Our expiring commercial treaty with the Brazils

My co-blogger, Hildete, wonders why sometimes I post items from a past date, such as the piece on Dilma and her opponent. To which I say, why the rush? This just in, from The Economist website: from the start of the British newspaper, the Brazils were on top of the index.

Our expiring commercial treaty with the Brazils
Sep 2nd 1843

The present unsettled state of our commercial relations with the Brazilian Empire presents a subject of more importance than any other at this moment to our trading, and, we may add, to our social existence; for the comforts and welfare of so large a mass of our people, whether engaged in agriculture or manufactures, have of late been proved to depend so greatly on the existence of our foreign trade, that nothing materially affects the one which is not quickly felt by the other.

Before entering into the subject immediately under consideration, we will, by way of administering some admonitory experience shortly refer to what has occurred in our trade to the United States of America, within the last two or three years. By their former tariff the duties imposed on our manufactures were on a scale which was subject to gradual reduction, and in 1840 the rates had become comparatively moderate. The great Southern States, growers of cotton, dependent chiefly on this country for a market, and desirous to obtain our manufactures in exchange, at the smaller price, were always friendly to the lowest rates of duties; but, in the Northern States, we had two of the largest and most important classes opposed to an extension of trade with this country, and consequently to low rates of duties. First,—the manufacturing classes of all kinds, with whose products our goods came in competition; and, secondly, the great agricultural classes, whose produce was practically nearly excluded from this market. They felt that even the peculiar construction of our scale of corn duties was as if designed to exclude them particularly from any share of our trade. The former class we had no means of appeasing, nor was it of much consequence that we should; but the latter class we had the power of doing so, not only greatly to their advantage, but also to our own; and the neglect to listen to their case, so strongly and so frequently urged upon the attention of the late Government, by individual friends of free trade in this country, and also by our diplomatic agents in America, not only as an act of justice to the consumer at home, but as the only means by which our great trade with that country could be maintained, threw at length much of the influence of the agricultural body in the Northern States into that of the manufacturing body, in antagonism with the trade of England. At their public meetings, nay, even in the columns of our own daily journals, in articles written by accredited agents of the parties most interested in a free trade with us, the tone of argument was, that England adhered with so much tenacity to her protective and prohibitory laws, that it became needful that America should, even against her own interest, submit to some inconvenience, make some considerable temporary sacrifice of her own admitted interests in obtaining the cheap goods of England, in order to coerce the English Government to a more liberal policy towards their produce. Others, chiefly of the agricultural body, felt that however good a thing it might be to have the cheap goods of England, yet if they had no means of paying for them, the advantage was lost to them, and the manufacturers, whose only object was to obtain a higher protection, had no difficulty to persuade them that they had better encourage the extension of their trade at home, by paying even higher prices, and thus increase the only market they had for their produce. Under these influences, which were operating for some time, and which were repeatedly and strongly urged upon our Government, and strengthened by the political events which occurred in this country in 1841—which stamped more and more our determination to persevere in principles of restriction—the free-trade party in America was so weakened, that their opponents were able to carry the present tariff, so destructive to our trade, with little difficulty. And let it ever be borne in mind, that when men in America were making up their minds as to the policy they would pursue towards England, they were influenced, not by any secret intentions (if such existed) of some great change which might be wrought in our tariff in 1842, but by the actual spirit which had been so unequivocally manifested in the elections here; and that, not as far as it showed a choice for this man or that man as leader, of this party or that party as predominant—for these are at all times both to them and us of little importance—but they looked, and had a right to look, intently, on the great issues which the English public were called upon to try; which simply were, extension or restriction, free trade or monopoly. We decided in favour of the latter, and a country never felt more palpably and instantly a punishment for an error, that in this instance; for if the surprise reserved for us until the Session of 1842 had been of a character even much more extensive and agreeable than it was, one enormous evil had been perpetrated by the moral effect which our decision had had on other countries. It would be difficult for the West Riding of Yorkshire, the town of Liverpool, or the city of London to estimate how much loss they have sustained by the countenance which they gave on that occasion to principles of commercial restriction.

By a return laid before the House of Commons, on the 12th of July last, the following results to our export trade have arisen from the change of the American tariff:

Showing a reduction of upwards of three millions and a half pounds. It has been customary, during the last year, when the bad state of trade in the manufacturing districts, which so much depressed the demand and price of agricultural produce, was attributed to the operation of the Corn Laws and commercial restriction, to be told, No—it is caused by the bad state of the American markets. Will people only take the trouble to look beyond the proximate to the first cause.

