“Remarks on New Zealand's Trade and Public Debt”^* and “The Flood of Gold,”^† and for some information on the subject I may refer the reader to this source. Taking the average over the years 1880–89 and over 1890–99, we find a fall in prices in the ratio of 77 to 66 as measured by Sauerbeck's index numbers—i.e., a fall in the ratio of 7 to 6, or some 14 or 15 per cent. Accordingly, if the exports of a country had remained exactly the same in quantity and general exchange-value from the one period to the other, the nominal value, or value in the pounds sterling of the time, would appear to indicate a fall of one-seventh, or about 14 per cent.; and the greater the exports in the former period the greater would be the apparent fall.

In Table I. are given the total nominal values of the special exports of the four leading nations commercially—namely, the United Kingdom, the United States of America, Germany, and France—for the decennial periods 1880–89 and 1890–99. The absolute increases are given in each case. These are the figures usually given; but in the table are added the approximate monetary values that the exports of the latter period would have had if money had remained of the same average value it had during the former period, Sauerbeck's index numbers having been used in the calculation. These figures represent, in terms of the money of the earlier period, and within the necessary limits of error of the estimates, the true or exchange values of the exports of the later period as compared with those of the earlier one. The corresponding absolute increases are also added.

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Much has been made of the facts that the apparent increase of the value of the exports for the United States is nearly seven times, and those of Germany about two and a half times, as great as for the United Kingdom. But this is true only of the nominal values, which, as we have seen, do not give a fair representation of the real changes. Considering the exchange-values, we see that the increases are much more nearly equal. The increase for the United States is just about two-thirds greater than, that for Germany is actually a little less than, and that for France is not two thirds of the increase for the United Kingdom. There is therefore nothing alarming to be derived from these figures as thus corrected. The method, of course, as any method must necessarily be dealing with this particular subject, is comparatively rough, but the results obtained give a far better representation of the true state of things than the nominal values nakedly presented.

The above change is brought about by the making of the correction for the apparent falling-off in exports which is due merely to the change in the value of money, and, the United Kingdom having the largest exports, the correction is the greatest in the case of that country.

Secondly, we should take account of the fact that the populations of the several countries increase at various rates, and this must affect their commerce; and, further, any prosperity the commerce of a country may indicate can only be properly judged by considering it relatively to the population. The population of Germany, owing to a higher difference of birthrate and death-rate combined with a smaller percentage of emigration, increases more rapidly than that of England, both absolutely and relatively; and the population of the United States of America, owing to the great amount of immigration, increases in both respects even more quickly. Now, comparing the exchange-values of the exports and their increases in the two periods in Table I., we see that relatively to the increases in population in the several countries England shows up better than both Germany and the United States; but it is France that really surprises us with her large increase and almost stationary population.

On account of changes in population it is much better, in comparing the commerce of nations as affecting the prosperity of their peoples, to take the trade per head; the element of population is thus eliminated. Table II. gives the special exports per head of the countries we have been considering for the quinquennial periods from 1875 to 1889. This can only be fairly used in comparing one country with another in the same period, and not in comparing period with period, because of the differences in the value of money.

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These are the figures usually given; but, to allow of approximately fair comparisons of period with period to be made, Table III. gives Sauerbeck's index numbers for the several periods, and likewise the values hence derived for the exports per head in the several periods expressed in terms of money of the same value as that of the first period, 1875–79.

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It will be noticed from Table II. that the nominal values of the exports indicate a rather chequered course of trade for each country; but Table III. shows that this is due to the changing value of money, for the general exchange-values indicate continued progress in every case, except that in the case of the United States there was a falling-off in the period of 1885–89. Thus, the exports per head for the United Kingdom, instead of being a little less in the last period than in the first, as the nominal values would indicate, were really much greater, and the increase is greater than for any of the other countries.

Table IV. is deduced from Table II. It represents the percentages that the exports of each of the other three countries bear for each period to the exports per head of the United Kingdom for the same several periods. The averages of these are also added. The variations due to the changes in the value of money as well as those of population are thus got rid of, and we have a fair way of comparing the industrial prosperity of the several peoples as far as such prosperity can be measured by the mere exports.

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Examining these results, and comparing the quinquennial period 1895–99 with that of 1875–79—htwenty-five years previously—we find that in the case of France the exports per head were 62 per cent. in the earlier period and 64 per cent. in the later period of those of England; in the case of Germany the percentages were 53 and 56 respectively; and in the case of the United States they were 47 and 49. The average percentage of these three countries changed from 54 to 56 in the same time. The close approach of the numbers for each nation in two periods separated by twenty years is worthy of remark, and shows that the exports of England, when reckoned per head of population, bore practically the same relation to those of the other countries in the recent period 1895–99 as they did twenty years previously.

Between the two extreme periods there were many fluctuations. In respect to the exports per head, and relatively to the other nations, France was at her worst in the second period, 1880–84; and in the two following periods the United States and Germany were at their worst in succession. In the first and last of the five periods considered the exports per head of England were depressed relatively to their average position with respect to those of the other nations. Thus each country has had its turn in the matter of relative depres-

sion—first the United Kingdom, then France, the United States, and Germany in succession, and then the United Kingdom again. We cannot expect the course of trade to run smoothly; it is of necessity liable to fluctuations. Hence follows the advisability of considering the course of trade grouped in periods of years, so as to minimise the effect of the more temporary fluctuations. But even then we shall have fluctuations, and it no more follows from the above statistics that the condition of English exports in the last period is the beginning of a permanent change than it did in the case of the first or in any of the other periods in the case of the nation whose exports per head were relatively depressed in that period. It is impossible to draw from these figures any conclusion that would condemn the free-trade policy of England. The mere inconsistency of any such inference would be conspicuous, for, if the greater advance of the exports per head of the other countries relatively to those of the United Kingdom during 1890 is to be put down to British free trade, to what must we give credit for the very different condition of things existing from 1875 to 1889, when free trade had already been in existence for over a generation?

