§ Order read, for resuming adjourned debate on Amendment to Question [28th July], "That the Bill be now read a second time."
Which Amendment was—
To leave out the word 'now,' and at the end of the Question to add the words 'upon this day three months.'"—(Mr. Lough.)
§ Question again proposed, "That the word 'now" stand part of the Question."
§ Debate resumed.
* MR. WHITE RIDLEY
I was pointing out when the dinner interval interrupted me that jam, biscuit, and aerated water manufacturers had not so much to gain by cheap sugar as is imagined. They were able to make large profits when sugar was £20 a ton, and they cannot complain if sugar which is now £8 should rise to £10 a ton. The demand those interested in these industries are making is this—that those who have practically enjoyed a bounty for many years should be still allowed to enjoy that bounty when the Government have 628 an opportunity of getting rid of it; n t only that, but when the figures are examined we find that the consumption of sugar in this country induced by the industries which are concerned increased rather more during the early part of their prosperity, when sugar was dearer, than later. I take the average price from 1872 to 1885, fourteen years, and I find it was 28s. a cwt. Then I take the years from 1889 to 1897, when it was 16s. a cwt., or 12s. less, and I find during the former period the consumption of sugar increased by 37,000 tons, whilst in the latter period it only increased by 19,000 tons, so that when sugar was 28s. a cwt. the annual consumption of sugar increased at a very much greater rate than when it was only 16s. a cwt. Therefore I venture to say that these industries which make so great an outcry are greatly mistaken in thinking that they will not be able to maintain their prosperity if sugar should go up in price. One of the first conditions of a successful trade is a regular market and regular prices; and everybody who looks through the variation in the price of sugar during the past many years, will see at once that industries such as these, which depend on a regular supply of sugar, could not look for prosperity when the variations were so great. I find that in the last twenty years the variations in the price in the course of one year have never been less than 1s. 2d. per cwt., and during the last three years 3s. per cwt.; a variation in the course of one year of about one-third of the whole of the price of the cwt. A variation so great as that is not one which ought to induce these trades to think such a condition of affairs would lead to their permanent prosperity. If you take any year you like from 1882 to 1902 you find these enormous variations in the price of the raw material upon which these industries depend, and I say that the very industries that can gain, or ought to gain, by this Convention, which, whatever it does, will steady the price of sugar, will be these industries which complain.
Turning to the case of the general consumer. The hon. Member for King's Lynn seemed very disturbed at what he called the monopoly created by this Convention. I say so far from creating any monopoly this Convention abolishes 629 monopoly. I was at a loss to understand what the hon. Member meant by monopoly, and was not enlightened by his speech. I find that the monopoly for supplying this country is gradually falling into the hands of Germany and Austria-Hungary; 68 per cent. of our, refined sugar and 35 per cent. of our raw sugar came from those countries in 1900; and taking the year 1902 I find the proportion of 68 per cent. of refined sugar has increased to 72 per. cent. and that the 38 per cent. of raw sugar has increased to 53 per cent. When you find two countries whose borders adjoin dealing in the same produce and adopting the same policy, and when you find those countries supplying this country with 72 per cent. of refined sugar and 53 per cent. of raw sugar I ant certain the House will agree with me in thinking we are rapidly approaching a time when Germany and Austria-Hungary gill have a monopoly. The hon. Member for King's Lynn thinks the saute monopoly will exist under this Bill, and thinks the surtax on the sugar, or tire difference between Customs and Excise duties will allow those countries to maintain that monopoly. I do not see how his opinion can stand against the deliberate opinion of the Convention. You find in the opinion of the Convention that the maximum surtax they propose to allow in the future is enough to stop any monopoly in these countries. What will be the real effect on the price of sugar? It is quite possible, and indeed probable, that the price will not fall blow the cost of production; but the utmost rise there can be will be a rise to the normal price of sugar, and I do not see that any section of the community can complain if the price is raised to its normal state. And I venture to say the normal price of sugar has been very little affected by the bounties. The lowering of the price of sugar by the bounties has been infinitesimal, The main cause of the reduction has not been the bounties but increased facilities of production incidental to modern ingenuity. Tire hon. Member for West Islington said, when it was a question of making a grant to the West Indies, that the price of sugar has not been affected to any extent by the bounties, and when the hon. Member 630 says that, it is reasonable to suppose the abolition of tire bounties will not cause a large increase of price. The fact is that the extremely low price of sugar during the last ten years is due not to the bounties but the extreme over production caused by the bounties. Hon. Members may think that if the price of sugar was reduced by whatever means, it might be a very satisfactory thing; but on glancing over the prices of sugar we find the result of the low price of sugar is a tendency to alternate to a high price. It is an artificial system of alternating prices, upon which no country can have any confidence whatever.
It is said we have given the consumers £8,000,000, but it cannot be said that the whole of these bounties go into the consumers' pockets. Suppose the West Indies can sell sugar in this country at £10 a ton, and Germany can produce it at £8 15s, and that they obtain a bounty of £4 or £5, the German producer does not reduce his price to the extent of the whole of the bounty but only to such an extent as to enable him to undersell the West Indies, and puts the rest into his own pocket; therefore I cannot see how it can be said that this £8,000,000 goes into the pockets of the consumer. These bounties have not been responsible for the great decrease in the price of sugar; that has been affected by other causes. If the bounties were abandoned to-morrow the other causes would remain, and the reduction in price would still continue. Supposing sugar returns to the normal price, we might naturally expect that in competition induced by free trade the sugar would lower its price. Not merely the West Indies will benefit, but there are large areas in Central America which will also profit by the Convention. Experience has shown that sugar could be produced profitably in England if there were no bounty to compete with it. There is one circumstance that will prevent sugar reaching its normal price for some time. There are very large stocks held by producers of beet sugar, and when those enormous stocks are got rid of it will to a large extent prevent any increase in the price of sugar. What was the meaning of 631 the private convention of the sugar producers on the Continent. It was that they had got enormous stocks on hand, stocks amounting to something like 2,500,000 tons, and that they had to face the reduction caused by the abolition of the bounties. It will be said that the West Indies will not be great gainers if the price of sugar does not go beyond its normal price; but those who make that remark are those who have not studied the conditions in the West Indies. Those who have read the Blue-book published by the Colonial Office on this question, will know that what is feared in the West Indies is not the actual price now but the price in the future. If they look at the Blue-book they will see that the merchants who are in the habit of lending money to the cane growers on their future crops, refused to lend further money, because the bounties prevented the profitable growing of cane sugar. That is why the West Indies has not been able to get on. It is because they could not get the capital to go on with, and this is a matter of the utmost importance for the consideration of the House. This question involves the discontinuation of the system so prejudicial to the west Indies, which practically prohibited the exportation of their sugar. We have granted preferential duties, not to the West Indies but to Continental countries, and I should venture to think the people of this country will be inclined to say if we to grant these privileges at all we should grant them to our colonies and not to foreign countries; and they will be the first to realise that what in the end will be the cheapest sugar will be that supplied in regular competition with all nations under the sun. To suppose the people of this country are not capable of appreciating, that seems to me to he gambling, not on the food but on the intelligence of the people.
With regard to the other chief objection which is raised to this Amendment. It is said we are placing our fiscal system under foreign control. It is an utter travesty of the situation to say so. This foreign board is one on which the British have an equal vote, or a more than equal vote, to that of the rest, and they have quite as much reason to see that the 632 Convention is properly carried out as anyone. It is not to the interest of France that Germany should go on granting bounties when she has abolished them, or to the interest of Germany that Austria-Hungary should go on when she has abolished them. It is the business of the Convention to decide what they shall give a bounty to, and what they shall not, and whether such sugar shall be excluded from the English market. The amount of sugar excluded will only be one-fortieth part of the supply, and it is a travesty of the situation to say that the exclusion of one-fortieth of the supply of sugar to this country is to render the food of the people dear. It is an utter absurdity which only has to be mentioned to show its falsity. This question is no doubt part of the larger one. It is, as the right hon. Gentleman said, some sign of the storm which is to break over us soon, but I venture to think those who are opposing any fiscal reform are those who ought to support the Convention. Nations, in their conflict with each other, can resort either to arms or to fiscal weapons. Neither of these methods appeal to those hon. Members who oppose this Convention. They approve of international agreement. This is n international agreement, and as such they ought to support it. Far from being a retrograde measure and one which this country will not participate in, I believe it is one of which the people of this country will unanimously approve. I believe the country will approve of this Convention, and heartily endorse the action the Government have so courageously taken in its support.
