SUGAR CONVENTION BILL.

HC Deb 28 July 1903 vol 126 cc587-627

[SECOND READING.]

Order for Second Reading read.

* THE PRESIDENT OF THE BOARD OF TRADE (Mr. GERALD BALFOUR, Leeds, Central)

On the 24th of November last this House passed the following Resolution That this House approves the policy embodied in the Convention relating to sugar, signed at Brussels on the 5th of March, 1902, and in the event of the Convention receiving the ratifications required to make it binding, is prepared to adopt the necessary measures to enable His Majesty to carry out its provisions. Since that Belgium, Germany, France, the Netherlands, Austro-Hungary, and Great Britain have all ratified the Convention, which thereby has become a binding document on those Powers. The Bill of which I ask leave to move the Second Reading to-day is a Bill, in the language of the Resolution, "to enable His Majesty to carry out" the provisions of the Convention. It is a Bill, in other words, the provisions of which have already received the sanction of the House of Commons, and to, which the good faith of this country is pledged. It will be clear to the House that Great Britain cannot recede from engagements it has entered into or fail to carry them out without infinite discredit to itself, and without destroying the confidence of foreign nations in our ability and willingness to carry out our international obligations. I would not do hon. Members who oppose this Bill the injustice of supposing that this consideration has escaped them, and therefore we may perhaps fairly assume that in taking the unusual course of opposing the First Reading and now in opposing the Second Reading they are actuated not so much by any expectation of being able to defeat the Bill, but rather by a desire to express their hostility to the principles of the Convention itself, and perhaps they would not carry their hostility so far if they thought there was any real chance of their securing a majority in the lobby. (OPPOSITION cries: "Nonsense" and "Yes we should.") I am very sorry to hear that statement because, whatever the intention in opposing this Bill may be, the effect of success would be to prevent this country carrying out its treaty obligations.

MR. GIBSON BOWLES (Lynn Regis)

Is not the right hon. Gentleman aware that these treaty obligations are specifically conditional upon the constitutional laws regulating this country.

* MR. GERALD BALFOUR

This country is absolutely pledged to the Convention which has been ratified after receiving the approval of the House of Commons. In any case I feel sure of this, that that is the view foreign Powers are certain to take. I hope that hon. Members, at any rate on this side of the House. even if in the first instance they were opposed to the policy of the Convention, will do nothing now calculated to east a doubt upon our obligation to give effect to the provisions of the international instrument to which we have set our seal.

Even apart from that consideration, has anything occurred which would justify the House of Commons in reversing the approval of the policy of the Convention which it placed on record last November; or is there anything in the Bill of an unexpected, objectionable character which would justify such a reversal? So far as I know t here is nothing. On the contrary, what has occurred since has rather tended to remove objections which were formerly felt than to create new ones. Take, for instance, the question of the application of the Penal Clause to our colonies. The other Powers in depositing their ratication made no reservation whatever. The only Power which made a reservation was Great Britain, who added the following declaration:— In depositing the ratification of His Britannic Majesty, the Minister for Great Britain declares it necessary to place on record that the Government of His Britannic Majesty will not consent under any circumstances to be bound to penalise sugar imported into the United Kingdom from any of the self-governing colonies. He further declares that His Britannic Majesty's Government are not prepared to accept any reference of this question to the permanent Commission to be established under Article 7, and His Majesty's ratification of the Convention is deposited under the specific declarations above mentioned. Why was this reservation made by the Government of Great Britain? Because doubts had been expressed in many quarters as to the true meaning and interpretation of the Convention. The view taken by the Government has however never charged It was expressed in a circular dispatch from the Foreign Minister dated 13th January of this year— The attitude of His Majesty's Government in regard to the matter has never varied. They have declined altogether to agree that Great Britain should be under any obligation to treat British colonies as foreign countries. The British delegates at the Brussels Conference repeatedly and formally declared that the fiscal relations of Great Britain and her colonies must remain outside the Convention, and that under no circumstances would the Penal Clause be applied in the United Kingdom to British colonial sugar. Those declarations are recorded, and are most explicit and categorical. I admit that if the terms of the Convention had really put us under a contingent obligation to penalise colonial sugar, in that case the Convention would have been open to very serious objections from the British point of view, even though the contingency might be remote. We therefore thought it our duty, in order that there should be no doubt as to the true significance of the Convention, to direct His Majesty's Minister in depositing the ratification to accompany it by the reservation which I have just read, which removes all possible ambiguity.

Again, exception has been taken to the powers entrusted to the Permanent International Commission, the most extravagant and exaggerated language has been used on this subject. We have been told that we were abandoning the autonomy of our commerce and destroying the independence of our finance, and it was not obscurely hinted that the representation of the Continental Powers on the Commission would combine together to outvote the British representative, with the deliberate intention of injuring British interests. How they were to contrive that is not apparent. The Commission have however met, and what have they done? They have considered the legislation actual or proposed of the various contracting countries—including the Bill now under discussion—and no objection has been taken to the legislation, of any of the contracting countries, with the exception of Austria-Hungary and France. In the case of Austria-Hungary the Contingent Law was declared by the Commission not to be in harmony with the provisions of the Convention. In regard to France, exception was taken to the arrangements for refining in bond. We have every reason to be lieve that the legislation of Austria-Hungary will be brought into harmony with the provisions of the Convention before the 1st of September, and we have also reason to believe that at the earliest possible date France will make the necessary amendments in her system of refining in bond. So much for the contracting powers.

But what about the non-contracting countries? In the case of Spain, Denmark, Japan, and Roumania, the Commission have fixed the amount of the countervailing duties to be levied. None of those countries during the last year sent to Great Britain any appreciable amount of sugar, so that it will not be necessary to apply to them the Penal Clauses,

MR. LOUGH (Islington, N.)

But suppose sugar comes from those countries?

* MR. GERALD BALFOUR

If sugar comes from those countries in any appreciable quantity, it will be the duty of this country to apply the Penal Clause. So far there is no reason to believe that sugar will come in sufficient amount to make it necessary to prohibit its entry. As to other non-contracting States, the Permanent Commission have, as a provisional measure, applied the scale of countervailing duties at present in use in the United States. What is the practical effect of that decision? In the case of four countries, and four only, does it appear that we shall have under any circumstances to apply the Penal Clause. Those countries are Russia, Argentina, Chili, and Peru. In the case of Russia the amount of sugar sent to this country during 1902 amounted only to about £2,000 worth. Peru has already signified her desire to adhere to the Convention, but she has not yet brought her legislation into conformity. It is not yet known whether Argentina and Chili intend to adhere to the Convention. The case of Argentina is somewhat peculiar, as part of the sugar exported from that country is in receipt of a bounty and part is not. But that has caused no difficulty in the United States, and I see no reason why it should create any difficulty here.

With these facts before us we have some measure of the true magnitude of those molehills which certain hon. Members have been so anxious to magnify into mountains. We now see what these magniloquent phrases about abandoning the autonomy of our commerce and destroying the independence of our finance really come to. Even supposing—which do not for a moment believe will be the case—that we had to prohibit the entire imports of sugar which we receive from these four countries, it would amount to only about 1,000,000 cwts., or less than one thirtieth of the total amount imported into this country.

MR. LOUGH

How much do the West Indies send?

* MR. GERALD BALFOUR

That has, nothing to do with the point. Seeing that the total production of the world is. about 13,000,000 tons, a change in the. particular source from which about 50,000 tons—less than one-half per cent. of that production—is sent to the British market, need not seriously disturb the slumbers of my right hon. friend the-Chancellor of the Exchequer.

I think I have said enough to show that nothing has occurred since the passing of the Resolution last November to justify the reversal of the conclusion then arrived at. I suppose, therefore, that those who intend to oppose this Bill will rest their case upon the arguments with which we were made familiar in the previous debate. Now on that occasion three main lines of opposition were urged. In the first place there was the opposition of those, who profess a desire for the abolition of the bounties but who object to the Penal Clause. That was the attitude taken up by the Royal Commission which inquired into the case of the West Indies, and until last year it was also generally believed to be the attitude of the majority of the Liberal Party. At all events that was the policy they had, pursued for very many years past. Last year I must admit revealed a change. Whether hon. Members opposite have been converted by the confectioners in their constituencies I cannot say; but at all events most of them seem to have deserted their colours and gone over body and soul to the second class of objectors. What are the second class of objectors? They are those who claim to represent the interests of the consumers and of the sugar-using industries, and ho denounce the Government for having wantonly thrown away a present of millions of money which the bounty-giving nations are foolish enough to make us. The third class of objectors are those who hold that the Convention will not have the effect of appreciably raising die price, and therefore cannot avail to save the West Indies from ruin.

