§ [SECOND READING.]
§ Order read, for resuming adjourned debate on Amendment proposed 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. GRIFFITH BOSCAWEN (Kent, Tonbridge)
I suppose it is inevitable that in this debate there should be references made to the fiscal inquiry now pending, although I confess I do not myself see exactly what connection there is between this Bill and the scheme of the right hon. Gentleman the Colonial Secretary. Whatever may be said in regard to it, that scheme, as far as practical polities goes, is a new question; whereas the subject of the sugar bounties is an old one, which has occupied the attention of successive Governments and successive Houses of Parliament for a great many years. One would think, from speeches made on both sides of the House, that the Government had suddenly made a great plunge and adopted an entirely new policy in pressing for the abolition of the sugar bounties. [Mr. GIBSON BOWLES: Hear hear.] My hon. friend the Member for King's Lynn cheers that statement, but surely he knows, and the country knows, that this question has been before it for upwards of forty years. As long ago as 1862 a Liberal Government caused a Convention of Foreign Powers to be called in order to discuss this very question, and a few years later Mr. Gladstone urged the abolition of the sugar bounties on the ground that they were had for the producer, the importer, and the consumer alike. Both parties in the State have, in successive years and on many occasions, endeavoured to get this question settled, but now we are told that it is contrary to free trade. I approached the question of free trade with considerable fear, for if we take the statement of those who have always been regarded as the leading free traders of this country, they have never for one 691 moment regarded sugar bounties as anything but an abomination, and they have desired to get rid of them as a step in the direction of free trade. Mr. Cobden said—What we free traders want is that every natural source of supply should be open to us, as Nature and Nature's God intended it should be, without artificial interference.And the late Mr. Gladstone—whose orthodoxy as a free trader no one would doubt—in 1881, said—We do not regard with any satisfaction the system under which an artificial advantage is given in our markets to the product of foreign labour—the principle to be observed being that of equality. Some people say that it is a good thing, because the consumer gets the benefit of it, but I do not think that any benefit founded on inequality and injustice can bring good even to the consumer.Then again, the late Lord Farrer, another orthodox free trader, speaking as lately as the year 1897, to the Cobden Club, used these words—Upon this point (sugar bounties) we must walk warily. We must admit to the fullest degree that sugar bounties are an abomination; and we must not, because they make sugar a little cheaper in this country, say that they ought to be continued. If Mr. Chamberlain were asked in any fair way to get foreign nations to do away with their bounties, we ought to wish him God speed.My hon. friend the Member for King's Lynn and hon. Gentlemen opposite ironically cheer these sentiments! What is the meaning of it? Surely the Government have gone a very long step forward towards doing what Lord Farrer said they would wish Mr. Chamberlain "God-speed" in doing. They have succeeded in getting foreign nations to agree to the abolition of sugar bounties. How is it, therefore, when this thing has been accomplished—a thing which both Parties have been striving for for years, we have this determined opposition to the carrying out of this most eminently laudable free trade doctrine.
What are the objections to the Sugar Bounties Convention and to this Bill? They are brought forward I frankly admit for one particular object—viz., to save some of our colonies from ruin. The Sugar Bounty system has well nigh ruined the West Indian colonies. Some hon. Members appear to doubt that and seem to think that if one trade is destroyed another can be established in its place, and that all the West Indies have 692 to do in order to regain their prosperity is to start some other trade. That, however, is not a very nice prospect for the West Indian planter, who has sunk his capital in the sugar industry. But is it true that other trades can be set up which will restore the prosperity of the islands? One or two of the islands have been enabled to do this, but a Royal Commission has stated specifically that some of the West Indian Islands depend on sugar alone, and if the trade in it were destroyed destruction awaited them. In the case of Barbados, British Guiana, and the Windward and Leeward Islands this is the case, and can hon. Members contemplate with equanimity the destruction of the trade of these colonies? Are we right or not in trying to save them? Are we going to allow them to be destroyed by the bounty system when we have ready to our hands a weapon which will enable us to get rid of it? How far are hon. Members prepared to go? Are they prepared to see certain trades in this country destroyed also by the bounty system? I venture to say that if any trade in this country were threatened as the West Indian trade is, hon. Members opposite would be the very first to urge the Government to conclude a convention whereby the bounties might be abolished. What then are the specific objections to this Bill? We are told in the first place that the Convention and the Bill based upon it, will not benefit the colonies to any appreciable extent, and secondly, even if it does it will inflict a heavy burden on the English consumer and on the manufacturer who depends on sugar as a raw material.
Take first the case of the colonies. Is it proved that this Convention will not benefit them? I am informed that the Royal Commission took the view that the abolition of the sugar bounties would be of enormous benefit to the colonies. Indeed, the Commission said it was the only thing which could benefit them. It is not a question of the price of sugar. It is a question of credit, and the reason why our colonies have fallen so far behind is that they have been unable to obtain sufficient credit to enable them to develop their estates, to put in the best machinery, and to adopt the best methods 693 of cultivation. My hon. friend the Member for King's Lynn made a great point as to the unproductive character of the methods employed in the West Indies. He seemed to think that because they had not been progressive nothing should be done for them. He seemed to forget the reason. I venture to say that if you get rid of the bounties, capital will flow into the West Indies, and the inhabitants will have an opportunity of developing their resources, of improving their methods, and of producing sugar more cheaply than can be possible so long as the bounties exist. But we are told that if we benefit the West Indies we shall greatly increase the cost to the British consumer, and it is practically suggested that the evil would be so great that we ought to do nothing for the colonies. We have heard all kinds of prophecy, and we have had this statement put forward in every shape and form, but I think the most remarkable form of all was that advanced last night by the hon. and learned Member for the Launceston Division, who stated that the bounties had reduced the price of sugar to the full extent of the bounty given. I think that was a ludicrous argument. It is not true in fact, neither is it in conformity with any theory I have ever seen put forward. That it is not true in fact can easily be proved. We have been informed by the President of the Board of Trade that the cost of production of sugar in Germany and Austria is about £8 15s. per ton. The bounty amounts to £5 per ton, and consequently if the bounty had reduced the price of sugar by the full amount, sugar would have been sold here at £3 15s. a ton, whereas the price has never fallen to anything like that amount. It has never gone below £6 or £7 a ton. If it has not so fallen then I say the price will not rise in a like degree. No doubt the greater part of the bounty does not go to the benefit of the consumer in this country, it goes into the pockets of the producers of sugar in Germany and Austria. If you abolish the bounties my belief is that although there may be a slight rise on present prices, it will be very small indeed, and it will very soon be equalised by the fact that the cane-producing countries of the world will produce a great deal more 694 sugar; there will be free competition, and cheaper methods of production, tending to reduce the price of sugar. When a bounty is put on an article a very large part of it naturally goes in the first instance towards countervailing the superior natural advantages of the countries against which it is directed, and inasmuch as the West Indies can now produce sugar cheaper than it can be done in Europe, a large part of the bounty goes to countervail that advantage. It is quite untrue that the producer gives the whole of the bounty to the consumer; he only gives just enough to secure the market and he pockets the rest. Therefore it is monstrous to suggest that the abolition of the bounties will increase the price of the article by the full amount of the bounty.
But suppose you do not abolish the bounties. Suppose you permit the present system to go on. What is going to happen? Yon will create an absolute monopoly on the part of the German and Austrian producer of beet sugar, and he will, of course, when once he has secured the monopoly in our market, proceed to raise the price of sugar to any extent he likes. We are told that the confectionery trade will suffer. I think it will suffer a very great deal more if the present bounty system is allowed to continue. It may gain at the present moment by the temporary cheapness of sugar, but it will suffer later on by having to pay anything the German or Austrian producer may choose to charge. Last year 72 per cent. of the sugar imported into this country came from Germany and Austria. The Germans and Austrians have no doubt gone to very great expense in giving these bounties, but we may be sure that they have not been given merely to benefit the English consumer. The object has been to obtain the mastery of our markets and to drive out cane sugar altogether, as well as to get rid of other competitors in the beet sugar industry. That they have nearly done, for France has dropped far behind in the race, and when they finally succeed they will be able to raise the price of sugar to any extent they like. We hear a great deal about the confectionery trade, but where will it be if hon. Members, by conniving at the keeping up of the bounty system, pave the way for raisin, the price of sugar to a prohibitive 695 amount? Where will it be if the Germans obtain the mastery of our markets? We have heard that we are placing the control of our fiscal arrangements in the hands of a foreign Convention. But after all that Convention only exists in order to see that the Powers agreeing to it carry out the Convention. We are no worse off than any other nation in that respect. If we do not abolish the sugar bounties we shall be placing the control of our sugar supply absolutely and entirely in the hands of a foreign sugar ring, and that would be far more dangerous to this country than allowing a foreign Convention, on which we are represented equally with other nations, to see that all parties to it carry out their agreement. There is nothing more serious and nothing more likely to damage our people in the future than allowing the control of our food supplies to fall into the hands of foreign rings. We had an example of that last year in connection with the beef trade. An American ring controlling that trade put up the price of beef to every consumer in this country from 1d. to 2d. per 1b. At that time we in this House were discussing the shilling registration duty on corn, and although we seemed to be much concerned about the possible effects of that in increasing the cost of the foods of the people, we paid no attention whatever to the action of the foreign beef ring, which had really increased the price of meat and inflicted enormous hardships on our people. I again assert that the abolition of sugar bounties will not really put up the price of sugar except to a very small extent, whereas if we allow the control of our sugar supply to remain in the hands of those who pay the bounties, and have thus obtained the mastery of our markets, the effect upon our people will be very serious indeed. I do not think I need labour the point further.
For my part I candidly confess that I do not understand the objection of hon. Members opposite to this Bill. I am not going so far as to say that because we ratified the Convention last November we are therefore bound to carry it out. Of course we retain our freedom of action, but we are, I say, bound to carry it out unless we can show very strong reasons indeed for going back on our policy. To my mind there seems every reason for going forward with the policy of abolishing the bounties—a policy which every 696 Government for the last forty years has striven to bring about. Like everbody else, I do not wish to see the destruction of the confectionery trade; but what will happen to it if the victorious German or the victorious Austrian, having destroyed the West Indian sugar planters and the sugar refiners of this country, then proceeds by a system of bounties to destroy the confectionery trade? Suppose they gave large bounties to export confectionery from Germany and Austria, and dumped the goods down here, so that English confectioners would be unable to compete with them. What would be the position of the confectionery trade then? Will hon. Members still say that we have no right to interfere with the bounty system? Will they still say that it is far better to leave the foreigner to make these presents to English consumers. I venture to say they will take an exactly opposite line, and I can see the hon. Member for West Islington come here, hat in hand, asking the Government to get rid of the bounties because they are ruining the English confectionery trade. The same principle applies all round, whether we are free traders or protectionists. Bounties are an unnatural interference with the course of trade; and because this Bill will enable us to get rid of them, and will at the same time give a chance to our colonies and to our home refiners, I hope the Government will continue in their policy, and, by carrying this Bill through, will consummate what has been the object of this country for so many years.
MR. KEABLEY (Devonport)
The assumption underlying the speech of the hon. Member for Tonbridge is tie the Bill will abolish sugar bounties, but I would like to point out that under its provisions a permanent bounty is going to be set up far higher than the official bounty given by various countries for many years past. His argument as to what will happen unless these bounties are abolished therefore falls to the ground. It is clear that bounties are not going to be abolished at all. The hon. Member has pointed out some terrible things that are going to happen to us at the hands of certain Continental sugar producers if bounties are not abolished. He says that Germany and Austria will get us under their heels, and have a monopoly 697 of our trade, but he seems to forget that the total sugar production of the world is increasing at a great rate, and that therefore we need never be in the position of being under the heels of either Germany or Austria. The hon. Member has not perhaps studied the statistics as to the production of cane sugar, but I may tell him that the quantity produced has in the last two or three years increased by considerably more than a million tons, therefore we are not so dependent on the action of Germany or Austria as he seems to think.
§ MR. KEARLEY
There is such a thing as sugar production in countries outside Europe, and the statistics show that what the hon. Member has predicted cannot possibly happen. What has induced the Government to join this Convention? They have advanced two reasons—first, that our West Indian colonies are being ruined by the bounty system, and secondly, that British sugar refining is also being ruined. I have a few words to say about the arguments used by the President of the Board of Trade in building up the Government case. He told us in November last, and he practically repeated the same thing yesterday, that bounties are responsible for the over-production of sugar, and that that over-production has caused wild fluctuations in prices. He argued that were the bounties abolished the wild fluctuations would cease and we should have a natural and normal price of sugar. He says that these wild fluctuations of the past twenty years have been occasioned solely by the bounties. What are the facts? In fifteen of those twenty years the only bounty that existed was what is termed the official bounty. For the last five years there has been another bounty—created by the cartel system. The official bounties in Germany and Austria, the two largest exporters of sugar, amounted to from 1s. to 1s. 2d. per cwt., so that for the fifteen years before the cartel system came into existence the bounty was, speaking roughly, 1s. 698 per cwt. In the last five years the creation of the cartel has increased the bounty to 4s. 6d. or 5s. Now, between 1882 and 1897, the fluctuations in the price of sugar ranged from 8s. to 28s. per cwt., while in the last live years, although the bounty has been four times as great, the fluctuation has only been from 6s. to 12s. 6d. What becomes, then, of his argument that the bounties are the cause of these wild fluctuations? Then again the right hon. Gentleman says that the bounty of 1s. per cwt. has caused over-production. I always thought that over-production caused prices to fall, and, consequently, the price of sugar should have fallen continuously, but it has not. Let me tell the right hon. Gentleman what has really caused the fluctuations. He has no practical knowledge of the trade; he only gives the views of the experts who have coached him; and I want to show him how utterly fallacious is the statement that the fluctuations in price have been occasioned by this 1s. bounty. In 1882 the price of sugar was 23s. 6d. per cwt.; in 1884 it had fallen to 10s. Was that fall brought about by the 1s. bounty? No. What was the real cause of it? It was the law of supply and demand. At the end of each sugar year statistics are collected showing the amount of sugar on hand from the old crop. In 1884 it was found that the carry over of sugar was 1,200,000 tons—more than sufficient to supply this country for the coming year. Naturally this had a very disconcerting effect on the market, and prices tumbled down to 10s. per cwt. The 1s. bounty had nothing whatever to do with the fall. In 1889 sugar suddenly shot up to 28s. per cwt.—the highest price reached for 25 years. What was the cause of that? Was it the 1s. bounty? No. It was found that the carry over at the end of the year was only 473,000 tons. That influenced the market immediately and produced speculation which led to very high prices. I think I have disposed of the contention that these wild fluctuations were occasioned by the 1s. bounty.