§ MR. CAWLEY (Lancashire, Prestwich)
I think the hon. Member opposite has proved too much. He seems to think that he knows more about the real interests of the consumers of sugar in this country than the consumers themselves. Surely an enormous trade, such as the jam and confectionery trade, are able to take care of their own interests; they certainly know as much about the matter as the hon. Member opposite, and they are unanimous in their demand that they should be allowed to buy their principal material in the cheapest market. The 633 hon. Member says we do not get the whole of the bounty. That is possibly so, because the producer of beet sugar in Germany in normal times makes a profit, and so pockets some of it. But they are in competition with one another, and when there is a glut in the market the producer has to give not only his bounty but something else as well. The whole thing seems so simple that it is difficult to understand why the Government are taking this course. Unless reasons are brought forward which have not yet been adduced, it is impossible for me to understand it. I know something of business, and to me the case seems to be this. These Continental countries want the votes of the agriculturists; they have influence brought to bear upon them to give a bounty for growing beet sugar, and in order to propitiate certain people they give the bounty. The bounty stimulates production; so much sugar is grown that it has to be dumped down here, often at a loss. Who pays that loss? The consumers in Germany, France, and Austria-Hungary pay a big price so that our people here can get sugar at a low price. In other words, the working classes of those countries take so much money out of their pockets and present it to our working people. That is what the Government propose to stop. Sugar is often sold here at 3s. below cost price, and how anybody can say that we are not gainers by that I cannot understand. This Convention will prevent sugar corning at such a low price, and according to the hon. Member for Stalybridge it is better for the jam trade that they should pay 10s. instead of 6s. per cwt. for their sugar.
§ MR. CAWLEY
The President of the Board of Trade said that in future he thought the price would average 10s.
§ THE PARLIAMENTARY SECRETARY TO TME BOARD OF TRADE (Mr. BONAR LAW, Glasgow, Blackfriars)
He said, provided the cost of production remained the same.
§ MR. CAWLEY
What I understood him to say was that if this Bill passes the chances are that the average price of sugar will be 10s. It can now frequently be obtained at 6s. What is the advantage of this I It is to enable the West Indies to make a profit. I say that it would be cheaper for us to give the West Indies a million or two per annum direct than to try to give them this advantage in such a roundabout way. The attempt to bolster up a trade in this way, by increasing the price, will not stand looking into. One of our principal competitors ill this matter is Switzerland. Switzerland will be able to get sugar dumped down in her country, and to produce confectionery at a lower price than we shall. At present we get sugar from Germany and France below cost; we manipulate it, make it into jam and sweetstuffs, and actually ship back their own sugar at a profit. That the Government want to do away with. To my mind it is a suicidal policy, which will do very little good to the West Indies; it will injure an enormous and growing trade which is worked under the best conditions as to labour, and employs 250,000 hands; and the Government by persisting in their policy will do a very ill deed to the country.
§ MR. PLATT-HIGGINS (Salford, N.)
The hon. Member opposite has candidly admitted that he does not understand this subject.
§ MR. PLATT-HIGGINS
But not this business. I understood the hon. Member to rely on statements made to him by the trade, and he saw no reason why if cheap sugar were offered to them they should nut take it. I do not know whether the hon. Member is a fisherman or not. If he is, he will be aware that the bait usually contains a hook, and there are two very obvious hooks in this cheap sugar. One is that under the condition which he so favours, the trade of this country, especially in connection with confectionery, is absolutely at the mercy of some regulation of the German Government giving their export bounty on confectionery instead of on raw sugar. I 635 doubt whether that is a prospect which the confectionery trade can contemplate with equanimity. The next is the monopoly which the Germans now enjoy, and to which I will allude presently. A great deal has been said about the Convention putting a burden on the consumers of this country. In my constituency we have neither refineries nor jam manufactories, nor are we in the slightest way concerned with the West Indies; consequently I am supporting this Convention absolutely in the interests of the consumer. It is said that the abolition of bounties must raise the price of sugar by the amount of the bounties. That is the fallacy of the Cobden Club leaflet, No. 120. That leaflet sets out that Germany, Holland, and Belgium give us so much, and it totals up the amount at £2,770,000, which it says is a free gift, and asks why we should not have it, It is not always easy to upset predictions, but it is sometimes easy to upset statements as to the past. That leaflet refers to 1898, and it is easy to show that its argument is a fallacy. In that year, the average price of beet was 9s. 7d. f.o.b. Hamburg, or 10s. 3d. delivered in London. The cost of making sugar is 8s.9d. Therefore those countries not only did not give us a penny of that large sum, but they made a profit of 1s. 6d. per cwt. out of us. Hon. Members who talk of the burden on the consumer would do well to study these subjects. Then there is a leaflet of the National Liberal Federation in which we are told that by this Convention we shall lose £8,500,000 a year. That is based on the supposition that we should lose the benefit of 5s. a cwt. on the 1,500,000 tons that we receive. But hon. Members opposite know very, well t hat if two men on the Manchester Exchange offer to sell an article, one at 8s. 6d., and the other at 8s. 9d., and the one at 8s. 9d. has an illegitimate bargain of 5s. up his sleeve, the latter does not say that because he has that 5s. he will offer his article at 3s. 9d.; he tries it at 8s. 5d., and probably books the order, so that instead of getting 5s. the buyer gets 4d., and that is where the mistake of the National Liberal Federation comes in. It is said that you cannot upset the statement of Sir H. Norman that there would be an advance of ½d in the pound. But the whole of that passage is very 636 seldom read. It was made nearly six years ago, and is as follows:—It must be admitted that if countervailing duties are levied, and have the desired effect, the people of the United Kingdom will have to pay more for their sugar than they do et present, perhaps to the extent of id a pound.There is a good deal of qualification about that "perhaps." What was the price in 1897? It was 8s. 9d. f.o.b. Hamburg, or 9s. 5d. delivered in London. Arise of ½d a pound would mean 14s. 5d. Will any member of the House bet a hat that the price of sugar will rise to 14s. 5d. this winter? This is a great struggle, not between the West Indies and Germany, but between cane sugar and beet sugar all over the world. I am utterly amazed that hon. Members opposite should constitute themselves the champions of a German monopoly. Germany enjoys an almost exclusive monopoly in the production of beet sugar. In 1893 the consumption in the United Kingdom of beet sugar from all quarters of the world was 1,000,000 tons; the consumption of cane sugar was 373,000 tons. In 1902 the consumption of beet sugar had risen to 1,400,000 tons, and that of sugar cane had fallen to 176,000 tons. Can any man of common sense say that it is to the interest of this country that cane sugar, which is the better sugar, should be driven from the country in this fashion? That is the attitude of hon. Members opposite. The hon. Member for West Islington took pride in showing how cane sugar is-as being driven even out of the West Indies. I see nothing to rejoice at in it. Rather is it to the interest of this country to stimulate the production of cane sugar, so that it may form a more powerful rival to beet sugar. The arguments of hon. Members seem to be based entirely en the fact that the price of sugar in 1902 was about Gs. But that was an abnormal state, and an abnormal state is in its essence temporary, and I say it is not to the interests of this country that the sugar supply should remain in that state. Some years ago American lard fell to 17s. a cwt., at which price it ceased to pay, and the production fell off. A trust in America got possession of the market, and the price has risen from 17s. to 58s. Are we to be exposed to a catastrophe like that I Yet that is the practical effect of the 6s. argument.