In the course of the previous debate I went very carefully into these various arguments, and I do not wish now to travel over the ground which I then traversed in detail, but I should like to make one or two observations. In the first place it is evident that these various objections are not really consistent one with the other. Those who hold that the abolition of bounties will in itself be a good thing, though they may object to the particular means we have taken to bring it about, cannot complain of the economic effect of the abolition of bounties, which is obviously independent of the means by which it has been effected. They cannot, make it the ground of opposition to this Bill that the effect of the Convention will be to raise prices. On the other hand those who contend that the effect of the Convention will be to cause a heavy rise in price to the consumer, cannot also contend that the West Indies will not be benefited. We shall probably in the course of this debate hear all these arguments over and over again, but I trust that at least we shall not again hear them used by the same speakers. In the next place the effect which the Convention is likely to have upon prices is so important that I should like to say a few words on this part of the subject, in order to make the position clear as I understand it. The opponents of our policy argue as if this was a perfectly simple matter. They start from an assumption that a bounty of 5s. per cwt. or £5 per ton is given by the producing countries. They take the consumption of this country at about 1,500,000 tons, and by multiplying the figures together they arrive at the easy conclusion that this country, by the effect of this Convention, will be throwing away a sum of money equal to between £7,000,000 and £8,000,000 sterling. My hon. friend the Member for Kings Lynn, speaking the other day at a meeting in the Westminster Palace hotel, went even farther than this. According to the Times of July 18th he said— It was a Bill the essential clause of which put the King of England into foreign bondage, for he was placed under the orders of a. permanent Commission sitting at Brussels. Sugar which in Berlin cost 5d per 1b. and in Paris 7½d per lb. could be bought in London for 1½per lb. That was in consequence of the now existing, but soon to be abolished, bounties. In other words my hon. friend the Member for King's Lynn made a bounty, which at the utmost calculation does not amount to more than a halfpenny per £, responsible for a difference in price as between London and Berlin of 3½d and as, between London and Paris of 6d.

* MR. GIBSON BOWLES

The figures I quoted were from Mr. Czarnikow a. very great authority in the sugar trade.

MR. GERALD BALFOUR

It is quite possible that the figures quoted correctly represent the difference in price between London on the one side and Berlin awl Paris on the other. But I do not think Mr. Czarnikow drew the same conclusion as the hon. Member. I do not think he would be prepared to commit himself to the hon. Member's deduction that a bounty of a halfpenny per pound was responsible for a difference in price as between London and Paris of 6d. I really think that my hon. friend the; Member for King's Lynn on this occasion has given somewhat less careful consideration than he usually does to the subjects to which he devotes his attention, or else he must have been presuming a good deal on the credulity of his audience. However that may be, even the more modest estimate of between £7,000,00 and £8,000,000 which we are informed the British Government have recklessly and foolishly thrown away rests upon a patent fallacy. What is that fallacy? It is that of supposing that the producers and exporters of bounty-fed sugar make a present of the whole advantage of the bounty they enjoy to the British consumer. It is absolutely certain that they will do nothing of the kind unless they are obliged to, and they will only he obliged to do it in certain very exceptional conditions of the talker,. As a general rule, I doubt whether they give one-tenth part of the bounty they receive to the consumer, and what they give to the consumer they give, not only to the consumer in this country, but in the producing country as well. Those who have studied the history of the sugar industries during the last ten years know very well that prices have been subject to violent fluctuations. During the last ten years prices have varied from 18s. a cwt. down to something below 6s. a cwt., which was the figure reached for the first time in the whole history of the sugar trade in June or July last. I expressed an opinion in the debate last year that, after the Convention had come into operation, the average price of sugar in the next ten years would not he higher, and would probably he lower, than the average price in the ten years which have just passed; and to that opinion I still adhere. At the same time I am quite ready to grant that so long as the present cost of production continues the effect of the Convention will probably be to prevent sugar from falling again, as low as 6s. per cwt. It will also, I believe, prevent sugar from rising so high as 18s. per cwt. Let me remind the House that 6s. per cwt. is nearly 3s. per cwt. below the lowest cost of production. By far the larger amount of sugar imported into this country comes from the Continent, and more especially from Germany, and it is the cost of production of 88 per cent. beet sugar f.o.b. Hamburg that I am speaking of. The cost of sugar from the West Indies, proper allowance being made for difference of quality, is also about the same figure—namely, from £8 15s. to £9 per ton. In my judgment the effect of the Convention will he to bring about an era of moderate and, at the same time, comparatively stable prices. In June or July last the cost of sugar was 3s. per cwt. less than the cost of production. Even the forward prices quoted for delivery in April and June, eight months after the Convention comes into operation, are barely, if at all, above the cost of production. I commend that circumstance to hon. Gentlemen opposite and their friends the confectioners, who seem to be crying out very long before they are hurt. At I the same time I do not wish to question for one moment that the price of sugar after the Convention is passed, will not gradually rise above the level of the cost of production. I think it will so rise until it represents the cost of production plus a reasonable profit to the producer. That price I put under present circumstances, and assuming the present cost of production to continue, at about £10 per ton. £10 per ton may I think be regarded as the normal or natural price after the Convention has come into operation, and a system of free trade is established in connection with this commodity. At such a price, and provided the trade is freed from the violent fluctuations which the bounty system tends to produce and to aggravate, the West Indian planter may hope not indeed, perhaps, to make a great fortune, but, at all events, to secure something like a living wage. What ruined the West Indian planter in the past was not the average price of sugar. It was the uncertainty in the price and the recurrent periods of very low prices. With moderate but fairly stable prices he can once more look forward to a time of reasonable prosperity. Possibly some one may point to the price of 6s. touched in July last, and contrast this with the price of 10s. which I anticipate will be the normal price when the Convention has had its full effect. But does any one who has considered the problem imagine that a price nearly 3s. below the cost of production could possibly continue indefinitely, even if the Convention had never been heard of? Experience and common sense alike show that that is not possible. When he price falls as low as 6s. per cwt. the necessary result is to curtail the area of production. That again produces a reaction, prices rise, and the mount of production also rises, and a further reaction is produced and prices again fall. In this way you rave a series of fluctuations in which prices are alternately greatly below and greatly above the cost of production. That is the condition of things that has ruined the West Indies, and that is the condition of things which we desire to bring to an end. If the price really was to continue at 6s. for any considerable period I believe the result would be that Austria and Germany would probably be the only countries to ride out the storm. But what would become of cheap sugar then? Is it not clear under these circumstances that the Austrian and German kartels would become masters of the market, and that prices would rise, not merely from 6s. to 10s., but to a figure which would, I think, convince the opponents of the Convention of the short-sightedness of their present policy.

I have alluded in the course of my speech to a meeting of the Confectioners Alliance recently held at the Westminster Palace Hotel, and which was addressed by my hon. friend the Member for King's Lynn. I believe the chairman of the meeting, who is also one of the most active organisers of the opposition to the Sugar Convention, is a member of the firm of James Keiller and Sons, the well known makers of marmalade. I do not know whether Mr. Bond represents the opinions held by the firm at the present time. If so, I can only say that they have not always been of that opinion. In 1889 Messrs James Keiller and Sons wrote a letter to Sir Neville Lubbock, which seems to me to fit in so well with the circumstances of the present moment that I will ask the leave of the House to read it. Dear Sir,—As large consumers of sugar we trust the efforts of your association will succeed in spreading the knowledge of facts bearing on the question of sugar bounties. The more widely they are known, and the better understood, the more evident will it appear that the abolition of bounties would not injure the fruit-growing, fruit-preserving, and the confectionery trades of this country, but would confer a direct benefit on them by giving them an ultimately cheaper as well as a more regular and more reliable supply of sugar. More than a year ago we expressed this opinion to Mr. J. Duncan, and subsequent, discussion and study of the question have served to confirm it. An international agreement on the sugar bounty question would be a blow to bounties of all kinds which might be applied to any trade, and those who are fortunate enough to bring negotiations on the subject to a successful issue will merit the gratitude of the working classes as well as the merchants and manufacturers of the country. —We are, yours truly,

JAMES KEILLER & SONS."

