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PROBLEMS OF EMPIRE. by goods produced in highly protected countries, is attributed to the superior efficiency of the workshop management and the labour of his competitors; but it is also a proof that free trade is not essential to cheapness of production. Even were the management and the labour as efficient in British workshops as it is represented to be in the United States, it is doubtful whether the British manufacturer can hold his own. The American manufacturer (and the same remark applies to a lesser extent to the German manufacturer) possesses an enormous home market protected by duties well-nigh prohibitive, and through the formation of Trust companies, with their huge aggregations of capital under single control, is able to make an enormous profit on goods sold in the home market. In order to spread the general charges of his business and thus increase the profits on the goods sold at home, he sells his surplus abroad at a price, not perhaps below the cost of manufacture, but below the cost of production if the goods sold abroad were debited with their full proportion of general charges. I believe that it will become increasingly difficult for the British manufacturer to hold his own under present conditions, and that Mr. Balfour's warning in the House of Commons was amply justified by the circumstances.

5. Lastly, Mr. Chamberlain's proposals ought to be considered from the point of view of Ireland. During the seventeenth and eighteenth centuries the fiscal policy of the United Kingdom was regulated solely in the interests of the people of Great Britain. Irish industries were crushed by restrictive enactments imposed by the British Parliament in the interest of the British manufacturer, while Irishmen were excluded 140