637 The danger of monopoly is one of the greatest dangers threatening thiscountry. In Manchester we have a very familiar example in the sewing cotton trade. That trade is in the hands of a combination. Does that combination make use of the fact to give cotton at the cheapest price? Not a bit of it. They use their monopoly to put dividends in the pockets of their shareholders, and their shares stand at an enormous price. It is asked, "But if prices rise, why doe: not competition come in?" Because it dare not. If it did the combination would come down and swamp it as easily and as ruthlessly as a farmer's wife wrings the neck of a chicken. As to the German monopoly, here is a report of a meeting of the United Alkali Company, held in Liverpool this year, at which the chairman bemoaned his hard fate. He said:—The English manufacturer has to fight an unfair battle for his own home market. To meet this difficulty the company had had for two years an agreement with the German makers as to the quantity they should export to the markets of the world including this country. When the agreement came up for renewal for the present year the representative of the German manufacturers insisted that a large increase in the total quantity assigned to them must be made, and that the United Alkali Company should undertake not to sell for consumption in Germany and Switzerland, and, further, that rights should he given to the German makers to sell in our own home market and in the United States at a difference in price in favour of German bleaching powder which would give them power to undersell the company in those markets.Is that a state of affairs we can contemplate with equanimity? Yet it is a state of affairs which would be actually brought about. It is said that we have received some benefits from the bounty system. I think we have, but the bounties have been a counterweight to the rise in the price of sugar which might have taken place had there been no competition. I want to show that the benefit must still accrue whether the bounties go on or not. The Germans, the French, and the Dutch have laid out enormous sums of money in the cultivation of the beetroot. They have established a trade which cannot stand still, but which they will be bound to continue for a certain period of time. They will he bound to give us the benefit of their supplies, whether they like it or not. They will not plough the land up. Looking at the matter from a common- 638 sense point of view, it would be to the interest of this country that we should have, instead of one-tenth of cane and nine-tenths of beet sugar, half of each. If we distribute our production all over the world we shall be naturally on much safer ground. Bounties in their nature are like stimulants: there are times when stimulants may be given with advantage, but there conies a time when it is not safe to give them without serious danger to the patient. In my judgment that is the present state of affairs, but unfortunately those men who are so fond of bounties are like the dram drinkers who cannot give up dram drinking.
§ SIR JOHN GORST (Cambridge University)
The first question which seems to arise is whether the House of Commons is free to exercise its judgment on the Second Reading of this Bill. The first Lord of the Treasury tells us that the Government has entered into a Convention which has been recognised by a vote of this House and therefore we are no longer free agents, and that we are hound to pass the Second Reading of this Bill merely to carry out the stipulations of a Convention already made. That seems to be a formidable argument. But, in the first place, the Convention itself reserves the right of the Legislature to consider this matter. Secondly, it must be remembered that the Resolution approving the Convention was passed at the end of an autumn session by the use of the closure and upon a document which was afterwards found to have been mistranslated. These circumstances justify the House in acting as if they were free agents. The last speaker talked as if those who were opposed to the Second Reading of the Bill were in favour of bounties. Nothing could be more incorrect. As a free trader I am strongly opposed to bounties. I think they form the very worst mode by which Government can interfere with the free course of trade, and I therefore rejoice that the countries of the Continent have seen the errors of their ways and are prepared to a certain limited extent to adopt the policy of abolition of bounties. But I am sorry to say that they reserve the surtax which is to have the effect of giving them the absolute monopoly of their own markets. If this had simply been an agreement on the part of the countries interested to abolish bounties, 639 we should have had nothing but approbation, sympathy, and the strongest possible admiration for their conduct. But in this case something is asked of us. We are not only asked to applaud the abolition of the bounties but to take an active part in a considerable interference with the course of trade. When we are called upon to do that it becomes our duty to ask what interest have we in this matter.
Now, are our interests promoted by entering into engagements with regard to the sugar trade on the Continent? I wish to say a few words on two hypotheses: first, that the price of sugar will rise, and secondly, that it will not rise. I have the most profound distrust of the prophecies made by economists and by the Board of Trade as to what will be the effect of a proceeding of this kind. After all, the price of sugar depends originally on supply and demand and the causes which ultimately settle the price are of a very complicated nature. Suppose the price does not rise, the people of this country will get their sugar cheap. The consumers will not suffer at all, but those who have been hurt by the bounties will not get the advantage they anticipate under the Convention. The West Indian Islands will gain nothing. I confess that when I hear people crying out about the impossibility of carrying on an industry I always think it is owing to want of enterprise and skill in the conduct of that industry. I cannot help thinking that if a little of the energy and wisdom of Egypt were imported into the West Indian Islands there also the sugar industry would become profitable. Beet sugar cultivation was once tried in Egypt and it failed, so the agriculturists turned their attention to cane sugar and found it one of the most lucrative industries. Therefore it appears to me that if the price of sugar does not rise under the Convention nothing Will be lost and, on the other hand, nothing will be gained. But suppose the price does rise. What will he the result We know that there are cartels at work with a view to regulating the quantity of sugar to be placed on the market. If the price rises how shall we gain by it? In the first place, the great masses of the 640 people will have to pay more for their sugar, which is an extremely serious matter, as it involves a diminution of the people's food. The raw material of the sugar industries will also rise in price. It is quite true, as has been pointed out, that a rise in the price of raw material does not necessarily destroy trade. But it disturbs it, and I think the House will admit it would be a great misfortune if a rise in the price of sugar should check the development and prosperity of a big trade. The only compensation for these evils—and it is a small one—is that the sugar-refining industry at home and the sugar cultivators of the West Indian Islands will be slightly benefited. The Bill affords an object lesson of the risks and dangers and difficulties which attend the making of fiscal arrangements with foreign countries to the disturbance of trade. It is an extremely important Bill for that reason, and I hope it will be fully discussed so that the country may see the dangers that are lurking under this kind of interference. The Government got into difficulties in making this Convention by agreeing to prohibit the importation of bounty-fed sugar, and when the time came for the ratification of the Convention it was found necessary to insert words providing that the protocol should not apply to British colonies.
§ Sin JOHN GORST
Then it is a pity you did not make it clear in the first instance. It shows that, in entering into trade relations with foreign countries, we shall have to make exceptions in favour of our self-governing colonies. Again, it has been found that the Convention is a violation of the "most-favoured-nation" clause in commercial treaties. We know what the United States has had to say to that, while it is important to note that Russia has taken up the position that England, by entering into the Convention, has violated the most-favoured-nation treatment in the commercial treaties between the two countries. We have actually been driven to repudiate the arbitration of the Hague tribunal in this matter. It is certainly a very unfortunate position for us. Then the next thing to note is that the Government do not 641 bring in all the members of the Empire. They have brought in the Crown colonies, but India has refused to come in. Yet India is completely under the control of the Government and Parliament of this country. Another difficulty is that if this Bill passes the House of Commons will become a body of log-rollers. I do not want to be personal or discourteous, but I must say that in the debate which took place in the autumn I thought I discerned some symptoms of incipient logrolling, and this will certainly he one of the difficulties of the future under a system of commercial legislation of this kind. I have just one more objection to this kind of legislation. After all, the discussion of this Bill in this House is a purely academic affair, because the Bill will go elsewhere. By "elsewhere" I mean, not the House of Lords, but an assembly in Brussels consisting of ten foreigners and one Briton. That assembly, which will have to give the final decision, has already censured and disagreed with the legislation of Austria Hungary and of France, and I suppose it will feel itself powerful enough to disagree with the legislation of Great Britain. As a member of the British Empire I strongly object to any kind of negotiations or agreement being entered into with foreign countries which interfere with the sovereign authority of the House of Commons and of Parliament. If we pass this Bill we shall have to refer it to the Belgium Commission to see whether it is pleased to approve of it, and if it is not approved then I suppose we shall have to amend it. It is this House which ought to decide whether or not we shall substitute total prohibition for countervailing duties.
§ MR. BRYCE (Aberdeen, S.)
