§ MR. CHARLES MCARTHUR (Liverpool Exchange)said he wished, in moving the Resolution which stood in his name, to call attention to some special dangers affecting British trade at the present time. Those dangers had all a family likeness, and were all derived from the policy of Protection which had so long been prevalent in foreign countries. This country had for the past fifty years consistently followed a policy of Free Trade, and the experience of those years had been partially disappointing and partially reassuring. It had been a disappointment that the anticipations of the supporters of Free Trade, that the example of England would speedily lead to universal adoption of a Free Trade policy, had been disappointed. For fifty years we had preached this gospel, and he did not know that we had made a single permanent convert. We had' piped to them, but they had not danced, We had mourned with them, but they had not lamented. Foreign nations had failed to respond to our cordial invitations or solemn remonstrances. That was the unsatisfactory side of Free Trade. But when they turned to the effect of Free Trade upon the commercial interests of the country they found altogether a different result. They had every reason to believe that England had prospered greatly under the Free Trade policy of the last fifty years. Our trade had nearly trebled in amount during that period, imports and exports 1070 increasing from £308,000,000 to £878,000,000. The fact that Free Trade had shown such marvellous vitality and elasticity in combating the protective-system had shown to the nations which adopted Protection the inadequate nature of the means at their disposal for spreading their trade, and consequently there had been within comparatively recent years a modification in the protective policy of foreign countries. There was a time when the policy was simply defensive, and when foreign nations were content with a tariff meant to be prohibitive, but now they had changed their tactics and adopted an aggressive Protection. They had so organised their commercial system, with the support of their respective Governments, that they had been able to attack the trade of other countries in their own, and also in neutral, markets. They had now to face the foreign bounty system, treaties of reciprocity between nations intending to displace the trade of other nations, and concessions of an exclusive character which prevented anyone but the subjects of that State engaging in a particular trade and in a particular area. Whilst a pacific protective policy might be met by a pacific Free Trade policy, an aggressive protective policy must be met by an active Free Trade policy. Free Trade required a certain sphere for its operation, and if that sphere were circumscribed there came a time when Free Trade ceased to be Free Trade. Therefore it was necessary that Great Britain, while adhering to her Free Trade policy, should meet that aggressive protection by some counteracting measures, and he submitted that the Free Trade policy properly included action necessary to prevent measures restrictive of Free Trade.
Our recognition that principle had led us in recent times to adopt the policy of the "open door," and of counteracting foreign bounties by a convention. It was not only sugar bounties which attacked British industries. We had bounties in regard to shipping which were equally injurious. In the interesting Report of the Shipping Subsidies Committee they found a list of the subsidies given to their shipping by foreign countries. The United Kingdom, which had over one-half of the tonnage of the world, gave subsidies amounting 1071 to £834,312; Germany, with about one-tenth of the world's tonnage, gave £417,525, and in addition preferential railway rates and exemption from Custom duties; France, with only 5 per cent., gave £1,787,231; Russia, with 2 per cent., gave £364,756; Austro-Hungary, with only 1 per cent., gave £399,743; and Japan, with 1½ per cent., gave £745,607. Those figures would enable the House to realise how heavily British shipping was handicapped. It was impossible to refer to all the branches of the shipping trade affected by those subsidies, but some had been diverted to foreign countries altogether. One instance would show the prejudicial effect of those bounties upon our sailing-ship trade. By the French law of 1893, which gave a subsidy of 1s. 4½d. per gross ton for every thousand miles traversed, a vessel in her first year received on the voyage to and from San Francisco £4,142, which was so much to the good provided by her Government, and was almost sufficient to pay the working expenses. The result was that the French vessel, with the assistance of the bounty, was able to undercut her British competitor, and made a handsome dividend, whilst the English vessel often had to sail away from port in ballast. If sailing ships had a fair field and no favour they would pay their way, and it must be remembered that they provided the very best nursery for the training of British seamen. In the five years from 1895 to 1900, whilst the tonnage of British sailing ships had decreased by 25 per cent., that of France had increased by 32 per cent., which was due to the operation of the bounty system. Italy and Germany had also increased. If nothing was done, and those conditions continued, there was no doubt in the course of a few years our sailing ships for long voyages would disappear completely. The Subsidies Committee had found no remedy for those questions. He was not there to advocate the policy of giving bounties to shipping, but he did think that they should do something to penalise those vessels which competed with ours on such very unfair conditions. There ought to be an extra duty imposed upon the bounty-fed vessels visiting our ports which would to some 1072 extent counteract the effects of these bounties and restore equality of treatment to British ships.