The right hon. Gentleman has told us that the West Indies can produce sugar more cheaply than Europe, but that these wild fluctuations in price prevent capital going into the colonies, and he wants 699 the House to believe that when these bounties are abolished we shall have a normal and natural price of sugar. We shall have nothing of the sort. We shall still have the same variations in the market. The Colonial Secretary knows something about business. Will he not admit that fluctuations are occasioned by outside circumstances, such as the state of the crops and their magnitude or their expected failure. If the Government base their case on the assumption that prosperity will be brought back to the West Indies by stability of prices I would not give much for their future prospects. It is preposterous to say that in the future the price of sugar will not be determined by supply and demand. But according to the reasoning of the President of the Board of Trade, cost of production is to govern prices in the future. The right hon. Gentleman said that the price of sugar in the future will not be greater than the average of the past.
§ THE PRESIDENT OF THE BOARD OF TRADE (Mr. GERALD BALFOUR,) Leeds, Central
No; I said I believed the fluctuations in the price of sugar in the future would not be higher than the average.
§ * MR. KEARLEY
We have had it said over and over again that the price of sugar in the future would not be higher than the average.
§ MR. GERALD BALFOUR
I never said that. It would be absurd. I always admitted that the price of sugar is subject to fluctuations, but that those fluctuations would sometimes be above the normal natural price and sometimes below.
§ MR. KEARLEY
What does the right hon. Gentleman mean by the normal and natural price of sugar? What does he mean by drawing our attention to the fact that the cost of production in the West Indies is £8 10s. per ton and in European countries £8 15s.?
§ MR. GERALD BALFOUR
The hon. Member is under a misapprehension. I was speaking of the average price when I said that it would not be higher than it had been in the past. That is very different from saying the price would never be 700 higher than the average price in the past.
§ MR. KEARLEY
The average price in the future will not be higher than the average price in the past. What is the average price of sugar. How does the right hon. Gentleman arrive at it.
§ MR. KEARLEY
In 15 years the price has fluctuated from 5s. 9d. to 28s. The whole case for the Bill is based on stability of price; and when the right hon. Gentleman is asked what the average price is he takes the average price for the past ten years, and on such a happy-go-lucky calculation contends that sugar will be no dearer in the future than in the past. It is on these grounds that we are asked to go into this Convention? That brings me to another general proposition. The right hon. Gentleman says—That even if the interests of consumers of sugar and users of sugar did suffer from the abolition of bounties, that abolition would still be an object for which we ought to strive.Why? There is no divine law against bounties. They are not immoral in themselves. Each bounty, I maintain, should be considered on its merits. The effect of these sugar bounties is to give buyers in this country an advantage in price which they would not otherwise enjoy. I do not think it can be shown that any home or competing industry is suffering. It has been stated that a great number of sugar refineries have disappeared. But it still has to be proved that the refining industry has been ruined by these bounties. The fact is the manufacturers of this country get the advantage of the bounties, or they could not carry on their trade. Remember, it is only the official bounty which is to be abolished under this Bill. The pseudo bounty, created by the eartel system, is going to remain. If the 1s. bounty has ruined the sugar refiners of this country they will continue to be ruined by the larger cartel bounty. Thirty years ago there were thirty or forty sugar refineries scattered about the country; many of them have now disappeared, and the conclusion is jumped at that they have been ruined by the bounty system. As a matter of fact the bounties have had nothing to do with it. They have been 701 vanquished in competition with English competitors. Take the case of Greenock. Have the refineries there been ruined by the competition of foreigners? The responsible authors of their decline were the two successful firms of the present day, Tate's and Lyle's. Lyle was originally a Greenock refiner in a small way.
§ MR. JAMES REID (Greenock)
He was in a large way. He had a refinery capable of turning out 1,500 tons a week.
§ MR. KEARLEY
And now he turns out double the quantity. He left Greenock because he found it was not a suitable centre for carrying on his operations, and in view of the changed condition of affairs as well as with a view to the development of beet refining, he left Greenock to come to London. He has increased in wealth and importance, and those who remained behind in Greenock have fallen out, being unable to face the competition of their old townsman Lyle, or of Tate. The Colonial Secretary says: "Oh yes, but Tate's have a special patent process which has placed them practically outside the region of competition." That is absolutely not the case. It is true that Tate's have enjoyed the benefit of a certain patent, but they have not had a monopoly of it. The patent from which Tate's cubes proceed was acquired by Tate in 1876, when Tate was an ordinary small refiner. But that patent was owned conjointly by one of the oldest refining firm in the country—Messrs. Martineau & Sons—a firm with an existence of 100 years behind them, and all the benefits of an old connection. What happened? Tate amassed an immense fortune, and his sugar is pre-eminent throughout the country, but the old firm of Martineau & Sons failed. Why was this? On the one hand you have a new man with a new equipment, who, working according to modern ideas, kept himself to the front, feared no Competition, faced the competition of Europe, was the better for it, was not defeated, and is now one of the greatest refiners. On the other hand you have this old firm, with the traditions of a hundred years of trade, working with obsolete machinery, but who, notwithstanding the advantage of the patent which the Colonial Secretary says is responsible for Tate's position, went under. Lyle had no patent of any 702 sort or description, and he is still doing well. Tate and Lyle between them turn out as much sugar as the whole of the thirty refiners who existed thirty years ago turned out. I will go further. These two refiners between them turn out more domestic sugar than all the other refiners in the country. The output of Tate and Lyle is estimated at 300,000 tons a year, while that of all the other refiners amounts to 360,000 tons, of which 120,000 is brewers' invert. The refining industry of this country is not ruined; it is a prosperous industry. Anybody who likes to embark upon it with up-to-date machinery, capital, and business ability, is bound to make a large fortune. One of the grounds upon which we are being called upon to support this Bill is that the sugar refining industry of the country is being ruined, but I say there is no sign of any such ruin.
The only remaining question is that of the West Indies. Before I come to that let me say a word more about the bounties. The President of the Board of Trade last night said they amounted to 4s, 6d. or 5s. Does he contend that the English refiner does not get the full benefit of that bounty? Is that the contention of the Colonial Secretary? Some speakers have asked, "How can the English refiner expect to carry on his business with an adverse bounty of 4s. or 5s. against him?" He could not keep his factory doors open a week if that were the case. The thing is too ridiculous. I maintain that the English refiner enjoys to the fullest possible extent the advantage of the bounty. As regards the West Indies, they produce the raw material, and no doubt bounties would have some effect. But if anybody hopes that the abolition of bounties is going to restore West Indian sugar refiners to a state of prosperity, he will be greatly disappointed. We all desire to see such prosperity restored, but the bounties alone are not the cause of their distress. Until recent years sugar production in the West Indies was a very profitable industry. The old West Indian planters were extremely rich men, and a small share in a West Indian plantation was considered to be a fortune. They extracted sugar from the cane by windmills and all sorts of obsolete machinery. But with competition of beet and the bringing of the process of manufacture up-to-date, the West 703 Indies dropped behind. They dragged on thinking something would come up to rehabilitate them, but they have gone from bad to worse. They had all the natural advantages in the West Indies.
§ MR. KEARLEY
I suppose the right hon. Gentleman, by that ironical cheer, suggests that when the bounties were abolished the West Indies would prove their capacity to compete with the rest of the world. How long will it take for that to happen? Until the West Indies improve their methods, bounty or no bounty, they will never regain their old prosperity. We were invited last November to consider this question from a practical point of view. Let us consider the West Indian aspect of the case from the profit and loss standpoint. What are we to gain or lose by the abolition of bounties? The English refiner is prosperous, and the abolition of the bounty is not required on his behalf. There is some case for the West Indian, I admit. Every 1s. of bounty that we throw overboard represents £1,500,000 a year. Some estimate the amount of the bounty to be 5s., or a total annual value of £8,000,000 a year. I do not know whether that is so or not, but I do say it would be far cheaper for us to give the West Indies a large sum of money every year instead of throwing away all the advantage of these bounties. The abolition of the bounties will be a very bad thing for this country. I cannot conceive what has induced the Government to adopt the course they are pursuing. It cannot he that they desire to see £8,000,000 a year thrown away. I can only conclude that they have not made themselves acquainted with the true facts of the case, and that they are proceeding on faulty information. I oppose the Convention because I contend that we must have regard to British interests at large, which we are not doing by this measure. We have allowed ourselves to be lured into this Convention by a coterie of interested people, and I hope that at all events those who hold that free trade is a good principle will vote against this Bill, which is really the first step towards protection. No arguments have 704 yet been adduced which prove conclusively either that the sugar refiners in this country are entitled to the benefits they will receive under this Bill, or that the passing of the measure will restore the prosperity of the West Indies.
§ SIR WALTER THORBURN (Peebles and Selkirk)
My hon. friend who has just sat down has spoken mainly of the bounties given on raw sugar, and he has not dealt at all with the large bounty which is given on refilled sugar. The amount of bounty given upon refined sugar practically, makes it impossible for the trade to be carried on in this country. There is no doubt whatever that for a long period of years the refiners have been unable to carryon their industry in this country because of the unfair competition. London is the centre of a very large population, and the consumption of sugar in the Metropolis is so great that sugar can be distributed at a much less expense than in the case of those who, carry on refineries farther away. A refinery in London can get nearly Is. per cwt. more for the same class of sugar than a refinery in Greenock. Of course it is impossible that all these refineries can be carried on at one centre. Many hon. Members who have addressed the House upon this question are more or less interested in certain trades which are supposed to benefit by these bounties. I intend to make a few remarks on the effect winch these bounties have produced upon the sugar industry in Scotland. Prior to the introduction of bounties the refining industry in Greenock was a large and prosperous one. Some years ago there were no less than 16 sugar refineries in Greenock. I do not assert that all of them were in a thorough state of efficiency, but we have at the present moment only six of them left in active operation, and with regard to them I can say that there are no factories better equipped, and they can turn out sugar as cheaply as any other refineries if they have fair competition. For many years past the margin of profit between the claw and the refined sugar has been absolutely nil. To my certain knowledge if these refineries had kept their works going simply by buying the raw material and refining it at once, they were bound to lose almost all the expenses of refining. Only those 705 connected with the trade who are well off financially, and who can buy largely when the raw sugar is cheap, can possibly get any advantage, but the ordinary average man who buys the raw material from day to day finds that it is impossible for hint to make a profit. The German bounty is 35s. per ton on refined sugar. A general impression exists in this House that this country gets the full advantage of the German bounty, but there is nothing so erroneous. All that the German refiners give off that 35s. is a margin just sufficient to submerge the profit of refining in this country, with the result that it is impossible to carry the trade on here. I ask hon. Members if they happened to be engaged in an industry like this, I ask those interested in the confectionery trade if they were so handicapped, would they sit quietly by and say, "We can do nothing." This state of things is not for the benefit of the country in the long run. Is it for the benefit of the country that all the money which has been sunk in refineries, in machinery, and in stores, should be put down the gutter while the German manufacturers, after having killed the industry in this country, will be able to get what price they choose to ask for their sugar? Is it to the advantage of the country that all the labour which those factories would employ should not be utilised?
In the town of Greenock the Harbour Trust built large stores for the storing of sugar, but since the collapse of the sugar industry these stores have been practically unused. At one time the Harbour Trust bonds were looked after very anxiously by investors, but what is the case to-day? The second bonds, which at one time even trustees would buy in very large quantities, had been so affected by the decline of the sugar trade that the price of the £100 bond was now down to something a little over £30. If hon. Gentlemen think that the extinguishing of this industry is one which is beneficial to the country in order to give a temporary benefit to certain people by these bounties, then I can only say that I take a very different view. The confectionery trade have been very active in this matter, and I do not know how many circulars I have received more or less couched in the most extravagant language. These confectioners have been absolutely coining money.
§ SIR WALTER THORBURN
No, I do not, but I think they will be very little injured by this measure. For the sake of maintaining these enormous profits the confectioners are using all the resources they possess to induce hon. Members to vote against this Bill. Those people have no competition at all abroad, and if they put their heads together they can get any price they like. No doubt they will take that course. No one can complain of the, price of sugar in this country even now or in regard to what it will be under this Convention. I believe that when the bounties are abolished the price of sugar will not appreciably rise. I believe that the price of a good white sugar is from 1¾d. to 2d. per 1b., and for brown sugar about 1½d. per 1b.; surely moderate enough in all conscience. The expectation of the trade is that this Convention will produce a much steadier range of prices, and that on the whole prices will be decidedly low. I do not know what part of the world my hon. friend referred to as showing an extraordinarily increased quantity of cane sugar. I know that for some years the bulk of sugar produced in the West Indies has gone principally to America. Why? because America countervails all bounty-fed sugar, with the result that better prices can be obtained there that in this country. After the passing of this Act I have no doubt that more West Indian sugar will be grown, and that it will come to this country in larger quantities than for many years past. Hon. Gentlemen opposite are never done speaking for working men in this matter. I happened to meet a number of working men, not all of my way of thinking politically, and I discussed this question with them. I put the whole facts before them at the time when it was proposed to deal with the sugar bounties, and everyone of them, without regard to Party, declared that such a state of matters as that should not be allowed to exist. When the bounties are abolished, at all events you will find that the West Indies will be put on an equal footing with continental growers of beet. Fair competition I do not object to. If we cannot compete with our foreign competitors after the abolition of the bounties, 707 then I will accept the situation, but I protest as strongly as I can that an industry which was carried on and employed a considerable number of people in this country should be killed by unfair competition under a system of bounties. The hon. Member for King's Lynn quoted Messrs. Tate's prospectus, but he omitted to say that the £200,000 he refers to was largely because of the imposition of the four shillings duty that year. I may further explain that Messrs. Tate were protected by patents which enabled them to obtain higher prices. The right hon. Gentleman the Member for South Aberdeen stated last night that cartels would still exist and the bounties would still be carried on. If that is so, why object to this Bill. We think differently. We believe there is sufficient provision made by the Convention to prevent cartels. If we fail, then I hope there will be a Government in power that will deal with any other system of cartels that happens to arise. I speak feelingly, as one who has suffered, and I can assure the House that the Scotch sugar refiners resent it being stated that the reason for their misfortune is owing to their machinery not being up to date. I fearlessly assert that no sugar works in this country are more efficiently equipped as regards machinery than the six works in Greenock which I have referred to. I cordially support the Second Reading of the Bill.