It would be well for those agriculturalists who hoisted the banner of monopoly in 1841, to consider what they lost in 1842, from the depressed and ruined condition of their best consumers, arising out of the loss of above 3,500,000l. value of their labour. We sincerely believe that the agriculture of Great Britain would not have suffered even temporarily to the same extent which it did from this cause and the general bad state of other trades partly arising therefrom, had the whole system of protection been abolished, and the Corn Laws totally repealed in 1841.

While these events have been going forward in North America, we have had questions of not less importance raised respecting our relations in the Brazils, and in consequence of the extraordinary and unaccountable apathy with which the country, even that portion whose interests are most deeply and dangerously threatened, view all great questions of commercial policy—it appears at present only too probable that the Government will be left quietly alone—to do nothing—until the discussions end in a result as disastrous in the South as they have done in the North.

Our commercial relations with Brazil are of so extraordinary a kind, and perhaps not well known to many of our readers, that it may be needful shortly to explain them. On the 10th of November, 1827, we ratified a treaty with that power for fifteen years, “and further until one or other of the high contracting parties shall give notice of its termination. In which case the treaty shall terminate at the end of two years from the date of such notice.” By this treaty English manufactures were to be admitted into the Brazils at the rate of the most favoured countries—and at duties not to exceed fifteen per cent., ad valorem, but which duties have in practice been raised by additional charges to about eighteen and a half per cent. With this moderate duty our exports rapidly increased, until that country has become the fourth largest foreign market we have; our exports annually amounting to from 2,600,000l. to 3,000,000l. value of British manufactures. Here, then is one of our largest markets, in which we are treated with greater liberality than we are by any other foreign powers, with very trivial exceptions. Let us examine what treatment we have given in return. The chief—almost sole—produce of Brazil, excepting gold and silver, consists of—

SUGAR,

COFFEE, and

COTTON WOOL.

On the former, we impose a duty of 63s. per cwt., equal to 300 per cent. on the value when landed in our docks, and equal to 150 per cent. above the duty chargeable on sugars produced in our own colonies, which in practice is quite prohibitory, and we consequently consume none of their sugar. On their coffee, even by the new tariff, we impose a duty equal to 200 per cent. on its value landed here, and equal to 100 per cent. above the duty chargeable on coffee produced in our colonies, and we consequently use little or none of their coffee. On their cotton wool we impose a moderate duty (the same as on North American), and of this article we import to a value under 250,000l. annually; to which, if we add a few other articles to a small extent, we may compute their exports to this country for our consumption about 300,000l.

Thus a country from which we receive such liberal treatment, which takes from us on the most favoured terms manufactures to the amount of at least 2,600,000l. per annum, finds that we practically prohibit from our consumption every important article which it produces except to the trifling amount of 300,000l. Let us conceive that case reversed;—imagine this country taking the produce of some other country to the amount of 2,600,000l. annually, and that country, by placing high prohibitory duties on our manufactures of 200 to 300 per cent. consuming only to the extent of 300,000l. thereof, and then let us conceive the indignation which such treatment would draw forth from all parties in the country and the state.

It can, therefore, be no matter of surprise that the Brazilians should have felt very strongly the unfavourable position in which they were thus placed in the disposal of their produce, and should have been exceedingly anxious to get rid of so partial a treaty as early as possible; and this anxiety could be in no way lessened by seeing, in 1841, that the great struggle between political parties in this country was actually successfully tried on the issue of affirming the continuance of this state of the law; and that the proposition which led to this decision of the legislature was introduced by the representative of a great commercial town, second only to London, which had more to lose or gain by the Brazilian trade than any other. But what was still more disheartening to them was, that when again appealed to the electors of that great commercial town again returned Lord Sandon as their advocate for restriction of trade. In their anxiety to terminate this treaty they placed a construction on the words quoted above, that they were at liberty to do so at the end of fifteen years by giving a notice of two years previous to the expiry thereof, which they accordingly did in 1840, making the treaty to expire in 1842; our Government, however, contended, and we have no doubt rightly so, that the power of giving that notice did not arise till the expiry of the fifteen years in 1842, which version was acted upon, and the due notice having been repeated in 1842, this treaty accordingly expires next year. These circumstances are chiefly of importance, as showing how earnestly and severely the Brazilians feel their disadvantageous position.