I have kept an absolutely open mind on this question, for I have deemed it to be one on which we should endeavour to listen to all the arguments that can be adduced on either side. I have never addressed the House on it, and I entered the Chamber this evening with unusual curiosity and interest, looking forward to a full statement of the reasons which had induced the Govern- went to take this exceptional and even unprecedented course. This is the first time we have ever subjected our legislation to foreign control, and, therefore, a strung case must be made 642 out for it. I agree with the hon. Member for Stalybridge, who said we ought to study the interests of the consumers, but I confess I fail to see that he adduced any reason for the belief that the consumer would benefit under this Bill. He went on to say that he was opposed to monopolies. So are we, but it does not seem to us that the best way of stopping them is by prohibiting the importation of goods into this country. He told us later on that Germany was the enemy. I do not think he is right in that, for Germany has from the first been one of the countries willing to bring its legislation into conformity with that of other countries. The speech of the President of the Board of Trade was marked by much speculative thought but the right hon. Gentleman was unable to explain the difficulties which perplex our minds; he could not tell us what would happen if prices were raised and how the West Indies would benefit. The prophetic clement was particularly strong in the speech of the President of the Board of Trade. The right hon. Gentleman laid stress on the absolute obligation of this country to carry out this Convention; but not only is the constitutional right of the Legislature explicitly reserved, but it is an axiom of all Parliamentary countries that no treaty requiring legislation can possibly have any effect or bind any country until after legislation has been passed. We were absolutely and perfectly free, and I cannot for a moment accept the suggestion of the right hon. Gentleman that we are bound in any way.
The right hon. Gentleman did not put before us any practical arguments. He discussed a good many interesting questions, but he did not tell us what are the practical gains that we are to expect from this Convention. I will try to supply the omission by asking what are the practical gains which are put before us by the agitators who have kept up the movement in favour of this Convention for more than twenty years? In the first place, they say it will promote free trade. That is a very strange argument to come from protectionist s. This Bill is, as a matter of fact promoted IT protectionists. I do not include the President of the Board of Trade among the protectionists. The mental state of 643 Members of the Government has become a subject of absorbing interest to us on this side of the House, and we are only too delighted to have some little corner lifted of that veil which shrouds their intentions. I gather that the right hon. Gentleman is a free trader, and therefore I am sure it is in the interests of free trade that he has brought forward this Bill; but that is not the motive of the great bulk of the people who have been promoting the agitation against the sugar bounties. It is quite certain that Austria-Hungary, Germany, and France are not free traders, and that they intend to maintain their protectionist character. In one respect this Convention will be a setback to free trade, because it establishes the surtax, and we have made ourselves parties to that surtax. There is nothing in the Convention to get rid of cartels, and I do not see any ground whatever for thinking that cartels will not be just as powerful, just as able to raise prices in their own country, just as able to "dump" goods in this country as they have been hitherto. We are not escaping from cartels in any way. The President of the Board of Trade and the advocates of the Convention have defined free trade for their own purposes as that which allows commodities to find their natural level. There is no reason to believe that in that sense there will be any more free trade in sugar than there has been hitherto. The President of the Board of Trade argued that the Convention would have the effect of steadying prices, and making trade less liable to fluctuations. But there is no reason given for that; nor is there any reason to believe that the fluctuations are in many cases due to the bounties.
§ MR. GERALD BALFOUR
The fluctuations are largely due to bounties; but I admit there are other causes. We will never be able to get rid of fluctuations entirely.
§ MR. BRYCE
That is a question on which I have no special knowledge. It is a statement which requires proof. I want to be shown that the fluctuations in prices are coincident with bounties. Just look at the enormous fluctuations that occur in cotton and grain, and who 644 will venture to say that there will be no further fluctuations in the sugar trade. It is not a statement that can be accepted on the mere ipse dixit of any Department. The cartels will very likely be interested in causing fluctuations, and they will have the power to cause them. The President of the Board of Trade said that the Convention struck a blow at the system of cartels, which was applicable to every protected country. That in one sense is a most valuable admission that the system of combinations and trusts and rings is more easily carried out where there are protective duties than where there are not. That has been our contention throughout, and one of the strongest objections to a change in the fiscal policy of this country was, that so far from delivering us from combinations it would expose us to them. Therefore, the admission of the right hon. Gentleman is of the greatest value. But let us remember that we do not get rid of protection. Are we, whenever we find a bounty in existence, to make a convention to put a stop to it. Take the case of our own colonies. Ontario is, I believe, at this moment giving a bounty on the production of beet sugar in order to meet competition. The Dominion Government is, I believe, giving a bounty on iron, lead, and steel. Are we to remonstrate with Canada? Are we to consider that Canada is pursuing a policy hostile to us because she gives a bounty? Let us mind our own business, and if some other country chooses to injure itself by giving bounties let it mind its own business. We hear a good deal about "dumping," and it is evidently to be a large part of the controversy. "Dumping" has become a term to denote the selling of goods below the cost of production. I suppose the term is intended to stigmatise the process as being something miserable and revolting. The idea suggests refusa, and that the articles "dumped" are fit for nothing except to be cast out and got rid of. How does that apply in cases in which the things "dumped" are iron, steel, and sugar, not useless articles, and in some cases parcels of cotton goods. Therefore, all that "dumping" means is that somebody is kind enough to give us goods below the cost of production. Is there anything to resent in that? Is it any injury to the 645 trade of this country? Has it ever been so? Never. I say with some confidence it has never been an injury to the trade of this country except on small occasions and for brief periods. I do not deny that there are moments when the markets are disturbed by putting parcels of goods below cost price on them; but what I do deny is, that there has ever been a case where permanent injury has been inflicted.
§ MR. GERALD BALFOUR
It has inflicted injury on the West Indies, and has almost destroyed their trade.
§ Mr. BRYCE
I will be prepared to deal with that case presently. If goods are "dumped" here, what is the proper course to pursue I The proper course is to buy them. If people "dump" great quantities of pig-iron and steel upon us, it is our business to take that iron and steel, and to work it up into manufactured articles, making more profit than if the raw materials were produced in this country. That is the proper way to deal with "clumping." We may he perfectly certain that no body of foreign manufacturers, no foreign combination, in their own interest ever pursue this process for very long. Now I come to the ease of the West Indies, which is the whole foundation for this Convention. There is no other argument fit to be considered for a moment. The West Indies are amongst our oldest colonies, and they are a group of colonies of which we are proud. I do not wish to approach their case in an unsympathetic spirit, but I may remark that the.President of the Board of Trade omitted altogether to point out what is the substantial benefit to be expected by the West Indies from the Convention. It has been remarked that the sugar from the West Indies is only a small part of the total production, and only an exceedingly small part of our imports. The United Kingdom takes 1,600,000 tons annually, but only 45,000 or 50,000 tons from the West Indies, while the total animal production of those colonies is 240,000 tons, the great bulk of which goes to the United States. Therefore, our trade in the West Indies is a very small one, and it is a mere matter of opinion as to whet her that trade will be very greatly enlarged. At any rate it is not certain, and it is in the realm of hope and not 646 of fact. If the West Indies are to be benefited it can only be by the raising of the price of sugar, and very serious reasons have been given to show that it is not certain that the price will be raised. And if the price is not raised, how are the West Indies going to be benefited? I found when I visited the West Indies that the general impression, both in Cuba and Jamaica, was that the West Indies sugar trade was chiefly suffering from bounties, and that it would revive if the bounties were put an end to. We know that discontented people are likely to attribute their misfortunes to any cause except the right one, and I am not sure that the West Indies have made a true diagnosis of the disease from which they are suffering. The President of the Board of Trade did not commit himself upon the question as to whether the price would be raised or not. Very serious reasons have been given to show that it is not certain that the price will be raised.
§ MR. BRYCE
That is practically the same thing. The President of the Board of Trade says that we cannot argue both that the price will be raised and that it will not. If the Government raised the price they may possibly benefit the West Indies, but they will injure the trade and the consumers; if they do not raise the price they will not benefit the West Indies. How can the Government meet that dilemma?
§ MR. GERALD BALFOUR
It depends on whether we are speaking of the average price. If the average price remains approximately the same, without great fluctuations, the West Indies may be enormously benefited without any injury whatever to the consumers.