§ MR. EDMUND ROBERTSON (Dundee)
The hon. Baronet who has just sat down has put before the House the case of certain industries in Scotland, which he alleges have been injured, if not ruined, by the existing state of things. I want to follow him because I represent a constituency where an exactly opposite condition prevails. But before I say a word from the point of view entertained by them, I wish to say a word on the general aspect of the discussion. An hon. Member who spoke early in the debate expressed some surprise that the opposition on this side of the House to the Bill should be so strenuous as it appears likely to be. The reason of that is not far to seek. It is that we, at all events, rightly or wrongly, regard this debate as the first action between protection and free trade, the first step in the great controversy which 708 seems likely to occupy the attention of the country for some time to come. I cannot help remembering what has occurred this session on a similar occasion when the bread tax was under discussion. The late Chancellor of the Exchequer who imposed the bread tax last year, came forward this year and voted for its abolition because he saw that it might be used in the interest of protection. I hope that hon. Members on the opposite side of the House will be inclined to take the same action with regard to this proposal, and that, although they may have voted last year for the ratification of the Convention, seeing as they must now do, that the Convention is part of a great new system, they will vote against the Bill on this occasion. May I remind the House that this is not a mere case of protection, but protection in its worst form. It is not a case of countervailing duties only; it is a case of absolute prohibition. I am quite sure that all those concerned in the trade, and all those who know the needs of the country, would say that if there was to be any dealing with this bounty system in the country at all, they would prefer that it should take the shape of countervailing duties, bad as they are, rather than the prohibition proposed under the Bill. And it is a prohibition which we are to impose at the dictation of a foreign tribunal manned by the representatives of protectionist States, and avowedly inspired by local protectionist motives. It is to be automatically imposed upon the Government of this country at the behest of that Commission without any regard to the justice of the particular decree the Commission may name. I should like to put it to the right hon. Gentleman the President of the Board of Trade whether it would not have been better to have given the House of Commons an opportunity of deciding on all these decrees itself. How are we to know whether a particular decree is wise or just. Would it not have been possible to bring forward each ease on its own merits and to have voted permission to take action. They are asking for them en bloc, without giving any opportunity of considering the evidence on which the Commission acted or discussing the justice of the decisions at which they have arrived. Why not submit each particular case to the House, and do with this as with other and larger questions—consult the people beforehand. It is because we regard this 709 Bill as part of an insidious and long continued campaign against free trade, which is now beginning to be disclosed, that we oppose it. I hope that in all the future stages of this Bill we shall continue to offer strenuous opposition to the proposal of the Government.
May I say a word about those local interests which have benefited by the system of bounties? I represent a community which has profited largely by the present system, though I am not putting their case as one which should prevent the House, merely in their interest, from taking what may appear to be a right and proper action. The case of the manufacturing confectioners in places like Dundee is exactly the case of the people at large. But I am anxious to put their view, because on former occasions, if not now, their opinion has been misrepresented. Local opinion has been cited in favour of these proposals; but local opinion, so far as I know, is absolutely against them. The President of the Board of Trade quoted the opinion of the head of the great firm of Keillers as being in favour of this proposal. It is true that the late Mr. Keiller, fourteen years ago, expressed an opinion in favour of the proposals of to-day, but I have the authority of his successor to say that the present firm and its head are entirely of the other way of thinking. The case of the Dundee industries is typical. They import sugar from Germany and mix it with their local fruits, and sometimes with foreign fruits, and they make up confections which they send back to Germany, thus selling to the Germans at a profit the very sugar that is imported from them. The belief of the industries concerned is that the price has already risen more than it would otherwise have done in consequence of these proposals, and their belief is that it will rise further still if these proposals are carried out, and that, just as the Greenock refiners have been injured by the present system, so the industries that have been brought into existence under that system will probably be injured, if not ruined, by the alteration now proposed. We set up the case of the people and the case of the manufacturers against that of the West Indies and of the sugar refiners. Bounties are bad, and I do not desire to advocate them, but would prefer to see a bounty given to the West Indies 710 and the refiners rather than have alt other sugar driven out of the country. But why are bounties impossible? Because the people would then know exactly what they were paying to the West Indies and the sugar refiners. A proposal to give half a million to the West Indies and the sugar refiners would raise such a storm in the country that no Government would dare to propose it. But the Government are proposing in this indirect way to inflict upon the whole people a burden ten or fifteen times as great. They are thus adding to indirect taxation without giving any corresponding benefit to the people.
There are only one or two other points to which I wish to direct attention. One is the serious question of our handing over, not merely the control of our fiscal arrangements, but the control of the legislation of this House to a foreign tribunal. Let me refer for a moment to the Convention. I do not know whether the House really knows what has beep done by Article VII. of the Convention. You set up a Commission whose business it is to supervise the execution of the provisions of the Convention. And how do they propose to supervise it? We have an example of the kind of action they intend to take in the despatch of Sir Henry Bergne, dated 13th July, which said—The duty of the Commission was, first to examine the legislation of the Contracting States, in order to see if they were in conformity with the Convention.And he gave an account of the proceedings taken by the Commission under this delegation of Powers. For instance, this foreign tribunal, on which we have one single representative, pronounced by a majority that "the legislation of the Netherlands was in harmony with the Convention"; and they presumed also to sit in judgment on this country. The report of our delegate said—Great Britain and Belgium had not yet passed their laws, and it was, therefore, not easy for the Commission to express decided opinions. I submitted our existing law and our Bill, saying, however, that the latter might be altered in Parliament. A few easily answered questions were asked, but no objections were made. A cursory examination of the Belgian Bill was made in the same way. No objection was found to it. It may be 711 added that it was recognised that all these decisions were not definitive in character, but were subject to revision at future meetings of the Commission, if occasion should arise.That meant that our Bill may not, in the end, satisfy the Commission, and that they asserted the right to sit in judgment upon it subsequently. We have no assurance that the Bill, if passed in its present form, will satisfy this Commission. I am satisfied that this Bill, on many points, will not be in harmony with their opinions. What I want to impress on the House is that we are, first of all, legislating by direction of a foreign tribunal; and, second, that we have not got its final direction; but that, even if we pass the Bill, the result may be that this Commission may have another meeting to examine it again, and may direct the British Government to bring in an amending Bill, and compel the Government to come down to the House of Commons and say that they had an international obligation to carry out the wishes of the Commission. I do not think that is a position to which the House of Commons ought to reduce itself. It is not merely giving away our power over our fiscal arrangements, but it is surrendering our Imperial right of legislation. So far as the Crown colonies, some of which manufacture sugar, are contented, this foreign Commission is to have the right and duty of supervising their fiscal system as regards sugar, and the Imperial Government must see that these sugar colonies obey the dictates of the Commission. What is the position of the South African colonies? I understand that they are, under the Convention, clearly non-signatory States, and if so they fall under the declaration made by the Convention as to such non-signatory States. The question has been raised that if they give bounties on sugar produced in their territory, we would be compelled to exclude their sugar from this country. It is quite true that the noble Lord the Under Secretary of State for Foreign Affairs has, on behalf of the Government, repudiated that obligation. But how? He told us that he had informed the foreign Governments that we should wider no circumstances consent to penalise the sugar from our self-governing colonies. But that does not settle the question—right or wrong—under the Convention. The German, 712 Austrian, and French Governments do not accept that view.
§ THE UNDER SECRETARY OF STATE FOR FOREIGN AFFAIRS (Lord CRANBORNE,) Rochester
Our consent to the Convention was only given subject to that condition.
§ MR. EDMUND ROBERTSON
But the effect is that it is disputed by certain members of the Convention, and not admitted by a good many more; and the only answer that we can give is that we deposited our ratification of the Convention on the understanding that we were not to be held liable to exclude the sugar from our bounty-giving self-governing colonies.
§ MR. EDMUND ROBERTSON
Then this was a conditional ratification. I do not understand a conditional ratification. Has this condition been accepted formally by the plenipotentiaries at the Convention? I understood that when a treaty has been made between eight or ten Powers, if the ratification is not absolute, it is no ratification at all. It conies to this, that we are asked to-day to sanction the execution of an international Convention, the meaning of which is disputed by one of the most important parties to it, and as to which the Government of the day has given no real ratification. I think that point ought to have been cleared up before the Bill founded on the Convention was brought before the House. I am sorry that this business has been left in the position it has been by the Government. There is a very serious question of the same sort, or of a similar kind with regard to the most favoured-nation clause. The point has been raised that the treaty as sanctioned, or, at all events, the legislation founded on the treaty, will be in conflict with the most-favoured-nation clause in treaties with foreign countries. Our Government does not admit this; Russia is of a contrary opinion. I have read the correspondence, and I think Russia sets up a very serious case. I do not think that it is a satisfactory answer to say:—"If you do not like it, we are prepared to denounce the treaty with 713 Russia." The policy which begins with a readiness to denounce commercial treaties is a policy which ought to be proceeded with very slowly. I do not argue the question as between Russia and this country; but I do not support the attitude of the Government in refusing to make this question of the meaning of the most-favoured-nation clause the subject of arbitration. That is not a satisfactory way in which a great foreign nation should be treated. That is one of the most serious objections I entertain, not only to the Convention itself, but to the Bill founded on the Convention. I put it to the noble Lord whether he can tell us if, under such a clause, in such a treaty as we have with Russia, any single State has even claimed a right of discriminating between modes of production and modes of protection. If he has a precedent of that kind I hope he will produce it. My point is that the Convention cannot give you any greater right to set aside the most-favoured-nation clause than you would have independent of the Convention. This Bill is merely in its preliminary stage to-day, and I hope there will be a full discussion on it in Committee. The great objection to it is that it is again doing what was done last session in what was called "broadening the basis of taxation." It is part of the same policy. You are increasing the burden of taxation on the poorest of the poor in the most objectionable of all forms, because you are not adding with that burden on the poorest of the poor a single penny to the Treasury revenue.
§ MR. WINSTON CHURCHILL (Oldham)
I have listened with the closest attention to this debate so far as it has at present proceeded, and a reflection has been borne in upon me by it which I desire to submit to the House. It was always found in the past to be a misfortune to a country when it was governed from one particular point of view, or in the interests of any particular class, whether it was the Court, or the Church, or the Army, or the mercantile or labouring classes. Every country ought to be governed from some central point of view, where all classes and all interests are proportionately represented; and I venture to think that even in modern days that principle to some extent applies to our Government, and that there will always 714 be ground of complaint against the Government and friction and distorted and disproportionate acts of legislation, when any one particular Department has too much to say to the making of policy. I consider that the Colonial Office has had far too much to say in our policy during the last four or five years. I think that the country ought to be governed by the Prime Minister. If the Prime Minister associates himself in particular with any one of his colleagues, that colleague ought to be the Chancellor of the Exchequer, because the Treasury is, after all, in a certain sense a central point of view. When the Prime Minister and the Chancellor of the Exchequer are closely associated, when there is an intimate sympathetic understanding between them, their views must prevail in nearly every case upon the rest of their colleagues in the Cabinet, and the course of public business will be smooth and satisfactory. But if the Prime Minister should fall under the influence of one of the spending or administrative Departments, if he should unduly allow himself to be swayed in Ins policy by the influence of a Minister of one of these Departments; worst of all, if he should hand over some part of his supreme authority to such a Minister, then I say there will be friction and disturbance in the Cabinet, and distorted and disproportionate acts of legislation like the Bill we are now considering.
I am quite aware that this is a subject upon which free traders take different views; and it is quite natural that they should. The economic arguments for or against the Sugar Convention do not he by any means on one side; and in theory, at any rate, they may be said to be almost equally divided. The abolition of bounties as a general object is one which all free traders ought to desire, or, at least, to acquiesce in, whatever views they may entertain about the method by which that abolition is obtained. Another point occurs to me. I have heard it said that this Convention will confer great benefit on the foreigner and great injury on our own people. I believe that is perfectly true. So far as the injury to our own people is concerned, I deplore it; as to the benefit to the foreigner, that is not a matter which should accentuate hostility of free traders to this Convention, 715 for we believe that in commerce the good of any is the good of all. I quite understand that there are on this side of the House a great many hon. Gentlemen whose fiscal orthodoxy is unquestionable, who will go into the Lobby to-night to support this Convention, and who will not think themselves in the least compromised as regards the far graver issues which have lately been raised. After all, when this Convention was first introduced we stood in a different position. They gave their support to the Government then, and when support is given to a Government for one special particular act of policy, it ought not to be withdrawn except for very strong reasons indeed. Therefore, I would observe that the division to-night is not a division which can in any sense be said to represent free trade opinion on the main issues which are before us; and although I do not doubt that the associates of the right hon. Gentleman (the Colonial Secretary) will not hesitate to make what capital they can out of the division, I feel sure that the right hon. Gentleman himself is too clever to let it seriously influence his calculations. Nevertheless, I would submit to the House, and to those hon. Gentlemen who are going to vote for this Convention to-night, and who are staunch and true free traders, that the case has been very much altered since we were first confronted with this Convention. Then it stood alone. It was an isolated act of policy to meet a special case of admittedly peculiar hardship. Then the great principles of free trade under which we had so long proceeded were unchallenged, and not only unchallenged but were actually extolled, applauded and employed by the very authors of this Bill. The right hon. Gentleman, speaking in support of this Bill last year, said he spoke as a convinced free trader.