Now, then, what steps have we taken to protect and retain this important branch of our trade? Last autumn Mr Ellis was sent out with powers to negotiate a new treaty; he, however, returned without any success, and it has never transpired what were the proposals which he was authorised to make; it has, however, transpired that the Brazilian Government required that their produce should be admitted to this country at a duty not exceeding that charged on our colonial produce, more than 10 per cent.; that duty being now 24 per cwt. on sugar, and 4d. a pound on coffee, would make, with the addition of 10 per cent. in each case, the duty on Brazilian sugar and coffee about 110 per cent., while our goods are there subject only to a duty of 18½ per cent. Thus the matter remains, as far as we are concerned, in statu quo. A long session of parliament has just concluded, which has been marked in an unusual way, by the little that has been done, and during which time this urgent and important question has scarcely been alluded to.

While we, however, are doing nothing, let us inquire what others are doing and what the Brazilian Government is doing. We have before us a long report made by Francisco Vianna, the Finance Minister to the Emperor, dated the 17th of May last, and also a decree of the Emperor of the same date, by which he appoints a commission “for the purpose of arranging a new tariff,” &c. &c. from which we extract the following:—

“Art. 4. It will take the necessary steps to select those commodities which form the prime necessaries of life, or, from habit, have become the principal articles of consumption, the produce of, and imported from, foreign states, subjecting them to a duty of 20 per cent. ad valorem, with the exception, however, of such as, without prejudice to the consumers amongst the lower orders, and without risk of being smuggled, can be charged with a higher rate of duty. Of these a separate list must be formed, and on which a duty of 24 per cent. shall be charged, notwithstanding they may be considered articles of necessity.

“6. It must, likewise, ascertain what kinds of produce or merchandize imported from other countries are identical with those produced in Brazil, the latter being prejudiced by competition with the former: on such a duty of from 50 to 60 per cent. should be imposed, according to the quality of those produced in the empire, the amount of capital employed in their production, and the perfection of which they are susceptible.

“7. The commission will subject to the said rate of duties all such products and merchandize as are now beginning to be produced or manufactured in the empire, or the manufacture of which can be readily introduced from the abundance of the raw material indigenous now produced: graduating the scale of such duties according to the greater or less degree of perfection they can be manufactured in this country (Brazil).

“8. Cotton manufactures of the coarsest quality shall be subjected to a duty of 60 per cent., those of finer quality to 40 or 50.

“9. All looms and machinery employed in making yarn, or weaving cloth, are to be exempted from all duties whatever.

“11. Wines and spirituous liquors are to pay 50 per cent., and all other goods, wares and merchandize not specially mentioned in this decree shall pay 34 per cent.

“14. AND FINALLY, WILL TAKE ESPECIAL CARE TO BE PREPARED AGAINST THE TERMINATION OF THE TREATY WITH GREAT BRITAIN, SUBMITTING THE RESULT OF ITS LABOUR TO ME, THROUGH THE MEDIUM OF MY SECRETARY OF STATE OF THE FINANCE DEPARTMENT.

In these extracts we are forcibly struck with four important considerations:—

First. That whatever duties the Brazilian Government impose, those on the first necessaries of life shall be on the lowest scale.

Second. That they are about to place a prohibitory duty on most of the articles which we export to that country.

Third. That they are ready to avail themselves of our new laws allowing the export of machinery; and

Fourth. That all their arrangements are directed to be “prepared against the termination of the treaty with Great Britain.”

In the meantime a Brazilian Princess has been united by marriage with a French Prince; and rumours are afloat of a commercial treaty being at this moment privately under discussion between the two countries.

In Germany, also, where Brazilian produce is chiefly consumed at very low duties, and where a strong desire becomes manifest to extend their export trade of manufactured goods, the hope of inducing the Brazilian Government to conclude a treaty with them favourable to their goods is daily becoming stronger. The following extract of a letter in a Bremen paper, translated into the Leeds Mercury, accurately expresses the very general feeling in Germany on this subject:—

“There is scarcely any country in the world that possesses such a power as Germany to procure a great sale of the products of its industry. This power of Germany when united, as we hope it soon will be, consists exclusively of the great use of colonial productions. No considerations towards its own colonies, no political dependence on neighbouring states will tie up its hands; it only requires the will of its distinguished statesmen, with the assistance and advice of practical men of business from the sea-ports, to call into life a commercial policy, founded on reciprocity after the model of the United States of North America. Almost all those markets abroad are now supplied with the British manufactures in preponderating quantities and principally the Brazilian market, which is now almost exclusively in the possession of British industry, would be constrained to make a greater use of German manufactures, as soon as United Germany had the courage to impose differential duties on the products of those countries which till now have only come to us in Britain and foreign ships, and almost exclusively in return for British manufactures, till they are convinced of the indispensability of the great German consuming markets, and see the necessity of making reciprocal concessions.”