Another way in which foreign countries were pursuing a very aggressive policy with regard to our shipping was by limiting their coast wise and colonial trade to their national vessels. That policy was adopted by Russia and applied to a voyage from the Black Sea to the Baltic and from Odessa to Vladivostok, by the United States, who applied it to a 15,000 miles voyage from New York to San Francisco, and by Germany, Italy, Spain, Portugal; and many other countries. Was it fair that Great Britain should throw her trade open to all the world, and that foreign countries should limit their trade to their own ships? He thought there ought to be a certain amount of reciprocity in that matter, and he could not help thinking if Great Britain, with the largest coast line in the world, were to say unless foreign countries gave her vessels fair treatment her ports would be shut against those foreign vessels, they would very soon see a very different state of things. The Subsidies Committee recommended that course, and on the occasion of the conference of the Colonial Secretary with the Colonial Premiers last year the Colonies showed their willingness to concur with this country in that policy, and passed a resolution that it was desirable that the attention of the Governments of the Colonies and of the United Kingdom should be called to the present state of the navigation laws, and the advisability of restricting coastwise trade, including trade between the mother country and the Colonies and one colony and another to British vessels.
Having referred to the question of reciprocity treaties, mentioning in particular the effect of that which had been arranged between Cuba and the United States, he asked what steps the Government had taken in order to deal with the situation as to exclusive territorial concessions. He referred to what had taken place in the French Congo. Our traders were established there before the French acquired political rights there, but when they did obtain those rights the position of our traders was considerably changed. They had to submit to very onerous differential duties. They continued under most embarrassing conditions, and every means had been taken to expel 1073 them from the country. This conduct appeared to be entirely contrary to provisions of the Berlin Act. Trade did not enjoy freedom. A complete monopoly had been established, and there did seem to be a case for the reassembling of the Powers which signed the Berlin Treaty.
While he thought it was desirable that there should be some more conceited and effective action to endeavour to remove these hindrances to British trade, he was not there to advocate a preferential system of trade between the United Kingdom and the Colonies. There were two considerations in regard to that. They had to remember that three-quarters of our trade was done with foreign countries and only one quarter with the Colonies, and, however much we might wish to increase our trade relations with the Colonies, yet we could not shut our eyes to the fact that our largest customers were to be found in foreign countries, and that whatever our opinions might be, we should do nothing which would alienate or endanger our trade with foreign countries; we ought to give careful and sympathetic consideration to the overtures of the Colonies in this respect, and he believed a closer political union, which he supposed most Members of the House desired to see established, could only find its really solid basis upon a common interest between the United Kingdom and its Colonies. He was not prepared to advocate a departure from our Free Trade system, but he thought that any thing that could be done consistently with that, to draw the Colonies closer to ourselves would be in every respect a step in the right direction, and he looked forward to, at some distant time perhaps, the establishment of what the Government had expressed as their goal in this matter—Free Trade within the Empire. In this Free Trade within the Empire he believed we should find the best solution of some of our difficulties. There might be difficulties in the way, but he thought the time had arrived when they might ask the Government to pay special attention to these attacks which were being made upon British trade, and to urge that some joint action should be undertaken between the Government of the United Kingdom and the Colonial Governments in order to safeguard the 1074 common interests of the Empire. He believed that as our Colonies so nobly fought with our soldiers on the battlefield in defence of Imperial interests, so-they would be willing to stand side by side with us in the more peaceful object of safeguarding the trade of the Empire.