Do principles change with dates? When this Convention was first brought to our notice we must remember that the rise in sugar which is contemplated, and which it is designed to effect, might be considered apart from any plan or proposal for increasing the cost of food generally in this country. Now all these things are changed. Now we are told that this Convention is a sample, a specimen, of what we are going to have when the right hon. Gentleman has got his mandate, and when the new 716 regime begins to add to the prosperity of the country. Now there is a very deliberate and insidious attack on all those principles of free trade which many of us on both sides of the House regard with veneration and confidence. Thirdly, the increase in the price of sugar, which this Bill proposes, is no longer an isolated act, but part of a general scheme for raising the cost of articles of consumption in this country, in the real or supposed interests of individuals or industries in the, colonies. The noble Marquess who has the Foreign Office in charge said in another place about three weeks ago:—And with regard to the question of retaliation I cannot help hoping that just as we have hardened our hearts in the case of sugar, so we may find it possible to deal in a similar spirit with similar aggression in respect of other kinds of industries and manufactures.This Bill, therefore, if I understand it rightly, is a working model submitted to us for inspection before we lay down plant on a large scale. I do not desire to pay any compliment to the right hon. Gentleman, but I am bound to say that if that is the intention of the measure it is a very perfect working model indeed. There is hardly a feature which the greater scheme contains which is not shown on a small and convenient scale in this Sugar Convention Bill. I notice, in the first place, the same avoidance of debate. This measure was passed last session at a single sitting, which was terminated by the closure. It is brought in this session very late, when many hon. Gentlemen have to be away from the House, and when naturally interest in political affairs is not so keen as it would be at an earlier and cooler period of the session. There is the same inconsistency in this measure as in the greater scheme. The corn tax was abolished just before we were to be told that a tax on corn is vital to the continuance of the Empire. There is the same inconsistency shown in Clause 11 of this measure that we are actually prevented from making, in respect of sugar, that preferential arrangement with our colonies which the right hon. Gentleman says is necessary if we are to remain an Empire, or indeed a nation. There is the same disingenuous use of free trade arguments, the same interference with trade, the same odd mixture of sentiment and business, and the same astonishing exaggeration of colonial 717 as against British interests. There are, moreover, one or two very instructive points to be noticed. We have a fine, full-fledged, substantial specimen of "dumping" in full working order. All the nations of Europe are combining "to dump," and we find it very profitable. We are to have retaliation, such as a great Imperial statesman, if he obtain carte blanche from the electorate, would apply, and it is found that this retaliation is unnecessary, wasteful, futile, awl inconvenient. Lastly, we have one thing very certain, whatever else may be uncertain, whatever else may be arguable, and whatever else may be proved or not proved—we have in this, as in the greater scheme, the certainty of dearer food. We have dearer food, not as a statement in a leaflet, not as a Parliamentary device of the Opposition, not merely as a menace for the future, but as an accomplished fact, avowed and admitted, and which is vaunted as the achievement of the legislation we are now asked to pass. I would ask the House to remember that we have to consider this Sugar Convention in a new light. We have to consider the proposal to increase the price of sugar—for that is what the Convention practically does, as far as we are concerned—in conjunction with the Colonial Secretary's proposal to put a considerable tax on corn, and with his plan of putting a tax on meat, including bacon. We have to consider the proposal to increase the price of sugar in conjunction with the right hon. Gentleman's plan of putting a tax on butter, cheese, and eggs. The right hon. Gentleman will contradict me if I am wrong.
§ MR WINSTON CHURCHILL
The House will doubtless appreciate the extreme reluctance of the right hon. Gentleman to give any information on this subject. Lastly, we have to consider the proposal to increase the cost of sugar in conjunction with the proposal to increase the cost of fruit. Under these circumstances, I think that hon. Gentlemen, even those who, on free trade grounds, support this measure, are justified in pausing before they finally commit themselves by voting for it, while those of us who have opposed the Bill from the beginning—and I may 718 claim to have been one of the first to protest against it—find ourselves fortified in our hostility by the facts I have mentioned. Let me look a little more in detail at some of the features of this smaller scheme which are also apparent on a larger scale in the greater scheme of the right hon. Gentleman. What is the position to which the bounty-giving nations have reduced themselves by the policy of bounties? I do not take the view that they are poor ignorant foreigners, unable to appreciate the simplest economic truths which any schoolboy is able to learn. These things are not so simple as that.
§ MR. WINSTON CHURCHILL
I think the right hon. Gentleman will admit that the case for fair trade is sufficiently delusive to be of considerable use when it comes to an electioneering campaign. We are ourselves learning the temptations to which the minds of quite clever people are exposed by the arguments of fair trade and protection when they are put forward, as they were last night, by a very skilful politician. But we are not in the position that foreign nations were in when they embarked on the bounty system. It is very easy to embark on that policy, but it is very hard to stop, and still harder to repair the consequences which that policy entails. We have not merely to balance economic arguments one against the other; we can see the results of the policy itself. We have the experience of these other countries before us, and we shall have only ourselves to blame if we are led into the same disasters and the same confusion. What is the experience of all the European nations who have adopted the bounty system? They have reduced themselves to an astonishing position. Vast industries of poor people, artificially stimulated, exerting considerable political power, and using that political power to maintain and even increase that artificial stimulation; giant trusts enjoying a complete monopoly of the home market, making enormous profits out of the home consumer, and no doubt using the wealth thus obtained still further to influence the Government machinery. As the 719 result of this state of things over-production on a prodigious scale; cut-throat competition between the trusts for the free English market; enormous exportations at unprofitable prices, and encouragement by the Government of this enormous unprofitable exportation, which increases year by year at an astonishing rate. As the result, again, of this, a score of trades in these countries are hampered by dear sugar, and many industries are driven out of the country; the bounty-giving Governments are confronted with deficits and financial embarrassment, and sugar is 7d. a pound to the population of the country in which the sugar is grown. And all this time free trade England, anchored by irrefragable logic to economic truth, rides out the gale—indolent, prosperous, triumphant. What an object-lesson! They would indeed have been poor ignorant foreigners if they had not made a great effort to repair the misfortunes which have come upon them through the policy they had adopted. It is to their conviction that this bounty system had got out of hand and was injuring them in an extraordinary manner, and to their belief that they must do something to put a stop to it, and not to the diplomacy of Lord Lansdowne, or the supplications of the West Indies, or even the prestige of the Colonial Secretary, that the Sugar Convention we are now considering is due.
I would ask to be allowed to consider a little more in detail the great advantages which accrue to England, not through any merit of our own, but through the adoption of this bounty policy by European States. I am told on very good authority that, merely looking at the difference between the price of sugar with the bounty and the price as it would have been without the bounty, the gain to this country is £5,000,000 a year. But that does not by any means represent the total advantages. We have to add to that the economies in the cost of production which this extraordinary, and, to some extent, unhealthy competition has produced. Those economies have amounted in many cases, in regard not only to beet, but also to cane sugar, to 50 per cent. of total cost. The sum of these two advantages may be 720 variously estimated at from £6,000,000 to £7,000,000 a year. What are the consequences of all this? I think it was Burke who said of the French Revolutionists, that they forgot that every set of circumstances involved every other set of circumstances. So it is with the fair traders. They watch the river flowing to the sea, and they wonder how long it will be before the land is parched and drained of all its water. They do not observe the fertilising showers by which in the marvellous economy of nature the water is restored to the land. Sugar is cheaper in England than anywhere else. What does that mean to our crowded populations? First of all it means that the masses of our people eat more sugar, and are comforted and strengthened thereby. Does the right hon. Gentleman think that important? [Mr. CHAMBERLAIN made no reply.] The right hon. Gentleman does not think that important! I think it very important, and I know a lot of people outside this House who think it very important too. Next, because they spend less upon their sugar they have more to spend on other things. See what a real refreshment this is to that great home market of which we hear so little from the right hon. Gentleman that one might almost think he did not now it existed. It is very difficult to trace further the consequences of these two great advantages which we have enjoyed; their further consequences are real, large, important, and valuable, but intangible. There is, however, a third set of advantages which are enjoyed as the result of cheap sugar and which we can trace a little further. Upon the basis of this cheap sugar, precarious and unnatural as it was to some extent, which we obtained, not by breaking, but by rigidly adhering to economic law, there grew up a various and imposing array of secondary industries. The hon. Member who yesterday moved the rejection of the Bill, in a speech which I venture to think was heard not without pleasure even in quarters where it did not excite agreement, read a long list of the industries which had grown up as a result of cheap sugar. We make jam and biscuits for the world; we make soda-water, and all kinds of sweets; even French chocolate is made in London. And in spite of the greedy 721 consumption of the home market—for the home consumers clustered like a swarm of bees round these good things—our export trade in these commodities steadily increased. I was reading only on Monday an article in The Times by that writer whose articles are so interesting and amusing, and who, though he is plainly a very wasteful person, signs himself "Economist," and I observed a quotation from the Statistical Abstract showing that the export trade in confectionery is increasing to a very considerable extent. Then, Sir, sugar attracts fruit. The union between sugar and fruit is natural, pleasant, profitable, and prolific. I wonder that my right hon. friend the Member for the Sleaford Division, who all his life has been on the watch for anything that could help or benefit the agriculturist, has not attacked the right hon. Gentleman for reducing the cheapness of sugar which has no doubt reacted on the demand for fruit in the English market. Furthermore we must remember that all these articles require other commodities to wait on them. Bottles have to be made to hold the soda-water, pots for the jam, jars for the pickles and preserved fruits, labels for all, and corks, stoppers, and boxes. Special and complicated machinery had to be set up. I am told that at the Glasgow Exhibition there was a corridor or large gallery entirely occupied with the special kinds of machinery used in the making of jams, biscuits, and so forth, the construction of which has been made a great and growing industry in England by the stimulus afforded by cheap sugar. I do not say that the withdrawal of the bounties would kill these industries. That would be attempting to prove too much. But in so far as you succeed in raising the price of sugar—and you have already succeeded to some extent—you will injure all these industries, and they know it well. The Parliamentary Secretary to the Board of Trade told us that the sugar refiners had been ruined. That is not quite true. No doubt they have suffered, but, as has been pointed out, they now produce more than they produced before. I see that there are now employed 2,416 persons in the refining business, as against 3,733 in 1891. Although there has been a decline, which I do not want in any way to minimise, it is not arguable that that decline can be set against the great and vigorous new trades which have sprang up.
722 I have a theory which I should very much like to have examined by competent persons. I will make a present of it to the Prime Minister, who is almost the only person in the country, not grossly ignorant of the whole subject, who has an open mind, and perhaps he will have it tested. Old countries in which there are no new discoveries—of mines, mineral oil, or water power—must look not so much to their basic industries for the development and expansion of their trade as to the more complicated and secondary processes of manufacture. As their primary industries are brought more and more into competition with the resources of new countries, possessing perhaps greater natural facilities, it will undoubtedly be necessary for the older countries gradually to move on to the more complicated and secondary processes of manufacture, and in the higher grades of manufacture to obtain the expansion of their trade which they need. I have heard it said that in the evolution of the steel and iron trade something of that process is to be traced. We export less in weight, but more in value. I think there is something hearing on that point in this sugar story also. So far as it is effective, I think we ought to contemplate that evolution and the transference of our people from being, as it were, hewers of wood and drawers of water to the more elaborate processes of manufacture with unmixed satisfaction. But if we are to find that outlet for our strength, energy and skill, it will be only by utilising our resources of capital, which old countries have accumulated, in the provision of better education, the best machinery, and the highest scientific knowledge. It is only by those means, and under the influence of open competition and free enterprise, that we may succeed in finding the outlets we so seriously need.
At this stage in the story it is right to consider the action of the Colonial Secretary.
§ MR. WINSTON CHURCHILL
The right hon. Gentleman occupies such a very large arena. The West Indies are unde the Colonial Office; the West Indies were suffering; the West Indies had to be relieved. Parliament had shown its disinclination to continue the policy of subsidies; 723 consequently we were hurried into this Convention. Now either this Convention will raise prices or it will not. If it raises prices the English consumer pays; if it does not raise prices the colonial producer does not gain. The Convention has, in fact, raised prices by about £2 per ton. Have the objects of the Convention, therefore, been achieved? It is not enough merely to raise prices, but to raise them sufficiently to let in West Indian sugar. In order that the West Indies should benefit effectually, it is necessary that the British consumer should suffer substantially. But that is not all. There is no parity between the loss and gain. It cannot even be argued that what we take out of the pockets of one class of British subjects we put into the pockets of another class. Even assuming that the whole of the present output of West Indian sugar is taken by this country as a result of this Convention, we shall still have to buy from foreign countries six times as much as we get from the West Indies. For the purposes of the argument it does not matter by how much sugar is going to rise. But the President of the Board of Trade knows all about the future rise in price. If he is such a good prophet, I wish he would tell us when the general election is going to be, and what the result is going to be. I will not emulate the right hon. Gentleman's prophetic power. For every 1s. per cwt. that sugar goes up it is self-evident that we pay 1s. more for what we buy. The West Indian producer gets 1s. more for what he sells, and as we buy six times as much sugar from foreign countries as from the West Indies, we lose 6s. for every 1s. the West Indian gains. That is a very interesting calculation, because it enables us to measure the relative importance which the Colonial Secretary attaches to a British subject resident in the colonies under the authority and protection of the Colonial Office and one of the ordinary subjects of the King. In the opinion of the right hon. Gentleman, a British loss of 6s. is compensated for by a colonial gain of 1s. That, again, accords well with the general conception of this larger scheme. But it does not stop there. It is certain that we shall lose, but it is not certain that the West Indies will gain. We lose immediately; the West Indies may not 724 gain for a great many years. Therefore it is not an exaggeration to say that the actual opinion of the right hon. Gentleman tested mathematically as to the relative importance of persons under the care of the Colonial Office and persons outside the authority of that Department, is that a certain and immediate loss of 6s. to the British public is compensated for by the remote possibility of a gain of 1s. to the West Indies. We are to lose. There is no doubt about that. Even if this Convention would save the West Indies I would not support it. I think there are cheaper ways of helping them. But will it save the West Indian sugar industry? The real market of the West Indies, I am informed by those who have carefully studied the subject, is not to be found in Europe. The West Indies export 260,000 tons of sugar per annum, of which 200,000 tons go to America, and only 60,000 tons to the rest of the world. In regard to the export to America, they are greatly aided by countervailing duties. The United States have now acquired Cuba, and that, with the growth of the beet industry in the United States, is going to make them, as regards sugar, nearly as self-supporting as the right hon. Gentleman would like this Empire to be. In four or five years, therefore, the American market w ill probably be closed to the West Indies. What follows? They will have to find a market over here not for 60,000 tons, but for 260,000 tons, and that sugar have to come into competition with the will product of Europe. Although sugar will undoubtedly rise under this Convention, there is great probability that it will not rise sufficiently to benefit the West Indies. I will give the House five reasons for that. The stocks of sugar are enormous. The harvest last year was the best on record. European consumption will naturally grow slowly. European production, when the bounties are withdrawn, will naturally dwindle slowly. Lastly, the rise in price will stimulate competition from Java and India. The result may easily be that we shall suffer this loss through the rise in sugar without conferring those benefits on the West Indies which everyone in this House would gladly see conferred. We shall not save the West Indian industry; we 725 shall only prolong its dying agony; and by impoverishing ourselves we shall weaken our power to help the West Indies in the hour of their need as charity may suggest and policy dictate. Under these circumstances, I shall have the greatest satisfaction in recording, consistently with my former action, my vote against the Second Reading of this Bill.
