tive adverse trade balance, which has amounted during the war to £2,250,000,000. Our coal production steadily diminishes until our factories are starved for the want of fuel, people have coal doled out to them by the hundred weight, and are very thankful even to get that small quantity. In the meantime competition from U. S. iron and steel and coal exporters grows keener every day. In the House of Commons the other day Sir A. Geddes (President of Board of Trade), gave out the following figures on this subject: Rails in the United Kingdom before the rise in coal, £16 a ton; after the rise, £17 10s. and in the United States today £10 a ton. Ship plates £17 15s. before the rise in coal; £19 after. American. price £14. Crown bars £21 a ton, before the rise in coal; new price £22 IOS. United States price £11 15s. Pig iron, Cleveland No. 3 foundry, £8 before the rise, £9 after; No. 2 Pittsburg, £6.

The trade reports from Birmingham state: "It is now established that United States bar iron has been bought at £18 15s. delivered at Liverpool, costing the buyer about £19 158. when delivered at a Midland destination, and competing with British iron prices at £21. The importer claims. to have sold the whole of the cargo, while users are eagerly asking for more. The iron has not yet been sampled, but it claimed to be as good as material emanating years ago from the same source. Some large firms claim to have bought American billets at £12 10s. at the port as against £13 10s. at Welsh works.

While the building of ships in Britain does not increase to anything like the quantity we hoped for, there is an immense .amount of work being done in United States yards. The gross tonnage of merchant vessels under construction in United States ports exceeds 3,874,000 or 1,350,000 more than our own. That is to say, America has now provided herself with ship-building accommodations vastly in excess of what we possess. This means that in a few years, even if we work as hard in our yards as you are working, the merchant tonnage of America will exceed that of Great Britain and you will have ousted us from our ancient supremacy in the carrying trade of the world.

If England is to avoid economic disaster of the first magnitude her people must work as they have never worked before. Instead of that we see today one great orgy of holiday making and extravagance,-celebrating peace when there is nothing but bitter class and industrial strife. The recent "rejoicings" were a mockery of the real conditions. When we have paid our debts and regained our trade supremacy then let us rejoice, and not before.

As I have told you on several occasions, Japan is one of the very few countries which has made a profit out of the war, and it does great credit to her astuteness. What does it matter to her how we rend ourselves? We shall be less formidable as competitors and perhaps as future foes. While all Europe and America have been busy piling up debts she has been equally busy in reducing her obligations to

foreign creditors.

She has lent to the Allies well over £100 millions and has become a creditor instead of a debtor nation. Her national credit stands higher today than that of Britain.

It really makes one rub one's eyes and think the world is really upside down. While our foreign trade has gone down hers has increased nearly 200 per cent, as compared with the latest pre-war period. The United States has made great inroads into the trade which Great Britain formerly had with Japan, and American exports thither (excluding raw cotton) valued at £5 millions in 1913 grew to £42 millions in 1918; whereas our exports to Japan were worth over £12 millions in 1913 and have fallen to nearly half that last year. But Japan has a long way to go before she can compete with a white country on equal conditions, and one of those conditions is commercial probity.

An instance of Japanese methods of trading is given in the Journal of the British Chamber of Commerce of Shanghai. Among the many varieties of cotton cloth which Lancashire produces for the East and the Far East is brocaded poplin. China in particular has imported large quantities of this material, which is used for many purposes, including clothing. Japan is now making brocaded poplin and is shipping it to China in the hope of getting the China trade into its own. hands. Much of the Japanese poplin received in Shanghai is found to be defective. It may be serviceable for quite a week, and in isolated cases.

even a fortnight. Examination has disclosed the fact that in the weaving a weft was used which was not cotton at all! While the twist was cotton yarn the weft was paper yarn! A shower or two was sufficient to destroy the paper threads, and the cloth became useless. became useless. If this paper yarn

had been found in only a few isolated instances the fact would hardly be worth noticing, but this does not seem to be the position. The cases have been sufficiently numerous to bring all poplins into some disrepute, for up-country sellers, it is said, are afraid to order the perfectly satisfactory Lancashire cloth for fear unscrupulous dealers should substitute the Japanese article. Really, when will the Japanese mercantile community begin to learn that after all honesty is the best policy?

The government is being urged by the press to take a strong line with the trusts. Before the war we were always being told that such things could only grow on protective soils; but here we have in free trade England enough trusts to stock the whole of the United States with. The recent report of the Parliamentary Committee on Trusts showed that there is scarcely a trade in Britain which is not, to a greater or lesser degree, controlled by trusts and combines. It showed various methods by which concerted action was used for maintaining high prices and preventing the free play of competition. The London free trade "Chronicle" says: "We have reached a stage when profiteering should be treated as a crime. Concerted action between dealers to

The following is quoted from an editorial in the New York Journal of Commerce:

"It is more conspicuously obvious than it has ever been before that exports must be paid for sooner or later with imports, which are the exports of other countries with which we have trade. Nothing could be more absurd than such a proposal as is being attempted in Congress by the Chairman of the House Committee on Ways and Means for an immediate revival of the protection policy for American industries and trade. . . We shall need all the markets we can obtain for our products, adjusted as fully as practicable to the needs of the others in their struggle for the revival of productive industries. But that market will not develop for us unless we present a market here for the products of foreign industries to the utmost extent practicable."

