions, whether Gladstone's or Mallet's, to which I have referred in the previous chapter, and whether his political master followed them as a man in a gig follows his horse or not. The other Commissioners were W. E. Baxter, Sir Charles Rivers Wilson (always the most careful and businesslike of negotiators), and Mr. (afterwards Sir) Joseph Crowe, the then British Commercial attaché, a man whose world-wide experience of life and of all its arts and crafts made him the most delightful of talkers and most charming of companions to a good listener.

We made a great mistake in not accepting the Treaty the French offered us. The doctrinaires who thought that to take less than in 1860 was sacrificing the principle of Free Trade, incurred a heavy respon

sibility for the unfortunate consequences of their obstinacy.

They waited too long and missed the chance of profiting by Gambetta's attachment to an AngloFrench understanding which might have been based on a more or less favourable Treaty of Commerce. The negotiators had been appointed in May, 1881, and Gambetta's fall in February, 1882, shut out all further hope of concluding a satisfactory treaty.

I wrote on August 26, 1883 :

"The want of a Treaty of Commerce between France and England is beginning to be keenly felt in all Anglo-French relations. There can be no doubt whatever that the late Treaty had an indirect effect in stimulating good feeling between the two nations, and this was one of its smallest virtues. England and France felt that they were allies who must not jeopardise an old-standing friendship by impatience in judging each other's acts. They spared each other's susceptibilities, as old friends are wont to do, and if hitches occurred they did their best to remove them with the least possible friction. But all this is changed now. A rupture has taken place. We are no longer allied, but trade with each other at arm's length. Trifling misunderstandings are immediately fanned into burning questions, and not an opportunity is lost of recapitulating our respective grievances. We are now, like old friends turned foes, bitterer in proportion as our friendship was the closer. . . . The French are a sensitive and may not be a wise people, but they are a great European Power and a great industrial and consuming nation, and it is to be regretted that our relations with them are in a state of tension which is not only socially uncomfortable but causes political uneasiness, unsettles trade, and prevents the recovery from the crisis of last year. A return to the entente cordiale is the wish of every Englishman here, and this can only be effected now by the conclusion of a new Treaty of Commerce."

Again on March 28, 1884, I wrote :

"It is decidedly a pity that we did not accept the Treaty offered us at the last negotiations. It would not have been

a step backwards, as was supposed; for the present tariff, taken generally, is not a step backwards, and the Treaty offered to England was a better one. It was a blunder on

our part not to accept it; it will be long before we shall get as good terms again. France is not becoming more favourable to Free Trade; she is becoming more and more Protectionist. The President of the Republic remarked some days ago to an Englishman: 1 You Englishmen do not realise French feelings on this subject. The French have a sincere conviction that foreign competition is destroying their manufactures. They have a pride in their industries, and will make a sacrifice to keep them afloat. Whether they are right or not is not the question. Such is their conviction, and they will act accordingly.' The present state of trade will not lead them to amend their opinions, and I fear that an acceptable treaty with France is not to be thought of. As things are, England, by the bounty of the French Parliament, has the benefit of the most-favoured-nation terms, but any day an agitation may be set on foot to withdraw them from her; so it is well to remember the President's words. He is a man who has closely watched the character of his countrymen. The French,' he added, are not a wise people; like all southern peoples, they are the slaves of their feelings and amourpropre."

From May 25, 1882, till now we have, nevertheless, enjoyed the most-favoured-nation treatment and had the benefit of all the reductions of duty any other Power, with its tariff artillery, has been too able to coerce France into granting. Meanwhile France was transforming her system. In 1881, while negotiations with England were proceeding, the reaction began with the imposition of duties for the protection of agricultural produce (mainly against the competition of American grain) and the adoption for manufactured goods of specific in the place of ad valorem duties. New treaties, however, were concluded and the treaty system was retained till 1892. In the interval the I was the Englishman and the President was M. Grévy.

duties on agricultural produce did not keep out the foreigner to the extent expected, and that miracle for Protectionists occurred, which was destined to repeat itself again and again, of the rise in price of domestic produce, rendered possible by the protective duty on the same article from abroad, eventually paying the duty, or so materially helping to pay it, that after a time the foreigner comes in again as before.

Then came the tariff war with Italy. In 1878 the Italians had preceded the French in the adoption of specific for ad valorem duties, and in 1883 and 1887 began the construction of what began to be called the

tariff wall "—that is, the system of a general tariff operating as a rampart which can only be scaled by concessions, sufficient to purchase substitution for it of a lower conventional tariff. In 1887 the FrancoItalian negotiations were broken off; both pulled down their conventional ladders, and thenceforward presented the bare unscalable walls of their general tariffs to each other's produce.

The tariff war thus begun became one of great bitterness. The Italian general tariff on the whole was higher than that of France. The French a year later raised theirs against Italy. Italy immediately retaliated by raising hers to a still higher scale against France. At length in 1892 the parties came to see the transcendant folly of a war which was as advantageous to outsiders as it was disastrous to the immediate parties. France then took off the excess duties and Italy was placed under the régime of the ordinary general tariff pending an arrangement which was concluded in 1897.