§ * MR. AUSTIN TAYLOR (Liverpool, East Toxteth)
The hon. Member for Oldham has pointed out that we do not stand exactly where we did when this Convention was first introduced. I think that is perfectly true. We do not know exactly where we do stand. But as far as I understand the scheme of the Colonial Secretary—and I confess I do not understand it in all its completeness—there are aspects of it which do not in any way commend themselves to me. The hon. Member for Oldham bids us examine the Bill before the House as.a working model of the larger scheme which the right hon. Gentleman is to propound. On that I will make only this observation. If this Convention is a true sample of the bulk of the larger scheme, our fears will be very largely diminished. I desire to distinguish between the objective or principle of this Bill and the machinery by which effect is to be given to it. I remember an interesting occasion in this House when the hon. and learned Gentleman the Attorney-General attempted to distinguish between theology and the machinery by which you give effect to theology, and he received a very severe rebuke from my noble friend below the gangway for distinguishing between doctrines of religion and the machinery by which they are propagated. We are not now dealing with theology, but with an economic subject, and although one hears the phrase orthodoxy and heterodoxy in connection with this matter, it is from persons whom no one would ever suspect of being theologians. What is the declared objective of this Convention? It is the removal of the inequality of competition between the different kinds of sugar and the increased consumption of sugar. I think those are objects which must commend themselves to every free 726 trader. The evil which it is desired to remove by this Convention is the artificial stimulation of a particular commodity in given countries by the settled policy of the State in giving bounties to the producer, which has created an unfair competition. That, Mr. Speaker, is the evil which this Convention is designed to remove, and it is a course, I think, which may fairly be taken by free traders to remedy the state of things which exists in Central Europe. In this connection, may I point out that what it is desired to alter is an unfair and illegitimate and artificial system by which a bounty-fed product has driven out, or at any rate has retarded, the development of another product which relies wholly or mainly upon the natural law of supply and demand. The hon. Member for Devonport, in a most able speech, called attention to the relative position of beet and cane sugar, and seemed to argue that cane sugar had not suffered in the way some hon. Members of this House had suggested. I hold in my hand some interesting figures on this point, which show that between 1892 and 1902 the development of beet sugar, under the steady influence of a system of State bounties and cartels, had risen from 3,420,000 tons to 5,850,000 tons; and that during the same period the other kind of sugar which rely mainly upon natural circumstances, and owe nothing to State assistance, had only varied to this extent—that in 1893 the production was 3,510,000 tons, and in 1902–3 it had only reached 3,940,000 tons, which practically may be taken as a stationary position. I do not think it can be denied that that is not a satisfactory position for this country to contemplate. When hon. Members speak of the effect of bounties, it is impossible for them to judge them by their effect in one or two years, and during our debates upon this question the cumulative effect of bounties, steadily pursued for a course of years, has been somewhat ignored. I think the figures I have given to the House fairly show that these bounties have artificially stimulated the one kind of sugar, and in that way the effect has been to depress and retard the development of the more natural and, if I may say so, the more nutritious kind of the article.
727 A great deal has been said about the possible results of this Convention. I do not intend, in regard to the question of price, to enter the schools of the prophets. I think it is perfectly impossible to predict either the exact price or the average price which will rule in the future as regards such an article as sugar. But I think it cannot be for a moment denied that the general tendency after the removal of these bounties will be for the price of sugar to advance. I know there are some hon. Members of this House who persuade themselves that all these matters are the concern of the foreigner. They imagine that if a duty is imposed upon an article it is always in some mysterious way borne by the foreigner, who takes the convenient form of a United States railway which reduces its carriage in order to countervail the effect of the duty. I cannot really follow such a mysterious doctrine as that. If you impose a duty, the result is in the main to increase the price of the article to the consumer: and in the same way, if you have an artificial cheapness due to the giving of a bounty in the producing country, the removal of that bounty will have exactly the same effect, and will raise the price of the article. I am not going for a moment to deny that I think the general result of the abolition of these bounties will be a tendency to raise prices. I followed carefully the hon. Member for Oldham in his description of the advantages which this country has derived from the cheap sugar supplied by Central Europe. I do not think it is possible or desirable to minimise those advantages; we must face them, and the only valid argument which I think will be found in the long run to hold water, as justifying us in voting for this Convention as free traders, is that by so doing we are attacking and condemning the vicious principle of State interference with trade, and the artificial cheapening or enhancing of values by State interference. That is the principle which is attacked by this Convention, and it is therefore with a clear conscience, or almost a clear conscience, that as a free trader I vote for this Bill.
I am aware that the West Indies have to be considered in this matter. I followed the hon. Member for Devonport in his remarks, when he stated that the refining industry of this country had not 728 suffered very much from these bounties. I think he must admit that there has been a great dislocation of trade, and I cannot conceive that it has been altogether for the benefit of the refiners of this country that they have had to scrap a great deal of their machinery, and transfer or close their works altogether. They have also had to adapt their machinery to this particular kind of beet sugar in such a manner that they are not prepared to deal now with cane sugar at all. That is a point which appears to have escaped the hon. Member for Devonport. That is a point which emphasises the artificial position as regards this country, which I do not think is a safe one, because it places us more or less at the mercy of State bounties adopted by France, Germany, and Austria, and which I think, as free traders, we are justified in getting rid of, if we can do so upon the merits of the case. I am not, however, prepared to rest the case upon the West Indies, which supply only 2½ per cent. of our total imports of sugar. But while I do not desire to ignore them as a factor, I do not think it is possible to justify this Convention upon the case of the West Indies alone. I do not desire to get into the habit, which I think would be deplorable, of weighing the colonies against the mother country. In this case, were I to do so, I am not sure the scales would not go against the West Indies. That is the last thing I wish to do. I wish to see the British Empire knit together by bonds light as air, but durable as steel, and it should not be driven to rest itself for unity upon a series of huckstering bargains between its component parts, in which the gain of each would be regarded as the loss of another. While I take that point of view, I must fall back upon the larger and wider view which has been tacitly adopted and affirmed by the high contracting parties to this Convention, namely, that these bounties have produced a false economic position, that they are burdensome to the countries that have given them, and who now desire to be released from them; that we feel that the principle is vicious, and that the position in which we are placed is not satisfactory; and that, weighing the whole thing up upon a balance, we are prepared to adopt the principle of this Convention.
729 Then, Sir, may I say a word or two about the machinery? I think that such steps as the abolition of the bounties and the rigorous limitation of the surtax are distinctly in the right direction. The hon. Member who spoke from the opposite benches called attention to this fact, that in some way a new system of bounties by means of the surtax was set up by this Convention. I think these surtaxes have always existed in these producing countries, or at any rate have existed for a very long time, and that they have been the basis upon which these cartels and trusts have flourished, which have been instrumental in producing this artificial state of affairs. Therefore the abolition of the bounties, from a free trade point of view, must be welcomed as a pure gain That is also a distinctly free trade position. The further position that no preferential terms are to be given, either by this country or by the Netherlands, to their colonies is surely one more concession to the principle of free trade. I freely admit what we are going to get under the Convention is not absolute free trade in sugar. It is only an approximation to free trade in sugar. It is perfectly true that protective duties remain in the countries that now have them, though they are, under this Convention, to be strictly limited, regulated, supervised, and confined to what those countries think their legitimate object—the protection of their native industry. Therefore it is open to the opponents of this Convention to say that we are conniving to a certain extent at a vicious violation of free trade principles by allowing our delegates to administer or supervise the protective machinery of those European countries. I understand that possibly in the minds of hon. Gentlemen opposite there is some fear that our delegates may be contaminated in their free trade principles by having to supervise this protective machinery. Well, there is a very easy remedy. Those delegates have been appointed, but I suppose they can be changed. There are plenty of gentlemen, even hon. Members of this House, who are so far inoculated already with protectionist principles, who could be trusted to go into this bad company and take no harm whatever. I am not sure but that if the Parliamentary Secretary to the Board of Trade—though I am sure we could not afford to lose him from this 730 House—went on the Commission, so far from taking any harm he might give them a wrinkle or two in the matter of protective machinery which it is some part of the work of the Commission to supervise. But this concession, if it be a concession, to protective principles, will not, I hope, be too severely condemned. Even Naaman was not condemned by Elijah for occasionally bowing in the House of Rimmon, even after his flesh had come again to him as a little child, and I do not find it recorded of Elijah that he had any attack of leprosy for saying to him, after hearing his confession of weakness, "Go in Peace." Therefore I hope we may as free traders on this side of the House be forgiven if we are satisfied with a fairly complete approach on the part of those European Powers to free trade principles, if we cherish hopes of their final conversion, and if we, because we cannot free them at once from chains of protective bondage, yet do not refuse to extend to them a helping hand upon the path upon which, I take it, they are now entering.
The hon. Member for Oldham referred to this Convention as a dangerous precedent, and as simply a sample of what might be further expected. If any future measures are taken by this country to meet bounty-fed competition, and the same conditions are insisted on that exist in this Convention, I do not think we shall have much to fear. You have general consent not to the indiscriminate retaliation of one autonomous fiscal unit against another, but a general consent of most, if not all, of the principal nations of Europe to retaliate, and to retaliate only in cases of specific offence on the part of the nation giving bounties upon sugar. A strict adherence to this principle will make the punishment fit the crime, by making the amount of countervailing duty equivalent exactly to the bounty conferred, with a provision, of course, that the countervailing duty will cease with the cessation on the bounty given by the producing country. I think that all these are satisfactory features, and that on the whole, although this Convention has its doubtful and weak points, it is a sufficient vindication and justification of the principles of free trade to enable us who are free traders on this side of the House to vote for it with a certain amount of goodwill. Though the political position has certainly 731 changed since this Convention was first introduced, may I say that I have been strongly fortified in my adherence to it by the speeches of the right hon. Gentleman the Colonial Secretary. I do not refer to his recent speeches, although, of course, they have made an impression on my mind, nor do I refer to those earlier speeches of, say, twenty years ago, which are now for some mysterious reason being circulated so widely throughout the country. I refer to his comparatively recent speech on the 24th November last year, in which he justified this Convention upon absolute free trade principles. On that occasion the Colonial Secretary said:—The hon. Member for South Shields, I think, triumphantly appealed to what he says is the fact that since the adoption of a protectionist policy by foreign countries their trade has fallen off proportionately to ours. Well, Sir, as a convinced free trader, I listened to that argument really with seine alarm. Because, if free trade is to stand upon such a foundation as that—upon that assumption that protection has reduced proportionately the trade of foreign countries in comparison with our own—we have indeed to look forward to a bad time for free trade, because the absolute reverse is the case. As a matter of fact, since the establishment and since the increase of this protectionist policy, we have found the trade in the United States, which is the most protectionist of all nations, and the trade of Germany, which conies very near at its heels—we have found that trade increasing with giant strides, and we have found it increasing in very much larger proportion than our own. I have always thought that there was an answer to that from a free trade point of view. We must attribute this enormous expansion of trade to other circumstances, without detracting from the principle of free trade. What was the doctrine of free trade? It was not founded merely on commercial expediency or on questions of temporary loss or gain, but on the endeavour to establish as a principle that everything should be done to secure the natural course of production and exchange. Mr. Cobden said something to this effect—I do not know that I am using his exact words—that, 'What we (meaning the free traders) want is that every source of supply should be open to us as Nature and Nature's God intended it should be, and without artificial hindrance.' But this Convention, on the face of it, at any rate, is surely intended to secure this equality, and to secure the natural course of trade. Our object is to secure the natural course of production and exchange.That line of argument and justification by the Colonial Secretary of this Convention amounts to this, that it is a defensive operation against the artificial deflection of trade from its natural sources by the intervention of States; and that seems 732 to me the most emphatic condemnation imaginable of any attempt to apply the same principle either to this country or to the British Empire at large. I will take a hypothetical case and assume that some Minister of the Crown were to step forward and suggest that our colonies, or some part of the British Empire, was to be given a bounty—for that is what it comes to—in the shape of a preference in the largest consuming market in the world—the market of this country—and to propose that particular parts of the British Empire should be artificially stimulated to produce certain food-stuffs, just as central Europe was stimulated to produce beet. I should place that proposal exactly on all fours with the policy of Germany, Austria, and France, which in another way, but with exactly the same object, has stimulated the artificial supply of beet sugar in those countries. I do not want to insist too much upon the argument, but it appears to me that those on this side of the House who are going to vote in favour of this Convention are voting in condemnation of the artificial deflection of industry, and in condemnation, as the Colonial Secretary himself put it, of any interference with the natural course of trade. If a Minister should ever come forward with such a proposal I should rely on the Colonial Secretary of November last year, as the champion of the principle of non-interference with the natural course of free trade, to be foremost in the application of the principle to the British Empire. This is a line of argument which I think amply justifies those of us who are free traders on tins side of the House in voting for this Convention. I admit that it is not a perfect measure, but it is possibly the best that could have been done in all the circumstances. It is at any rate an attempt to deal with a principle which is vicious and which leads to artificial results. I hope it may be successful, but, in any case, the vote we shall give to-night in its favour will be to retard, if not to shatter, any movement for applying this radically vicious principle to the Empire of which we are so proud.