It sounds as if the Journal of Commerce had the same editor that it employed in 1827, when that paper was founded, for the argument is just the same as it supported nearly a century ago, in company with Hayne, Calhoun, and other free-trade rushlights. Nothing appears to have been learned from the past. The facts that Great Britain is returning to the protective policy, supplemented by imperial preferences; that France has already raised her tariffs; that Germany holds fast to her protective policy; and that Japan is hewing to protection and seeking to bar the “open door” in China to all but Japanese goods, makes no impression on the Journal of Commerce editor. He is still an unreconstructed free-trader.

The entire industrial South has been converted to protection. The Democratic party is attempting to get on the protective side of the question

by advocaing much higher rates of duty under the guise of more revenue needed; President Wilson has felt the impelling force of country-wide demand and is now flirting with protection, as his message to Congress May 17th will show. But the editor of the Journal of Commerce is steeped in the fogs of a century ago.

The fact is "it is more conspicuously obvious than it has ever been before" that this country must return to the protective policy-protection straight out, not the Democratic camouflage now being prepared by Wilson and his party for the purpose of catching votes. There is about to set in an era of trade competition the like of which we have never before experienced. Production and distribution costs must be pared to the last fraction of a cent consistent with maintaining the remarkably high standard of wages which labor achieved during the war, which neither labor nor capital desires to see diminish, and which need not be diminished so long as there is adequate market capacity

for our goods. If there has been a general wage increase abroad of 100 per cent there has likewise been 100 per cent increase in wages at home. The workman who formerly received $1 for his day's work in England may now receive $2 for the same work. The American operative who formerly received $2 a day now gets $4. The pre-war wage disparity was $1, the two workmen considered. Today it is $2. Before the war British organized labor prevented the use of laborsaving devices to a large extent. Now Great Britain is installing them in every industry.

We can't give our home market away as a swap for foreign markets. Our consumption capacity at home is over $40,000,000,000. The peak of our foreign exports is something over $6,000,000,000. Maximum operation means minimum unit cost essential for competition abroad. Maximum operation can only be assured by command of the home market, and that in turn can only be secured through protection. This is our fundamental need.

Washington, August 25, 1919. The willingness of the Republicans to abandon their plan for a summer recess, because of the pressure of business, is very commendable, all the more so as Congress has been in ses

sion almost continuously for years. The surplus which the Democrats were to produce never made its appearance, but the deficit requiring the issue of bonds, and other forms of indebtedness, has grown to a sum never

before equalled in the history of the nation.

But the end is not yet. More and more money is called for,-a vast reduction has been made in war expenditures, and still new forms of taxation will have to be adopted in order to make both ends meet. That is the wonderful effect of President Wilson's control of his party. He is urging the issue of some $20,000,000 in bonds to pay Colombia for the use of the ground on which the Panama canal is built. Colombia has no shadow of right to any such sum of money, but it begins to look as though she might get it.

HOW DEMOCRATS REVERSE THEM

SELVES.

The Democrats for long years fought any bill that proposed to help American shipping, so as to put it on an equality with foreign shipping, with its much lower wages, etc. But they have wasted over $500,000,000 in experimental shipbuilding, to say nothing of the vast sum used in building ships that had to be sold. They are still engaged in shipbuilding with government money, and may succeed. in the end, though with enormous loss in producing a ship that can be made to pay. But the same end could have been accomplished at vastly less expense by giving aid to vessels built and operated by American citizens.

REPUBLICAN PLANS.

The Republican Congressmen as a rule are busily engaged in planning necessary legislation. They have passed several tariff reform bills in the House, but the Senate's time is too

much taken up with the war legislation to give time at present to the tariff. What will ultimately become of the war legislation is yet difficult to tell. The President's conference at the White House with the members of the Senate committee having charge of the measure, has not thrown any important new light on the subject. Mr. Lodge and others still assert that important modifications must be made either in the form of amendments or reservations.

CHICANERY IN SUGAR DEALING.

The House has passed a bill to impose 60 per cent ad valorem duty on glassware, a higher duty on clothes, sugar, etc. Food Director Hoover made an agreement with the sugar producers under which the price is fixed until the 1919 crop is harvested. There is no sound reason for any increase in the retail price of sugar. There is no law now restricting to two pounds the quantity of sugar_sold at retail, but this plan is still persisted in by some retailers.