It would appear therefore, judging by the events of the last years as shown in this brief survey, that the stronger the Asiatic nationalisms are becoming the less they require Soviet assistance; and the less this help is needed the more the responsible minds of Asia are coming to resent Soviet interference. Asiatics have no use for Bolshevist dogmas as to the relations between capital and labour; they have problems of their own to solve which appear to them far more vital. The incongruous alliance of Russian Reds with Asiatic Nationalists is but a wayward meeting of two travellers, who have some immediate objects to reach together, but whose ultimate goals lie in opposite directions. The result of this passing co-operation appears to have been more favourable to Asia than to the Soviets, because the latter, in exchange for great expenditure of money and energy, only got back from Asia what had previously belonged to Russia or, as in the case of Mongolia, had been practically under Russian sway. And it is the irony of a nemesis logically explainable that the great effort of the Soviets has led in Asia to the strengthening of nationalistic movements diametrically opposed to the ideals advocated by Lenin. The Bolsheviks in their blind hatred of European capitalism were so eager to raise all the hurricane winds of Asia that they failed to notice that the strongest of these were blowing against them. A. LOBANOW-ROSTOVSKY BY SAFEGUARDING Y far the most important political issue likely to face the country in the near future is the question of tariff protection. It is an issue ever-recurring, though from time to time suspended. Theoretically it is at present suspended, so far, at any rate, as the next general election is concerned, by the pronouncement made by the Prime Minister at the close of last session. Mr. Baldwin then said, in a letter addressed to the Chief Government Whip: "We are pledged and shall continue to be pledged not to introduce protection. We are pledged and shall continue to be pledged not to impose any taxes on food." In addressing the National Union of Conservative and Unionist Associations on 27th September he in effect repeated the same pledge. In form, that is as definite a statement as anyone could possibly make. The trouble is that nobody knows what is the difference between protection and safeguarding. From a literary point of view both words have exactly the same meaning. From an economic point of view a Safeguarding Duty is a Protective Duty. All the duties under the Safeguarding Act of 1921 have been imposed for the specific purpose of protecting certain selected British industries from the competition of foreign firms in our home market. That is exactly the purpose aimed at by avowed protectionists. The only difference that can be discovered between what is politically called Protection and what is politically called Safeguarding is a difference of degree. The " Safeguarders," in effect, say that they only want a comparatively small number of industries, suffering from special disadvantages, to be protected; the "Protectionists" demand a general policy of protection for all industries that can be safeguarded by a tariff. Up to the present this distinction has been of considerable practical importance. No industry has hitherto been able to obtain tariff protection under the Safeguarding Act until it has (a) received permission from the Board of Trade to submit a claim to a special tribunal; (b) satisfied the tribunal that there are reasonable grounds for that claim. In practice this has meant that only a few industries, and those of minor importance, have received tariff protection. The Board of Trade promptly turned down several applications, including an application from the iron and steel industries. Of those applications which the Board of Trade allowed to go forward, particulars are given in the very useful "Supplement on Safeguarding," published on July 31, 1928, by the Daily Telegraph. Nine claims have been rejected; nine accepted. The rejected claims are duties on (1) Superphosphates, (2) Brooms and Brushes, (3) Aluminium Hollow-ware, (4) Ladies' Dress Fabrics, (5) Light Leather Goods, (6) Ladies' Handbag Fittings, (7) Hosiery, (8) Monumental and Architectural Granite, (9) Handkerchiefs and Household Linen. The following is the list of the accepted claims, with the duty granted, in each case for five years from the date given :-- 33 1/3%, Dec. 22, 1925 16 2/3%, May 1, 1926 28s. cwt., Ap. 19, 1927 33 1/3%, Ap. 28, 1928 June 13, 1928 Enamelled Hollow-ware, Iron or Steel 25%, Whether the protection given to these nine specially selected industries can on national grounds be justified is a debatable point; but, at any rate, the favours which they have acquired through the machinery of safeguarding still leave the bulk of our industries unprotected by tariffs. To this extent it is accurate to say that there is a clear distinction between protection and safeguarding. But how long will that distinction continue? The protectionists have for some time been passionately demanding that the safeguarding procedure should be amended so that more