Before I conclude let me briefly call attention to one sentence in this letter. It is that in which reference is made to the possibility of the bounty system being applied to other commodities as well as sugar. Some ten years ago when the letter was written that danger might have seemed comparatively remote. I venture to say that it is remote no longer. The most dangerous bunnies are not those which arise from direct payments by a Government. They are those which arise from the operations of cartels supported by a prohibitive tariff. This kind of bounty is peculiarly dangerous because where-ever a trade is organised under a trust or cartel, it can be applied to almost any article which comes within the protective tariff. Now the Brussels Convention has struck the first formidable blow against this new and insidious method of bounties. I venture to ask the support of the house to this Bill not merely on the ground that the Convention will avert ruin from the West Indian planter, and relieve the British sugar refiner from unfair competition, without, in my opinion, injuring the consumer; not merely on the ground that the Bill is required in order to enable us to fulfil our treaty obligations; but also because the Convention is the first great public instrument which has recognised that form of bounty which arises from the operation of trusts acting under the cover of protection, and acknowledges that to meet and defeat such bounties the strongest fiscal remedies may be properly and legitimately applied. I beg to move.

Motion made and Question proposed, "That the Bill be now read a second time."

* MR. LOUCH

The right hon. Gentleman has proved to us with some skill that we are bound to fulfil the treaty. Well, that does not carry us far. This Bill is quite different from the treaty. When we had last a long speech from the right hon. Gentleman on this subject, we wore told that we were to fulfil the treaty in quite another way. We were to do it by countervailing duties. There is nothing about countervailing duties in the Bill. He does not propose to carry out the treaty in that way, and we may say that there may be other ways of meeting our obligations under the treaty. The House is perfectly free to do as it pleases with the Bill. It is not for us on this side of the House to say what we would do if we were supported by a majority and in the right hon. Gentleman's place. If we were there, we would let him know what we would do. The argument of the right hon. Gentle man about the Powers whose sugar we would have to prohibit is that we only get a thirtieth from those Powers. How much sugar do we get from the West Indian Islands, which started this campaign? It would have been convenient to the House if the right hon. Gentleman had answered that question. We got only a fortieth from the West Indies, and the Government think it necessary on behalf of that fortieth to undertake all this campaign. And now it is the right hon. Gentleman who says that the thirtieth is a mere bagatelle and not worth considering. I desire to move the Amendment that stands in my name, namely, that this Bill be read a second time this day three months. We had a statement from the First Lord of the Treasury with regard to the Bill, to which I would direct the attention of the House. He was speaking of the new fiscal proposals, and he put this Bill in the forefront of his speech. He said— If it were not that the proper investment of capital in the West Indies has become impracticable and dangerous, there is no conceivable reason why we should not allow the foreigner to tax himself for the benefit of the consumer in this country. In that remarkable statement of the First Lord of the Treasury there are three confessions to which I would direct the attention of the House. Firstly, he confesses that this Bill is brought forward in the interest of a small group of capitalists; secondly, he confesses that it is brought forward to relieve the foreigner of a tax; and thirdly, he confesses that the payment of that tax was a great benefit to the consumers in this country. Now I think there could not be a more excellent epitome of the fiscal proposals now before the country. It is supposed by many that the principles of this Bill are sanctioned by the Royal Commission that inquired into the question six years ago. In accordance with the recommendations of that Commission we spent £400,000, and we make an annual payment of nearly £40,000 to these Islands. We have fulfilled every recommendation made by the Commission, but there is no truth in the contention that they went the length of the Bill now before us. Anyone who has read the speeches of the right hon. Baronet the Member for the Berwick Division will know that no Commission of which he was a member would recommend the closing of our ports in the way now proposed. It did not recommend the laying of any permanent burden on the taxpayers, or any countervailing duties. Its most fruitful recommendation was that other sources of cultivation should be resorted to. The fate of that report throws light on the alleged enquiry the Government is making now. The Secretary for the Colonies was not satisfied with the recommendations made by the Royal Commission. The Commission itself was only a blind, and the moment the right hon. Gentleman had carried out those recommendations, he introduces a new policy. Only last July we granted £250,000 to the sugar planters of those islands, one of the most flagitious applications of public money ever sanctioned by Parliament. Then he proceeds to introduce this Bill, the whole responsibility for which, therefore, rests on the Cabinet alone.

Perhaps we will have a complete view of the question if the House will allow me to look at the position occupied in this country by the great commodity with which the Bill deals. Let us contrast the position of the sugar industry in England and in France. The moment we do that we become aware of the great disadvantages from which we suffer compared with France. France is a producing country. It was in France that the art of extracting sugar from beet was devised. The French also possess great skill in refilling and in the manufacture of sweet-meats. But they never developed any great industry out of their discoveries. The sugar was mainly used in sweetening coffee and making cakes and sweet-meats, and the total consumption is much the same as it was in England sixty years ago, and amounts to only twenty-nine pounds per head of the population. And it is remarkable that this is also the consumption in Germany, Austria, Holland, and Belgium—all the great producing countries. We turn to England and find that against these natural disadvantages we have only one set-off, and that is our free-trade or dumping principles, which permit the free import of sugar in abundant quantities. What is the result? The springs of industry have been loosed, invention has been stimulated. Capital and enterprise were devoted to the development of fruit preserving, fruit growing, the manufacture of mineral waters, to brewing, and to hundreds of other kindred industries; so that sugar has ceased to be merely a food, and become a raw material of the greatest importance, and the national consumption has risen to the astounding figure of ninety pounds per head of the population. When we come to ask, "Why have they not been able to do this in these foreign producing countries, where they have every natural advantage?" the only answer is that in France and Germany they had also protection, prohibition of imports, a heavy ditty, and high prices, which are the very evils which the Government desire to bring on this country. When we look at the question from this simple standpoint, it seems as if the Government had merely entered into a conspiracy with these foreign Powers to destroy some of our fairest national industries. But it has been said that the object of the Convention is not to make sugar dear and that the price will not rise materially. It would be desirable if we could get a clear understanding with regard to this. Without higher prices none of the objects of the Convention can be realised. The right hon. Gentleman has been candid in regard to this matter, and he says it will rise 5s. per cwt.

* MR. GERALD BALFOUR

No, Sir; I do not think the average price will rise at all.

* MR. LOUGH

I will not weary the House with niggling details. I will present my argument in my own way. I thought I was trying to treat the right hon. Gentleman fairly. The Colonial Secretary admitted that there might be some rise.

THE SECRETARY OF STATE FOR THE COLONIES (Mr. J. CHAMBERLAIN, Birmingham, W.)

I never made any such admission.

* MR. LOUGH

Well, Sir Henry Norman said—

MR. J. CHAMBERLAIN

Nor Sir Henry Norman.

* MR. LOUGH

Sir Henry Norman suggested that there might be a rise of a halfpenny in the lb. But there is a rise already of 30 per cent. in the price of sugar in view of the passage of this Bill. I think that the Government would do better if they were candid. If the price of sugar does not rise, no advantage whatever can accrue. If you look at the Report of the West Indian Commission, you will find that the promise was made that benefit could only accrue to these Islands if the price of sugar rose. But suppose the rise is a halfpenny in the lb., 5s. per cwt., or £5 per ton on the consumption I have quoted, it would impose a burden of £8,000,000 on the people of this country. We have placed a tax of, roughly, a halfpenny on sugar which brings us in £7,000,000 a year. That is to say that a rise of 1d. per lb., which has almost taken place at the present moment in the price of sugar, means a burden of £15,000,000 on the people of the country; and that is equal to the produce of a 6d. Income Tax. With the rise of a penny sugar is only 2½d per lb. But why should the rise in price stop at 2½d., or 3½d., or 4½d.? Why should not the price of the sugar rise to the same level as in Paris or Berlin—the capitals of the countries with which we have entered into alliance? Whatever the rise may be every penny represents £15,000,000 of a burden on the people of this country. And in this connection I would warn the House of the one great mistake that it has always made in dealing with this Government. It has never realised the weight of the burden that the small beginnings of its had policy might throw upon the people. When we entered on the war with South Africa the cost was to be £14,000,000; but in three years it ran up to £230,000,000. If we pass this Bill, I should not at all be surprised that it will lay on the people of this country a burden as great as that caused by the South African War. We may be told that the object of the Government is not to destroy our industries, nor raise prices, but to abolish bounties. What does that argument mean? It means that we shall get rid of these bounties in accordance with the principles of free trade. I could wish that this were true; but I regret to say that it is not only not true, but the very opposite of the truth.

