[BILL 198.] COMMITTEE. (Hansard, 15 June 1865)

§ THE CHANCELLOR OF THE EXCHEQUER

said, the object of the Bill was to give effect to a treaty which had not yet been ratified, and therefore could not be presented to the House in the usual form by command of Her Majesty, but for the information of the House, as the treaty required legislation, a copy had been presented as a return from the Treasury. The treaty was an attempt to establish a practical equality as far as regarded sugar duties between four European countries, which among them comprised a very large 281 share both of the import and consumption and the refining trade in sugar; namely, France, England, Belgium, and Holland. It was very well known that for a length of time it had been a matter of complaint in certain of these countries that the legislation of the other countries was so regulated in relation to duties and drawbacks as to operate unfairly upon them, and the refiners in particular in this country had loudly complained that a large bounty was practically granted to the refiners of sugar in Holland under the name and title of drawback. We believed in this country that our drawbacks were fairly adjusted to the duties paid by our refiners, but complaints were made against us in France and Holland that our drawbacks included in them the element of bounty. The French Government made to Her Majesty's Government a proposal three years ago that we should endeavour to arrive, on this great article of commerce which was the subject of so much exchange between the respective countries, at an uniform system. Her Majesty's Government, replied, that it would be impossible to think of inducing Parliament to enter upon any system of duty on sugar which should cripple or restrain the liberty of Parliament with regard to making that article a vehicle for its financial purposes; that they could not by any international convention agree to part with their liberty of raising or lowering the duty upon sugar; but still it was urged that what might be done was this, that our Government might agree to establish a certain relation between their duties on sugar and their drawbacks, which should come as near to absolute equality as science and experience could bring it, and that they could also undertake so to adjust the duties on sugar that if they did not think fit to make them uniform on all qualities of the article, yet the relative duties should be so accurately adjusted to the value for refining purposes that whatever the amount was, so long as that proportion was observed, it might move up and down so as not to interfere with the principle that all on sugar going out of the country should receive back neither more nor less than the duty it had paid on coming into the country. In pursuance of this view of the French Government, to which Her Majesty's Government acceded, they went into the matter, and the result was the treaty to which he had referred. With regard to the scale of duties on sugar that treaty provided that careful and elabo- 282 rate experiments should be instituted on behalf of the four Powers in common, and subject to verification by the representatives of every one of those Powers. That was the mode by which it was proposed to fix the relative amount of duties to be levied on different classes of sugars; and so far as that part of the treaty was concerned, which was the most important part, the operation of the treaty would remain to be determined according to the result of those experiments when verified and accepted by Her Majesty's Government. But, in the meantime, the representatives of each of the Powers, in their examination of the present state of the law, became judges of the justice of the legislation of the other, and, of course, in each case of legislation three of the Powers might be considered to be impartial, and in some degree competent to pronounce on the legislation of the fourth. The effect of that was that various flaws were found in the scales of duties of the other Powers, and important boons would consequently be conferred on our refiners by the rectification which, under the treaty, would at once take place without waiting for the result of the experiments in the laws of the other contracting parties. But these contracting parties, when they came to be judges of our law, laid their finger on what they unanimously held to be two decided flaws. One was, that our drawbacks were too high, and contained the element of bounty; the other was, that in addition to our varying tax on sugar, to which in principle they did not object, and our separate duty on molasses, we had a duty on an article anomalous in character, being neither molasses nor sugar, namely, the article called milado, which was supposed to be a mixture in given proportions of sugar and molasses; and the representatives of the other Powers had made our concession of these two points an absolute condition of their acceding to the treaty. Her Majesty's Government had done what they could to ascertain how far they could proceed safely in this matter. There was no fiscal question involved; there was no question of competing claims between the Exchequer and the trade. The sole object was to make a convention which would tend to the enlargement and prosperity of this great trade. They found, as regarded the drawback, in which the refiners were principally interested, that there was a decided and general willingness to assent to the reduction proposed. They found 283 that as regarded the duty on milado, what was demanded by the other Powers, was that they should abolish that as a separate duty, and raise it to the standard of the duty which they now levied on the lowest class of sugar. The arguments that were used by the other Powers in support of this course were two. One of them was that it would be manifestly almost impossible, by ordinary methods and experiment, to ascertain the actual constituents of milado. The second argument was that it therefore followed that there would be proportionate facility for fraud, by the introduction, under cover of that title, of quantities of sugar larger than ought to come in in proportion to any rate of duty fixed upon it. In the first place they were not able to deny the force of these arguments, and in the second place they had to deal with this state of things, that the representatives of the other Powers might say, "Accept these terms, or else we are not able to enter into this engagement." Therefore, the question was whether it was desirable in the interest of this trade to carry this treaty into effect. Her Majesty's Government were of opinion that it was. That was the proposal they now made. One or two words more. Let it be clearly understood that there was nothing in this convention to prevent Parliament from taking whatever steps it thought proper with regard to raising or lowering the duty, and there was nothing in the treaty to fetter their dealing as they thought fit with that part of the subject which was called refining in bond. That was a matter in respect to which great difficulties were apprehended, and he did not think that any mode of overcoming those difficulties had yet been discovered, but there was nothing in the international obligation that affected it. It had been represented to the Government that in altering this separate duty on milado some hardship would be inflicted on the owners of part of the article that was on its way or was in course of preparation for coming here, and they were disposed to think that there was some equity in those representations. They had consequently made a request to the other Powers, who entered into this convention, that the new duty on milado should not take effect immediately, but should take effect on and from the 1st September next.