HC Deb 08 February 1904 vol 129 cc599-623

[FIFTH DAY.]

Order read, for resuming adjourned debate on Main Question [2nd February], "That an humble Address be presented to His Majesty, as followeth:—

Most Gracious Sovereign,—

"We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—(Mr. Hardy.)

Main Question again proposed,—

* MR. JOSEPH WALTON (Yorkshire, W.R., Barnsley)

I rise to move the Amendment standing in my name—"And we humbly represent to Your Majesty that it ! is essential for the safeguarding and promotion of the commercial and political interests of the British Empire that adequate steps should be taken to maintain and extend our commercial treaty rights, and that the Consular Service should be reorganised and strengthened on lines calculated to make it more effective for the promotion of the trade of the British Empire." As a Member of the House who has always been actively engaged in endeavouring to promote the prosperity of British trade, I welcome the attention that is now being given on the part of this country to the condition of our trade and commerce, and I desire to bring under the consideration of the House some practical methods which might be employed by the Government in developing that trade, altogether apart from the imposition of protective or preferential tariffs, which would, in my opinion, being an interference with the freedom of our trade and commerce, tend to lessen rather than to increase its prosperity. I will briefly refer to the urgent need which exists for the reorganisation and strengthening of the British Consular J Service, so as to make it more effective for the promotion of British trade. As at present constituted, the British Consular Service is deficient and inefficient for this purpose. The Committee which sat last yearunder the chairmanship of Sir William Walrond to inquire into the constitution of the Consular Service, reported most emphatically in favour of radical and important changes, and it was with the deepest regret that I saw no reference was made in the King's Speech to any intention on the part of the Government to introduce legislation carrying out those recommendations.

The Committee reported that the Consular Service at the present moment is not attractive to capable young men in that it offers no definite prospects of promotion, because men, new to the service, may be appointed over the heads of those who have been years in it. The Report goes on to say that the Committee, while they recognise that power must be reserved to the Secretary of State to appoint any person, regardless of the age limit, to one of the higher positions by reason of his special qualifications, recommend, nevertheless, that such appointments should be rare, so as to avoid lessening the attractions of the service by blocking the promotion of deserving officers. Then, in regard to commercial training, they strongly recommend that an effort should be made to draw into the Consular Service young men who have been trained in commercial houses for four or five years, and that there should be introduced—in order to increase the efficiency of the service—some system of inspection of the Consulates and Vice-Consulates. That reminds me that within my own knowledge several most distinguished members of the Consular Service have been attracted from it by the offer of more lucrative appointments elsewhere, and I venture to say that if there had been some system of appointing Inspectors-General of Consulates, the services of these distinguished and experienced men might have been retained. How, for instance, can the British Minister at Pekin properly supervise and visit all the Consulates and Vice-Consulates throughout the great Chinese Empire? It is absolutely necessary, then, for the efficiency of the service to have Inspectors-General appointed. Another important recommendation is that in large cities the system of having unpaid Consuls should be continued. On that point I am at variance with the Committee, because I venture to hold that the appointment of unpaid British Consuls and especially of foreigners to represent British trade is adverse to the interests of our trade. Probably they are members of business houses working in competition with other firms, and obviously it cannot be expected, while human nature remains what it is, that they should afford equal facilities to the whole British commercial community in conflict with their own personal interests. There has, it is noteworthy, been practically no increase in the expenditure on our Consular Service in the last thirty years. Thirty years ago it cost £200,000 annually. Now the cost is only £230,000, and, seeing that our trade has practically doubled and our shipping trebled in that time, it is clear the service must be deficient so far as regards the employment of a sufficient army of able agents to promote our trade and commercial interests all over the world.