When you come to examine the Convention, you see that by Clause 1 bounties are abolished with a profusion of expression which would make any one suspicious. But by Clause 3 a surtax is set up. We had never heard anything of this surtax from the Government. The surtax is the difference which is allowed between the import duty charged in the producing countries, and the Excise duty in these countries; and the surtax is fixed at £2 10s. per ton, or 30 per cent., on the price of the sugar. I wish to make two remarks on that point. The first is, that that is a provision absolutely hostile to the principles of free trade. Anyone who examines the last clause in the Convention will see that it is there plainly and openly stated that the object of the surtax is effectually to protect the home markets of the consuming countries; not only that but each one of the countries which have gone into the Convention are open and avowed protectionists. There is also a provision which allows the surtax, if not sufficient for the purpose intended, to be increased. There is therefore written over this Convention the words "Free trade abandon, all who enter here." What the Government have done is this—they have substituted for a system of bounties which were an offence against free trade, with which we had nothing to do, and which were favourable to this country, a system which is still more offensive to free trade, and for which we are responsible, and which will do the utmost injury to the people of this country. The second remark I wish to make on the surtax is, that it is a circle within a circle. It is a provision of the Convention very beneficial to all the signatories except to us. It makes it a Convention between a flock of sheep and a pack of wolves. They all get something out of it except us; and we get nothing, because we are not producers. The surtax enables them to set up the most extravagant cartel ever established in the world. That cartel will control an output of 5,000,000 tons of sugar annually. Its object is to regulate production, distribution, and price. What is the last information we have on this point? The Prime Minister does not deny that there has been a Conference, from which we were excluded, between the Sugar-producing Powers, the object of which was to raise the price of sugar in England and prevent the flooding of the British market. If the House will only think of the extent to which that may be carried, it will realise that the suggestion I have made as to the terrible burden which will be placed on the people of thiscountry was not in the least exaggerated.

It adds to the humours of the situation to remember that at the very time the Government are assisting in founding this cartel, the Prime Minister and the Colonial Secretary are going up and down the country lecturing the people on the evil of Trusts. Then there is the very extraordinary Article IV., to which I wish to direct the attention of the House. It obliges all the signatories to this Convention to impose a special duty on the sugar from all countries which give a bounty of any kind. When we had a discussion on 24th November last on the subject we were told by the President of the Board of Trade that the Government would adopt this course, that countervailing duties were not offensive to free trade, that when imposed under the Convention there was no harm in them, and that Mr. Gladstone, Lord Farrer, and others had spoken in support of countervailing duties. He went so far as to say that there were some who considered countervailing duties a "damnable heresy, an unclean thing which this House should not touch," but that he regarded such persons as guilty of "aggravated economic prudery." He was followed by the Colonial Secretary, who was as clear in his statement that Mr. Gladstone approved of countervailing duties. The Chancellor of the Exchequer, the other day, blamed me for suggesting that such duties were in the Bill and the right hon. Gentleman said there was no suggestion of countervailing duties. I would ask him to talk to his colleagues the President of the Board of Trade and the Colonial Secretary as to that. We are not being treated fairly in this matter. We ought to know why countervailing duties were adopted in the first case; and why they have been abandoned. This is not a mere debating point. The Prime Minister has already told us twice that the principle of this Bill has been assented to. The President of the Board of Trade also put that point just now. But we assented to it when the agreement was for countervailing duties. That is not now the principle of the Bill at all. The Bill is based on the principle of prohibition. As far as I can see, what happened was this. The Board of Trade found themselves in this difficulty—that countervailing duties were impossible, if not unconstitutional. I believe the Government lawyers in 1881 said they were unconstitutional. For some reason, they have been abandoned; and the policy of prohibition has been adopted. This is a notion taken from the 42nd Clause of the Customs Consolidation Act, which deals with false coin, indecent literature, adulterated food, and diseased cattle; and the idea of the Government is to add the word "sugar" at the end. What parallel can there be between a clean and decent import such as sugar and anything else mentioned in that clause.

Consider the difficulty that this policy of prohibition will lead us into. It will be necessary to issue orders for prohibition against some of the countries who are our best friends and customers, such as Russia, Denmark, Spain and Portugal, the United States, and the Southern States of America which have been mentioned. You will have prohibition against every one of them. Just think of the position of a captain of a British ship at a loss for cargo at any one of the ports in these countries. He will not be able to fill up with sugar. My hon. friend the Member for Hull, who sends his ships abroad laden with coal to bring back sugar, will no longer be able to do so, because a prohibition order may he issued against the particular country at which his ships happen to be. If you adopt a policy of countervailing duties sugar may be admitted at a price; but under this Bill no added price will permit it to enter. This measure will necessitate a policy of certificates of origin. Those certificates apply not only to the prohibited countries, but to all other countries from which we receive sugar. After the 1st September next, no sugar can come into this country without a certificate of origin. The reason is plain. We might get sugar from a prohibited country, through a country which observed the Convention. There will be further proofs required. The domestic aspect of this question of prohibition ought to cause this House to pause before it puts its sanction on such a policy. We ought to think of the difficulties we will get ourselves into with other countries, such as the United States. If the Government will not consider the question more fully from the domestic point of view, I believe the consideration of the question will be forced upon them by the foreign difficulties into which they will stumble.

There is one other very curious provision in this Convention. Article 7 sets up the Permanent Commission already mentioned. The House ought to bear in mind the constitution of this extra-ordinary Court. It is to consist of eleven Judges, ten appointed by Continental sugar-producing Powers, and one appointed by this country. It will deal with all the questions of prohibition. But the curious thing is that while we only appoint one Judge, all the interests the Court will have to deal with are ours and ours alone. The other contracting Powers are not importers. We are to submit all our great interests and trade in this vast article of commerce, as well as the interests of all the trades springing from it, to this Court in which we are in a minority of one to ten. I suppose the Government were as much misinformed about this question of imports as they were as to where we got our sugar from. At any rate, they ought to have known that this question of imports did not interest foreign Powers. They are producers. We produce nothing. We may be starved under the Convention. We are entirely dependent upon our imports. There was a meeting of this Permanent Commission; and I do not quarrel with the description of it which was given by the right hon. Gentleman. It was true, as far as it went, but I would direct the attention of this great. Parliament, which believes in public opinion and in letting the people know what is going on as regards interests which concern them, to the proceedings of that meeting. The Convention met on the 1st of June. I waited ten days, thinking we would be furnished with an account of the proceedings, and I asked the noble Lord the Under Secretary of State for Foreign Affairsa Question on the subject. Hecould give me no answer; but he handed over the Question to the Prime Minister, no doubt relying on his great capacity to answer Questions without telling us anything. Only yesterday we were told that we would get the proceedings in about a fortnight or three weeks. Was there ever anything so insulting said to the House of Commons? Here we are assembled to discuss a Bill, the whole basis of which is this Permanent Commission. We must remember that this treaty is not a thing which we can merely agree to, and that then nothing more happens. It is a sort of living organism; it sets up a Permanent Commission which may meet as often as it likes, and may send out these prohibition orders which affect our trade and our trade alone of all the countries in Europe.