§ *MR. EVELYN CECIL (Aston Manor)seconded the Motion. For himself, he said he did not believe that shipping subsidies were a paramount remedy, though under certain conditions, when given for value received, they were very valuable adjuncts to skill and industry, Neither was he an advocate of Fair Trade with Protection; but he did not desire to see our policy of Free Trade used by foreign countries,, to injure our commerce and further their own policy of Protection. It was no use when our trade was being seriously attacked simply to stand by. Among the recent developments of foreign fiscal and commercial policy which threatened British trade were the introduction of through preferential rates, and the reservation of the coasting trade. The freight from port to port in German and English steamers was the same, but when goods were taken from a place inland to a place inland, from Berlin, for instance, to Johannesburg, the actual rate per mile was considerably less on the German lines than on the English, owing to the through preferential rates. The result of the action of this commercial and fiscal policy of foreign nations had been that orders were placed with foreign manufacturers in preference to British manufacturers, owing to the cheaper through rates of freight. Mr. Spicer, a well-known wholesale stationer, in his evidence before the Steamship Subsidies Committee, as representing the London Chamber of Commerce, had stated that on several occasions his firm had had paper stock to procure for its Australian houses; that the rates of freight from New York to Melbourne and Sydney in 1899 to 1901 were from 17s. 6d. to 20s. and 25s. a ton, and from London to Melbourne and Sydney at the same time they were 42s. 6d., and that consequently those goods had to be placed with American manufacturers. It could not be said, therefore, that no harm had been incurred by British trade, in consequence 1075 of the action of foreigners in their commercial and fiscal policies.
There were many remedies to counteract the harm which was incurred by British trade in consequence of the action of foreign Governments in respect of their fiscal and commercial policy which might be suggested. In the first place, he would suggest the abolition of light dues; and, in the next place, he believed that a direct British line to East Africa would be of value both for Imperial and trade purposes. But these remedies involved money; and this year, at all events, he could not expect His Majesty's {government to spend money with that liberality that he should desire in regard to these matters. Much could be done, however, without any expenditure; and he hoped the Board of Trade would be disposed to show more energy than it had sometimes done in directions which he would indicate.
A small and easy, but an important, matter was the institution of a small permanent committee, with representatives of shipping and commerce, who could watch foreign competition and consider from time to time how it might best be met. This would be in the nature of a council of commercial defence. There was also the question of the Amendment of the Board of Trade regulations and of their application, as far as possible, equally to foreign ships as to British ships, because it was notorious that in recent times British ships which could not be made to pay owing to the Board of Trade regulations had been sold to foreigners, and had been run by foreigners with an increased carrying capacity and a smaller crew and less wages. He would more especially direct the attention of the Board of Trade to the need for a thorough revision of our load line regulations. The House must be aware of what Germany had been doing in that respect. She had been very busy for the last two or three years in a minute investigation of the load line question, and more particularly of our Board of Trade rules. Thousands of reports on various ships had been collected by a semi-official body called the German Association of Maritime Classes. The investigation was not yet completed, but, so far as it had gone, it was thought that the British load line regulations would not be accepted for 1076 German ships indiscriminately, as some types of vessels could be loaded more deeply than was allowed by British rules, and others not so deeply. This in itself was amply sufficient to justify him in urging the Board of Trade to take this matter into consideration, and he was sure that Parliament would not be behindhand in sanctioning any alteration of the rules based upon good sense and modern needs.