§ * MR. LEVY (Leicestershire, Loughborough)
I think I have never heard professed free traders put forth the theory that to close our ports is the best method of expressing their opinions 733 as free traders. And yet, practically, that is what the last speaker has done. I always thought that free trade was to open our ports and to take all the goods we required which other nations would send us at the lowest possible price. The right hon. Gentleman the President of the Board of Trade, in introducing this Bill, said we were compelled to pass it, otherwise it would be a breach of faith on our part as a nation. I am not quite sure of that, as under Article XII. the "constitutional laws of each of the contracting parties" must be adhered to; and it is specifically provided that if we or any other nation should not confirm the ratification of the Convention, it is possible for the other nations to continue or secede from it—thus making it clear that we are not irrevocably bound to this Convention. I go farther, and ask: Is it better to break faith with foreign nations or to break faith with the people of this country, and, by a side issue, alter the whole fiscal policy of this country? For this is undoubtedly the first step in the Colonial Secretary's scheme towards the abolition of free trade in Great Britain. Still further, is not this Bill intended to put an increase on the cost of the food of the people of this country, possibly to the amount of £8,000,000 or £10,000,000 per annum? The right hon. the President of the Board of Trade said that the price of sugar would not average in the future more than 10s. a cwt. But that would necessarily lead to an enormous increase in the cost to the people, and therefore there would be a diminished quantity of money to spend on other commodities, therefore while we are all thinking so much now of the education of the rising generation, of physical culture, and of the necessity of getting a strong manhood, we are going by this Convention to limit the supply of food to the great majority of the people of the country. The Secretary to the Board of Trade asked last evening, "Do principles change with dates?" That is a very pertinent question, which should surely have been addressed to the other side of the House, and the right hon. the Colonial Secretary might have given an answer; and if he were consistent to his principles he should support the Amendment of my hon. friend the Member for West 734 Islington. Speaking on the sugar question in this House in August, 1881, the Colonial Secretary said:Why is it that this trade has been so prosperous of late years, so much so that I have heard it currently reported that one of the leaders of this manufacture has made a fortune of £1,000,000 to £2,000,000 in less than twenty years. It is partly, at all events, in consequence of the injudicious system adopted by these countries, which has enabled our manufacturers to get their raw sugar at less than cost price, and has enabled them to undersell the manufacturers of the rest of the world, especially neutral countries.Why should we to-night endeavour to do away with what the Colonial Secretary says enables us to get sugar at less than cost price and to undersell the manufacturers of the rest of the world? Probably the Colonial Secretary may take this opportunity of showing how the wages of the people of this country can be increased when the price of their food is increased. It is his duty to do so. We have a right to demand that he should show how he proposes to increase the wages of a great majority of the people of the country when we are to give annually £7,000,000 or £8,000,000 more for our sugar to the foreigner. What precedent have we for that?
This whole thing has been engineered by the Anti-Bounty League. The Royal Commission on the condition of the West Indies has reported directly against this Convention, and stated—It must be recollected that the chief outside influence which the Government of certain colonies have to redeem are the representatives of the sugar estates, that these persons are not interested in anything else but sugar, that the establishment of any other industry is often detrimental to their interests, that under such conditions it is the special duty of your Majesty's Government to see that the welfare of the general public is not sacrificed to the interests, or supposed interests, of a small but influential minority which has special means of enforcing its wishes and bringing its claims to notice.Surely these words prove conclusively that the agitation in favour of the Convention was not got up on the part of the great majority of the people of the West Indies but on behalf of those who owned the sugar estates there. We are not justified in endeavouring to bolster up a decaying industry—decaying 735 on account of their land laws, the indolence of the people, the lack of improved machinery, and the want of enterprise. If we wish to improve the West Indies there is a far better method than allowing our own trade rivals to dictate to us what the fiscal policy of this country should be. When we do that we lay ourselves open to the Members of the Brussels Sugar Commission to dictate to us what shall be the conditions under which we shall carry on our trade with people who buy from us £100,000,000 of goods every year. In my opinion, the people of the West Indies would be infinitely more benefited if we established there a system of peasant proprietors, if we got rid of the "gombeen" man; if we provided, if you like at the Government expense, new machinery for the sugar factories; if we endeavoured to reduce the shipping charges, and secured better conditions of labour for the people. Half-a-million spent in this way would do far better service to the West Indies and to this country than by the ratification of this Convention.
But there is a more serious aspect to the question, and that is the international and the colonial aspect. Now, the United States have not been invited to take part in the Conference, and I think we have a right to know why the United States were not invited. We also have a right to know whether our Government has since received any communication from the United States Government in reference to this Convention. I know it is argued by the members of the Government that America sends us very little sugar. Although that may be true, at the present moment America has a very large sugar-producing power, and under the conditions which it possesses that power may increase year by year. I believe that the amount of sugar imported by the United States last year was £2,500,000 less, than in any previous year, and when its resources are developed it will naturally become an exporting country. Then this Conference in Brussels might say to us, "You shall not continue to receive sugar from the United States in future because it is a countervailing and bounty-giving nation." That is a very serious state of chairs to contemplate. It is absurd to think that we should have a policy dic- 736 tated by foreigners who are all more or less anxious to capture our markets if they possibly can. But again, have we not got to look after our colonies? The Colonial Secretary is always saying that we should have the power to give preferential tariffs to the colonies; but under the conditions of this Convention we should be excluded from such a course, for by this Convention we are bound to do nothing to interfere with the inflow of sugar from Germany. Germany would therefore have control over our imports from our colonies because it was distinctly stated in the German Parliament by Baron von Thillman, that—As regards England, I can affirm that the Imperial Government will sign no Convention in which we bind ourselves to her as regards export bounties or sugar duty, were she to retain a free hand to treat the raw sugar front her colonies more favourably titan German sugar.The case is even somewhat more serious, because when handing in the ratification of the Convention, Baron Koziebrodzki, of Austria, stated clearly that his Government would not be bound by the reservation Great Britain had inserted, and which Germany would not accept, and that Austria and Hungary would "merely take note of the reservation made by the Royal Government of Great Britain, on the presumption that, in practice, no bounty fed sugar coming from the English self-governing colonies would be imported into the United Kingdom of Great Britain and Ireland during the period of the Convention, and they reserve to themselves a complete liberty of action, in case a considerable importation of such sugar into the United Kingdom should occur during the course of this period." That shows clearly and conclusively that any considerable importation of sugar from any of our colonies where there is any system of bounty or preference will be prohibited by this Convention; and, therefore, I say we have no right to enter lightly into this Convention. There are far better methods of providing for the needs of the West Indies. It is unnecessary that the people of this country should be asked to make such sacrifices and have one of the principal items of their food taxed to such an unreasonable rate, nor ought we to be 737 parties to any such arrangement which permits the traders of Russia, Austria, France, Germany and Belguim, to limit and allot the exports of sugar in such a way as to increase the price in Great Britain, nor ought we to permit foreign nations to dictate our fiscal policy. On these grounds I support the Amendment of my hon. friend.
§ MR. CUST (Southwark, Bermondsey)
Unwilling as I ever am even to criticise for a moment the policy of the Government, I am bound both by consistency and conviction to protest against the further progress of this scheme, not only for its own inherent viciousness, but because of the methods and management by which it has been introduced and forwarded. I quite admit the danger of refusing support to the Government in Acts of an international character; indeed, my attitude is not opposition, but rather in the nature of what I believe in philanthropic circles is called rescue work. We want to save the Government from itself, not by destruction, but by postponement. We want to stop it committing suicide, but we do not want to kill it ourselves.
The President of the Board of Trade expressed a hope that the same speakers would not use the same arguments as last year, and then he himself recapitulated as lucidly, but more concisely, his speech of last year. And here, Sir, on a particular point, I would protest most emphatically against the right hon. Gentleman's sentimental appeal to "National honour," "good faith," "obligations," etc. He appeals first to the preliminary negotiations, then to the Resolution of last year, and then to the signing of the Convention. I will not dwell on how the original approval of the House was obtained. The plan was sprung on us at very short notice indeed. The House was largely in ignorance of the subject, and had not time to appreciate the character of the Blue-book, which had only just been issued. The Colonial Secretary, on the eve of his departure as the apostle of colonial peace, made an appeal to the House not to handicap his future; and I do not think that an expression of approval, which was then obtained, such as it was, in any way 738 bound the honour and good faith of this country. But, apart from these singular methods, a financial treaty expressly differs from all others. The assent of the House must be obtained before such a treaty binds, and this is expressly recognised in this treaty. Article XII. lays down that the treaty can only be ratified and confirmed subject to the passing of this Bill.
It is absurd, therefore, to talk of honour and good faith. If the Government has engaged the country in such an understanding they have grossly exceeded their powers; if they have not, their appeal is, to put it indulgently, mere sentimental rhetoric. We know that France and Austria, two of the most important Powers, equally engaged with ourselves, have admittedly not yet fulfilled the legislative necessities, but we have not heard for a moment that their national honour and good faith are impugned.
So much for the methods and the handling of this proposal. Now what are the motives, and what will be the result? The motive, as we gathered from the debate in November, must be one of three: (1) To benefit this country; (2) to benefit the West Indies; (3) to push the principles of Free Trade.
The case of the West Indies has been already dealt with at length. The one central authority found for us by the Government is the Report of their own Commission, which may be summarised as follows: The West Indies may be saved, but the abolition of bounties will not save them. I will read extracts from that Report, if desired, but all interested have read it already. Here, Sir, I would pray the Government to remember that there is much value in a sense of proportion. When we hear, as we did last night from the Parliamentary Secretary to the Board of Trade, that "great staple industries" are being ruined by bounties, it gives us pause. But when we find that the great staple industry supplies us with something between 2½ per cent. to 5 per cent. of the great staple, and that we are to mulct ourselves in millions to save this tiny fraction, it gives us pause again. It has been shown us ad nauseam that sugar is not now the natural industry of the West Indies. The Commission has so reported 739 and has suggested alternatives. In the face of knowledge, evidence, and sense we are being driven to make a great sacrifice to gain a great loss. Surely some sense of proportion is wanting. In the same month we are bleeding to death the East Indies, which form our greatest possession, and for the West Indies, which form our smallest, we are bleeding ourselves when our blood can ill be spared.
Now as to the effect on this country. Sir Henry Norman's calculation of ½d. per £ increase would mean £6,000,000 lost to this country. This the President of the Board of Trade amiably, but quite conjecturally, denies. I will not go into the enormous sums of capital and labour connected with it, which are dependent on cheap sugar, a cheapness that at present at any rate, depends on foreign bounties. We were told last night that the divine Cobden,—I say divine in the sense that the dead Roman Emperors were called divine—wished only for the "natural price," whatever that may mean; careless as he was as to whether it was more or less the consumer had to pay. Well, Cobden is dead and our times are other than his! I would only ask the House, did ever any man out of Wonderland, whether in Cobden's time or any other, did over a customer threaten and bluster and bully a shopkeeper in order to force his prices up? Did ever a man haggle to pay more? Did ever human being remove his custom from a store on the ground that the goods were not nasty, but by far too cheap?
A point much dwelt upon both by the President and the Parliamentary Secretary to the Board of Trade was as to the advantages gained in this country by the abolition of bounties, the right hon. Gentleman read a somewhat musty letter from a Mr. Keiller, a jam-maker, dated 1889, which has been raked up from the archives of the Board of Trade to grace this occasion. Mr. Keiller favoured the abolition of bounties, and the Parliamentary Secretary told us that the jam-makers of 1889 "knew better and saw farther than the jam-makers of to-day." Why so, Sir? Was 1889 the Augustan age of English jam-makers? Is it not probable that the jam-makers of to-day, who are unanimous against this Bill, may understand their own jam-making best? So, Sir, if the Bill will not save the West Indies, if the Bill will damage consumers in this country, is it brought in 740 to further the principle of free trade? I never know now-a-days whether to mention the word free trade is profane or whether it is improper. This unhappy Bill puts us all in vexatious positions. The lines of cleavage, nowadays, are somewhat tortuous and zigzag. Anyhow, last year considerable capital was made in support of this Bill, as constituting a sort of encyclical address to all nations, in support of the true doctrine. The Colonial Secretary himself "speaking as a convinced free trader," listened with some alarm to the arguments of the hon. Member for South Shields, a statement in itself which has found a new humour only six months after, and he also observed—You will find within the last few years when the new school of economists have started into existence—talk of the new economists—the new economy is not found on this side of the House, it is found on that, but until the last few years no economist has ever denied bounties absolutely contradict the principles of free trade.Well, Sir, the whirligig of time brings its revenges.
Now, coming to the vexatious position of this Bill I want to make a suggestion as to the solution of it, and I will in doing so be as short as I can. It seems to me that in strict economic principle, the Opposition and, indeed, all free traders, condemns the Sugar Bounties Convention, because in a sense it protects the 2½ per cent. or 5 per cent. of our sugar supply, which is provided by the West Indian colonies, and indirectly increases the price of the food of the people and raw material. From another point of view, but on equally strict economical principle, they admit that the Bill is aimed against the whole principle of protection as practised on the Continent. They therefore find themselves in the position of the lady who lived with the lady and could not live without her. They find themselves on contrary grounds, bound to support it and bound to reject it. The real solution, I venture to think, Sir, is to be found in the reflection that there is no such thing as political principle, but only political conviction, which must, to be rightly directed, be governed by what is wrongly called opportunism, in a bad sense, but what is essentially realism in a good sense; that is to say, the clear perception of hard facts as they vary from question to question, from year to year, from generation 741 to generation, the ultimate test being the proper prosperity of the country in which you live during the period in which you live in it. It is true, of course, that in the philosophy of politics there are such fundamental ideas as justice and liberty which dominate politics and policy, but these belong rather to the philosopher's study than to the circus of the House of Commons. In the constantly shifting world of politics and business these theories must be made relative to facts. It follows, then, that foreign sugar bounties stand or fall on their own merits, and not as a part of political philosophy.
The Convention, therefore, fails as an eirenicon of free trade. Take the three possible motives of the Bill, not one in any way justifies it. 1. It will not save the West Indies nor benefit them; 2. It will heavily penalise the people of this country; 3. It will not advance the principles of free trade, even if those principles were worth advancing. But further, Sir, if we apply some such practical method as the one I endeavoured to indicate to the present Bill, what do we find are likely to be the results which may flow from its provisions. We abnegate a considerable portion of our commercial freedom and place it in the hands of our commercial rivals. By the original plan of countervailing duties our freedom would have been much more largely preserved, but under this Bill w e are helpless. We prepare the ground for the most delicate and discomfortable complications with every foreign Power in the world, whether included in the Convention or not. We run the risk of offending our colonies both sentimentally, commercially and politically. We hamper to a large extent any plan of preferential tariffs and retaliation which many hon. Gentlemen desire. We deliberately—according to the President of the Board of Trade—we deliberately raise the price of sugar to the English consumer in order to benefit producers who are now able to sell to us below the cost of production, because the difference is now paid by foreign taxpayers on our behalf. Sir, I ask the House is the game worth the candle? Is it worth while to sacrifice our liberty, to tie our hands, to let our natural competitors control our national markets, to lessen our wealth, to increase our taxation, 742 to rebuff our colonies and to invite complications abroad. All for the sake of a possible, but purely conjectural, modification in the fluctuations of the price of sugar.