§ MR. BRYCE
I admit, that that is an escape from the dilemma Which my right hon. friend has prepared for himself. There is nothing to show that the price will not fluctuate, and there may possibly be just as great fluctuations after we have got the Convention; and, if so, the West Indies may suffer 647 in the future just as in the past. Then it must be remembered that the cartels may reduce the price, and also that the loss of the United States market may inflict a far greater injury to the sugar trade of the West Indies than could possibly be made up by any rise of price the Convention might make. The United States is very likely, in view of its arrangements with Cuba, to raise the duties so high against the West Indies that they will be cut out of this, which has been their great market. That would be a far greater blow than any benefit which may be conferred under this Convention. There is, too, the competition of Cuba, whose last harvest of sugar was nearly three times as much as that of the British West Indies; under the fostering development of the United States, Cuba will in the future be a far more dangerous competitor. Cuba is an island bigger than all the West Indies put together, and it is admirably suited to sugar cultivation. It has now got a population far below what it is capable of keeping. It has only a population of about 1,500,000 and it is capable of supporting 10,000,000. In the last harvest it produced 800,000 tons of sugar. Cuba is to be opened up by the construction of railways. United States capital is flowing into it, and it is likely to undergo a very remarkable development, which will make it a far more dangerous competitor with the West Indies than it has ever been before. I give these warnings lest it should be thought that by passing the Convention we are ensuring the well-being of the British West Indies. The depression in those islands is due to far deeper causes than sugar bounties, such as the poor quality of the labour, the lack of enterprise, and the want of modern machinery and appliances. In Europe it is chiefly the application of science, skill, and enterprise which had developed the beetroot sugar trade, just as in Germany electrical machinery and dyeing industries have been developed. If Jamaica develops her trade in bananas, oranges, cocoa, and tobacco there is no reason why she should not do better than with sugar, and the same thing applies to a number of the other islands. Compared with the present policy, an annual grant to the West Indies would render 648 them a greater service, but unfortunately that is the very filing which this Convention forbids, and it thus closes to us the one door through which we might have helped the West Indies. A subsidy to the West Indies would have been better for those colonies, and it would have been a great deal cheaper for us in the end. As to the possible results of the Convention, one is the imposition of a total prohibition on the entrance of sugar from any country which does not comply with its provisions That prohibition has been adopted, I suppose, instead of countervailing duties, in order to escape from the operation of the most-favoured-nation clause.
§ MR. GERALD BALFOUR,
The reason is that we have considered that countervailing duties should not be applied without the direct sanction of Parliament.
§ MR. BRYCE
The imposition of a countervailing duty is contrary to the most-favoured nation clause, and surely it is an à fortiori case to refuse to admit goods on any terms whatever. It is like putting on a duty so high that it is absolutely prohibitive. I take it that it is the general opinion of lawyers that this is a transgression of the mostfavoured-nation clause.
I will not dwell on the other inconveniences, upon the difficulty that will be imposed on our shipping trade of not being able to get return cargoes, on the trouble that will be caused by the certificate of origin and other obvious difficulties which will arise, but there is one other matter upon which I wish to say a word. Just at the moment when we are claiming that we and our colonies are to be treated as one economical and political whole we are going out of our way to emphasise the difference between ourselves and the colonies. There is a grotesque inconsistency in our action with regard to this Convention. We have given the self-governing colonies the opportunity of joining in the Convention and they have refused to join, and we have bound ourselves not to give any preference to our colonies, and have made ourselves parties to a scheme under which our self-governing colonies, if 649 they give bounties, may be penalised. It is true the Government have tried to reserve power not to penalise sugar when it comes from a colony giving a bounty, but, under the Convention, sugar coming from a colony giving a bounty is to be penalised, and, being parties to the Convention, we shall be parties to the penalising of our own colonies. This Convention is clearly and admittedly bad for Great Britain. ["Oh, oh!"] It is intended to raise the price of sugar, and the only case made for it is that it may confer some benefit on the West Indies. I greatly doubt whether it will really do so, but I am quite sure that it is not the best way in which we can benefit the West Indies, because it will only prolong and partially alleviate their condition, which needs different and more courageous remedies. I cannot help doubting whether, when we entered into these negotiations, the Government meant to go so far as they have done, and whether they were not in some hope that they would obtain the abolition of bounties without entering into a convention at all. The question asked as to Austro-Hungarian sugar ought to be answered. Is it going to be penalised on 1st September?
MR. GERALD BALIOUR
I do not think the question will arise. By that time in all probability the Austro-Hungarian law will be brought into conformity with the Convention.
§ MR. BRYCE
There will not be time to enter a new conference. The Government will have to go and ask the leave of the Commission not to penalise Austro-Hungarian sugar. That is not a satisfactory prospect. We are only at the threshold of the difficulties that will arise. This is an ill-advised, short-sighted measure, framed with an eye bent on certain small interests, and blind to much greater interests and to the endless inconveniences which arise 650 from the interference by an external body with the trade of the country. In the attempt to rectify the interference of bounties with the course of trade the Government are going to make a greater interference with our own trade. In ninety-nine cases out of a hundred legislative interference with trade has done more harm than good. I fear we are going to have another illustration of that historical experience, and if we must have it, I only wish that it had been going on for some years, so that the country might have had an object lesson, which would be valuable now that we are asked to go back to an old policy which assumes that trade can be better managed by Parliament than by itself. The Convention is a trumpery and needless device for effecting, at the maximum inconvenience to the country, a relief to the West Indian sugar trade, which it is doubtful whether we can effect after all.
§ * MR. BONAR LAW
I desire in the first place to answer the question put by the right hon. Gentleman the Member for South Aberdeen as to whether we are going to enforce the penalty against Austria-Hungary. He knows, or should know, if he has studied the history of the Convention, that in the case of any country which is a party to the Convention, we should not be bound to enforce any penalty until the Commission has declared that we are bound to do so.
§ * MR. BONAR LAW
I beg the right hon. Gentleman's pardon. He asks if we are going to enforce it on 1st September. He knows that it does not meet until 1st October. Another point on which the right hon. Gentleman invited an answer was in regard to the statement of my right hon. friend the President of the Board of Trade that cartels had been scotched, if not killed, by the Convention. The right hon. Gentleman told the House that they were going to be as strong as they had ever been.
§ * MR. BONAR LAW
Does the right hon. Gentleman suppose for a moment that the cartel where the protective duty is 20s. will not be made infinitely stronger than where the protective duty is only 4s. 6d., and yet by the Convention that is the utmost limit of the surtax which can be put on? If the right hon. Gentleman will think about it, he will see that there is nothing like 4s. 6d. which can be given. The profit must be made out of the sugar sold to the borne market. That surely is sufficient proof that the cartels will not be as strong, but if he wants additional proof he will find it in this reason—that the private sugar industry in Austria has acknowledged that with a limitation of the surtax it was impossible to work a cartel that would do them the least good. There is only one other point in the last part of the speech to which I wish to refer. The right hon. Gentleman told us that prohibition was far worse than countervailing duties. I am not going to argue that point with him, but I will read the opinion expressed in this House in November last by the right hon. Gentleman the Member for West Monmouth. He said—Of course, anybody would have preferred countervailing duties to prohibition.This has been a very interesting debate, and those who have spoken against the Convention have used some very strong language. It has been described as foolish, clumsy, blundering, and by some other adjectives which I have forgotten, but the hon. Member for West Islington beat the record when he described it as a nefarious proposal. I do not think that anyone in favour of the Convention objects to the use of language of that kind, for there is no feeling more universal or better justified than that. On such questions as this the strength of the language is always in inverse proportion to tire strength of the argument, and the debate to which we have listened is not one of the exceptions that prove the rule. I was reading the debate in the Austrian Parliament on this Convention, and I came upon a passage which I thought might be quoted as a 652 foil in regard to the strong language used in this House in regard to it. The speaker said—England has conducted this business extremely cleverly and diplomatically.I would like hon. Gentlemen who think the Convention altogether to the advantage of Germany, and particularly the right hon. Gentleman the Member for South Aberdeen, to read the debates in the German Parliament on the question. If the light hon. Gentleman does so he will find that the German Parliament does not like it If he does so he will find they have accepted it simply because they had no choice and could not do anything else. Of course that does not prove anything to hon. Gentlemen opposite. These Germans are only poor ignorant foreigners; they know nothing about economics; they only know how to undersell us in our own markets. I do not object to the strong language, but I must say that it is surprising to find it applied to a Bill the principle of which has been approved over and over again by both political Parties in this country. That, however, is a consideration which does not weigh equally heavily with every one. The hon. Member for West Islington does not feel himself slavishly bound by the traditions of the Party to which he belongs. On the introduction of the Bill he made a speech in which he spoke very freely of Mr. Gladstone himself.
