Wars of tariff were common;for instance,we prohibited the importation of gold-lace from Flanders,and the Flemings in return excluded our wool.The system,however,resisted the teaching of experience,despite the fact that in abolishing the prohibition of the export of gold and silver,the Government acknowledged the true principle of free trade put forward by the East Indian Company.The latter contended that the law forbidding the export of bullion was not only useless,since it was easily stultified by smuggling,but even,if enforced,was hurtful,since the Orientals would only sell their valuable goods for silver.The success of this contention marks the transition from the Mercantile System proper to modern Protection.The advocates of that system had shifted their ground,and instead of seeking merely to prohibit the export of the precious metals,they established a general protection of native industries.
Their measures were not all alike bad.The Navigation Acts,for instance,were defended by Adam Smith,and Mill has indorsed his defence,on the ground that national defence is more important than national opulence.
The most famous of these Acts was the law of 1651,by which no goods of the growth or manufacture of Asia,Africa,or America were to be imported into England,Ireland,or the Plantations,except in ships belonging to English subjects,and manned by a crew three-fourths of whom were English;while no goods of any country in Europe were to be imported except in English ships,or ships belonging to the country from which the goods came.The argument used by the promoters of the law was that by excluding the Dutch from the carrying trade to this country we should throw it into the hands of English shipowners,and there would he an increase of English ships.It was admitted,indeed,that this would be giving a monopoly to English shipowners and English sailors,and that therefore freights would be dearer,and a check given to the growth of commerce.It was further admitted that owing to their higher charges English ships might be driven out of neutral ports;but the contention was,that we should secure to ourselves the whole of the carrying trade between America and the West Indies and England,and that this would amply compensate for our expulsion from other branches of commerce.
These anticipations were on the whole fulfilled.The price of freights was raised,because English ships cost more to build and man than Dutch ships,and thus the total amount of our trade was diminished.We were driven out of neutral ports,and lost the Russian and the Baltic trades,because the English shipowners,to whom we had given a monopoly,raised their charge.But on the other hand,we monopolised the trade to ports coming within the scope of the Act,the main object of which was 'the preservation of our plantation trade entire.'Our shipping received a great stimulus,and our maritime supremacy grew with it.At the time when the Navigation Act was passed our colonial trade was insignificant;New York and Jersey were Dutch;Georgia,the Carolinas,Pennsylvania,Nova Scotia were not yet planted;Virginia,Maryland,New England were in their infancy.At the end of the century the Barbados alone employed 400vessels;while with the growth of the colonies the English power at sea had increased,until it rivalled the Dutch.In the next century the continuous development of the American and East Indian trades gave us a position of unquestionable maritime superiority.
There is another argument in favour of Protection,at any rate in its early days.Its stimulus helped to overcome the apathy and dulness of a purely agricultural population,and draw a part of the people into trade.But here,as everywhere,Protection involves this great disadvantage,that,once given,it is difficult to withdraw,and thus in the end more harm is done than good.English industries would not have advanced so rapidly without Protection,but the system,once established,led to perpetual wrangling on the part of rival industries,and sacrificed India and the colonies to our great manufacturers.And our national dislike to Protection deepens into repugnance when we examine the details of the system.Looking at its results during the period from 1688to 1776,when it was in full force,we are forced to acknowledge that Adam Smith's invectives against the merchants,violent as they were,were not stronger than the facts demanded.
But the maintenance of Protection cannot be entirely set down to the merchants.Though the trading classes acquired much influence at the Revolution,the landed gentry were still supreme in Parliament;and the question arises,why they should have lent themselves to a policy which in many cases,as in the prohibition of the export of wool,was distinctly opposed to the interests of agriculture.Adam Smith's explanation is very simple.The country gentleman,who was naturally 'least subject of all people to the wretched spirit of monopoly,'was imposed upon by the 'clamours and sophistry of merchants and manufacturers,'and 'the sneaking arts of underling tradesmen,'who persuaded him into a simple but honest conviction that their interest and not his was the interest of the public.Now this is true,but it is not the whole truth.The landowners,no doubt,thought it their duty to protect trade,and,not understanding its details,they implicitly followed the teaching of the merchants.But,besides this,there was the close connection,already referred to,between them and the commercial classes.Their younger sons often went into trade;they themselves,in many cases,married merchants'daughters.Nor did they give their support gratuitously.they wanted Protection for themselves,and if they acquiesced in the prohibition of the wool export,they persuaded the merchants to allow them in return a bounty of 5s.a quarter on the export of corn.