The President of the Board of Trade is pleased, is indeed bound, to carry an optimistic soul. The future of sugar smiles rosily towards him. But, whatever the future sugar monopolists may be, the right hon. Gentleman has no monopoly of inspired conjecture. We all have an equal freehold in the unknown. And some of us, looking to the higher prices and less employment which must almost inevitably follow from this Bill, find the outlook less engaging. It is hardly the moment, perhaps, to make a commitment of opinion when the whole world is being inquired into and convictions are notoriously unsettled. But surely we may seek for caution. We have seen that two of the most important powers concerned, France and Austria, have seen cause to reconsider their position, and from to-day's news it seems likely that the reconsideration will last a very long time. Might we not with honour—which they seem not to have forfeited—and with the caution which safeguards their security, might we not also follow their wise example? The politics of England and of the British Empire are hardly floating on a calm sea under a sky of blue. A proper prudence implies no injury to pride. I respectfully supplicate the Government to pause again, and yet again, before they embark upon a heedless and undesired venture, in which the way is surely perilous and uncertain, and the port they make for is far-off, unknown, and hostile.
§ * MR. JAMES REID
I wish to say a few words on behalf of the sugar refiners of this country. I may say I am not engaged in sugar refining myself, but on the other hand I happen to represent a constituency which contains one third of the sugar houses still left in this country. The House will hardly be surprised if I make it my standpoint from which to say that which I wish to say. The hon. Member for Devonport referred mostly to the two sugar houses in London—Messrs. Tate and Messrs. Lyle. Now no sugar refiners in the Kingdom have been more anxious than those two to get me to do all I can to get this Convention Bill carried. Yet no two firms have been 743 more prosperous. When the head of the firm of Lyle's gave up his interest in the firm he did it on the offer to his partner either to pay out and he would remain in the firm, or to be paid out, and go. His partner elected to pay out, and so he retired. I hope, therefore, the hon. Member for Devonport will be a little mere cautious when dealing with the prosperity of those two firms. The hon. Member for Peebles and Selkirk put the matter very clearly. These two firms have a great advantage in that they each possess specialties: Messrs. Tate have cubes, and Messrs. Lyle have syrups, and it is largely owing to those specialties that they are so prosperous. I am sure we all wish them continued prosperity. In my opinion the bounty system is rotten to the core, and engenders illegitimate and bastard trading. No man who gets his materials under cost price has a right to compete with others. It is a rotten system of trade, which though it cannot last for ever may last long enough to drive legitimate trade out of the market; and then we shall be at the mercy of the men who come into the market on the back of bounties, who receive bounties, and who then will certainly not be so foolish as to give out of their bounties what they give now. If this system is carried to its logical conclusion, may not confectionery also come into this country bounty-fed. Cobden said that the natural price ought to be the value of every article, but bounty-fed sugar does not come in at the natural price. It is well known that cane sugar and beet sugar can be produced at about the same price. The working men throughout the kingdom are against bounties to a man, and many thousands express the opinion that the bounties ought to be put an end to. Such a thing would increase the labour in various trades. Think of the various trades outside the sugar houses in which labour would be increased; think of the immense consumption of coal, which the sugar houses in this country are responsible for. Those engaged inside the sugar houses are infinitely less in number than those who ought to he engaged outside in trades allied to the sugar trade. This bounty-fed sugar is not fair trading. Sugar refiners in this country want a fair field and no favour; they want their own material at its natural value, if not it 744 may be that British sugar may go to the wall.
As to prohibition versus countervailing duties, I think prohibition is better; and I am not without hope, whatever little differences may exist in this country, that British diplomacy may bring them to an end. In fact, it is hoped in high official circles that the whole thing may come to an end before September. The hon. Member for Launceston said that a majority of the sugar refiners are antiquated, or words to that effect, and he excepted only these two houses in London who are working on specialties; but he said the other refineries were "fire traps." He also said that in 1864 there were sixty houses, a statement the correctness of which I doubt, that now there are only fifteen doing as much work as the said sixty. Surely this is the reductio ad absurdum, as it proves that the fifteen which survive have been kept up-to-date. As a matter of fact all modern sugar houses are fireproof—at least I speak for my own constituency, and I am authorised to say that there is no foundation in fact for the hon. Gentleman's statement. And I claim for my constituency that they possess as much enterprise and versatility of method as their southern fellow-subjects; indeed. Scotchmen are generally credited with possessing a larger share.
§ MR. ROBSON (South Shields)
The hon. Member who has just addressed the House has laid down a great principle. Throughout the debate I have been trying to discover the economic principle which underlay all the arguments of the various hon. Members who have spoken. The hon. Member says no man who gets his goods at less than cost has a right to compete with others. I wonder whether the hon. Member or any of his family have ever purchased the goods of a bankrupt. A man who buys a bankrupt stock gets it at less than cost price if he is lucky, and sells it at less than cost price if he is fair. But that has never been considered unfair trading. Now when this Convention was put before the House it was justified by the President of the Board of Trade as an achievement for free trade. What a distance we have got from that in the speeches of to-day and yesterday. Those who have defended the Convention have 745 not professed to do so on the groin of free trade. We have had in support of this Convention speeches which display protection in its most reactionary and mouldy form. The hon. Member for Peebles also laid down in the speech he delivered a short time ago what he regarded as a principle. He said he was connected with trade and spoke feelingly, and he did speak feelingly when he referred to the enormous profits made by the confectioners, which he seemed to think were almost immoral; and then he went on to say that the only persons who prospered under the modern conditions of the sugar trade were those who could buy their goods cheap. This is put before the House as a commercial hardship, which it is the duty of this House to remedy; that there are certain firms who are able to buy large stocks when they are cheap, and sell, I suppose, as dear as they can. That is described as unfair competition. Are we going to adopt the some principle with domestic legislation and foreign affairs?
For open protection we have to go to the speeches of members of the Government, to the speech of the Parliamentary Secretary to the Board of Trade. This policy of protection is approved not only by the Parliamentary Secretary, but also by the eminent fiscal inquirer, the Prime Minister. I venture to say the Prime Minister's sympathy and desires are just as protectionist as those of his colleagues. Let me make a few observations on that speech, which merits the attention of the House, because it shows the distance we have traversed since the last debate in November. The hon. Member endeavoured to harrow the feelings of the House by describing what would happen to the shipping trade. He told us if we had not the bounties we should not have ships bringing sugar over in a night and carrying back a return cargo in a night, but that they would bring sugar thousands of miles and take a return cargo back thousands of miles. The result of that is that you not only have dear food, but you must do more work for it. Then the hon. Gentleman went on to mention another fact, which he thought would have a great effect on his argument. He said there had been a reduction of 50 per cent. in the number of men engaged in the sugar trade, and the hon. Gentleman left it to be inferred by the 746 House that this was a hardship which legislation ought to remedy. The hon. Member's speech suggested in the latter part an answer to that. He said that bounties had not cheapened sugar. Although, perhaps, the number of men employed has been reduced, there is by no means a corresponding reduction in the trade. A careful examination of the figures will show that the reduction in the number of tons refined is not great, but there has been an improvement in the quality. There is certainly now a better output in the sugar trade than there was in some of the years preceding the application of the bounties. That, I think, accounts for the reduction in the number of men employed. The hon. Member opposite suggested that the lot of 50 per cent. of the men dismissed from their work was a very hard one, and he asked what comfort is it to those men to hear that employment has increased in Dundee. It may not be much comfort; on the contrary, it is a misfortune to men in any trade when competition reduces the number employed, but we have not to consider the interests of any particular trade, but the interests of the whole community, and it is a comfort to say, if we hear that 50 per cent. of the men employed have suffered from the competition, that every man employed in other trades to a still larger degree is benefited by the same circumstances. The Parliamentary Secretary referred to the silk trade, and pointed out that whereas Coventry used to manufacture silks, bicycles were now made largely in that town. But why does Coventry not go on making silks? Because we can buy them cheaper elsewhere, and we have to pay for them by the manufacture and export of other goods. Therefore it pays us to make goods for export in order to pay for cheap silks rather than, make silks at profits smaller than we can obtain in other industrial spheres. That is why we have parted with some of our silk trade, and we are acting upon the same principle as when anyone goes to his office or chambers to make a profit in order to get money to buy his own clothes and boots. It is better for a man to devote his skill and energy to the trade in which he can make the most money, so that he may be able to supply his wants in other directions. That is 747 the principle upon which England has parted with so many of her minor trades, with results beneficial to her general prosperity.
The hon. Gentleman opposite has shown that any observations made in direct conflict with foreign and domestic trades are sure to meet with approval on the front Ministerial Bench. We have to realise not only that the Government are inclined to make an attack upon the food of the people, but they are making a deliberate attack upon the foreign trade of this country. They are attacking it because they know not what they do, but they are attacking it all the same. The hon. Member spoke of the cartels which the President of the Board of Trade said were practically being destroyed by the operation of this Convention. The right hon. Gentleman had the prudence not to enter too much into argument or explanation upon that point. He said the Convention would make cartels difficult or impossible. The Parliamentary Secretary to the Board of Trade went on to explain how cartels had been made impossible. I use the word "cartel," but one might better use the word trust or syndicate. The Parliamentary Secretary went on to describe how this had been made more difficult. My contention is that that which enables a syndicate to export at a lower price than it sells to the consumer is a protective duty. By this Convention you put a surtax of 2s. 6d. per cwt. on sugar. If a country forms a syndicate for a cartel, they can charge the consumer 2s. 6d. a cwt. more than they would otherwise be able to charge, and they can get the benefit of the protective tax. That enables them to sell their produce abroad at a lower price than to the home consumer, so that the old cartel which prevailed in Germany enabled the producer to give dearer sugar to the home market and cheaper sugar to the English market. The Parliamentary Secretary says that is made more difficult, but it is not made impossible because there is still a surtax, and to that extent a syndicate is still feasible, and to the same extent there may be an export at less than cost price. Although the operation of cartels is not made impossible, they are in some measure restricted. The Parliamentary 748 Secretary and his Government have enabled the German producer to make a new kind of cartel. They have enabled the German producer to make a cartel which aims not at giving England cheaper sugar, but at giving her dearer sugar.
§ THE PARLIAMENTARY SECRETARY TO THE BOARD OF TRADE (Mr. BONAR LAW,) Glasgow, Blackfriars
The cartel to which the hon. and learned Member refers is only possible on account of the monopoly, and the Convention kills the monopoly and does not create it.
§ MR. ROBSON
Let us see what is happening now. At the end of July last two telegrams appeared in the Times on this point. The first pointed out that the sugar producers in the various countries which were parties to the Convention had combined, and they had formed an international cartel which otherwise would never have been possible. [An HON. MEMBER: Why?] The hon. Member asks "Why?" It was not possible before to get all these producers to combine, because England was then free to buy from those who did not form part of the cartel. Depend upon it if combination, apart from this Convention, had been possible between Germany and France, we should have had it; but it was not possible until the Colonial Secretary, the President of the Board of Trade, and the Parliamentary Secretary to the Board of Trade made it possible. They made this new international cartel not merely possible but inevitable, because they put us under the disadvantage of not being able to buy from anyone except the members of this cartel. Therefore this Commission is under the control of the sugar-producers of the Continent. We have assisted the formation of this organisation, giving it assistance of the most invaluable kind by binding ourselves not to buy from their rivals. If anyone does not join in the Convention, but persists in the enormity of sending us bounty-fed sugar, we shall have to refuse to buy it. Foreign countries enter this Convention with perfect security, because before they were afraid of the competition which keeps so many men from 749 entering into combinations. All that is now put on one side, and combination is made easy. We have now refused to treat with anyone except those who belong to this combination. We have now got a new international cartel not to make our sugar cheaper, for that would be totally contrary to the gospel of scarcity put forward by this Ministry, but to make our sugar dearer. The telegram I referred to stated that it was proposed to raise the price of sugar in the English market by about two francs. Another telegram said it had been proposed to countervail the bounty-fed sugar from Russia. That has apparently been accepted by the Commission. The telegram went on to say that the Commission had hung up its resolution with regard to a countervailing duty on sugar from Russia, and it stated that Russia had joined this new international cartel. I have no doubt we shall have from the Colonial Secretary some official diplomatic reason as to why the Commission has allowed the final steps taken against Russia. The business reason is obvious enough, and Russia has joined the new cartel. Her assistance was valuable, and there is no reason why she should remain outside. This is an illustration of the extent to which the Commission is dominated by the foreign producer, and we have put ourselves almost entirely into their hands. Under these new circumstances, are we not entitled to ask hon. Members opposite who have received this Convention as a free trade proposal to reconsider their position?
It was pointed out that it actually forbade a colonial preference. So far as retaliation is concerned, the Convention put on some air of financial orthodoxy by putting countervailing duties in the background and putting forward prohibition—prohibition being justified by the analogy of diseased cattle and things of that sort. Now those flimsy pretences which prevailed when the Convention was first put before the House avail no longer. The Government are unmasking their guns. This Convention is a deliberate step in their new policy of founding the Empire on the artificial scarcity and dearness of the food supply. When the Convention was first put before us the Colonial Secretary justified it on grounds of Imperialism. Now we know what his Imperialism means. We have had various types of Imperialism in the history of 750 mankind. We have had the military empire; we have had the colonial and commercial empire founded upon consent; and now we are to have an empire founded upon theories of scarcity. We are to have a sort of starvation Imperialism. I would ask hon. Members opposite who believe in free trade whether they are prepared to join the banners of that new Imperialism, or whether they would not rather take the opportunity of at once deserting them? This Convention does not profess to add anything to the revenue of the country. It has no practical object except to raise prices. Its only object is artificial dealing. That which was first introduced and justified as an exception is an exception no longer. Dear sugar must now takes its place with dear bread and dear meat as the third pillar of the new protectionist Imperialism of the Colonial Secretary. There seemed to be an idea that we were entitled to take almost any measure in order to retaliate on those aggressive invasions of our free trade by foreign countries. It seems to be thought that free trade has no power of resistance, and that the free traders of England were incapable of retaliation without assistance from legislation. But is it really a fact that free trade is so entirely without the power of retaliation? We know that protection is sometimes a dangerous method of retaliation by the instances which have been given in this debate. It deprives us of our right and power to protect our own market. The German sends over to this country goods artificially cheap. The English free trader accepts all the financial advantages which those cheap goods give him. He will take these advantages lying down if he cannot get them in any other fashion. And having got these financial advantages he promptly proceeds to retaliate upon the German with cheap jam. That is the retaliation of free trade. The first penalty which the German jam manufacturer pays for his own economic stupidity is his exclusion from neutral markets. But that is not all. He very soon finds that his own market for confectionery and sugar preserves is invaded, as the result of the bounty he gives on commodities exported to another country. Is not that a sufficient retaliation? The German manufacturer of sugar preserves thinks it is more than enough, and as he suffers from 751 this painful retaliation of free trade in his own markets, who is it that comes along to heal his wounds and soothe his sorrows? Why! It is the Colonial Secretary in his Sugar Convention. The right hon. Gentleman says to the Germans—"We will protect you against the results of your own stupidity by this Sugar Convention!" I commend that to the hon. Member for the Toxteth Division, who says that he is supporting the Convention on the ground that it is to destroy bounties founded on a vicious principle. Undoubtedly if the nations of the Continent would agree to accept free trade we should be very glad indeed to see these bounties abolished. Otherwise the bounties ought to be retained as an object lesson in free trade. There is no better lesson in free trade than the money which the German nation has to pay for these bounties.