The third remedy, which did not require; an expenditure of public money, was connected with the question of through preferential rates. What was the Board of Trade policy in regard to that? It was clear that through preferential rates did not infringe any doctrine of Free Trade, because they wore admitted for inland purposes, and higher rates per ton per mile were charged from London to Grantham than from London to Hull. The inequality was recognised by the; Railway Rates and Charges Acts, 1892, and there was no doubt that railways in; Great Britain could give preferential rates to goods carried in great bulk or run long distances. Why then could they not extend the principle beyond the seas? there could be no objection to giving through preferential rates for goods from London to South Africa. It was a matter for the consideration of the House. He did not want to make any exaggerated or extravagant demand, but if it was to the national advantage to establish low through preferential rates, thereby encouraging British trade, the matter was one worthy the consideration of the Board of Trade. As regarded ocean and the operation of preferential transit, through rates he would not deal with that at any length, as they would probably have ample opportunity of discussing it when the Cunard agreement came before the House; but he imagined there would be no real objection to regulating ocean freights with through rates so as to bring them within a maximum limit, as was already done with regard to passenger fares on railways. He did not want to adopt a minatory attitude, but he believed that the steamship and railway companies would really be gainers by cheap through rates, as increased traffic would be attracted. He had heard it suggested that the initiative ought to come from the railway companies; but the state of the law was very doubtful. There was a section (27, 1077 sub-Section 2) in the Railway and Canal Act of 1888 dealing with undue preference, and though in the case of the Mansion House Association v the London and South Western Hail way, decided in 1895, a decision was come to not prohibiting all inequalities of rates, yet the Judge (Mr. Justice Collins) stated that the effect of the proviso in the sub-Section was that goods which had already traversed long distances before reaching the United Kingdom were not entitled to lower rates in consequence. He did not think railway companies were likely to oppose a change, if required, in favour of through preferential rates. Manufactories had been removed from the Midland counties to the sea-board in order to avoid the high railway rates, and the companies would not have been such fools as to allow that had it not been for the law of undue preference; for when a factory was removed the place where it had been was reduced to a mere village, and was absolutely of no advantage to the company. The Board of Trade should make up its mind whether this policy of through preferential rates would not be of Imperial advantage, and, in the event of its being felt that it would be, it ought to be satisfied that the law created no hindrance.
The fourth remedy, which did not require money, and which could therefore be undertaken by the Government, was the reciprocal reservation of the British coasting trade, a reservation to meet the case: of such nations as chose to reserve their coasting trade against us. That seemed to him to be a very laudable policy. It had been urged by a high financial authority Sir Robert Giffen; it was the opinion of the hon. Member for Great Yarmouth and it was emphatically the opinion of very many of our colonies The coast line of the British Empire was the greatest of any Country in the world, and he did not think the would be making any mistake if they were to advocate a policy which would ensure to us reciprocal advantages against those countries which reserved their coasting trade against us. He had been 1078 told that one of the objections to such a policy was that the consumers would suffer. He did not think they would, for he competition among the British steamship companies would be too great, hat argument prompted the proposal which he submitted in his draft report to the Steamship Subsidies Committee for a qualified reservation of the British Imperial coasting trade, embracing a some-what different proposal to the one actually decided upon. He did not mean to say he disagreed with the decision of the Committee, but ho submitted that his liter native proposal did not infringe any doctrine of Free Trade in any respect, while it would materially safeguard us against the system of foreign governments in reserving their coasting trade to themselves. His proposal had been to exact a fine or licence from foreign ships engaging in British coasting trade, computed on the basis of any subsidy or trade, navigation, or construction from which they benefit. Foreign vessels trailing to British ports no doubt only represented 9 or 10 per cent, of the total number, but this was not a trifle; he did no fear reprisals; and foreign nations which reserved their coasting trade to themselves could not complain if we chose to follow their example, if only in a qualified way and if we decided to open our coasting trade only to those who opened theirs to our ships.
