No. 28.
Mr. Dockery to Mr. Seward.

No. 13.]

Sir: Referring to your circular of August 16, 1877, I have the honor to report with regard to the export trade of this district, that its present [Page 90]condition is anything but satisfactory to manufacturers here. Linens and woolens being the chief articles of production, our duties have effectually checked exportation to the United States, only a small quantity of the very highest class of woolens, with somewhat more of the cheaper stuffs, finding their way there.

From conversation with leading merchants here, I am justified in saying that they have virtually abandoned the hope of ever again seeing their manufactures exported in large quantities to the United States; they also appear to have become indifferent about the requirements of the American market. They further aver that a moderate reduction in the duty on woolens would be of no effect in stimulating trade, but that to produce any marked change the duty must be taken off entirely. This convinces me that English manufacturers no longer monopolize the manufacturing industry, because against our tariff and increasing enterprise they have continued a hopeless struggle, until now they are forced reluctantly to admit that even with a free entry they are not certain that they could advantageously compete in America with the home manufacturers.

Undoubtedly our tariff is the original cause of the decline in trade here, but as that trade has been steadily decreasing with the same tariff in force, it is evident that other causes are at work as well. Frequent strikes here and an uncertain system of labor have aided in increasing the cost of production throughout the kingdom. It is also said that an American artisan will do twice as much work in a given time as an English artisan, and that the workmanship itself is superior. This will explain why the difference in the price of labor should not be considered in any comparison of the productive resources of the two countries.

Again, during all this time the cost of production in the United States has been gradually decreasing, and there has been a steady improvement in the manufacturing industry. Whether the advances made are sufficient to enable them to thrive without the aid of protection is matter of conjecture.

But it is a fact that through American enterprise England has not only lost her best customer, but that customer is competing with her in India, Brazil, and other markets, and nothing is more certain than that the Americans will never come back to this market. So that England has not only lost an important market, but she has met with an active, shrewd, and powerful competitor, which produces as well as manufactures.

The subject how to regain their manufacturing superiority is the leading topic with the newspapers and among all classes of people, but no one has yet been able to suggest any feasible plan by which that object can be accomplished. While the loss of prestige is often deplored they seem to fold their arms in enforced impotency.

The difficulties of the situation are great, and the master-key cannot be found, apparently.

The one dominant idea in England on free trade is gradually, though surely, losing favor, and people are beginning to wonder if protection may not, after all, be worthy of serious consideration. They are disposed to regard protection less unfavorably than hitherto, since they observe its beneficial influence in almost all other countries 5 and the idea of government bounty to the manufacturers is being agitated. It is, therefore, becoming painfully evident that something must be done, or else the mainstay to the prosperity of this country is gone forever. From such observations as it has been in my power to make, I am impelled to the conclusion [Page 91]that there is no remedy, and by consequence British commercial interests must continue to decline, and while I regret the prospect, yet I take consolation in the knowledge that our country is destined to be inversely affected.

As before remarked, there are two sorts of woolens sent to the United States. The finest kind, I am told, is for those consumers who must have foreign goods at whatever price in cost and duty, while the other kind is very cheap and pays only a small duty. But the total export is not large and is annually decreasing.

The linen trade is likely to survive somewhat longer, because this branch of industry being yet in its infancy in our country, the production is much less than the demand. However, I notice the increasing demand for jute and hemp machinery for the United States, and it is probable that ere long we shall be able to supply our wants at home.

On the other hand, the importation of American goods is constantly on the increase, not only of the staple products, but entirely new channels of trade are being opened, with fair prospects of success. In a future report I purpose to deal with the import trade.

It is apparent that the United States is destined to be the one country on the whole globe where can be produced all the requirements of both necessaries and luxuries, being dependent upon other countries for nothing in exchange for surplus productions, so that there must be a constant accumulation of wealth.

I am, &c.,