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Subject Area: Economics
Topic: Free Trade

CHAPTER V: THE METAL TRADES - Yves Guyot, The Comedy of Protection [1906]

Edition used:

The Comedy of Protection, trans. M.A. Hamilton (London: Hodder and Stoughton, 1906).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


CHAPTER V

THE METAL TRADES

Pursuing the same inquiry with regard to other industries, the Blue Book on Occupations divides the metal workers into two groups: (1) Mining properly so called, the production of metals, stands seventeenth among industries, and represents ·88 of the total, while (2) in the manufacture of iron, steel, and other metals, engineering and smiths’ work, of these five groups the first employs 50,000, the second about 650,000 persons. In all there are 31 firms with more than 500 men, and it is for the benefit of those among the 31 engaged in the production of cast iron, wrought iron, and steel that duties of 28s. to 60s. per ton have been imposed on steel and iron.

Has this system led to what is called “dumping” in England, i.e., that sale of goods abroad at very low prices which is made possible by the high prices which a protected industry can command for its products at home? No. Foreign trade in cast iron, iron, and steel only stands twenty-first in the list of exports. Taking the triennial averages, calculated on the three years before the 1892 tariff, and the last three years:—

Imports.Exports.
Tons.£Tons.£
1889-189133,000320,000221,0001,000,000
1900-1902135,000720,000247,0001,320,000

Thus during a period of ten years, in spite of Customs duties, imports rose 309 per cent. in quantity, while exports only rose 12 per cent., including the exceptional year 1902, which raised the annual average to its total export of 376,468 tons. This result, however, the Commission declared to be “due to a falling off in internal consumption.”

Foreign trade for 1903 was:—

Imports64,500 tons.
Exports434,000 tons.

But the 1903 Blue Book is not enthusiastic. “Exports have increased considerably, and imports diminished to a notable extent, but home consumption is being reduced and prices are falling; to maintain production it is necessary to go abroad for a market.” And these admissions come from the representative of one of the most strongly Protectionist trades in France. Iron and steel are raw materials; their production is controlled by a small number of firms; their consumption is an essential of a great number of different industries. In 1901 M. Millerand, at that time Minister of Commerce, estimated that the bounty granted to those among the thirty-one great firms which produced cast iron, iron, and steel had risen to 33 per cent. of the price of railway carriages, 9 per cent. on carriages and tramways, 6 per cent. on hydraulic machines, 33 per cent. on electric dynamos, from 31/2 to 12 per cent. on spinning and weaving machines, 4 per cent. on printing presses, 6 per cent. on agricultural machines, and more than 50 per cent. on naval works, of which the price was £18 a ton.

Structural ironwork and builders’ ironmongery gives employment to 60,000 persons, 68,000 engineers are employed in general engineering, 4,600 may be added as employed on locomotive building, 4,000 more on machine tool-making, 4,000 on printing and weaving machines—in round numbers a total of 80,000. There are 18,000 cutlers and 80,000 smiths. All these trades are taxed for the benefit of 31 steel and iron factories employing more than 500 men.