Summarising his remarks, he would repeat that the remedies which required money were the abolition of the light dues, and a direct Imperial line to East Africa; while those which did not require money and which, therefore, the Government could very well undertake, were a small permanent Committee of the Admiralty, Post Office, Colonial Office, and Board of Trade, together with representatives of shipping and commerce, which would constitute a commercial Council of Defence like the National Committee of Defence. We also needed a thorough revision of our load line regulations, the institution of through preferential rates, and a careful consideration or modification of the Railway 1079 and Canal Traffic Act, and, lastly, the reciprocal reservation of our coasting trade. He ventured to say that if some or all of these remedies were decided upon by the Government, the President of the Board of Trade would earn the gratitude of the commercial community, and his reign of office would be looked back upon by the nation as one of lasting value.
Motion made, and Question proposed, "That recent developments of fiscal and commercial policy in foreign countries, leading to the exclusion of British trade from areas in which it has previously been established, call for the serious consideration of His Majesty's Government, in concert with the Colonial Governments, where necessary, in order to safeguard the trade of the Empire."—(Mr. Charles McArthur.)
§ MR. EMMOTT (Oldham)said they had listened to some very interesting and moderate speeches, which however had raised many questions which did not appear on the face of the Resolution before the House, although they might be cognate to the trade of the country. The Resolution which the House was asked to pass dealt with four subjects—foreign shipping bounties, reciprocity treaties, exclusive territorial concessions, especially in the Congo district, and the need for closer commercial union between the mother country and her Colonies. These subjects affected three Departments of the Government—the Board of Trade, the Foreign Office, and the Colonial Office, while the question of a closer commercial union with the Colonies might concern also the Chancellor of the Exchequer. This was a huge omnibus Resolution dealing with many subjects, any one of which contained ample material for a night's debate. It was strangely am- 1080 biguous in its terms, and might be supported by free traders and opponents of Free Trade. He wished it had been more contracted in its scope and more specific in the remedies proposed. With the part dealing with exclusive territorial concessions he quite agreed. It was quite true that when the Berlin Treaty was framed we were promised in the Congo basin Free Trade and no monopoly, and when the Congo Free State was handed over it was promised that the moral and material regeneration of the natives of the State should be the chief aim of the Administration. Since then, however, we had learnt that all the products of the forest outside the villages and settlements were the property of the State, and the exploiting of these huge territories and forests by monopolist companies, which earned enormous dividends, and shared the profits with the State, had been the result; of this trade very little came to us—it nearly all went to Belgium. That was a matter in regard to which we had the utmost reason to complain, and when, in addition to that, we knew that the effect of this monopoly system had been such as to necessitate, almost, some of the horrible cruelties which could not be denied, and which were the direct result of that monopolist system with its brutal cannibal soldiery, he thought the Government might well be asked to see whether something could not be done to call together the Powers which were responsible for the Berlin Act, and ascertain if some new and better system could not be put in force.
He did not propose to deal at any length with the question of the shipping bounties, but he would ask 1081 What could we do in that matter? Some countries still kept on something like the old Navigation Laws, and neither the mover nor the seconder of the Resolution recommended that we in our turn should give bounties for shipping in this country to a greater extent than we were doing at the present time. The mover certainly did recommend that we should penalise the bounty-fed shipping of other countries, and on that suggestion he would not pronounce any opinion at the moment, but he did not think it would be worth while to do anything—as they might easily do—to raise serious foreign complications in regard to this matter. As to reciprocity treaties what could we do to prevent them? The United States might have made certain declarations with regard to Cuban trade, but our own Prime Minister just before the recent war stated, no doubt with perfect sincerity, that we wanted no gold-fields and no territory. It was impossible on all occasions to keep nations to declarations of that kind, and, for his own part, while he regretted this new reciprocity treaty, he was unable to see how we could help it.
The question of closer commercial union with the colonies was a very large one. Both in 1897 and last year conferences attended by the Colonial Premiers and the Colonial Secretary were held, and it was found that no such scheme could be carried at present. The Government were known to be favourable to any such scheme, if practicable and in accordance with the principles on which our trade had been and, in his opinion, must be conducted; why, therefore, should they flog the willing horse?
