shown to be the ordinary method of payment in point of fact, and then what does it all come to? Why, nothing but this: that imports are paid for somehow, either by goods, or securities, or something of value.

All this is plain and simple enough as a matter of reasoning and experience, but let me imagine a state of things which will illustrate it in a practical light. Suppose the great American millionaire, Mr. Vanderbilt, had been able and willing to buy the entire Isle of Man, and had built himself a palace there, and lived a life of opulence and luxury, importing everything that such a life demanded from England, or from abroad. If he had lived there to the age of Methuselah, what was there to prevent his spending his vast income in the purchase of foreign imports without exporting a single bale of goods, paying his way by bills drawn on America, representing the earnings of the New York Central Railroad?

Once admit that imports are paid for by securities, and there should have been no controversy at all; but so fixed is the belief in Mr. Medley's mind, that those who do not believe in Free Imports' are either ignorant or deficient in intellect, that, after having wholly altered his own proposition, and thereby enabled himself to run away from a position he could no longer defend, he proceeds to lay the blame of the controversy upon the dulness of his opponents.

It is in the use of the word 'export' (he says) that Lord Penzance and other protectionist writers involve themselves in fallacies. They seem to think that an export must consist of some material thing, and that it must also appear in the trade returns.

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They seem to think'! Is not this somewhat bold and just a little cruel? Why, who told them to think so, but Mr. Medley and his companion in arms, Mr. Mongredien? And who is it that seem to think' that the word 'export' means something material? Why-everybody, not only Mr. Medley and Mr. Mongredien and all the writers of the Cobden Club, but everybody, Free Trader and Protectionist alike, who has ever used the word 'export' in this controversy. What is the meaning of this battle which has raged about exports and imports until the reader is I fear nearly sick of the words, unless exports means exported goods? In no other sense have we any account of them; we know nothing of the securities that cross the Channel in parcels and post-bags, and the talk about imports exceeding exports is all nonsense except upon the understanding that exports means exported goods. Let us see what Mr. Medley himself seems to think' upon this subject. In his pamphlet entitled England under Free Trade, he says: Of this trade our imports amounted to 411,000,000l., and our exports to 286,000,000l., leaving an excess of imports over exports of 125,000,000l. Now, let me remind you that it is in regard to this excess of imports over exports that the Fair Trade battle most hotly rages, the Fair Trader maintaining that this excess of 125,000,000l.

is the measure of our national loss for 1880, while the Free Trader ridicules this view and maintains on the contrary that it may more justly be considered the measure of our national gain. In a little pamphlet called the Reciprocity Craze which I had the honour of writing for the Cobden Club, I made the assertion that this question of imports and exports was the pons asinorum or asses' bridge of the Fair Trade controversy. I reiterate that assertion, and with your permission we will endeavour to pass over this bridge hand in hand as it were.'

I venture to express the hope then that we may hear no more of imports necessitating exports, but before quitting the subject let me shortly point out the result which with Mr. Medley's assistance has been made clear by its discussion.

The import of foreign goods testifies to wealth, because it represents expenditure. So far as it consists of raw material bought for the purpose of employing upon it the labour of the population, it is an expenditure which is returned to us in the sale of the manufactures it has enabled us to produce, and thus plays a part in the produce of wealth. So far as it consists of articles of mere consumption it is the dissipation of wealth previously acquired. These imports may be paid for, and are paid for, in any way in which wealth or value is capable of being transferred. They may extinguish a previous debt either of the seller or of some one else to whom he has transferred his claim. They may be paid by a transfer of the current or permanent obligations either of individuals or governments, or by the transfer of the labour of man as embodied in manufactures or the produce of the mine, the field, or the ocean. They involve and testify to the acquisition of wealth in whatever form or from whatever source it may be produced, but they do nothing whatever to create it. On the contrary, so far as they are consumed without the expenditure of fresh labour upon them, they signify its dissipation and nothing more.

So much then for the substance of the controversy. But in Mr. Medley's confused and rambling production there is a great deal besides that offers a tempting mark for refutation and exposure, full of interest to his adversary, but not likely to interest the reader. I cannot wholly forbear comment, however. It was Single-speech Hamilton, I think, who pointed out that the most brilliant passages of a speech or essay were generally the weakest in argument, and I set myself to inquire whether this was so or not in Mr. Medley's case. I am not quite sure that I know which is the most brilliant part of the 'Lion's Share of the World's Trade,' but after some vacillation I have settled upon the following passage :

To suppose that, by taxing foreign imports, foreign competition will be killed, and home production and home labour stimulated, is an idea compared with which that of taking a pill to ward off the danger of a threatened earthquake is sanity itself.

It requires a pretty stout effort of the imagination to picture the

importation of say French woollen goods as an earthquake, and still greater to look at a tariff in the light of a pill, but this difficulty surmounted, and in possession of what it is that Mr. Medley means to assert, namely, that the imposition of a tax on foreign manufactures will not stimulate home manufacture, I think I shall best answer him by recounting the experiences of a country that took the pill, and did thereby avoid the earthquake.

