had emphasized the importance of free access to markets and sources of supply, and its coincidence with the prolonged conflict of the Revolutionary and Napoleonic wars had enabled British commerce and shipping to make extraordinary strides. While the development of the continent had been retarded by twenty years of devastation and disorganization and the flags of continental States swept from the seas, the British mercantile marine had not only made good its losses but expanded. British shipowners had taken the place of the Dutch as the common carriers of the world, and Great Britain rather than Holland was now the emporium for the world's commerce. The colonial traffic no longer afforded adequate employment to British shipping, which was actively engaged in the carrying trade of every part of the globe. Hence it was now Great Britain rather than her rivals who had most to fear from a competition in restrictive legislation or imposts, and in order to avert such a calamity a series of Reciprocity Treaties were concluded with various Powers, beginning with Prussia and Denmark in 1824. About the same time the complaints of the Colonies were partially met by permission to export to any place in Europe, Africa, or America either in British ships or in ships of the receiving countries and to import goods in ships of the producing country.

Thus, although the Navigation Laws were consolidated in 1845, and there had been no abandonment of the principle which they enshrined, so many modifications had been introduced into the system that it was estimated that over fifty per cent. of the foreign trade was governed by the exceptions rather than by the rules. In these circumstances the protection afforded by the Acts was small, while the inconveniences arising from the remaining restrictions were acutely felt by traders. Moreover, the experience gained under the Reciprocity Treaties suggested doubts as to whether the form of protection provided by the Acts was really necessary or advantageous to British shipping under the conditions of the time. The tonnage on the Register rose from 2,500,000 in 1827 to 4,000,000 in 1848, and the increase in the tonnage of British ships entered and cleared during the same period was actually much greater and proportionately very little less than that of foreign vessels. In these circumstances, an agitation sprang up for bringing the shipping industry into line with the newly

adopted free trade policy of the country, and in 1849 the entire body of the Navigation Laws was repealed with the exception of the clauses relating to the coasting trade. In 1854 the coasting trade itself was thrown open and British shipping was left to compete on its merits in every branch of traffic.

The repeal of the Navigation Laws was bewailed by many of the shipowners as heralding the downfall of British shipping; but their gloomy prognostications were happily contradicted by the course of events. The frank acceptance of foreign competition proved to be a stimulus to greater efficiency on the part of British shipowners and shipbuilders, and a successful effort was made to rival the performances of the American clippers. At the same time the government turned its attention to promoting the welfare of the mercantile marine by legislation aiming at a higher standard of education and capacity among masters and officers, stricter regulations with regard to the safety of ships, and better treatment of the crews. The transition from wood and sails to iron and steam gave an opportunity of which full advantage was taken, and the proportion of British tonnage in the trade of the United Kingdom rose from 65 per cent. in 1850 to over 68 per cent. in 1870, twenty years after the repeal of the Acts.

Since then British shipping has held its own with extraordinary success against the competition, often the heavily subsidized competition, of foreign services. Its positive progress has been almost unbroken, and if its relative position has suffered some diminution, it must be remembered that the overwhelming supremacy of British shipping, as of British commerce, during the earlier part of the nineteenth century, was due to abnormal conditions, and that some part of the leeway made by belated starters in the economic race was bound to be made up. By no conceivable system of commercial policy could nations possessing great natural resources and an industrious population have been prevented from taking part in the trade of the world when once their internal conditions and external relations permitted them to apply themselves to industry and commerce. A comparison of their trade and shipping to-day with those of the period preceding their economic awakening, affords no reliable criterion of their future progress relatively to our own. It must be remembered also that the commerce of the world, with the demand for

carrying space which arises therefrom, is not a fixed stock so that one nation's gain is necessarily another's loss, but that the market for our own goods and our own services depends upon the economic development of our competitors. Despite all the advance made by certain of these competitors, ships under the British flag accounted in 1914 for 45 per cent. of the world's steam tonnage.* British ships carried about 90 per cent. of the total trade between the United Kingdom and the Overseas Dominions, 56 per cent. of the trade between the United Kingdom and foreign countries, and about one-half of the total seaborne commerce of the world.† In the face of these facts the supposition that British shipping will be unable to hold its own in the future without protection seems a little far-fetched. It may be urged, however, that the losses of the mercantile marine during the war have been heavy and that the incidence of war taxation has prevented British shipowners from laying by such large reserves for the replacement of lost tonnage as their foreign rivals. In view of the importance of the question, any proposal for securing our shipping position may at least claim to be considered on its merits.