One suggestion I have to make is that our Consuls should have more leave given them to enable them to put themselves in direct communication with the commercial communities in this country doing business where they are located, another is that there should be a better system of control and supervision as between the Foreign Office and the Board of Trade. The delay which formerly prevailed in the publication of Consular Reports has largely been got rid of, but the fact remains that there is no proper provision for a careful examination of the Reports before they are printed, and there is no one at the Foreign Office whose duty it is to read them and to bring their merits or demerits under the notice of the Department or of the Secretary of State. I could quote the opinions of Mr. Bryce, Sir Charles Dilke, Sir Edward Grey, and Lord Derby in regard to the disorganisation of the service and the necessity for ensuring promotion by merit, if the services of the best men are to be secured, and if the service is to be made as efficient as it-should be in the interests of British trade.

I have this to say, that in my somewhat extended travels I have had many opportunities of meeting the Consuls of the United States of America, Germany, and Japan in various parts of the world, and I am bound to confess that, though we have many good men in our Consular Service doing excellent work, I believe that the Consular Services of those countries are more highly equipped, better organised, and better paid than ours; and that hey are at the present moment giving I more attention to the promotion of the commerce of their countries than to the discharge of judicial and diplomatic functions. They are, in fact, superior to our Consular Service in promoting the trade and commerce of their respective nations. It has been admitted by the Secretary of State for Foreign Affairs that our Consular Service is defective in connection with Persia. Last year the noble Lord said— I am bound to say that my impression is that the Consular Service has for some years past been undermanned in point of numbers, and also insufficiently equipped in point of that special knowledge which members of the Consular Service in remote countries like Persia should possess. And he added— I hope that before long I shall be able to announce that we have chosen means for giving our Consular representatives in Persia that special knowledge which, under the present system, they have, perhaps, not sufficient opportunities of acquiring. I shall be glad if the noble Lord can state to us what arrangements have been made to secure that object. We were told only last year in regard to the French Congo, where important British commercial interests were threatened, that this country had only one single Consul in that country, which is larger than France; and I want to know whether that has been remedied. Turning to the Colonies, we find that whilst foreign nations have got Consuls in all the British Colonies promoting the trade interests of their respective countries, we alone have no Consular representatives in the shape of trade agents in any single British Colony to further the commercial interests of the mother country. I learned only the other day from a Canadian friend that, through the active efforts of Belgian Consuls, two or three large bridge contracts had recently been given to Belgium, whereas we had no one on the ground to make similar efforts in behalf of British bridge builders. Again, I would give the House an example that I saw myself last year in Canada. I went to the town of Chicoutimi, where I found huge pulp mills recently erected which had been supplied with pulping machinery, turbines, electrical plant, and huge penstocks constructed of iron and steel for securing water pressure for driving the works. I found, also, that the whole produce of that great pulp mill had been sold for five years ahead in London. Knowing that we had a rebate of one-third from the Canadian import duty, and that our ships were going out light to bring back cargoes of pulp, I naturally expected we should have had a share in that trade; I said to my Canadian friend— I hope the mother country got a share of the orders for the new plant. But he replied that— British manufacturers did not supply an ounce; they, in Canada, did not even know that we made such things in England. The fact is, he said, we had at least twenty commercial travellers from the United States of America seeking this business, and not one from England. I quote this as a striking example of the fact that our trade is placed at a disadvantage in having no trade agents at work in our interest the same as other countries have agents working in their interest, and also by the inactivity of our commercial travellers. I recognise that the Agent-General of Canada does what he can to bring about trade relations between Canadian and British business houses, but that is no excuse whatever for the continuance of the present system. We have a Government in power which professes to be concerned about our trade and commerce. Let them take steps to improve by reorganisation on proper lines, and by proper equipment, our Consular Service. I would like to ask the noble Lord whether His Majesty's Government have appointed three Consuls to go to the newly opened treaty ports in Manchuria? We learn that the United States of America have already appointed Consuls there, who are to be at their posts within six weeks. Is the British Government going to be behindhand, are we to have no British agents to look after British commerce as soon as these ports are open? I much regret that there is no reference whatever in the King's Speech as to whether or not the Government intend to give effect to the recommendations in the Report of the Committee on the Consular Service. I raise this as no Party matter. I should be abundantly gratified if the noble Lord is able to give us the fullest assurance that they will be given effect to at the earliest possible date. But at this juncture, when the whole attention of the nation is being devoted to our trade and commerce, I think a reference to it might well have been introduced into the King's Speech.