industries may be able to slip through the turnstile, and Mr. Baldwin has made, both in his letter to the Chief Whip and in his speech at Yarmouth, an appreciable concession to their demand by promising that the procedure may be simplified, and that no manufacturing industry will be barred from presenting its case before the appointed tribunal. This apparently means that the Board of Trade will no longer be able to veto applications of industries which ask for protection; and that the decision will be left to the committees of enquiry. If these are composed of persons with a protectionist bias the country may very shortly be involved in a wholesale policy of protection. Tariff problems are not a new phenomenon in our national life. Again and again in our history, parliament has interfered with the free movement of trade. It is specially interesting to note that in former days parliamentary interference was directed to the prohibition of exports as well as to the prohibition or taxation of imports. For example, as far back as the middle of the fifteenth century an Act of Parliament was passed (8 Henry VI, cap. xxiii) ordering that "No thrums of woollen yarn shall be carried out of the realm." The purpose of this Act was to benefit the English weavers of woollen cloth by giving them exclusive rights over the yarn produced by English spinners. Two centuries later an Act passed in the year 1699 (cap. x)" to prevent the exportation of wooll out of the kingdoms of England and Ireland" gave English spinners an exactly corresponding favour at the expense of English farmers. Acting on the same principle of " safeguarding " one industry by prohibiting the exports of another, our protectionist ancestors used to prohibit the export of English tools and machinery, and even of models and plans for making machinery. This practice lasted well into the nineteenth century. Several of these Acts were specially designed to favour our textile industries-wool, cotton and linen-regardless of the injury done to the metal industries that were deprived of their foreign markets. In practice the prohibitory laws often had to be drastically amended a few years after they had been passed, and gradually parliament became doubtful of the wisdom of its own procedure. A parliamentary committee appointed in 1825 to enquire into the whole subject, recommended that the policy should be modified. Twenty years later the prohibition of exports was abandoned. The modern protectionist probably regards the prohibition of exports as absolutely grotesque, but it is capable of a fairly reasonable defence. Our older parliaments saw that some particular industry, which doubtless claimed to be "of substantial import ance," was being hit by foreign manufacturers, who were using English materials or English tools or English machinery to compete with that industry. Parliament therefore intervened and prohibited the export of these materials, tools or machines, with a view of checking that competition. It may plausibly be argued that if this policy had been maintained down to the present day, some, at any rate, of the troubles from which some British industries are now suffering would have been less than they are. The Lancashire cotton industry, for example, has lost a considerable part of its export trade, because foreign mills, equipped with British-made machinery, are able with the aid of cheaper labour to turn out cotton cloth at a lower price than Lancashire can now do. It is specially interesting to add that in some cases the export of this machinery is now receiving financial assistance in the shape of government export credits, so that to this extent the foreign competitors with Lancashire's textile industry are being subsidised by the British Government. It seems peculiarly difficult to justify such a use of export credits in face of the fact that at the present time the makers of textile machinery in Lancashire are said to be doing extremely well, while the Lancashire users of textile machinery are suffering from severe depression. A similar example of the injustice that so often results when politicians interfere with trade, was given in November 1921, by the chairman of the British Sulphate of Ammonia Federation, who stated that he could get a guarantee from the British Government to sell sulphate of ammonia to Polish or Roumanian farmers, but not to British farmers. The explanation of this curious attitude of the modern protectionist is that he cannot free his mind from the delusion that a country necessarily gains by what it exports and loses by what it imports. This obsession plays such an important part in the fiscal controversy of to-day that it is worth while to examine it in some detail. The delusion has its origin in the use of money as a medium of exchange. That convenient practice has been employed by the human race for so many centuries that we have most of us got into the habit of looking upon money, not as a medium, but as an end. Up to a point we are right. An individual by acquiring money-provided it is good money and not paper of varying value-acquires the power to obtain the things he wants, |