It is necessary first of all to consider the possibility of reviving the Acts for the more limited purpose upon which Dr. Holdsworth lays special emphasis, namely, the restriction of German trade. Our views with regard to this aspect of the question will necessarily depend very much upon the nature of the peace. If the declared objects of the Allies are attained by the signing of a peace which lays more stable foundations for the fabric of international intercourse, we shall be spared the necessity of transferring the struggle from the military to the economic sphere and there making it perpetual. If, on the other hand, the Allies are forced to acquiesce in a treaty on the old strategical lines, it may be necessary to contemplate the permanent division of the Great Powers into two hostile camps in a state of perpetual economic conflict, breaking out at intervals into open war. It is not an inspiring picture :

*Based on Lloyd's Register.' The figures include American tonnage employed on the Great Lakes. If these are excluded the percentage rises to 47.5.

Report of Committee of Chamber of Shipping and Liverpool Steamship Owners' Association,' 1917.

but if it becomes necessary to face it, it will at least be well to cherish no illusions with regard to the prospect. And it would be one of the gravest of illusions to imagine that such a situation would necessarily imply the disappearance of German commerce. We have already seen how small was the effect of the seventeenth century Acts upon the prosperity of Holland, a country occupied almost exclusively with the carrying and entrepôt trade, and there is perhaps even less reason to believe that a similar policy would prove fatal to Germany, a State highly developed industrially, and possessing vast resources of material and labour, intercourse with which must always be a matter of consequence to many foreign countries.

In the last year before the war the entrances and clearances with cargoes of German shipping at German ports amounted to some 36,000,000 tons, and in addition a large amount of German tonnage was employed in trading between foreign ports. The total entrances of German shipping at ports in the United Kingdom, other than those of ships coming from Germany or German possessions, was a little over 2,000,000, and a large proportion of this tonnage represented the calls made by liners in the North American trade, which discharged only a small part of their cargo at British ports. German ships entered at ports in the Overseas Dominions were mostly liners on the direct run from German home ports. It is clear, therefore, that the revival as against Germany of the principle of the Navigation Acts would by no means spell ruin to the German mercantile marine. The chief effect would probably be, as in the case of the Dutch, to intensify German competition on every track other than those leading to British ports.

It may be suggested that we should go farther, that the restrictive measures proposed should be applied simultaneously by all the Allies, and that German shipping should be excluded from any participation in the carriage of goods between ports in the British Empire, France, Italy, Portugal, the United States, and Japan. Even so, there would remain to the German shipowners the direct trade of Germany itself with these countries, and the whole carrying trade of countries at present neutral. Since Allied shipping would be diverted to a great extent from the general carrying trade by the necessity of providing cargo space for goods hitherto carried by German

vessels, it is certain that the German share in the traffic of neutral countries would be greatly increased, nor could German shipping be prevented from profiting by the increased trade of Germany with States whose producing and purchasing power was developed by British or American capital and enterprise. The logic of the situation would seem to lead almost inevitably to the absolute exclusion of German shipping, even when bound from Germany itself, from the ports of the Allies, and this in turn would involve practically the total cessation of commercial intercourse between the Allies and the Central Powers, together with such neutral States as, being economically dependent upon Germany, should attach themselves to the economic system of Middle-Europe rather than to that of the Western Powers.

Is there any assurance that such an exclusive system, involving a vast redistribution of trade on artificial lines having no relation to economic needs, could be permanently maintained? The answer is at least doubtful, the more so because the degree of loss and inconvenience suffered would vary greatly as between the several members of the Allied group. The economic interests of the Allied nations are by no means identical, and they are themselves competitors in many branches of commerce. Impatience of the restrictions imposed would provide the German diplomatists with opportunities for sowing discord of which they would not be slow to take advantage. Moreover, even if the system could be maintained, it is by no means certain that the German economic group would not receive such accessions from States whose commercial prosperity was dependent upon the German markets or supplies, as to afford employment to a body of shipping as large as that required before the war for Germany's share in the world's traffic.

We may turn, therefore, to the larger question of a revival of the policy of the Navigation Acts as a measure of encouragement to British shipping. For this purpose it is obvious that the exclusion of German competition will not suffice. Indeed our chief competitor after the war will be the United States, who have already increased their tonnage to an enormous extent. Japan Japan also, with also, with a greatly increased output, relatively small losses, and extended trade connexions, will be a formidable rival in the traffic of the Pacific and the Far East. Norway, even before the war, played an important