It would be well to point out, perhaps, that the relative recent advances of the foreign countries we have been considering in respect to the exports per head are in no wise inconsistent with the statement above that, comparing the exchange-values of the exports and their increases in the two periods in Table I. relatively to the increases in population in the several countries, England shows up better than both Germany and the United States. For, though these increases are smaller in the case of Germany and the United States relatively to the increases of population, they represent a higher value per head of the additional population than do the whole exports of the whole population, and so increase this latter value.

Thirdly, we should take into account the changes in the economic circumstances of a nation. How different the commerce can be relatively to population and resources, and consistently with the existence of the highest prosperity, is illustrated by contrasting the foreign trade of the United States, which is about £5 per head, with that of New Zealand, which is well over £30 per head. This is partly accounted for by the higher protective policy of the United States, but chiefly by other economic considerations. Changes in the economic conditions of a nation may, then, possibly tend to increase or diminish her commerce without affecting her prosperity. All these conditions must be taken into account before any change in the volume of commerce can be attributed to any particular influence. The subject is a large one,

and we have time only to barely touch upon it, remembering that our object is cot to interpret the statistics fully, but rather the negative one of proving that they cannot be claimed as supplying an argument against the free-trade policy of England.

It is obvious, first of all, that there must be a limit to the development of the industries of any nation. We have seen that the commerce of England has really not, ceased to advance, even relatively to her population. But England has reached a stage much nearer to this limit than her rivals. Her freedom of trade, while raising this limit, has also enabled her to approach it more rapidly. As time passes we cannot in the nature of things expect her to continue always to show either the same absolute or the same proportionate increases in her trade and industry as some of her rivals may show. Sandow is outdone every day in mere accession of strength, both absolute and relative, by growing schoolboys, who can nevertheless never hope to become Sandows. Whilst the resources of the United Kingdom generally are nearly fully developed, and some of them suffering from the first signs of exhaustion, theirs are only now being developed. They have been kept back by wars, divisions, and uncertain politics.

Again, the areas and resources of some of England's rivals in trade being so much larger than those of England, their industries and commerce must ultimately surpass hers in mere volume.

That the United States will very soon have a foreign trade absolutely greater than that of the United Kingdom is beyond doubt, because of its greater area and resources and its rapidly growing population, combined with the high industrial character of its people. I believe that Germany will not be very long in obtaining a trade equal to that of the United Kingdom in absolute value, for she has a much greater area with large resources, she has a more rapidly increasing population than the United Kingdom, and, like the United Kingdom herself, she has reached the stage of not being able to grow her own food and retain anything like the present standard of living, so that economic forces compel her to devote the labour of her additional population mainly to manufacture, and to obtain food for her people by the export of the products. These economic forces at work we cannot subdue.

We cannot, then, expect that under any commercial policy whatever England should almost monopolize for ever the manufacturing industry and the commerce of the world. Freedom of trade has enabled her, and still enables her, to utilise her resources to the best advantage, and the com-

mercial history of the world for the last century is a tribute to her energy and wisdom. But no commercial policy adds anything to her resources, puts another pound of coal in her mines, or adds another acre to her domain. Little country though she is, her history has been glorious, and her prosperity may remain exceptional relatively to her resources; but she must, in spite of any wisdom of policy, give way in the mere magnitude of her activities to countries with far greater resources. Sandow in strength must acknowledge the superiority of the elephant; train he ever so wisely, though he may excel other men he must remain a mere man. We cannot transcend the limitations of nature.

If other countries gain markets in their colonies and possessions in which their exports have special preference they are still further favoured. England has not attempted to exact such preference in her colonies. This has directly been an economic loss to her, but a great gain to them. But, on the other hand, if she had attempted to enforce such a policy the Empire no doubt would long ago have been dismembered, and she would have lost the preference, and with it the allegiance of the colonies. The complaints that have frequently been made that after all the spending of all the blood and treasure in South Africa the country has been open to the trade of all parts on equal terms sound very strange coming from an English colony. What right has England to enforce either preference with or the free admission of her goods into South Africa that she does not equally possess to enforce them on New Zealand? Those that raise their voices in condemnation of the policy of England in South Africa in this respect would be the first to resent and resist the application of any such policy to New Zealand. Still it is undoubted that preference to the Mother-country obtained from a colony or possession is a direct benefit to the Mother-country. In so far as England's rivals have achieved such a position of preference by the extension of their possessions they have gained an advantage in respect to their commerce.

Their advantage has been still further increased in so far as they have excelled the United Kingdom in the matter of technical education, in the improvement of and ready adoption of the best of machinery, and in the more economical application of their labour.

These considerations at least should all be taken into account in attempting to interpret how far the statistics of English trade prove or disprove the wisdom of England's free-trade policy, and I hope I have proved that it is absolutely unjust to draw from the figures we have examined any inference prejudicial to her commercial policy. And if in the future other nations do exhibit a much greater progress,