Concurrent with all these circumstances, a Brazilian Minister has arrived among us for the purpose of re-opening a negotiation for a new treaty. But strange to say, notwithstanding the heavy stakes which hang on the result, his appearance creates as little interest or excitement with the public, and for that reason only, with the Government, as if the two countries had no connexion with each other. Let us shortly examine what this connexion is, and whose interests are now so deeply at stake. In 1840, the exports of British products to the Brazils consisted of—

Which employed 49,912 tons of British shipping. We have made this enumeration in order to show how varied are the interests in this country which are deeply involved in the result of this question. By the new tariff proposed the largest portion of all this trade will infallibly be lost; and hereafter, when our manufacturing districts are thrown into still deeper gloom and distress, WHEN FARMERS ARE STILL MORE AND MORE DEPRESSED IN CONSEQUENCE OF DEFICIENT DEMAND AND LOW PRICES, when we shall ascribe their sufferings to restriction and monopoly, we shall again be told,—No; it arises from the bad state of the Brazilian markets.

We have, however, only viewed this subject in relation to the just complaints of the Brazils of the very unequal character of our trade; but if we had space we could easily show that whatever they have suffered from that cause, from being deprived of this market for the sale of their produce, the people of this country have suffered infinitely more by having been deprived of that which would have been to them a source of the greatest blessing and comfort; and that the conditions insisted on by the Brazilians for a continuance of our trade—instead of being onerous to us, are among the acts which would, independently of any other considerations, be of the greatest benefit to the country. We have shown in our preliminary number that the supply of sugars has not increased for the last twenty years, while the population has increased at least six millions; and what the Brazilians ask is, that we should have larger supply at lower prices than we now pay.

It is, however, alarming to see the deeply culpable apathy, or ignorance, or both, which prevails in the public mind on this important question. Have the people in Liverpool not yet seen enough of ruin amongst their neighbours, enough of domestic heartburnings and wailings, during the last four years, that they can now look on unconcernedly and see another large branch of their trade placed in the greatest hazard? Have the manufacturers in the Potteries, in Birmingham, Sheffield, Leeds, Manchester, Glasgow, and elsewhere, become so heedless of their own interests, and those of the millions of hard-working people around them, that they disregard the loss of the fourth largest foreign market which they now possess? Have the large farmers and graziers in Nottinghamshire, Lincolnshire, Yorkshire, and Cheshire become so reconciled to their share of the ruin and depression in the manufacturing districts, that they are prepared for a still further loss of demand, a still further sinking of prices? Where is Mr Christopher and their other advocates in Parliament who spent many long days in discussing the Canadian Corn Bill, a bill of such doubtful result, if any, that all parties were disagreed among themselves as to whether it would produce greater restriction or freedom of supply? Here is a question which, if continued to be neglected as it is, will produce greater mischief to the farmers of this country than a Canadian Corn Bill passed every day in the year; and yet it seems to receive not a passing thought. Or is it that people are all trusting to Ministers? If they are without other means they will be miserably disappointed. A long session has been passed with all these facts before their eyes, without a single proposition on the subject; and now the Brazilian Minister having arrived in London, the Queen’s Ministers have departed to enjoy the lull of the autumn in quiet and retirement, and it may, therefore, be that the foreign Minister may find his time better occupied at the Courts of Paris or Berlin.

No, if the country will make an effort—and it is infinitely more worth an effort than most of the little, silly, petty squabbles which engross and excite the public mind—they must take the subject into their own hands; they must forego that blind reliance on the mysteries of Downing street and Whitehall; and, by exercising the same popular influence on the Ministry which on another occasion they were able lately to do, they may yet succeed in averting this great evil;—but let no man blame the Ministers while he himself remains heedless and supine in matters of this importance immediately and deeply affecting himself; the question at issue to the British public really being, whether we will accept cheap sugar, and retain, nay improve, our means of paying for it, or whether we will persist in paying an extravagant price, and be deprived, at the same time, of much of the means we have at present to do so.