OBSERVATIONS. (Hansard, 19 June 1865)

§ MR. HUBBARD

said, he wished to draw the attention of the House to this subject. It had transpired that the treaty had been already discussed in both the Prussian Chambers, and that though it had not been formally presented the ratification was now on its way. He had received from a traveller a copy, which be believed to be a true one, and it might not be uninteresting to call attention briefly to a few points in connection with it. The treaty might be described in a few words to be an engagement between Prussia and the Zollverein on the one hand, and Great Britain and her colonies on the other, to the effect that the two contract- 462 ing parties should, with reference to trade and traders, he placed upon the footing of the most favoured nation. It was a declaration of reciprocity, and that only. But there was one very remarkable clause, the fifth, which contained this stipulation— The two contracting parties engage not to prohibit the exportation of coal, and to levy no duty upon such exportation. It would be in the recollection of the House that when the French Treaty was discussed there was one clause which met with very serious animadversion, and that was the clause in which the Government of Great Britain undertook for a period of ten years not to prohibit the exportation of coal, and not to levy any duty upon it. That clause was so utterly devoid of any reason to support it that it was assumed on all sides to be the result of an oversight. He could not think, however, that the recurrence of a similar clause in this treaty was the result of an oversight. There were two ways in which this clause might be regarded In the first place, it might be said that the clause was totally unimportant, and therefore might pass without any notice whatever, or else that the conditions to which Great Britain had bound herself were in themselves impracticable, and that, in point of fact, we had promised nothing except what we were really obliged to concur in. He was not prepared to accept that solution, because it would mean that our Government had made a solemn compact on a point either which was really wholly unimportant or that we were practising a delusion on the other contracting parties. But let the House consider whether the point was so unimportant. In certain circumstances nothing could be more legitimate or useful than an export duty, and if they were to look for precedents, what should they find? They found that in almost every instance a new country had begun by levying a duty upon its exports, because they were the first means of raising a revenue through their trade. And what had been the course in Europe? He had been engaged in the Russian trade all his life, and he could perfectly well recollect that Russia had invariably levied an export duty upon her productions. This country had from time to time strongly protested and remonstrated against this as an infringement of the principles of free trade, but the reply always was to mind our own business. Russia had not been able to continue to levy uninterruptedly the same duties in 463 consequence of the competition of other countries. India with its jute competed with her hemp, Australia competed with her in the production of tallow and hides, and thus Russia was forced to diminish her duties, and at present they were hardly noticeable. But we had an example nearer home. In India the late Financial Secretary, Sir Charles Trevelyan, had selected the four important articles of tea, wool, jute, and coffee for the purpose of raising a revenue. That proposal had met with the disapproval of the Secretary of State, and rightly, because in the present position of India there was not one of those articles on which a duty could be levied without some risk of arresting their production and consumption. Turning to the United States, we found that they were proposing to replenish their exhausted Treasury by levying a duty as high as 25 per cent on the export of cotton. Here we had instances in which important countries had taxed articles of annual production, which must, therefore, more or less, come into competition with the productions of the whole world. But there were other products of a different character not reproductive and not exposed to direct competition. There had been an export duty on Sicilian sulphur, but the Italian Government were obliged to diminish it, not owing to the competition of other sulphuric mines, but owing to the rivalry of chemical substitutes. The principle of export duties was by no means a new one, and although they required careful regulation, und that few countries were able to maintain them, yet when circumstances warranted their adoption, they were irreproachable. There were in England two commodities—coal and iron—the exports of which might be taxed without interfering with industry or checking the export of the commodity. In common with many economical writers he contended that they were both legitimate and advantageous subjects of taxation, because whatever duty was imposed on them was so much clear gain to the country, and, if kept within a moderate amount, it was a gain which carried with it not the slightest disturbance of trade, inflicted not the slightest injury upon the producers, and was so much tribute secured from the foreigner in return for our unexampled natural products. Coal and iron were gifts of Providence, and it was the duty of the Government to utilize these commodities for the benefit of the coun- 464 try. From them a revenue of three-quarters of a million sterling might be derived without any countervailing disadvantage. It might be said that this was a selfish policy, and that we ought to allow foreigners to receive freely these products of ours. But did we find that foreigners were as forbearing in the admission of our products as we were in allowing the free export of those products? We were engaging not to tax the export of coal; but Belgium levied a duty of 9d. on the import of coal; France, 1s.; Turkey, 2s. 3d.; the Zollverein, 2s. 6d.; and Spain, 5s. 6d. There was no reciprocity in an arrangement binding us not to tax the export of one of our staple commodities, while the contracting parties taxed it so seriously. He did not wish to advocate a selfish or narrow policy, but coal and iron were essential to the manufacturing industry of the age; they were also essential elements in war, and the country which could command them more readily than her neighbours would be best able to maintain her supremacy. Why, then, should we bind ourselves to cede untaxed these essential elements of commercial, manufacturing, and warlike superiority to other countries without any equivalent consideration in their engagements? In this treaty there was not the slightest consideration for the concession that was made. Much had been said lately of the hardships of the paper manufacturers arising from the fact that foreign countries levied upon the export of rags a very large percentage of duty, amounting, in the case of the Zollverein, to £5 per ton. Now, when we were undertaking to let the Zollverein have our coals free of duty, it would not have been too much to ask that the Zollverein should let us have their rags free of duty. Passing, however, from the commercial and fiscal question involved, he objected to a treaty which placed a continuous and serious embarrassment in the way of the Government of this country for years to come. What right had any Government in a treaty to tie the hands of its successors for twelve years to come in dealing with the important article of coal? If it were necessary to touch the question at all, surely the Government might have been satisfied to extend to the Zollverein the same indulgence as was extended to France. The clause of the French Treaty by which we undertook to put no export duty on coal would terminate in five years, as five had already run, and under the 465 most favoured nation clause the Zollverein would have enjoyed the same privilege; but this treaty was to last for twelve years, and during this time the Government had abdicated the right of regulating our revenue with reference to coal. He should like to know with whom the clause originated. Was it proposed by our Government or by Prussia, or by some of the minor States? Was it Hanover or House or Oldenburg that proposed it? Hanover was a coal-producing country. Now, suppose Hanover could only produce coals at 17s. 6d. per ton, and Prussia could import them from this country at 15s., Prussia might impose an import duty of 2s. 6d., bringing up the cost to the producer to the price at which Hanover could supply them. It was monstrous to let an article go untaxed from here, and be taxed on arriving at the other side of the water for the sake of the local producers of the same commodity. Had any concession been promised in return for the clause? He did not wish to ask for correspondence, which it might be unusual or inconvenient to produce; but he wanted to know how this remarkable fiscal blunder had originated, how these treaties were got up, who was responsible for them, and what was their object. Did they originate with the Board of Trade or the Foreign Office? Was there an itinerant mission going through the Continent making treaties in an arbitrary dilettante manner? The Austrian Treaty was supposed to be on the stocks, and the issue might be a document of a similar nature. It was therefore important to know who was responsible for arrangements which embarrassed the Government, impaired the internal management of the nation, and conferred advantages upon foreign countries without any consideration in their engagements towards us.