The first duty of the Convention was to consider whether each of the signatories to the treaty was fulfilling its obligations. Its second duty was to decide which countries outside were giving bounties. What did it do with the Powers who signed the treaty? Germany appears to be the Power which conies out on top in all this affair. The affection and love which the Colonial Secretary has for Germany is amazing. It was decided unanimously that Germany was acting in harmony with the Convention; and will the House believe that Germany is the only Power which has an absolutely clean record. Austria-Hungary was held to have acted contrary to the terms of the Convention. Then the Convention dealt with France, and some persons present made a complaint against that country. I know that the British, among other delegates, promoted this criticism of the French system. France was condemned; and we are told that her system was not in accordance with the Convention. Holland escaped be- cause it was found by a majority to be acting in harmony with the Convention; but when the Convention meets again in October that majority may be turned into a minority. Belgium has passed no law, and if we pass no law—and I earnestly hope we will not—we will be in the same position as France, Belgium, and Austria-Hungary. None of those countries have brought their proceedings into harmony with the Convention. Why should we hurry? I recommend the House of Commons to be extremely slow and to watch the action of these other Powers. Then the Convention went outside the circle, and the first Power attacked was Russia. Russia is a very astute country to deal with. The Convention went, so to speak, baldheaded for Russia, and unanimously agreed that the Russian system was all wrong, and fixed a countervailing duty of thirty francs on raw sugar and forty francs on refined sugar. Russia did not take this lying down. She entered into communication with Germany and said, "Would you mind bringing up our case again. We think that this Convention does not really know much about sugar. It has not dealt with us fairly." The Convention met again and decided that everything it had arranged about Russia was wrong, and it reversed its decision with regard to Russia, the Argentine and other countries. In short, it appears to have got into a great mess; and on its second meeting it said in effect—"We do not know anything about the sugar legislation of these countries, and we have no means of finding out anything about them; but we would advise any country to adopt the system in the United States." This is a very curious position. The United States has been too astute to go into this business at all. How then comes it that we are told to fall back on the United States system. I immediately asked what was the United States system. But the noble Lord the Under Secretary for Foreign Affairs declined to tell me. We are, therefore, asked to accept this decision of the Convention without in the least knowing what it commits this country to. Surely, if the business of our merchants is to be submitted to a tribunal, nothing is more essential than that the decisions of that tribunal should be clear, and that it should be readily known what they are. I ask whether anything of the kind can be said about this Commission. It is a farcical Commission; and I do not believe that even its own members take their duties seriously. We have no information that they have made any effort to fulfil the obligation made on them in the treaty. Why should the House of Commons have anything more to say to this extraordinary transaction?

Why have we gone into the Convention at all? It has been confessed to-day that we did it to assist the West Indian Islands. It would be more true to say that we have been led into this Convention by the astuteness and ability of two or three capitalists who pose in this country to represent the West Indian Islands but who only represent their own interests. I allude especially to Sir Neville Lubbock. He deserves the greatest credit for the way in which he has conducted this matter. When the Colonial Secretary was at the Board of Trade in 1881, Sir Neville Lubbock came to him with the same story; but then the right hon. Gentleman said that the Government preferred the interests of the vast body of consumers in this country to the interests of a small group of capitalists; and the Board of Trade declined to have anything to say to this business. How different was the Colonial Secretary then from what he is now. No now factor has arisen within the last twenty years. One reason why there is such an extremely strong feeling throughout the great industries whose prosperity will be affected by this 13i11 is that they thought that in 1881 they received the Magna Charta of their liberties from the right hon. Gentleman himself. They thought they could invest their capital safely, and that the Government would not sanction any disturbance, and now they find their hopes shattered and their business disorganised by the present Convention. I will only say with regard to the West Indies this one word. The right hon. Gentleman has accused some of us of being inconsistent with regard to the West Indies. He cannot level that accusation against me. I have always been consistent in that I have always said that we ought to look after ourselves at home and let the West Indies look after them- selves, we giving them what assistance we can by way of advice. The danger of the West Indies is that they rely too much on sugar, and when they use the fertile soil and beautiful climate for other cultivations besides sugar they will escape this danger. Already during the last five or six years in which we have been discussing this matter three-fourths of the West Indies have got out of their dependence upon sugar, and the other fourth will free themselves if they are left to the healthy operation of economic laws, and not subjected to this grandmotherly legislation. The population of the islands is increasing satisfactorily. During the last three years the coolie immigration has doubled, and reports of reasonable prosperity are given by each of their Governments. That this is so is shown by the annual reports sent to us, and it is a strange thing under those circumstances to undertake this extraordinary legislation. We only get about three per cent. of our sugar from the West Indian Islands, and we are putting this great burden on all our supplies of sugar in order that those who send us three per cent. may get a little more out of it. If they sent us all their production it would only be 15 per cent. of what we consume. While we give a slight benefit to the West Indies, we give the great benefit to those who send us most sugar. Germany sends us 50 per cent. of our sugar, and therefore Germany gets 50 per cent. of the benefit. If the benefits to be derived from the legislation are doubtful, its risks and dangers are clear met apparent. We shall put a great burden on our consumers and upset these industries of which I have spoken, and dislocate the great shipping industry. Shipowners are alarmed. New vessels will not be built, nor new routes opened out for a trade which depends on the whim of a secret foreign Commission. Nor are the evils of the situation confined to our own land. The Powers outside the Convention will be irritated and jealous. I therefore suggest that the House goes no further in this matter. Let the Prime Minister, who is so good at answering Questions to us, make some statement—raise some difficulty—so that this shall not be proceeded with for six or eight months, and then the whole thing will disappear. Sugar as an import occupies to-day the the position which corn occupied in the forties. Cobden always put sugar next to corn in importance, and he saw that if the principles of free trade were applied to corn, they would gradually spread to every other great commodity. No doubt the Government may, with the assistance of their majority, put their Bill through. Our opposition may not be of any use, but we must make the greatest effort on behalf of the principles in which we believe. You may carry this Bill, but if you do I am certain that when our ports are closed under it people outside will look back with deep regret to the time when our ships could come without certificates of origin of the goods they brought when our ports were open, when the factories of the country could be carried on without the prying visits of Government inspectors, and when it was the fixed principle of the legislation this House that there should be no tax on food or raw material. I beg to move.

* MR. GIBSON BOWLES

I rise to second the Resolution so ably proposed by my hon. friend opposite. Sir, this is a Bill to promote a foreign monopoly created by Germany in sugar, and the President of the Board of Trade, forsooth, tells us that it is a pure formality; that we have scarcely a right to debate this measure; that the House is bound to pass it because the credit of the country is pledged, and that if we reject it the honour of the country will be somehow involved. It is nothing of the kind. The right hon. Gentleman forgets that the Convention itself, by Article 12, provides that the fulfilment of the mutual engagements therein contained is expressly subject to the formalities and requirements established by constitutional law. One of the formalities and requirements of our constitutional law is that before any tax can be placed on the subject the consent of this House must be obtained. This House has a complete right, and it is not only the right of this House, but its absolute duty, to reject this Bill. This Bill is recommended to the House by the argument that England is going to gain something, but it is the fact that England is going to gain nothing. It is avowed that England must lose. All that is suggested is that the West Indies may gain something and also the sugar refiners.

MR. J. CHAMBERLAIN

I suppose that, in the hon. Member's argument, the sugar refiners are not Englishmen.

* MR. GIBSON BOWLES

As a matter of fact it appears from the Blue-book that they are mostly Germans. I will deal with the sugar refiners and their interests if the right hon. Gentleman will only be patient. Now, Sir, let me point out that this country is the great market for sugar; this is the great consuming country to which every beet sugar manufacturer looks for the sale of his produce. You may add the United States, but the United States provides for itself. The English market is the great prize contended for by European sugar-producing countries, who, to capture it, have fought each other by bounty against bounty. The result in this country has been cheap sugar. The figures I quote are those of Mr. Czarnikow, who, at all events, has not an English name. [A VOICE: He is a broker.] I have no doubt he is a most eminent broker; he says the price in London is now 1½d. per lb., while in Berlin it is 5d., and in Paris 7½d. I confess that it seemed to me that the cause of this difference in the price of sugar was bounties, but the right hon. Gentleman has said that is not so. The right hon. Gentleman, while denying that bounties cause the difference in price, offered no other explanation.

MR. GERALD BALFOUR

was understood to say that the difference partly arose from the internal tax.

