State debts are bills which the present generation draws onfuture ones.This can take place either to the special advantage ofthe present generation or the special advantage of the future one,or to the common advantage of both.In the first case only is thissystem an objectionable one.But all cases in which the object inview is the maintenance and promotion of the greatness and welfareof the nationality, so far as the means required for the purposesurpass the powers of the present generation, belong to the lastcategory.
No expenditure of the present generation is so decidedly andspecially profitable to future generations as that for theimprovement of the means of transport, especially because suchundertakings as a rule, besides increasing the powers of productionof future generations, do also in a constantly increasing ratio notmerely pay interest on the cost in the course of time, but alsoyield dividends.The present generation is, therefore, not merelyentitled to throw on to future generations the capital outlay ofthese works and fair interest on it (as long as they do not yieldsufficient income), but further acts unjustly towards itself and tothe true fundamental principles of national economy, if it takesthe burden or even any considerable part of it on its ownshoulders.
If in our consideration of the subject of the continuity ofnational industry we revert to the main branches which constituteit, we may perceive, that while this continuity has an importantinfluence on agriculture, yet that interruptions to it, in the caseof that industry, are much less decided and much less injuriouswhen they occur, also that their evil consequences can be much moreeasily and quickly made good than in the case of manufactures.
However great may be any damage or interruption to agriculture,the actual personal requirements and consumption of theagriculturist, the general diffusion of the skill and knowledgerequired for agriculture, and the simplicity of its operations andof the implements which it requires, suffice to prevent it fromcoming entirely to an end.
Even after devastations by war it quickly raises itself upagain.Neither the enemy nor the foreign competitor can take awaythe main instrument of agriculture, the land; and it needs theoppressions of a series of generations to convert arable fieldsinto uncultivated waste, or to deprive the inhabitants of a countryof the capability of carrying on agriculture.
On manufactures, however, the least and briefest interruptionhas a crippling effect; a longer one is fatal.The more art andtalent that any branch of manufacture requires, the larger theamounts of capital which are needful to carry it on, the morecompletely this capital is sunk in the special branch of industryin which it has been invested, so much the more detrimental will bethe interruption.By it machinery and tools are reduced to thevalue of old iron and fire-wood, the buildings become ruins, theworkmen and skilled artificers emigrate to other lands or seeksubsistence in agricultural employment.Thus in a short time acomplex combination of productive powers and of property becomeslost, which had been created only by the exertions and endeavoursof several generations.
Just as by the establishment and continuance of industry onebranch of trade originates, draws after it, supports and causes toflourish many others, so is the ruin of one branch of industryalways the forerunner of the ruin of several others, and finally ofthe chief foundations of the manufacturing power of the nation.
The conviction of the great effects produced by the steadycontinuation of industry and of the irretrievable injuries causedby its interruption, and not the clamour and egotistical demands ofmanufacturers and traders for special privileges, has led to theidea of protective duties for native industry.
In cases where the protective duty cannot help, where themanufactories, for instance, suffer from want of export trade,where the Government is unable to provide any remedy for itsinterruption, we often see manufacturers continuing to produce atan actual loss.They want to avert, in expectation of better times,the irrecoverable injury which they would suffer from a stoppage oftheir works.
By free competition it is often hoped to oblige the competitorto discontinue work which has compelled the manufacturer ormerchant to sell his products under their legitimate price andoften at an actual loss.The object is not merely to prevent theinterruption of our own industry, but also to force others todiscontinue theirs in the hope later on of being able by betterprices to recoup the losses which have been suffered.
In any case striving after monopoly forms part of the verynature of manufacturing industry.This circumstance tends tojustify and not to discredit a protective policy; for thisstriving, when restricted in its operation to the home market,tends to promote cheaper prices and improvements in the art ofproduction, and thus increases the national prosperity; while thesame thing, in case it presses from without with overwhelming forceon the internal industry, will occasion the interruption of workand downfall of the internal national industry.
