It may have been used in the construction of railways, an assistance which England has bestowed on so many foreign states, or China may have employed it in developing purely local industry. Directly, the gain to England is solely the interest which she annually receives, but here we must draw an important distinction. If the loan has been granted by England out of savings, out of surplus wealth won above consumption, then England is not made poorer by the loan than she was before it was granted; but there is a great principle which governs this question, which produces powerful effects. The progress of other countries, their growth in civilisation, generates a sure and constant development of exchange with each other, and especially, under the existing circumstances of mankind, with England; they increasingly desire English products, and England desires theirs. Tea from China, cotton and corn from America, wool from Australia, indigo from India, become the subjects of ever-expanding demand in England, and these countries gladly take English goods-the fruit of English labour, in return for what they send. In this great matter, nothing develops a country more than railways. The railways constructed with English money, bring corn to the sea-coast of America and Russia; lands formerly shut out from the rest of the world, are made part, so to speak, of the common agricultural machinery of collective humanity. Food can now reach England through the help of these railways, and food is what England most needs, and what is most essential for the support of her labourers. The enormous expansion of English trade, its vast exports, the

L

products of English labour, are due to the progress of other countries beyond all other causes, and if English loans have helped that progress by enabling its instruments to be provided, they have multiplied the international exchange of commodities, and thereby fed English industry, and rewarded English labourers with additional wages, and English capital with augmented profits.

We thus reach the conclusion that it is the manner in which the English loan is applied in the foreign country, which determines whether the export of English wealth does or does not benefit the industry of England, and those who profit by it. A loan to a spendthrift foreign people, which has consumed its wealth and merely seeks to satisfy its creditors, whatever may be the security given for ultimate repayment, is merely a gain of interest to England, and in every other respect is as pure a waste, as if it had been hoarded in gold in the Bank of England's cellar. If, on the contrary, it has been absorbed by sending out emigrants to Australia, who produce more wool for the increase of English trade, the effect is precisely the same as if it had been laid out in Lancashire or Yorkshire.

CHAPTER VI.

WAGES.

I.

We have now arrived at a subject which in the actual position of society throughout the civilised world is, along with free trade, the most important and at the same time, in some respects, the most difficult in all Political Economy. The prosperity of nations and the welfare of all classes of the community are most closely associated with the direction which public feeling and national legislation may take on these two paramount questions. Yet here precisely, in reference to these very matters, we are driven to re-echo the lamentation which Mr Goschen poured forth in the House of Commons on June 29, 1877. Democratic feeling throughout the world rejects Political Economy. It is held to be hostile to the interests of the mass of the people. It is looked upon with indifference, as something unreal, as ignorant of the ways of human life. It is regarded as the idle talk of a set of doctrinaires, who know nothing of human nature, nor of its position in the actual world. People refuse to listen to what it has to say. Why busy one's self with that which has no claim to be considered? Even the House of Commons has learned to sympathise with popular feeling. The authority of

Political Economy is on the wane there.

into philanthropy.

It has gone

Its legislation has sought to

protect the toiling labourers, who produce all the wealth the nation possesses, against the oppression of unfeeling theorists. It passes laws which rescue the poor man from the greedy tyranny of the capitalist.

This is a grave matter indeed-none can well be graver. A very plain and direct issue is raised. Political Economy is true or false. Let the question be tried with the utmost severity and sternness. But it must be tried at the bar of reason, not of sentiment. Much spurious science, as was shown in the first Chapter, has been thrust upon Political Economy. By all means let it be refuted and cleared away. That is not Political Economy. True Political Economy professes to recognise certain conditions imposed by the Creator on human existence on earth, and to analyse what is implied in them. If it does these two operations badly, if it mistakes error for truth, fond imagination for accurate fact, let it be rejected. Its teaching can then be only mischievous. But let the error be established by proof. If these conditions are the laws of human life in respect of its material well-being, sentiment cannot get rid of them by giving them bad names. Political Economy has exhibited false theory in plenty, but is false theory, theory contradicted by fact and having its root solely in the sense of the agreeable, unknown to philanthropy? Nay, is it not eminently rampant and peremptory in this very region of capital and labour over which democratic feeling claims such commanding authority? Sentiment might insist how nice it would be to forbid the day's work ever to exceed four hours. Would

Political Economy deserve to be reviled, if it declared that in that case multitudes of human beings must go out of existence? Does sentiment refute the assertion by disliking it? In this most serious matter of the relations of the labouring classes to society, democratic sentiment finds powerful motives for the selfish side of human nature to fling contempt on Political Economy, and to invent doctrine and theory of its own; but where the very terms of existence are at stake, there can be but one supreme issue between Political Economy and its despisers. Are the assertions made on either side, -not generous, or philanthropic, or noble,—but true or false, as judged by the realities of man's nature, and of his position in the world? To err here, and to construct conduct on the error may mean for countless millions, misery, sickness and death.

Political Economy, however, and philanthropy have each of them their legitimate spheres by the side of one another. Political Economy is a subordinate body of knowledge only. It assumes wealth as its end, but does not compare that end with the other objects of human life. The pursuit of wealth is not the paramount duty of mankind to which everything else must give way. On the contrary philanthropy and morality and social philosophy are authorised to declare that there are states of life and practices which must be avoided at the cost of loss of wealth, or even of poverty. Political Economy can show with the greatest ease that nothing is more antagonistic to the production of wealth than Yet every nation at times prefers war to riches, and the voice of humanity does not condemn them. There might be social arrangements enacted for the

war.