* MR. GIBSON BOWLES

I am glad to have got from the right hon. Gentleman an admission that part of the difference in price is caused by protective duties. But I do not care what is the cause of sugar being only 1½d. a lb. in England and 7½d. in Berlin. I am content to accept cheap sugar. It may be a bad thing, but I am prepared to endure it because I see it has been a source of cheap food and the cause of setting up very extensive industries in this country. I am afraid the. House has no idea of the amount and extent of these industries. Take the preserving industry. I know of no preserves quite so good as French preserves, no chocolates quite so good as the French, yet it is the fact that one French manufacturer of chocolate, because of the cheapness of sugar, has established himself in this country, and that English jams, made with French cheap sugar, are driving French jams out of the market in France. The enormous trade in sweetmeats which has sprung up has been founded and encouraged by our cheap sugar. There is not one little shop or a single country fair that does not show new kinds of sweetmeats entirely unknown in older days, the whole of which has been encouraged by cheap sugar. Of course I have every sympathy with the sugar planters and producers in the West Indies, and I have a considerable amount of sympathy with the capitalists who furnish the money necessary for them to conduct their business, and I am prepared to entertain any fair proposition to enable them to carry on a business in which for generations they have so signally failed, but there is nothing either in this present Bill or in the doling out of grants to the West Indies by which their trade can be saved, so long as they are deter, mined to tie their life up with the production of sugar. The West Indies sugar planters are demoralised. They were demoralised by slavery, and have never been able to rise to a conception of modern methods, of enterprise, or of improved machinery as other sugar-producing countries have done. Java produces sugar at 6s., Cuba produces it at 7s., yet the West Indies cannot produce it under 8s. or 9s. a cwt. I do not believe you will get thorn out of their difficulties by any system of state doles. It requires a new generation. Even then the West Indies will not be revived by sugar, but rather by fruits or by cotton. In support of my contention that this will not save the West Indies, let me read the testimony of Sir Henry Jackson, governor of the Leeward Islands. He says— What the effect of the abolition of bounties may prove to be in large colonies producing high-grade sugar is not for me to say, since the Leeward Islands are not among them, but it is only too certain that in these islands, producing only muscovado, and that by means of indifferent machinery, the immediate effect will be the reverse of beneficial. He goes on to say— It is absolutely certain, as shown by Dr. Morris, that directly muscovado and beet sugars come into open competition in the same market, as they must do on the abolition of bounties, the former trade must be annihilated unless the production can be improved. Even if the bounty system be continued, and the industry lingers on for a short time, it will be in a gradually diminishing condition, while with the abolition of bounties and without central factories, there will be an immediate stoppage on many of the largest estates. I think that shows that this remedy will not be sufficient for the West Indies.

Then I come to the sugar refiners. They talk as though their industry was in danger of ruin. Let me read the prospectus issued by Messrs. Tate and Sons on March 4th of this year. Does this tell a tale of ruin? Ever since its formation in 1859 the business has been eminently successful. The sugars have competed successfully with those of all makers of refined sugar, both British and foreign, notwithstanding the advantage possessed by the latter in the bounties given by the Governments of the countries of their production. They go on to set forth the increased prosperity of the business, and finally they give a list of their profits for the last eight years. showing annual profits varying from £91,000 to £148,000, while in the year ending 30th of September, 1901—five months before the Sugar Convention was signed, and when they ought to have been at their last gasp—the profits of these poor oppressed sugar refiners amounted to no less than £215,000. There is testimony taken from the fountain head—continued, unbroken. and increasing prosperity, and a share capital of one million pounds offered to the public for subscription. I think that disposes of the sugar refiners.

AN HON. MEMBER

That is only one of them.

* MR. GIBSON BOWLES

But even if the claims of the West Indies and of the sugar refiners were as sound as I believe them to be unfounded, I should still have a warm corner in my heart for the people at large in Great Britain; I should still claim cheap sugar for the poor; I should still have some feeling in my breast for those large new industries, built up on cheap sugar, upon which, as I am credibly informed, no fewer than 250,000 persons depend for their livelihood; and I should still appeal to the Government not lightly to sacrifice the interests of those persons to what I believe to be an entirely mistaken idea that they can either revive the West Indies or increase the tremendous prosperity of English sugar refiners by making sugar dearer, as they propose to do by this Bill.

I will now go rapidly over the Convention. Its purpose is stated in the preamble. The various Powers having met, this was declared to be their object— Desiring on the one hand to equalise the conditions of competition between beet and cane sugar from various countries, and on the other hand to promote the consumption of sugar. Let us see how that purpose is carried out. By the first Article, all the contracting Powers agree to suppress bounties on sugar and sugar products within their own borders. Let the House not suppose that this Bill and this Convention affect only sugar. In the language of the Convention and of our own Customs tariff "sugar" inclues all products into which sugar enters. It includes biscuits, milk, rose petals, violets, and even blacking, and the House will hardly credit the fact that it also includes Angostura bitters. The subject therefore is an extremely large one. The second article provides for refining sugar in bond; the third provides that the surtax, which represents the difference between the import duty and the excise duty, shall not exceed 2s. 6d. per cent.; the fourth article, which is the most important in the Convention, provides that each contracting State shall place upon bounty-fed sugar and sugared products a countervailing duty equal to that which is decided to be the bounty given. That decision rests with the permanent Commission, which has two duties—first, to pronounce whether the contracting States do or do not observe the obligation not to give bounties; and, secondly, to decide whether non contracting States give bounties, and if so, to what extent. In the case of the contracting States if the permanent Commission decide that they do give bounties, a reference has to be made to a conference of all the Powers concerned, with which the final decision rests. But in the case of a non-contracting State the permanent Commission decide out of hand without appeal and without conference, and their decision is "executive," and must be carried out by every one of the contracting States within two months. Finally, by Protocol A 2, this country is bound to give no preference to colonial sugars as against sugar from contracting States. The effect of all this must be to achieve dear sugar by giving a monopoly of the supply in this country to the contracting States have been amazed at the way in which the negotiations for the conclusion of the Convention were conducted. They were muddled and hurried; the negotiators were ordered to hurry over important matters like the cartel because if the abolition of the cartel was insisted upon, the Convention would not be obtained. To crown the whole business, t he Convention was submitted to this House in a translation so admittedly false that upon my representations the Foreign Office had to withdraw it and issue a new translation. flat it was on the first and false translation, supported at last by the Closure, that the decision of this House was asked and taken, and that, forsooth, is the debate upon whch the Prime Minister relies when he says that the principle of this Bill has been already accepted by the House.

This Convention differs wholly from the proposals made by the Colonial Secretary for the conduct of the fiscal affairs of this country. The idea of the right hon. Gentleman is to tax the foreigner for the benefit of the Englishman, and to prefer the colonies to all the word besides, excepting—though I am not sure whether he would not include—England. This Convention will relieve the foreigner from taxation which he now bears, it will prohibit us from carrying out the most beneficient ideas of the Colonial Secretary in the way of giving a preference to the colonies, and instead of increasing the industry and prosperity of the Empire, it will tend to make sugar dearer and seriously to hamper, and perhaps to crush, the new industries which have been created. Let the House remember that this is all to be done for the profit of a very few States with Germany at their head. It is a strange fact that to the conferences on which this Convention was founded one of the States most interested in the production of sugar. and which will yet be a competitor in this market—the United States—was not even invited. I do not know whether Switzerland was invited, but at any rate she did not come in, and in the confectionery trade Switzerland, who will prove a serious competitor, will continue to enjoy sugar as cheap as she can get it. The Colonial Secretary's scheme is entirely inconsistent with this Convention. He attaches great importance, as do I, to the action and the judgment of the self-governing colonies. What is their judgment about this Convention? Every one of them has refused to receive it or to adopt it. Every one of them, and India as well. Moreover, no sooner was the Convention signed than we ourselves began to repudiate it. Article 4 binds us to impose countervailing duties upon every country that gives bounties. It applies to every country or colony in the world. It makes no exception. By myself and others it was at once pointed out that that would include the colonies. Upon this. the Government, although it had signed the Convention and had pledged itself to this Article 4, began to proclaim that they would never impose countervailing duties upon colonial sugar, and when subsequently they came to ratify the Convention, they repudiated their own signature and made a special reservation which entirely cut the ground away from Article 4, and was, in fact, a repudiation of that Article. I am not sure even that view will suffice to protect the self-governing colonies. From an answer given by the President of the Board of Trade it appears that the Australian surtax is from is. to 9s., but the limit fixed by the Convention is 2s. 6d. per cwt. Taking that in conjunction with the solemn, and as yet unrepudiated obligation not to give preference to colonial sugar, how can you admit the Australian sugar as bounty-fed without giving a preference to that sugar? It will still be necessary to repudiate the Protocol which binds you not to give any preference to sugar coming from your colonies, as you have already repudiated Article 4.