I turn to the second subject I ask the House to consider—viz., whether our commercial interests have not suffered through the neglect of the Government to vigorously promote and extend British treaty rights. Take an example, in the first place, from our Colonies. We were rejoiced to know that our great Dominion of Canada had made a reduction of one-third on their duties in favour of British goods; but is the country aware—is the hon. and gallant Member for Sheffield aware, that while Canada gives with one hand, she takes away with the other in the case of the iron and steel trade of this country, a trade with which the hon. and gallant Member for Sheffield is identified?

SIR HOWARD VINCENT (Sheffield, Central)

Not a bit of it.

* MR. JOSEPH WALTON

Evidently the hon. and gallant Member is not aware of the great extension of the bounty system in Canada which has taken place since last autumn, even since 8th May, a notable political date. What are the facts in regard to that bounty system, not only on the iron and steel manufactures of Canada, but upon the hen and steel manufactures from this country, which pay a high import duty in addition to the costs of freight and insurance from our ports to the ports over there? The Canadian Parliament has in the last session passed two new Bounty Bills under which they have taken power to give a bounty not exceeding seven dollars per ton on steel rails produced in Canada, and from three to four dollars per ton on structural iron and steel—joists, girders, channels, bars, and plates.

SIR HOWARD VINCENT

On a point of order, Mr. Speaker, I ask is this pertinent to the Consular Service? The Motion refers to the inadequacy of the Consular Service, and I am not aware that this has anything to do with that subject.

* MR. JOSEPH WALTON

The second part of ray Motion is that "it is essential for the safeguarding and promotion of the commercial and political interests of the British Empire that adequate steps should be taken to maintain and extend our commercial treaty rights," and I take it that our commercial treaty rights are invaded by the bounty system. I specially notice with astonishment that no protest has been made by the Government or by their supporters, and especially in the numerous speeches delivered by the ox-Colonial Secretary, in condemnation of this extended system of bounties by which Canada is strangling our iron and steel industry. The right hon. Gentleman told us how he had condemned the strangling of the sugar trade of the West Indies by the Continental sugar bounties. Why do not he and his followers equally condemn the system of bounties so widely extended in Canada, and which is absolutely strangling our iron and steel trade? Is the hon. and gallant Member for Sheffield not aware that in the year ending the 30th June last, in addition to their protective duties, the Canadian Government gave in the shape of bounties $1,400,000 to Canadian iron and steel makers; and is he not aware that in the current year they are going to give them $2,000,000? I was told in Ottawa in October last that the new Canadian Railway from the Atlantic to the Pacific, the making of which was about to begin, would require 3,000,000 tons of steel rails, and that under the new system of bounties they did not expect to get a single rail from England; the whole would, they hoped, be made in Canada. Where is the prospect of the increase of trade in Canada from this country? While the Government have been hypocritically professing to be filled with concern about the trade of this country they have never uttered a word, nor has the ex-Colonial Secretary, who is misleading the nation, as to the true trade relations between this country and Canada.