§ * MR. BONAR LAW
That is a view for which there is a great deal to be said—the view embodied in a familiar proverb. It would not be polite to the hon. Gentleman to quote it literally, but I may venture, without disrespect for the memory of Mr. Gladstone, to paraphrase it by saying, "A living Member for Islington is better than a dead Member for Mid - Lothian." Only four years ago the leader of the Opposition stated in reply to the Secretary of State for India that he was just as much opposed to bounties as my noble friend. He said bounties were bad, for they disturbed trade and hindered the development of the country. But we do not need to go back so far as four years ago. Only last year the right hon 653 Gentleman the Member for South Aberdeen tacitly approved of the policy contained in this Convention. The right hon. Gentleman the Colonial Secretary brought before the House a proposal for a subvention in aid of the West Indies. He introduced it and defended it solely as part of the Sugar Convention, and if hon. and right hon. Gentlemen thought then as they think now, that this is such an abominable measure, surely that was their opportunity for making their protest.
§ * MR. BONAR LAW
They could have protested by speech or by their votes, for there was a division, but they protested in neither way. Not only did they give tacit approval, but the right hon. Gentleman the Member for South Aberdeen actually and openly approved the Convention which he has just condemned.
§ MR. BRYCE
I did nothing of the kind. What I said was that I was unwilling to oppose the grant in the hope that it might help the West Indies to tide over immediate difficulties. But I gave nothing whatever of the nature of an approval of the Convention itself. That would have been quite inconsistent with the views that have always been held on this Bench.
§ * MR. BONAR LAW
I am sorry if I have misrepresented the right hon. Gentleman. These are his words—But as the Vote was represented as being merely a temporary and exceptional remedy for tiding over the particular crisis which would exist until the arrangements made under the Sugar Bounties Convention came into operation he would…abstain from meeting it with that opposition which it might otherwise Bane been his duty to give.That meant that the right hon. Gentle, man would not disapprove of the grant, as it was part of the Sugar Bounties Convention.
§ * MR. BONAR LAW
He especially told us in the debate that he disapproved of the grant, but would not oppose it as it was part of the Sugar Convention.
§ * MR. BONAR LAW
I beg the right hon. Gentleman's pardon. He did not speak or vote against it. If he did not approve of the Sugar Convention then why did he not speak against the grant?
§ MR. BRYCE
The Sugar Convention was not before us. What I said was that I doubted very much the expediency of the grant, but it was represented that there was a case of distress in the West Indies, which would otherwise make it necessary to send charitable relief. That is why I would not vote against this particular proposal.
§ * MR. BONAR LAW
I will not argue that further. I would recommend the right hon. Gentleman to read his speech again, and if he does so I shall be greatly surprised if he does not admit that my interpretation is perfectly correct. But, after all, the important thing is not whether the right lion. Gentleman took one view last year and takes another view now. The important thing is whether the view he took last year or the one he takes now is the right one. Everyone who has spoken against the Bill has taken it for granted that the sole reason for introducing it is to benefit the West Indies, and not only so, but that it is impossible to benefit the West Indies except at the expense of the United Kingdom. I am not going to describe again to the House what is already known in regard to the position of the West Indies. A flourishing part of the British Empire has been brought to ruin, or the verge of ruin, by these bounties and by nothing else. I agree entirely with the statement made by the Secretary for India four years ago that, if one of the great industries of this country were ever destroyed in the same way as the sugar industry had been in the West Indies, he believed this country would not stand it. I believe that if the issue could be put before the country by itself, whether or no one of the great staple industries should be destroyed by unfair competition, there is not one man in a hundred who would not say such a thing should not be. I am sorry 655 to find that the right hon. Gentleman takes a different view.
§ * MR. BONAR LAW
What I was referring to was the statement that the more iron and steel that was dumped down upon us the better.
§ * MR. BONAR LAW
The House heard the speech of the right hon. Gentleman, and I must leave the House to judge on that point. I will only quote a few words to show that Mr. Gladstone had no sympathy with such a view. He said—If we are bound to observe the principles of equity towards foreign countries we are bound to observe the principles of equity towards our own subjects.And again—I cannot regard with favour any cheapness which has the effect of crippling and distressing the capitalists and workmen engaged in any lawful British industry.I do not argue with those who hold that view, but I do appeal to those who would not allow an industry in the United Kingdom to be destroyed by such means whether this House is not equally bound to defend the staple industry of one of our Crown Colonies. I quite admit it might happen that to benefit the West Indies would imply a disadvantage to this country out of all proportion to the gain to the West Indies. But what reason have we to suppose that the Convention is going to injure the United Kingdom? To say, as is said on the other side, that bounties have done good, and nothing but good, is not only absurd but can be proved to be absurd. When I first entered a commercial office in Glasgow one of the most flourishing industries was the supply of machinery for the West Indies. That has been destroyed, and the bounties have destroyed it. Was that no disadvantage to the people of this country? Twenty years ago the cane sugar imported into this country was about 14,000,000 cwts.; that has been reduced now to 2,500,000 cwts. That represents only a small part of the considerations involved in the figures. 656 With the natural growth in consumption, what would it mean to this country if the whole import came from the cane-growing countries? What would it mean to the shipping industry? If this sugar came from a distant cane-growing country our ships would have been employed in bringing the sugar to this country and in taking out machinery and supplies produced in this country, and our workshops would have been busy in creating the supplies of all kinds required by these plantations. There is another disadvantage from which this country has suffered in consequence of the sugar bounties. I refer to the sugar-refining industry, which was once one of the most flourishing industries in this country. The number of people employed in the sugar-refining industry in this country has been reduced by more than 50 per cent. in spite of the immense increase in the quantity of sugar consumed. We are told that this disadvantage is more than compensated for by the growth of the confectionery and other allied trades. Where is the compensation? Why should we not have both? When the sugar refiners find that the capital they have invested in the sugar industry has largely been lost, and when the men who have made their living out of the industry have bad to seek, often in vain, for other employment, what comfort is it for them to know that the same cause that has ruined them has made jam-making possible in Dundee? Why should we not have both? The confectioners take it for granted that this Convention is going to destroy their industry. What grounds have they for that assumption? With the Convention they will still have sugar cheaper than it can be got in any other country. For every other country is going to keep up its protective system, and the confectioners in this country will be able to compete, not only on equal terms but on most favourable terms, and surely if any trade cannot compete under such conditions that is not a trade which the apostles of free trade would desire specially to protest. I do not know whether the confectioners are now unanimously of opinion that the Convention is going to do them a great deal of harm. They did not always hold that opinion. A leading firm expressed the opinion that the abolition of bounties would not injure the confectionery trade.
§ * MR. BONAR LAW
I am obliged for the interruption of the hon. Gentleman. "Everything has changed since then!" Do principles alter with dates?
§ * MR. BONAR LAW
I am asking the hon. Member. There has been no change whatever in the position. Before 1889 the price of sugar had already fallen below 10s., a reasonable enough price. It is simply a difference of opinion among men in the same trade interests, and is it not fair to ask whether the confectioners of 1889 were not wiser and saw farther than their successors to-day.
Now these are the disadvantages. What is the advantage? There is one only, that of cheap sugar, and that is said to be an advantage so great that it is supposed to out-weigh all the disadvantages. Is the average price of sugar cheaper on account of the bounties than it would have been without them? The answer is supplied by the hon. Member for West Islington, who, speaking exactly a year ago, said there was nothing remarkable in the fall of sugar, that it had fallen like other commodities. The hon Member cited the case of tea, which, he said, had fallen quite as much as sugar. What was the cause of the fall in tea? It was not bounties; it was the improvement in the method of cultivation, the adoption of machinery instead of hand labour, and, above all, in the immense increase in the area of cultivation. Why should not the same thing apply to sugar? There is an immense area suitable for sugar growing, and who is prepared to say that, if sugar had been left to the natural laws of supply and demand, the average price of sugar would not have been just as low without bounties as it has been in consequence of bounties? The right hon. Gentleman the Member for Aberdeen has asked, "How will this benefit the West Indies?" I do not think the answer is very difficult to find. It is found in a 658 speech of the right hon. Gentleman him self, when he stated that the West Indies could be made one of the best sugar estates in the world, and that Cuba, owing to American capital, had been able to make sugar at a price with which the West Indies could not compete.
