The moral of the recent controversy is the extreme difficulty of tariff relations. Vaguely presented, as at the Paris Conference or in the Report of Lord Balfour of Burleigh's Committee, mutual fiscal adjustments possess many attractions. When they become practical issues, even within the Empire, great obstacles instantly present themselves. The Dominions will necessarily view these questions from the standpoint of local policy and interests. The claims of our allies cannot be ignored. Politics and scientific tariffs are incompatible.

As trustees of the interests of India,* we can do nothing which would check her growing industries or give the appearance of selfish exploitation. Even if a perfectly fair adjustment can be arrived at, which is an excessively difficult achievement, sentiment, which is always more powerful than reason, may render it impracticable. 'Indian industry,' states the Cologne Gazette,' has been systematically ruined by England in order that English goods may govern the Indian market'; and this has long been the favourite theme of Indian political agitators, from whom the German paper doubtless drew its inspiration. The facts that every hopeful modern industry in India has been initiated by British enterprise, and that Government is forwarding the steadily progressing industrial development of India by all the means in its power, do not in the least appeal to the agitator and are unknown to his dupes. That is a consideration which can never be left out of account; and our heavy responsibilities demand disinterestedness and consequent detachment of judgment. The welfare of India must be our main care; and the recent debates prove that the paramount authority is willing to make concessions and even sacrifices, provided that advantage to the Indian people is established.

These debates have led to another distinct gain. Here and in the Dominions it will never be forgotten that Indian troops have fought gallantly in six theatres of war, shared in our losses, and played a great part in the decisive victory in Mesopotamia; that the loyal Princes and Chiefs of India came forward with lavish and

* Every member of this House,' said Mr H. H. Fowler in the debate of February 1895, is a member for India.'

continued assistance in men and treasure to the Imperial cause; and that many Indians have contributed generously to the war funds, and have worked strenuously to provide for the needs of the troops and of the sick and wounded. What has not been sufficiently realised is the immense importance of the resources of India in relation to the war. This was lucidly explained by Lord Islington; and more could have been said. Our armies and those of the Allies have received essential supplies from India. Without these supplies the campaign in Mesopotamia could not have been carried through to brilliant success; and alike in Egypt and in East Africa the production of India has proved invaluable. The immediate advantages to India of a new export trade during many months of 'no less than 3,000,000l. a month tending to increase' are, as Lord Islington said, manifest; but the stimulus thus given to native industries will go far to promote the prosperity of the Indian people in the future. It will follow that competition in other trades may arise, creating new problems which, like that of cotton, will need dispassionate consideration and mutual good will for their solution.

now

SYDENHAM OF COMBE.

Art. 16.-GERMAN STEEL AND IRON.

1. The Iron and Steel Industries of Belgium and Germany. Report of the British Iron Trade Association. King, 1896.

2. Kontradiktorische Verhandlungen über Deutsche Kartelle: die vom Reichsamt des Innern angestellten Erhebungen. Band III: Eisen und Stahl. Berlin: Siemenroth, 1904.

3. The Trust Movement in British Industry. By H. W. Macrosty. London: Longmans, 1907.

4. Die deutsche Eisen- und Stahlindustrie. By Henry Voelcker. Berlin: Simon, 1908.

5. Die westdeutsche Eisenindustrie und die Moselkanalisierung. By Prof. Hermann Schumacher. Schmoller's Jahrbuch für Gesetzgebung,' and separately. Leipzig: Duncker, 1910.

6. Organisationsformen der Eisenindustrie und Textilindustrie in England und Amerika. By Theodor Vogelstein. Leipzig: Duncker, 1910.

7. Monopoly and Competition, a Study in English Industrial Organisation. By Prof. Hermann Levy. London: Macmillan, 1911.

8. Some Aspects of the Tariff Question. By Prof. F. W. Taussig. Harvard University Press, 1915.

9. The German Steel Syndicate.

By Francis Walker. 'Quarterly Journal of Economics.' Harvard University Press, 1906. Reprinted in 'Journal of the Staffordshire Iron and Steel Institute,' and separately, 1916.