Turning to another great question on which the Government have, in my opinion, failed to maintain and extend our just commercial treaty rights, let me instance the case of China, with its 400,000,000 of population. If that great country were to increase its trade to the same extent as the trade of Japan has been increased, it would be doing to-day seven times more oversea trade than it is now doing. For the five years ended 1901, the United States trebled their trade with China, whereas the trade of the United Kingdom fell 15½ per cent. In 1902 the trade of China increased £7,000,000 sterling. The noble Lord smiles; but how much of that £7,000,000 did we secure? We secured only £1,000,000 or 14 per cent., whereas our average previously of the entire trade of China had been 46 per cent. That shows how we are losing ground with regard to our trade with China. There is another point also. Take the shipping trade, upon which we so much depend for the continuance of our prosperity. The shipping trade during the ten years ended 1902, so far as China is concerned, went down 15½ per cent., whereas the trade of Germany during that period increased 8 per cent and the trade of Japan 12 per cent. To what causes may this falling off in British trade be attributed? I think I shall be able to show that it is largely due to the British Government failing to give the same vigorous support to British commercial interests in China as has been given by the Governments of competing nations.

Take the case of railways. China, the richest Empire on earth, is for the first time being supplied with a system of railways. The Government told us in this House with a great flourish of trumpets that British concessionnaires had got concessions for 2,800 miles of these railways. But not one single concession has yet been ratified, whereas Russia, France, Germany, Belgium and the United States are busily engaged in laying down railways in China. We opened China to trade; we fought at least two wars at great cost to keep it open, and yet when this unequalled and unparalleled opportunity of large and profitable trade with China has arisen, we have no share or part or lot in the matter. Yet the British Government says that they are concerned as to the position of our trade and commerce. What did the noble Lord the Secretary of State admit himself last year, as regarded the construction of railways. He said that he freely admitted that we had much ground for complaint regarding the manner in which the Chinese Government had dealt with applications for concessions, that the Government had found it necessary to make strong remonstrances to the Chinese Government on the subject, and that Sir Ernest Satow would return to China fully aware of the views of the Government and with instructions to support them energetically. That is an absolute confession on the part of the Government of the failure of their efforts in respect of British investors and British manufacturers having a fair share in the work of supplying China with a system of railways. But that is not the worst of the case, because in connection with a great majority of the railway concessions granted by China to foreign nations there is to be found inserted a clause under which it is stipulated that the whole of the railway material and rolling stock required is to be drawn exclusively from the countries of the respective concessionnaires to the absolute exclusion of British manufacturers. That, in my opinion, is a violation on the part of the Chinese Government of the most-favoured-nation clause contained in the Treaty of Tientsin. These railways have been constructed by foreign nations for the Chinese Government. They purport to be Chinese railways; the Chinese Government have a right under certain conditions to take them over; and I submit it is a violation of the most-favoured-nation clause that we should be deprived of all chance of having any part in the supply of railway material and rolling stock for these railways. I am bound to say that all the blame does not attach to His Majesty's. Government. Very great blame rests on the British syndicates who sought railway concessions and who, when they got them, failed to give effect to them. It is a disgrace to this country that whereas Belgian, French, American, and Russian investors found no difficulty whatever in raising the funds required to carry out their agreements with the Chinese Government, British subjects rest under the disgrace of having failed to fulfil their obligations. I think the British Government ought to try and encourage the entrance into the field of competition of other British investors, and that we should not hope too much from the existing syndicates.

Another important question, so far as British trade is concerned, is that some arrangement should be arrived at under which we shall enjoy equal rights in regard to railway rates over the Chinese railways with those enjoyed by the country constructing them. Lord Salisbury recognised the importance of this question, and gave instructions some years ago that this point should be very strongly pressed, and that some arrangement should be arrived at. The Russian Government in reply said, "Oh well, the railways are not yet built, and it will be soon enough to discuss the question of railway rates when they are." I should like to know from the noble Lord whether this important question is engaging the serious attention of His Majesty's Government.

* THE UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (Earl PERCY,) Kensington, S.

Preferential rates are prohibited by the Treaty of Tientsin.

* MR. JOSEPH WALTON

I should like the noble Lord to quote the clause which confirms that view. But we ought not to rest too much on the Treaty of Tientsin. It has been superseded by the recent treaty between His Majesty's Government and China, and by other treaties with other Powers. It would have been infinitely better if this particular clause had been brought forward and introduced definitely into the new treaty.