1082 The Resolution referred to—
Recent developments of fiscal and commercial policy in foreign countries, leading to the exclusion of British trade from areas in which it has previously been established.but neither the mover nor the seconder had pointed to any areas from which our trade had been excluded. But even if it had been excluded here and there, or had been made smaller than it otherwise would have been, our trade with the British Empire remained practically at the figure at which it had stood for the last forty or fifty years. Their British Empire had increased, and whereas other countries had put on tariffs against our trade, we had received reasonable fair-play from our own territories and possessions, and yet the proportion of our trade with the British Empire was no bigger than it was fifty, forty, or twenty years ago. Our proportion of trade with the British Empire in 1855–1859 was cent.; in 1897–1902 it was only 26 per cent. Our imports from the British Empire during that period, varied from 21 per cent, to 22 per cent., and our exports from 33 per cent, to 35 per cent. In the last two years there had been a slight increase in the exports, and he hoped the trade would increase in the future. The conclusion of the Resolution was that these facts—Call for the serious consideration of His Majesty's Government, in concert with the Colonial Governments, where necessary, in order to safeguard the trade of the Empire.There were many problems connected with trade requiring the constant and serious attention of the Government. He did not think the tariffs of foreign countries could be eternally raised without considerably damaging our own trade, but what was the remedy? If the Colonies gave us a preference, as Canada had 1083 done, that would be all to the good. If they were coming into a great scheme of Imperial federation, and were going to pay their fair share of the cost of Imperial defence, it might be necessary seriously to consider what we on our part could do in return. But if our expenditure was to go on increasing by leaps and bounds, that in itself would prove the greatest barrier possible to any scheme of Imperial federation, because it would frighten the Colonies from taking part in the huge burdens to which we were committed. Any scheme of taxing ourselves by giving the Colonies preferential treatment would be sheer madness at the present time, as our imports from foreign countries were still more than three-fourths of the whole of our imports, while of cotton alone only 1½ per cent, came from the Empire, the remaining 98½ per cent, coming from foreign countries. Cotton was very scarce and dear, and it would be absolute folly to interfere with that huge trade by making trade with foreign countries more difficult.There was one thing, however, he would like to see, and that was the removal, as regarded India, of the 5 per cent, import duty on goods other than cotton, the 3½ per cent, on cotton goods, and the excise duties; that would certainly facilitate trade with India. More attention might with advantage be given to exploiting our Colonies in a peaceful way There was a movement on foot to see, what could be done to encourage the growing of cotton within the Empire. A large fund had been guaranteed, the Colonial Office were doing what they could to help the movement, and the Colonial Governors were sympathetic. There were many territories in which cotton might be grown, and he hoped that before many 1084 years were over something would be done in that direction. That, however, was a question of the future. With regard to the present, a large trade in the importation of bananas from Jamaica had bee organised, and it was doing much to restore the prosperity of Jamaica, which had been so sadly damaged by the fall in the price of sugar. Trinidad, too, was compensating itself for the losses sustained from the sugar trade by growing cocoa. There were many matters of this kind in regard to which something might be done to improve trade within the Empire. They were matters of detail, but they required earnest and careful consideration. He was certain it was by such methods rather than by any fundamental changes, such as would doubtless be proposed before the debate concluded, that trade within the Empire might be improved. The Resolution would have very little effect if carried; it embraced far too many subjects to be voted upon at the present time. He hoped, therefore, it would not be pressed to a division.
§ SIR ROBERT ROPNER (Stockton), in supporting the Resolution, said that the Subsidies Committee, of which he was a member, after two years of careful consideration, came to the conclusion that indiscriminate subsidies to shipping, for no value rendered, were entirely unjustifiable.
§ Notice taken that forty Members were not present; House counted, and forty Members not being present:—
§ The House was adjourned at twenty-five minutes before Eleven of the Clock till to-morrow.
§ Adjourned at twenty-five minutes before Eleven o'clock.