§ * MR. BONAR LAW
What is it that has made it possible for Cuba to produce sugar at a reasonable price It is its connection with the United States; it is the knowledge that from the time Cuba was connect d with the United States its sugar would have a fair chance in the markets of the world.
§ * MR. BONAR LAW
My point is the pretty obvious one that long-headed men in the United States knew that after the war Cuba would receive these privileges, and there was an inducement for them to put capital into the industry, which has resulted in Cuba being able to produce sugar at a reasonable price. And, if the West Indies got similar advantages, if they had a lair chance in the markets of the world, is it not reasonable to suppose that the same capital and the same energy will be available there. I have an authority who is well entitled to speak from his special knowledge on this subject, the right hon. baronet the Member for Berwick. And this is what he says about the difference the abolition of bounties will make.In these days of scientific invention, machinery will always he improved, and constantly have to be renewed; but in any business, for the renewal and improvement of machinery you must have credit.And he went on to apply the argument that the bounties had interfered with credit and prevented the owners of sugar estates raising the capital to enable them to get new and improved machinery. The right hon. Gentleman also said that what was wanted was 659 scientific methods and better machinery. You cannot get scientific methods and improved machinery in any trade unless there is a reasonable prospect of profit. That seems to me to be a complete answer so far as the West Indies are concerned. They say that they can compete with the rest of the world. Give them a chance and a fair field and you will find that they are quite able to hold their own against any sugar producing countries, cane or beet, which are to be found throughout the whole of the world.
There is only one other point I would like to bring before the House. Nearly everyone who has spoken on this subject against the Government has taken it for granted that this question and all similar questions, can be dealt with by sonic, simple plan that acts automatically. Let us apply that argument to this case. The right hon. Gentleman opposite says that the Convention is contrary to free trade. I wish that my right hon. friend, the Member for West Bristol laid been present, for he knows as much about free trade as any hon. Member, and he thinks that the Convention is entirely within the scope of free trade principles. The world is now too complicated for us to get any simple plan which can be applied to every trade; to discover such, I believe, is no more possible then it was in earlier days to discover the Philosopher's Stone. You cannot do it. The trade conditions of the world have been changing enormously during the last twelve years. They have changed more, I believe, than at any previous period in our history in the same space of time. How are these changing conditions to be met? If the guidance of the country were in the hands of the right hon. Gentleman opposite, he would fly to the rock of his free trade principles, and, when the waves of foreign competition were sweeping over him, he would be seen, in the interval of a receding wave, clinging shivering to his rock and still exclaiming—" My principles are all right, the rock is still here, it is the facts that are all wrong." Yes Sir! It is the facts which are wrong, but since it is not possible for us to alter the facts to suit our theories, is it not time for us to begin to think of altering our theories to make them suit the facts?
* The FLETCHER, MOULTON (Cornwall, Launceston)
The speech of the hon. Gentleman puts the case of the Government on the most extraordinary basis. His justification of this Convention with all the consequences involved in putting England at the mercy of a foreign tribunal, is that it will enable the West Indies to get enough capital for the proper working of their sugar factories. The case that the Sugar Convention will raise the price of sugar and enable the West Indies to compete with the rest of the world is given up, and he would have us believe that this unprecedented step is solely to make it easy to get a million or two invested in new sugar machinery!
At the end of his speech the Under Secretary to the Board of Trade appealed to us to remember that the conditions of trade had altered more in the last few years titan in the previous fifty years. The House has heard the piteous plaint the hon. Gentleman made that the sugar refineries had been thrown out of work, and his statement that any cheapness which was fatal to such a trade was a cheapness which should be viewed with suspicion. It is perfectly true that many sugar producers in the West Indies are in difficulties, conditions of trade have changed and in nothing more than in sugar. But the change has not been wrought by bounties, but by the introduction of a new source of sugar, beet, capable of being grown in temperate climates, in the midst of the most civilised countries amongst peoples who are able to apply, on the spot, scientific machinery and processes. Thus, the centre, of gravity of sugar production is changed; the production of beet sugar has been going up in civilised countries, while the production of cane sugar in the tropics has been going down. It is idle to look to bounties as the cause of this change and it would be just as ridiculous to attempt to keep alive the cane industry as it now exists in the West Indies in the presence of the beet industry in France and Germany, as to attempt to stop the introduction of machine-looms because you do not want to throw out of work the hand-loom weavers. Let us look plainly at the facts of the case. As soon as the beet industry became developed on the Continent, they looked for what was the great sugar 661 consuming market. That market was England; and so important was it that there arose not only individual, but national, competition for it. France, Germany, and Austria competed, not against us, but against one another, for us as a most valuable customer, and they offered us the best terms they could. The competition, national and individual, to which is due the present price of sugar is simply a testimony of the enormous importance of our market. The consequence was that they offered these bounties, the sole effect of which has been to render the price of sugar in England lower, and as we are not a sugar producing country, it has been an unmixed good to us to get our sugar thus cheap. Now, supposing that there had been only a bounty on raw sugar, there would not have been one single person in the United Kingdom otherwise than benefited by these bounties The complaint of the refiner is not against bounties generally, but against the existence of one set of bounties in favour of raw sugar, and another in favour of refined sugar, the latter being higher than the former. This has a tendency to increase the proportion of sugar imported in the refined state, but this is not the main cause of the disappearance of so many old refineries in England. In 1864 there were some- thing like sixty refiners. By 1882 they had dwindled to thirty, and now they are only about fifteen, and they do far more business than the sixty did in 1864. I know what sugar refineries are and have been both in England and abroad. The successful refineries of to-day hear a resemblance to their forerunners. The old English refinery was a fire trap of the worst description—a risk which no office would take, they were so ill-arranged and so behind all other manufactories in the nature of their plant. I have been over the great sugar factories in France, and I know that Germany is not behind France, and there I have found magnificent machinery arranged in a way that facilitated, and reduced to the smallest amount, the cost of production. Do you suppose that anybody is going to keep alive antiquated refineries in competition with these up-to-date sugar manufactories? I think the industrial life of this country ought not to he carried on in museum but in properly equipped establishments. The real cause of the decline in the 662 number of sugar refineries is the antiquated plant and machinery used. What right have I to say that is the real cause? Well, take the two firms at the head of the trade now—Tate and Lyle. It is true that Tate's bought a patent in 1870 for a special process of refining sugar, but it expired in 1884, and of so little importance was it that, I believe, not a single refiner adopted the process when it thus became open to the public. It was said Tate's had a patent for cubes, but it also expired in 1888 or 1890, yet Tate's remained still at the head, defying competition as before. Another firm had the right to use the patent for cubes, yet it went under while Tate's flourished. It was not the patent that kept Tate's up. It was business ability. Lyle's crystals were made out of raw beet sugar which came into the country cheap by reason of these bounties, and he competed on equal terms and with the greatest success with the German refiners. Where our refiners have been men of enterprise and energy these bounties have not crushed them. They have built up magnificent businesses. It is a perfect delusion that by our sugar refineries we deal with only an insignificant part of the sugar that comes into this country. One-third of it is refined in this country, and considering that sugar is produced in countries like France, Germany, and Austria, where there is every facility for manufacture, it is no wonder that two-thirds of it is sent out in a finished shape. Indeed, I am rather surprised that as much as one-third is refined in this country, because there is very little more difficulty in shipping refined than unrefined sugar. The truth is that our refineries have held their own where they have been modernised; and they still refine a large portion of the sugar which comes to England. That is how the refiners' case stands. Is it to be said that we are to make sugar dear and interfere with free trade into England just because our refiners cling to their old methods, and have not enterprise enough to follow their leaders in new methods. It would be a most calamitous policy for England if she tried to keep alive an industry which would not learn the lessons of the day.