Not only have we repudiated the Convention in one of its most important articles, but we have consistently violated—and His Majesty's Government propose to continue to violate—the most-favoured-nation clause of our treaties in general. That clause binds us to admit the growth. produce, and manufacture of the country in question on as favourable terms as those of any other country whatever. We have that clause with no fewer than twenty-one countries which are not signatories to the Convention. Amongst them are Japan and the United States—Japan our, new ally, and the United States our dear cousins; and we are going to disregard the most-favoured nation clause and to violate, in their case and in every other, whenever it comes into conflict with the new notion set up by this Convention. The favoured-nation clause has given us priceless advantages. It has been recognised as the great bulwark and the necessary condition of our foreign trade. It has hitherto been ealously observed. So strongly, so earnestly, and so completely has every English Government hitherto desired to observe the most-favoured-nation clause that when accidently any infraction of it has been made we have made amends and have actually returned the duties levied under a mistake. In 1838 a duty was levied on beeswax from the United States, and the duty was repaid to the full. In 1884 a duty was levied on shins and hides from Sweden and that duty was also repaid to the full. In 1815 a duty was levied on rice from the United States, and that duty, because and only because it had been levied contrary to the nest-favoured-nation clause, was also repaid in full. And now it is contended by the Government that to put countervailing duties on sugar from Russia or to prohibit it from entering this country is no infraction of the most-favoured-nation clause. That is entirely contrary to the opinion of the law officers of the Crown of 1880. In that year the law officers of the Crown gave a considered opinion that any such act was a contravention of the most-favoured-nation clause. It is said that the present law officers have given a contrary opinion, but it has never been cited or quoted, and when I challenged the First Lord of the Treasury as to whether this was the opinion of all the three law officers of the Crown he did not answer. That left in my mind the impression that it was not the opinion of all those three law officers, but only the opinion of one of them. That opinion has never been laid upon the Table. We know the precise effect of the opinion of 1880, and if there be another opinion in acontrary direction we do not know its exact terms or whether it is concurred in—which I very much doubt—by all the law officers of the Crown I believe that my right hon. friends the Attorney-General and the Solicitor General are far too good international lawyers to concur in any such opinion. Meantime we have declared to Russia that we will apply this penalising treatment to her sugar even although it maybe a repudiation of the most-favoured-nation clause. Russia claims that it is an absolute violation of the most-favoured-nation clause to treat her sugar like this. We denied this, and then Russia offered to submit it to the Hague Tribunal. If ever there was a subject with which that tribunal is fitted to deal, it is this. But His Majesty's Government refused, and said they would pay no attention to this strenuous protest. As to the Permanent Commission which sits at Brussels to order us to prohibit this sugar and admit that, I can only liken it to that secret trade tribunal the Vehmgerichte, which existed in the Middle Ages, such is its absolute power over our fiscal relations as far as sugar is concerned. It is to be remembered that the system established by the Convention is departed from and altered very much by the scheme of His Majesty's Government embodied in this Bill. The original idea embodied in the Convention is that you should levy upon the bounty-giving country a duty that would counter-balance the bounty. The first report of the Commission upon this question shows that the bounties vary from about 8d. per cwt. to something like 10s. per cwt. The object of the countervailing duties fixed by the Permanent Commission is to equalise of competition; but our way of carrying out the Convention under this Bill is to prohibit alike the sugar of the State which gives a bounty of 8d. and of the State which gives 10s. There is no equalisation of competition in this; there is only a blind general closing of our ports for the advantage and the monoply of Germany principally and the other contracting States—for whom alone this our great market will be reserved by the Bill. My great objection to an International Commission is that this country should not be placed in any way under the orders of a foreign body consisting of ten foreigners and one Englishman, the ton foreigners all being interested in the maintenance of this monopoly.

Even now it seems to be entirely uncertain as to what we are going to do. France has declared that she cannot change her law by the 1st September. What is the Government going to do I Are they going to prohibit French sugars after the 1st September? It has been declared by the Permanent Commission that the Contingent Law, which is the cartel system of Austria and Hungary, is not in harmony with the Convention. The right hon. Gentleman says he has every reason to believe that the law of Austria and Hungary will be brought into harmony with the Convention. For what reason? The right hon. Gentleman gave no reason, and I have every reason to believe exactly the contrary, because there is a telegram in The Times from its usually extremely well-informed Vienna correspondent, who says— Dr. von BÖhm Bawerk, Minister of Finance, yesterday approached the Hungarian Government with a view to the substitution of some low arrangement for the state allotment system, which has been condemned by the Brussels Commission. He also seems to have met with meagre success. In regard to the tariff, the Hungarianscry, 'No changes without compensation!' and in regard to sugar decline to forego any part of the 300,000 quintals allotted to their refineries as a douceur to induce them to accept the allotment law. It may safely be predicted that the Hungarian Government will consent to no new arrangement that does not exclude foreign, and especially Austrian, sugar from the. Hungarian market. Will my right hon. friend tell me what reason he has for believing that the Austria-Hungarian Governments will bring their legislation and arrangements into harmony with the Convention, as they are not in harmony at present? I can get no information upon this point, and the right hon. Gentleman does not volunteer any reason. In the face of that I am bound to believe the information published by the well-informed correspondent of The Times. I wish to know if the Government are going to prohibit sugar that comes from Austria and Hungary after the 1st September? I am not going into the difficulties which have been put forward by the hon. Member opposite as to certificates of origin. According to the Bill not a single pound of sugar can come into this country without a certificate of origin. There never was a system of certificates of origin that did not absolutely break down, and this will break clown. When we gave a preference to Canadian over Baltic timber, the Baltic timber was shipped over there and the certificate of origin was afterwards forthcoming. The same thing was done in regard to certificate of origin in Spain, for the Spanish merchants found that their trade was carried on in exactly the same way. Therefore the Government could not rely upon certificates of origin.

There is one last thing I desire to say, awl it is that the whole of this intended equalisation of competition is going to be defeated by the new cartels. I think it was on the 18th July that a new cartel was made between Russia, Austria, and some of the other signatories, to this Convention, with the avowed purpose of limiting their output of sugar in order to keep up the price in England. In these circumstances I do not see how the President of the Board of Trade can say that the price of sugar in future will not exceed £10 per ton.

MR. GERALD BALFOUR

I said the average price.

* MR. GIBSON BOWLES

It will exceed that price if these eartel-making countries can effect it, and they avow that they intend to effect it if they can. I do not know how you can limit them to that price when you have given them a monopoly without competition from outside. I do not know at what heights they may establish it. To my mind the whole thing is a profound mistake. It has been marked by bungling and repudiation of other most solemn engagements such as has never been seen before or heard of in the history of the British Government. Its end must be to establish a monopoly which must be injurious to England, and from which England can gain no profit whatever. It will shatter our trade, strangle a growing industry, close a market, except to monopolists, which has always hitherto been open, and make dearer for us sugar which it is in our interest to get cheap. But there is still a place of repentance left to His Majesty's Government. I had formed great hopes of His Majesty's Government in this session. I brought to their notice a mistake they had made in regard to the Baghdad Railway, and in seventeen days they retreated from the position they hitherto held and most fortunately and wisely retraced their steps and abandoned their policy. Let them do that on this occasion. The is not a pressing one for us. We have nothing to gain from it. The Convention is a very had one for us. Let them give up the Bill and repudiate the Convention It is provided for in the Convention itself by Article 12. If instead of that they press the Bill through by the aid of a powerful Government majority, if they impose on this If use by that majority, as the initial step in their policy of dear food, dear sugar—to be followed by dear corn and dear meat—then I say they will incur a grave responsibility before the country, and they will also cause a most profound distrust of themselves.