I desire to draw attention to a point which does not seem to have been quite fully dealt with, although the hon. Member for Dundee touched upon it in some measure, and that is the hearing of this Convention on the most-favoured-nation clause. There can be no doubt that this Convention is an infringement of that clause. That clause in nearly all the treaties in which it is to be found—there are nearly fifty of them—forbids any party to the treaty horn prohibiting the goods of the other party from free access to its market. America endeavoured some years ago to limit the construction of that clause in a way that would make it almost valueless. It sought to make a treaty with some small island in the Pacific, by which it should give particular advantages to the other party, and the other party should give particular advantages to it. It claimed under that treaty special advantages and concessions which were not to be shared by England, who claimed to be entitled to them under the most-favoured-nation clause. England strenuously resisted that contention. It was resisted by Lord Granville, and it has been resisted ever since. Our argument has always been for an unconditional interpretation of that clause. Our contention has always been that in any advantage which either party in such a treaty gives to any outside nation, the other party in the treaty is entitled to share. The Government have accepted the American contention in relation to this Convention. They are 752 now saying with regard, for instance, to Russia, that they are entitled to prohibit the goods of Russia because they have a special reason for that, although the most-favoured-nation clause is in Russia's treaty with us. It is a very serious matter for this country, because we have surrendered our contention for the unconditional construction of the clause. We would not be able to renew that argument. Indeed, there is no point of view, commercial, international, and diplomatic, from which the Convention is not an unmitigated mischief, and I hope the House will decide to back out of it altogether.
§ * SIR EDGAR VINCENT (Exeter)
In the speech of the hon. Member for South Shields, to which I listened with pleasure, he referred to the action of cartels. It seems to me that some hon. Gentlemen in this House lose their heads when they have to discuss the question of cartels. I venture to think that some of this alarm is somewhat exaggerated, for so far as I am acquainted with it the principal action of these combinations has resulted in selling to this country sugar under its cost price, and buying from this country certain ships at considerably above their value. I would venture to ask the House to keep all its coolness in considering the result of their action, and not to lose confidence in the virtue of free and open competition. I feel that I owe an apology to the House for taking part in this debate. When I observe the serene calmness with which some hon. Gentlemen state what will be the price of sugar during the next ten years, it appears to me that I have strayed into some conclave of supernatural beings, and that an ordinary man with some experience of these matters can hardly venture to express an opinion. The President of the Board of Trade has vouchsafed us a glimpse into the future. That kind of fore-knowledge and prescience, though of great value here, is of even greater value in another region, and if the right hon. Gentleman would transfer his talents we should lose but he might undoubtedly amass in the course of a very short time a most gigantic fortune. I venture to say that a large number of hon. Members in this House will agree to this proposition: that a proper policy for this country to adopt in regard to sugar is difficult and 753 intricate; and if this view is correct it appears to me to follow that we should regret that action was not preceded by full discussion, directed to ascertain what the result would be of our entering into this Sugar Convention. I go so far as to say that in this case inquiry should have preceded action; and by inquiry I mean full and open discussion before an impartial tribunal—an examination under which evidence could be sifted, tested, discussed, and if necessary rebutted. In matters of this kind I am old-fashioned enough to wish to know the precise results which would follow any course of action before committing the country to engagements of an entirely novel, and of an extremely complicated character.
The Secretary of State for the Colonies stated last November that a Consideration of this question involved two sides, the moral and the material. I altogether agree with that view, but it appears to me that an unjustifiable, corollary is frequently attached to it—viz., that there is a necessary contradiction between the considerations on each side. I altogether dissent from the opinion, which is really largely held, that it is only necessary to prove that a given policy is bad business in order to be convinced that it it high policy. Viewed on larger lines, what is the state of the case in the plainest possible terms? We are asked to intervene in the interests of certain producers of sugar, and with that end in view to raise the price at which they can sell sugar in this country. Now, I think it is admitted that it is impossible to raise the price of sugar to the rate at which the West n lies can sell it, without at the same time raising the price of sugar sent to us by foreign countries. Remember, that these foreign countries give us more than 90 per cent. of our consumption. It appears to me to be admitted by the supporters of the Bill that the main object of it is to raise the level of prices to that at which the West Indian producers can sell their goods, but under the system of the Bill it is impossible to achieve that without largely increasing the price which we will have to pay to foreign countries In 1902 this country obtained 31,500,000 cwt. of sugar; we paid £15,000,000, and of this £1,000,000 went to the colonies and £14,000,000 went abroad. Now, under the Conven- 754 tion what will be the case? For the identical quantity of sugar we shall have, to pay, according to the best calculation, not £15,000,000, but £22,000,000, and of the additional £7,000,000 which this country will pay £6,500,000 will go to foreign countries and only £500,000 will go to our fellow subjects in the colonies. I will not deny that that proportion may gradually change; that the amount supplied by the colonies may become larger, and the amount supplied by foreign Powers become somewhat smaller. But the change will be gradual, and will be only partial in its effects, so that the permanent result will be an increase of the price we pay, leaving a larger proportion of the money to go abroad, and only a smaller proportion of the money to go to the colonies.
Is that good business? Is the Convention to be justified as a specimen of protection, or a specimen of free trade? I will not deduce any argument from the quarter from which the initiative of the Convention arose, or, if I may use the term, from the port from which the vessel hails; nor will I refer to the speech which we heard last night from the Secretary to the Board of Trade, which appeared to me to be a purely protectionist deliverance. I shall judge the policy solely by its anticipated, its avowed and probable results; and I say that this is a measure destined to advance a particular interest as opposed to the general interest. It is framed in order to give an advantage to the producer at the cost of the consumer, and so far as I understand it, it is absolutely analogous in its results to those Acts which abroad are supported by protectionist arguments, and which are aided by protectionist funds. In so far as it differs from the usual Acts of protectionist countries, it appears to me to differ in this, that the trade to be protected is unusually small, and the sacrifice to be made is unusually great. I confess that I ant somewhat surprised to see the very able and skilful advocates of protection in this House supporting this measure; because it appears to me to put their favourite device in an altogether unfavourable light. I almost feel a suspicion that they desire to press this Bill through in order to have on 755 the Statute-book something compared to which even preferential tariffs will be advantageous. Now, the Convention has also received a certain amount of support because it is supposed to have about it a spice or flavour of retaliation. It is intended to put an end to the nefarious practices of certain foreign countries. But even from this point of view, I rather doubt whether it deserves any enthusiastic support; because while intelligent retaliation—if there is such a thing—must be directed against those who have done us some injury, this is directed against those whose only fault has been to sell us their produce and their goods at too cheap a rate. And while retaliation is necessarily intended to apply some pressure against some foreign countries, this Bill gets these foreign countries out of a great difficulty, and, to use the expression of the President of the Board of Trade, relieves them of a very heavy yoke. It will thus be seen that while the Convention has many of the disadvantages both of protection and retaliation, it does not carry with it any but the smallest of their pretended benefits. The Bill, is indeed, a bad example of a bad school.
There is one other plea on which the policy of the Convention may be defended. It may be said that bounties are opposed to the strict theory of free trade, and I can understand an enthusiastic doctrinaire, thoroughly imbued with a kind of religious fervour for free trade, setting forth on a crusade, and laying about him to destroy all those who do not accept his faith in its fullest spirit. But can that argument be used by those who, before this Bill receives the final sanction of this House, already taunt free traders with their adherence to old shibboleths, and who appeal from principles and from theory to immediate practical trade advantage. Immediate practical trade advantage in the present instance is certainly against the policy of the Bill, and so it does not he with hon. and right hon. Gentlemen to appeal to general theory in which they do not believe, and which they are doing their utmost to destroy. Again, there is another argument which has been used—viz., that apart from its probable effect in raising the price of sugar, the result of the Convention will 756 be to steady the price. But surely if that were the sole object, it is not beyond the ingenuity of right hon. Gentlemen on the Treasury Bench to invent some system which would only affect the price when it fell below a certain level, and not raise the price both when sugar is dear and when it is cheap. I am opposed to this Convention on a wider ground—viz., that it is the first instance within my knowledge in which the action of the British Government has been employed to render dearer an article of general consumption. I thoroughly distrust the intervention of the Government in matters of this kind, merely because some producer or some manufacturer goes to the Government and complains of what he terms "unfair competition." I do not know what definition can be given of the term "unfair competition." I thoroughly distrust the intervention of the Government in matters of this kind to rectify the price and to remedy what is merely a private grievance at the public expense. I am against the Convention, because it appears to me to raise the price of food to the people without bringing any countervailing advantage to His Majesty's Treasury. I am convinced that this House ought not to tolerate any measure which increases the cost of food, except to the extent necessary for the purpose of revenue; and I believe that this Convention was entered into without full knowledge on the part of the country, and without, perhaps, full knowledge on the part of its authors as to its probable commercial effect. I hope, therefore, that all those who, in common with myself, fear a return of this country to protection, both on moral and material grounds, will see in this Convention an example of the kind of legislation, and the kind of negotiation which we must expect if protection and fair trade are to be the guiding principles of our policy.
§ * MR. LAWRENCE (Liverpool, Abercromby)
said several hon. Members had referred to this as a new question, and as if, forsooth, it had not been before the country for something like forty years. The fact is, that the hon. and learned Gentleman who last spoke has been for a long time serving the interests of his country abroad, and therefore he has come back fresh with the old ideas which were entertained when he 757 left these shores. He has not kept in touch with the movement of public opinion in regard to this very burning question. I was very much struck with the speech of the hon. and learned Gentleman opposite, who on the strength of a telegram on which he based half his speech with reference to an informal conference at Brussels, told the House that the Convention would render the cartel system twice as bad as it was before. The fact is, that what the hon. and learned Gentleman referred to was a meeting of producers, who, having on hand something like 1,500,000 tons of sugar for which they could not get a market, were trying to do something to raise the value of the commodity of which they had such a large stock. The hon. and learned Gentleman has really only found a mare's nest, which might perhaps be worthy of being put before a common jury. Hon. Members have harped upon the suggestion that this Convention is going to recreate a monopoly. If ever there was a monopoly it exists at present, and this Convention is, in Canning's phrase, an effort to call in the new world to redress the balance of the old. No cartel, syndicate, or system that is capable of being formed in Europe with varying tongues and nationalities, can be otherwise than doomed to emphatic failure when the new world and the, cane-producing countries are called into their proper output, It is perfectly obvious that under the Convention the produce of cane would enter into a fair competition with the cultivation of beet; and the cane growers would not enter into the same conference with the beet producers. We are told that the price of sugar will go up enormously, but I desire to point out how impossible that is when the consuming world has the temperate and tropical zones to draw upon.
Another argument is that this Convention will do the West Indies no good. I would ask business men, is it not extraordinary that for no less than a generation the sugar production of the West Indies although submitted to the keenest competition still survives. What industry on the face of the globe could have withstood such competition for so many years and yet still be in the condition the West Indian sugar industry is now in? It is perfectly certain that the West Indies, with their natural advantages, 758 only want a fair opportunity in order to grow sugar as well and cheaply as any part of the temperate zone. It is absurd to think that a region with such natural advantages can, if not handicapped by artificial restrictions, fail to succeed. Stress has been laid upon the fact that the West Indies only produce a small percentage of the sugar imported into this country. Whose fault is that? Time was when most of our sugar came from the tropics, and it is entirely owing to artificial circumstances that the present proportion is so low. I would remind the House moreover that beet sugar from the earliest stages of its existence has been subject to bounty-feeding arrangements and rose to the position it now occupies entirely owing to artificial treatment. It is an interesting and important fact that whether in the tropics or in Europe the production of sugar per acre, whether beet or cane, is about the same, and the labour is practically the same. There is, therefore, every reason to believe that those two sources of supply will continue, under proper and legitimate competition, satisfactorily to supply the wants of the world. It was entirely owing to the over production caused by the present artificial system that prices got to the absurd and abnormal condition of last year. It is quite unfair and unbusiness like to quote a special artificial figure, such as that of last year, and say that the people of England, especially the working classes, will criticise any action which allows the important supply of sugar to be produced under legitimate and fair circumstances. Speaking for my own constituents, whom I have known intimately now for seventeen years, I am perfectly prepared to say that they will always be as they have always been, cordially responsive whenever I invited them to be just to the colonies. We are asking for no preference, but simply that England shall be just to the colonies of which she is the trustee. Those colonies are held in the hollow of the hand of the mother country, which enjoys the benefit, with which she has no intention of parting, of the two great harbours of St. Lucia and Jamaica, which command the approach to the future Panama Canal. The mother country may fairly be called upon to discharge her high duty, and although she has been tardy hitherto 759 in recognising the claims upon her, I feel that new ideas have of late years arisen, and that the time is coining when she will not be backward in discharging the obligations of her high position. It is quite a mistake for the House to think this is a measure promoted in the interest of capitalists. If the Members of the House had been with me in Jamaica in February last and stood by when certain black workmen were informed that the cultivation of sugar was going to cease in the district where they lived, they would have recognised that it was not a question of capitalists but of the daily bread of those who are, equally with all members of the Empire, British subjects.
And, it being half-past Seven of the clock, the debate stood adjourned till this Evening's Sitting.