I have said that if it were not for the refiners, there would not be a word said by any-one in England against these 663 bounties. Everyone else in England unquestionably benefits by them. And this plea for the refiners is a mere pretence to cover the real motive for the action of the Government. The main reason why the Convention came into existence was, on the authority of Lord Lansdowne, the West Indian Islands. The hon. Gentleman who has just spoken said there was no justification for that statement. I do not know whether the dispatch of last year is any justification in his eyes. It is a despatch from the Secretary of State for Foreign Affairs. Of course, we know that there is now no connection between the views of one Minister and the views of another. Moreover, the dispatch was written a year ago; and that is rather a long period for a Party that thinks that the best use to make of the word "Consistent" is for a telegraphic address. But for all this the public are entitled to rely on the fact that Lord Lansdowne stated that the reason for this Convention was the state of the West Indies. Now I want to deal with that. The figures have been quoted again and again and they demonstrate the utter futility of such an excuse. The West Indies cannot produce enough sugar for England, and even if they could they would not. I feel satisfied that if the Government were not committed to this Convention, and if the individual members of the Cabinet had taken the opportunity of looking for themselves into this question, we should never have had the Convention forced upon us because of the so-called case of the West Indies. First of all, these islands only send us one-fortieth of what we consume, and only one-third of the sugar coming from cane-producing countries. So backward are the West Indies, that Java and places further off are able to beat the West Indies, not only in our markets, but in the markets of the United States. Nor is it true that the sugar they send is unable to compete with European sugar. They send a fine refined sugar, an artificially-browned sugar, which sells extremely well in the market. They might sell as much more as they liked, as, for old associations sake, people would buy it in preference to white crystals, which are equally good. But the West Indies are far too lazy to make that refined sugar throughout. What they largely make is a very coarse sugar, and 664 the principal market for that is the United States and not our English refineries. Our English refineries do not refine any of that sugar; and if it comes over here it is only to be turned into invert sugar for the purposes of brewing. Therefore, the West Indies are not producing what they could produce, and which would sell here at a very good price. The next point is that even if they would, they could not. Suppose we were to pass a self-denying ordinance refusing to use beet sugar, the consequence would be that the other cane-producing countries would beat the West Indies in sugar which is treated in this debate as being their own particular product, and the result would be that we should obtain our sugar from Java or other Foreign countries. Apparently that would delight very much the Under Secretary to the Board of Trade, who seems to admire everything that makes sugar expensive, and he seems to imagine that all the machinery for producing sugar would be obtained from England. If the hon. Gentleman looks into the question of sugar manufacture, he will find that England is not so far ahead in the question of making sugar machinery as it used to be. If we stick to old methods that is the consequence. Therefore, we cannot keep any important part of our market in the hands of the West Indies, by artificially raising the price. Yet this is what the Government are proposing to do. It is too silly to suggest that this Convention was entered into for the sake of enabling West Indian planters to get a loan of £1,000,000 or £2,000,000 of capital to put up works. Everyone knows that in some parts of the West Indies there are excellent works which are doing very well, and for which the proprietors have been able to find the requisite Capital. If this were the real reason it would be infinitely better for us if we were to give them £2,000,000 for the purpose of improving their works. No such subterfuges invented at the last moment will avail the Government. We know that one of the objects of the Convention is to raise the price of sugar, Sir Henry Norman said by ½d. in the pound, the Colonial Secretary said by £5 a ton.
§ MR. J. CHAMBERLAIN
I beg the hon. Gentleman's pardon. I never said it would raise the price £5 per ton. All I said was that bounties at a particular time, in a particular country, amounted to £5 per ton.
§ * MR. FLETCHER MOULTON
The right hon. Gentleman, of course, does not remember all he has said. The right hon. Gentleman's statement was—The advantage given by the bounties to other sugar as opposed to West Indian sugar is probably not less than £5; a ton.
§ * MR. FLETCHER MOULTON
According to the right hon. Gentleman the advantage given is £5 a ton, and the consequence is that if you abolish these bounties you increase the price of bounty-fed sugar by £5 a ton. There is no reason to] think that it is now being sold at any exaggerated profit, and the consequence is that its price will be raised by £5 a ton, and that the West Indies will join in the increase. Bounty-fed sugar is the main sugar in the market, and fixes the price, West Indian sugar being only a small supply which has to compete with European sugar which is being subjected to a change of treatment calculated to raise the price £5 a ton. If that does not mean that West Indian sugar will have the advantage of the price of sugar being raised £5 a ton in England I do not know what it does mean. It very nearly corresponds with the estimate of Sir Henry Norman of an increase of ½d. per pound. Just see what we are going to do. The total produce of the West Indies at the present moment is 240,000 tons. Let us assume that they will give up sending their sugar to the United States, although I think the United States is at least as good a customer as we are. Even in that case, they would only send to us one-sixth of the quantity of sugar used in this country; and the consequence would be that what the West Indies would gain would be the rise of price on one-sixth of the sugar consumed in this country, the rise on the remaining five-sixths going into the national exchequers of France, Germany, and 666 Austria-Hungary. The fact is that these nations were in a very grave difficulty. when the Government came to their aid I have never said that bounties are good. They are as unwise as every other form of protection, but they are the one form of protection which does good to foreign countries, however bad it may be at home. Once bounties are started it is hard to drop them; just as it is hard to drop any other form of protection. As long as these bounties were kept up there was more or less competition between the different countries, and that kept down the price of sugar. Now what have we done? We have relieved these National Exchequers from paying sums which, in the case of France, amounted to something like £4,000,000. These bounties were paid by the Government of the several nations to secure for their nations as large a share of the English market as possible. They did this under pressure from the agricultural as well as the manufacturing interest and so long as they did so it was not practicable for the rings of sugar manufacturers and refiners in the different countries to limit and apportion production so as to get for themselves the maximum profit. But now all this is changed. Now the cartels can settle the whole matter among themselves and arrange what amount each country has to produce, and that is settled solely from the point of view of keeping up the price of sugar in England. The consequence is that we have relieved the Governments of these countries of the se huge payments—and they must have heaved a deep sigh of relief when they got this Convention safely signed—and have left ourselves defenceless as regards the cartels. We have set them free now, before any development has taken place in any other sugar producing country, and we are left as their victims. Every terror with which we were threatened as a possible censequence of the system of bounties has been made a present reality by the action of the Government. It is like a man who commits suicide because he is afraid he may be hurt in a duel. We have given these countries the power, if they like, to run up the price of sugar in this country, and what have we done it for? I have pointed out that the West Indies can only get, at the most part, the rise, whatever it may be, on one-sixth of the 667 sugar we consume, whereas, five-sixths will go to relieve the National Exchequers of other countries, and we set free £7,000,000 or £8,000,000 to be employed perhaps as bounties for other trade and we shall only have the satisfaction of knowing that by means of this Convention we have put a burden on the shoulders of the British consumer equal to about 5s. per cwt. Now I wish to show what a brilliant piece of finance this is. I wish to contrast West Bristol and west Birmingham. The late Chancellor of the Exchequer placed a tax on sugar, but it was put on in accordance with the traditions of English finance, and (allowing for the necessary friction and confusion of trade which accompanies every tax) every single penny of that sugar tax, to the amount of about £6,250,000, went into the National Exchequer. Now the Colonial Secretary proposes to put on us an approximately equal burden. The price of sugar will be augmented by just as much as in the other case. But this was not done according to the traditions of English finance, and the consequence is that a burden equal to the former sugar tux, or rather greater, has been put on the shoulders of the English consumer, not one penny of which will go to the relief of national burdens. Every penny that does not go into the Exchequers of Germany, France, and Austria Hungary, will go into the pockets of the planters of the West Indies. and he shall have contrived, at a time when expenditure is increasing so rapidly, and,the necessary taxes are so heavy, to put a second sugar tax on without reaping the benefit of a single penny from it. The only consolation I have is that when the fight comes—as apparently it is to come, when the dominant power in the Ministry says "go"—when it is a question of whether or not the new finance is better than the honest old English finance, we have only to send the people to the grocers' shop, and they will be able to see for themselves whether West Birmingham is an improvement on West Bristol.
§ Debate to be resumed to-morrow.