Amendment proposed— To leave out the word anal at the end of the Question to add the word upon this day three months.'"—(Mr. Lough.)

Question proposed, "That the word 'now' stand part of the Question."

Mu. WYLIE (Dumbartonshire)

I have listened with much interest to the speech delivered by my hon. friend the Member for King's Lynn in support of the Amendment, but I hope in the course of my remarks to show the complete fallacy of some of the arguments. I support the Second Reading of the Bill for the following reasons—because it is a too long delayed measure of justice to a large number of employers and workmen connected with the sugar industry, both at home and in the colonies, who have been too long crushed by the conditions hitherto prevailing. I believe it will add greatly to the trade of the United Kingdom, not only in sugar but in a great variety of products which the increased prosperity of the colonial and home sugar industry will necessitate. I support it as a measure of sound policy for securing the permanent cheapness of sugar by preserving the most powerful and reliable competition to beet sugar, which has lately been becoming a most dangerous monopoly. I support it in the interest of universal free trade. Let me refer to each of these points in a little more detail, and in the order in which I have mentioned them. For more than forty years a large number of the sugar manufacturers and the producers of sugar in the colonies have been crushed by a gigantic system of protection, one of the most obnoxious and injurious forms of protection, namely, in the shape of sugar bounties, from which it is proposed by this measure to relieve them. Hon and right hon. Gentlemen oppose it, but surely the British workman, whose products have been shut out of almost every market in the world by hostile tariffs, is entitled to demand at least fair play, if no favour, in his own country. if we deny preferential treatment to the colonies we are bound at least to give them that equality of treatment which will place them on a level with their Continental competitors, and which if they had been self-governing instead of Crown colonies they would long ago have secured for themselves This appears to be a matter of justice, and it was very ably stated by Mr. Gladstone, who persistently opposed bounties, when he said that while we were bound to observe the principles of equity towards foreign countries we were bound to observe the principles of equity towards our own countrymen. I am sorry to see that hon. and right hon. Gentlemen opposite deny this equality of treatment to our own workmen on the plea that it will increase the price of sugar by a halfpenny per pound. It is a pity that to-day the policy the old champions of free trade advocated is so much spoken against by hon. and right hon. Gentlemen opposite. The argument that the price of sugar will be increased by a halfpenny per pound is founded on an erroneous assumption. They say that this policy will injure the jam and confectionery trades by increasing the price to the extent of a halfpenny per pound But in the meantime let me say that those trades which have so success fully resisted foreign competition in other respects will be able to survive. I believe cheaper sugar will be obtained for them under this arrangement. It is quite certain that by the aid of the cartel the complete extinction of the cane sugar industry would have been accomplished but for the intervention of the United States.

Hitherto we have pursued a short-sighted policy in this matter. The total disregard of everything except cheapness has been one of the great fallacies in connection with our support of the bounty system. The bounty giving system is a total disregard of the principles of political economy. I suppose therefore in the interest of free trade this is the greatest measure since the repeal of the Corn Laws. We all know what free trade in corn did for corn. Apprehension has been expressed that free trade in sugar will have quite the contrary effect.

SIR JAMES JOICEY (Durham, Chester-le-Street)

I listened with considerable interest to the speech of the hon. Gentleman who has just sat down, because when he first began he made a declaration that it was his intention to prove that the arguments of the mover and seconder of the Amendment were perfectly fallacious. I confess that, with all the care I have been able to use, I have not hoard one solid argument to show that my hon. friends, statements were fallacious at all. I must congratulate the mover and seconder of the Amendment upon the very excellent speeches they have delivered to the House, and am bound to say that no case was made out for the Bill by the right hon. Gentlemen who moved its Second Reading. Every argument of the President of the Board of Trade was completely riddled by the hon. Members for Islington and King's Lynn. I cannot see any justification for this Bill being brought into the House by the Government. Now, I am a free trader. I admit that there are advantages and disadvantages in connection with any tariff system which you may adopt. I recognise that in all tariff systems there is a balance of good on one side, and a balance of evil on the other side; but I confess that I cannot see where the balance of good comes in in connection with the system proposed in the Bill. Personally, as a free trader, I am opposed to bounties, but there are many Governments which give bounties on articles other than sugar. The French give bounties on ships; are the Government prepared to adopt the same course in regard to these bounties as in regard to the bounties on sugar? I could hardly think that the Government would take that course. It is said that the Bill to abolish bounties is introduced for the purpose of benefiting our West Indian islands, winch send 47,000 tons of sugar to this country. But we receive 1,800,000 tons of sugar Born other countries; and I cannot help thinking that if the Government were really anxious to benefit the West Indies, they would have brought forward a grant in aid to the West Indies, which would represent an additional price to their 47,000 tons of sugar, rather than impose a duty on all sugar which conies from the various countries of Europe and elsewhere. We have heard the President of the Board of Trade make a good many statements as to what would be the effect of the policy of this Bill, but I confess, looking at the point as a business man, I am not very certain that the prophesies of the right hon. Gentleman will be realised. I feel sure that the President of the Board of Trade is not in a position to look into the future any more than any other Member in the House and I do not put the slightest value whatever on his prophecy that the average price of sugar, if the Bill becomes law, will be only £10 per ton. The Government ought to have made an overwhelming case in favour of their policy before bringing in this Bill, but I have listened to the debates both on the Convention and on this Bill, and I fail to see any justification whatever for the policy which they have adopted. I have not yet been able to get a grip of the position of the right hon. Gentleman the Colonial Secretary, because he seems to have one policy one day, which he modifies the next. But if this Bill becomes law, the right hon. Gentleman will not be able to carry out one portion of his policy which he has foreshadowed— viz., to give preferential duties to our colonies in regard to sugar.

I represent a very large working-class constituency, and come from a district in the north of England which has 1,200,000 inhabitants, where the co-operative system is carried on to a great extent with extreme success. Now all the co-operative societies are thoroughly opposed to this Bill, and I believe that the working classes throughout the country, as a whole, do not imagine that they will get any benefit out of a measure of tins kind. I thoroughly agree with the hon. Member for Islington that the large number of industries which depend to a large extent for their prosperity on cheap sugar will be seriously injured if this Bill is passed. I also agree with the hon. Member for King's Lynn that the Bill puts the complete control of our sugar industries into the hands of a Commission of twelve men, only one of whom represents this country, the remainder re-presenting countries which will be benefited by the abolition of the bounties. In fact, I believe that the Bill will be most disastrous to tins country, and I shall do my best to prevent its passing into law. I shall oppose it at every stage, and I hope that its opponents in this House will also resist it at every stage so that the country may become thoroughly alive to the mischief with which the Government threatens the country.

* MR. WHITE RIDLEY (Staly bridge)

The hon. Members who moved and seconded the Amendment have made a great parade of the glorious principles of free trade, and given thier own personal opinion as to the effect of this measure. I wish to draw the attention of the House to the peculiar position in which they find themselves. Here is a practical opportunity of securing free trade in sugar, but because some protectionists support the Bill they would reject it. That position is illogical. If the Convention is not for free trade in sugar I would like to know what it is for. The natural, and indeed inevitable, result of trying to apply rigid economic theories to practical, work-a-day life is to land yourselves in difficulties. Those who have a great dislike to bounties are the very people who absolutely refuse to abolish them. They refuse to take the only practical means to abolish them because, forsooth, there are certain industries in the country which have made a great stir about the matter, and which assert that they will be ruined by the Bill if it becomes law. Those who oppose the Bill have discovered a newly awakened interest in the consumer. They rest their case on the plea that the Bill will raise the price of sugar, and that their industries depend upon cheap sugar. I entirely controvert the proposition that their prosperity depends wholly on cheap sugar, because, when these industries were built up and became prosperous, sugar was twice the price it is now. They waxed fat and prospered when sugar was at £20 per ton, and when sugar has been reduced from £20 per ton to £8 per ton they complain that a very small rise which may take place in the price of sugar will injure their interests.

And, it being half-past Seven of the clock, the debate stood adjourned till this Evening's Sitting.