And other works.

IRON and steel during the 19th century were in large part the making of Great Britain; during the twentieth they have been well-nigh our undoing. If one wants to understand Great Britain's position during the Victorian era, among the principal facts to be weighed are such as these that in the middle of last century it produced half the iron of the world; and that so late as the time of the Franco-German war, when the new process for manufacturing cheap steel was fully established, it still turned out half as much steel again as Germany. On the other hand, when we entered into the struggle with Germany in 1914, we engaged in conflict with a nation

that was producing 85 per cent. more pig iron per year than we were, and 143 per cent. more steel. The history of the war and of the Ministry of Munitions is, to a very great extent, a commentary on this simple statement.

It would be folly to suppose that, by any conceivable efforts of manufacturing ability or national policy, this little country could have permanently retained the allround industrial supremacy, measured in terms of output, which it enjoyed in the middle of last century. A country such as the United States, with an area five-and-twenty times as large as that of the United Kingdom, with extensive natural resources of almost every kind, and with a rapidly growing population of European stock, was bound to surpass us, and to surpass us vastly, in the scale of its manufacturing activities. The remarkable thing is not that, in the matter of iron and steel, America should have left us far behind-its production is already three times as great-but that it should have taken so long to catch up.

The growth of the steel industry in the United States requires separate treatment; it is Germany with whom we are at war; and it is Germany, far more than the United States, that has been competing with English steel-makers alike in Britain itself and in oversea markets. And, applied to Germany, the fatalistic explanation is by no means convincing. That Germany in 1913 had a population 44 per cent. greater than that of the United Kingdom is not a sufficient reason why it should be already producing 85 per cent. more pig iron, or why it should have reached that degree of preeminence within a decade from the time when it was hardly more than level, and during those ten years should have advanced seven times as rapidly as our country. For it must not be imagined that, when Germany began to forge ahead, it enjoyed any advantage in the way of material or fuel or labour. It had only recently, it is true, realised how large were its supplies of coal; the annexation of the Lorraine ore-field in 1871 had greatly supplemented its command of iron deposits; while the application from 1879 onward of the basic process, invented by the Englishman Thomas, had enabled it to utilise its ores for steel making. But the Lorraine-Luxemburg ores-the basis on which the German steel industry was originally

created, and on which, in the main, it still rests-cost considerably more at the furnaces than the ores consumed in Cleveland, Lincolnshire and Northamptonshire.' This is the opinion of the Delegation of the British Iron Trade Association which went over to inspect the German works in 1896. The cost of fuel,' they also reported, 'at the mine's mouth' was about the same as in our own country.' As to labour, there was not the difference in the wages paid, as between Germany and this country, that was generally supposed to exist'; one might safely go further, and say that, on the whole, wages in the two countries were about the same.

Nor is it true that Germany has outpaced Britain because of superiority in metallurgical science. It is, of course, common knowledge that all the great creative inventions in iron and steel, from the days of Darby and Huntsman and Cort to those of Neilson, and then on to those of Bessemer and Musket and Siemens and Thomas, were made in England, the only outstanding exception being the work of the Frenchman, Martin. But there is an impression in some quarters that, during the last half century, German science has taken up the running and shot ahead. This is not the case. The method of blowing blast-furnaces by the combustion of their own waste gases, the production of high-speed toolsteel by the introduction of tungsten and other element the application to the structure of metals of microscopical analysis-advances of three very different kinds but all of them of the first order-were all of English origin.

However it may be in other fields, in metallurgical practice the German intellect is not original and creative, but imitative and receptive; it applies, systematises, organises. German scientific experts are not better than ours, but there is more demand for them, and their advice is more quickly listened to. Where Germany has been strong has been in business acumen and enterprise. And there is little doubt that in 1914, though there were concerns in this country which could compare favourably with the most up-to-date German establishments, our manufacturing practice on the whole was backward and relatively inefficient. In introducing electricity into our works, in applying gas engines, in installing bye-product plant, we have been unnecessarily slow. The trucks which