It is well known that in Canada the protective system has been largely tried of late years and with great success. Here is the account given of it by Sir John MacDonald :

I am largely responsible for the national policy of Canada, a policy which has been, and perhaps is now, severely criticised on this side of the sea, a policy of revenue secured by tariff. There is nothing to show that this policy has in any respect failed in its intention. The balance of advantage has been largely in its favour; indeed, high as party feeling runs in Canada, even the Opposition have ceased to attack the protective policy, or, as both parties have agreed to style it, the national policy of our Government. Our policy is to protect such staple industries as are capable of a practically unlimited expansion, and to admit raw material free which cannot be produced at home. When we commenced to tax cotton and woollen goods we were assured that the consumer would be ruined and driven out of the country by high prices. What has been the result? Our manufacturers of cotton and cloth are in a position of increasing prosperity, and to-day the consumer is able to buy his goods more cheaply than when Canada was upon a Free Trade basis. Formerly our industries were at the mercy of the manufacturers of the United States, who recognised that our mills, once closed, were never likely to re-open, and that it was therefore prudent and profitable to sell goods in Canada for a short time even at a loss for the sake of controlling Canadian markets later at their own prices. This was actually being done. We found that the cotton operators of the United States were sending us goods at less than the cost of production, and were collecting the amount of that loss by levying an assessment on their Manufacturers' Association.

One more sample of the way in which Mr. Medley reasons, and I have done. Having given a definition of his own of what constitutes the difference between a tariff for revenue only and one which is protective, and having defined me as the most simple-minded of men,' which I regard as a high compliment after some fifty years' contact with Westminster Hall, he goes on thus:

If Lord Penzance had borne this definition in mind, he would not have penned the contradictory and mutually destructive propositions contained in numbers 2 and 3. It is impossible to carry out number 2 without setting aside the directions under number 3, whilst it is impossible to act on number 3 without violating the principle contained in number 2.

What were these propositions which were so mutually destructive and contradictory? They were as follows: Number 2.--That no duty should be imposed save for purposes of revenue. Number 3.—That in selecting the articles upon which duty should be imposed, it is advantageous to the community, ceteris paribus, that the duty should fall upon any article in which the foreigner competes in our markets with the labour and skill of our own people. It is impossible, says Mr. Medley, to carry out number 2 without setting aside the directions under number 3; whilst it

is impossible to act on number 3 without violating the principle contained in number 2. To Mr. Medley's mind it is impossible then that a Finance Minister should determine that it is expedient to lay a duty upon some article of general consumption with a view of taxing the class which consumes it, and, at the same time, in determining what article of general consumption it should be, to endeavour to find a fit subject for such taxation among the articles the like of which we produce at home.

The sole object of the Minister in imposing the tax at all may be to equalise the incidence of taxation by reaching classes whom he cannot reach by any direct impost through the medium of a tax on the class of articles they consume. In what way would he act inconsistently with this object if he should select for taxation, out of that class of articles, the particular article the taxation of which will encourage home production? I am quite unable to suggest what confusion of ideas has led Mr. Medley to imagine this inconsistency, and I doubt, therefore, whether any further exposition of the subject will elucidate it to him; but it sometimes happens that an apposite illustration will succeed when reasoning fails, and I will suggest a very homely one. Let me imagine that Mr. Medley lived in a village in which there were two bakers, one highly enlightened and a Free Trader, and the other dull, ignorant, and stupid, and, like Prince Bismarck and the American Government, a Protectionist; and let me suppose that the Free-trading baker should press not only for Mr. Medley's custom, but that the latter should buy twice as many loaves as he needed in order to advance the baker's prosperity. Might not Mr. Medley, without inconsistency, lay down the following rules for the governance of his household?—

First.-No bread shall be bought for the benefit of any baker, but only so much as is needed for the purposes of consumption.

Secondly.--In selecting the baker from whom it shall be bought, the preference shall be given to him whose interests I desire to further to the enlightened man who understands political economy as I do; in other words, I will not allow bread to be bought to benefit the baker, however enlightened he may be that would be like coddling his trade with a protective duty-but what bread is bought (and that shall be only so much as shall be required for consumption) shall be bought from him. To that extent I am justified in giving him an advantage. If Mr. Medley finds any inconsistency here, I have nothing more to say. I would not have troubled the reader with this, but I wished to show the way in which Mr. Medley reasons. I have spoken of him as an able and accomplished writer, and I should be very sorry to say less; but, as a reasoner, I confess he seems to me to leave something to be desired.

I now pass to the second branch of the controversy—I mean the evidence of the soundness of the Free Trade system which is to be

found in the prosperity of this country since that system has been acted upon. What I have to say about Mr. Medley's observations in respect of this will be very short, for it will be confined to the exposure of a single fallacy which runs throughout that entire portion of Mr. Medley's essay which deals with this branch of the subject, and indeed has given the article its name, 'The Lion's Share of the World's Trade.' Mr. Medley seems to forget what it is we are discussing when reference is made to the commerce of other countries. I had asserted that, great as our progress has been since Free Trade was adopted, other countries which adopt the opposite system of Protection had progressed as fast or faster, and from this I drew the conclusion that our prosperity was not due to the Free Trade system, and I quoted a table from Mr. Mulhall's Progress of the World, which Mr. Medley has reproduced, and in which the commerce of thirteen different communities is set down and contrasted at two different epochs. The rate of advance in commerce in each community after an interval of forty-eight years is thus exhibited:

This table shows that the rate of advance made by this country is only sevenfold, whilst the average advance made by the other twelve communities is as much as eightfold. It would be a mistake, however, to take this comparison as proving more than it really does. Let me point out what such a comparison is really worth.

We find two systems in operation among the thirteen nations which Mr. Mulhall enumerates. Twelve of them act in different degrees upon the system of Protection, whilst one only acts upon that of Free Imports, and denounces Protection as injurious. It is natural that we should turn to the practical results-I will not say caused by, but which have accompanied, the operation of these two opposite systems during the last thirty or forty years.

We must not accept these results as a positive proof in favour of either system, for it is obvious that the commerce or prosperity of any individual country may be, and no doubt is, more largely