Front Page Titles (by Subject) CHAPTER XX: IMPORT BONDS - The Comedy of Protection
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CHAPTER XX: IMPORT BONDS - Yves Guyot, The Comedy of Protection 
The Comedy of Protection, trans. M.A. Hamilton (London: Hodder and Stoughton, 1906).
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An ingenious system—Its effects—Cost to the State—Law adding to the deficit—The permanent deficit.
The years 1899-1901 were marked by a series of attempts in Senate and Chamber at the creation of import, or rather export, bonds. For every cwt. of wheat brought from abroad the exporter might claim a bond for 2s. 10d., limited in every case to a depreciation of three months’ interest and a deduction of 4 per cent., payable on demand by the Treasury. The Higher Board of Agriculture threw out the scheme as extravagant, but on July 7th it was passed in the Chamber in spite of the opposition of Méline, who was frightened by the boldness of his disciples, one of whom, M. Viger, introduced the project in the Senate. Thus, at the very time when the failure of the sugar bounties was most glaring, an attempt was made to apply the same system to wheat: the 2s. 10d. duty was to encourage the landowners to produce and to restrict home consumption, while the high bounty in the Budget was to induce foreigners, and especially England, to consume French wheat. The effects of such a system would have been as follows: In 1897 the harvest failed; on May 4, 1898, on the eve of the election, Méline, as President of the Chamber of Commerce, followed exactly the opposite policy to that of 1885: then a duty of 1s. 3d. had been imposed, now the 2s. 10d. duty was suspended until July. Some 38 to 40 million cwt. of wheat came in, an excess of about 8 millions over what was needed:—
Estimating the annual consumption at 9,620,000 tons, that is for the two years 17,240,000 tons, there was a surplus in 1900 of 1,116,260. Had the law voted in the Chamber of July 7th come into operation, these 1,166,260 tons would have been exported and the State would have had to pay 1,116,260 × 55s. = £3,070,000. Two months later it was found that the harvest was 1,000,000 tons below the normal. The State would then have received £2,750,000, and the loss, if it had not been necessary to suspend the duties, would have been reduced to £1,640,000. And the wonderful effect of the law would have been to add a failure in the harvest equivalent to 1,000,000 tons to the 1,116,260 tons whose exportation it had encouraged, and £4,520,000 would have gone into the pockets of skilful traders for having sent corn out of the country and paid nothing to bring it back.
The chapter of Budget history dedicated to what were paradoxically called import bonds would have been one of permanent deficit, its statistics would have depended on the excess of the selling price in foreign markets increased by 2s. 10d. per cwt. over the buying price in France, including cost of transport, &c. To satisfy the fears of men more far-seeing than themselves the authors of the scheme limited the experiment to 1901-1904. This fine system was supported by M. Viger, former Minister of Agriculture, and opposed by M. Durand Savoyat, of the Bounties Commission, M. Couteaux, an intelligent farmer, and M. Caillaux, Minister of Finance. It was rejected, but I have dealt with it here to show the aberrations to which Protection leads.