* EARL PERCY

There is no doubt whatever that preferential rates would be contrary to our most-favoured-nation rights under the Treaty of Tientsin, which has not been superseded by the recent commercial agreement.

* MR. JOSEPH WALTON

I should have imagined that a statesman of the experience of Lord Salisbury would not have thought it necessary to press this as a most important question if it had been already fully and satisfactorily secured by the Treaty of Tientsin. I have great doubt in my mind as to whether the explanation of the noble Lord will bear examination. I complain of the Government for having failed to arrange an equally satisfactory commercial treaty with China as has been concluded between the United States and China and Japan and China. Under our treaty with China one advantage is supposed to be the abolition of the Likin duties, but the Native Customs are continued not only on the coast but on the inland waterways and land trade routes in the interior of China. In the American treaty, however, these duties are limited to the ports and the land frontiers of China. It is perfectly true that in our treaty five new ports are to be opened, but four of these ports are conditional upon the treaty being accepted by all the other treaty Powers, and only one is conditional on the signing of the treaty. As regards our treaty commercial rights in Manchuria, all I will say is that while His Majesty's Government did not get a new treaty port in Manchuria, the United States succeeded in securing three, showing thereby that they regarded Manchuria as an integral part of the Chinese Empire. I should like to ask the noble Lord if he will tell us what Powers have assented to the British treaty; also whether the treaty came into force on the 1st January last, which was the date fixed. There are several provisions in that treaty which if brought into force would promote British trade and commerce. I should like to know whether the new rules relating to the inland waterways have come into force, and whether the five new treaty ports have been opened to trade, and, if not, when they will? Have the ports on the Yangtse River and West River been opened?

There is also another important question, and that is the grave and serious danger which now threatens British commercial interests in Manchuria. That great Province, with an area of 400,000 square miles and a population of 15,000,000, has great possibilities of expansion of trade. Last year its trade, although it has only one treaty port, was £6,000,000 sterling, of which the British Empire secured 42 per cent. Russia, on the other hand, did nil. British shipping was 175,000 tons, Russian shipping 1,200 only, and yet the Government now in power allowed Russia, with no trade interest whatever, through the treaty port of Niu-chwang, to assume absolute military and civil control of the port. At the present moment Russian officials are in control of the Customs House, and collect customs duties to the tune of 1,500,000 taels a year, which they do not hand over to the Chinese Government although those duties are the security for British bondholders. They simply pay them to the Russo-Chinese Bank and what becomes of them no one knows. They are now in actual military and civil occupation of the port of Niu-chwang. It is quite true that they undertook to evacuate it on 8th October last, but they are there still, and I want to know from the noble Lord what steps have been, or are going to be taken, in the interest of British commercial and trading rights, by the Government to restore to the British traders the rights they are entitled to. We have had given to the Chinese Government given in this House; given in the House of Lords; published in the Press; a multitude of assurances as to Russia's intentions in regard to the evacuation of Manchuria and Niu-chwang, but these assurances remain unfulfilled. Before going into that, I say that in our new treaty there is no proper provision for securing to us the most-favoured-nation clause. There is only a very shadowy provision that we shall participate in the most-favoured-nation tariffs, but when I turn to the Japanese treaty I find it is expressly stipulated— That the commerce rights and privileges of Japan shall not be placed at any disadvantage as compared with the commerce rights and privileges of any other Power. The Japanese Government safeguard to themselves in that explicit fashion every right that may hereafter be granted to the subjects of other countries. Our Government do nothing of the sort. I have the treaty here, and I ask the noble Lord to point to any one clause of it and show where British trade is protected in the same manner. This treaty is only another example of the slipshod manner in which our treaties are framed and worded.

Now I turn to the Manchurian question. In 1895 the Russian Government addressed a communication to the Japanese Government—and I would especially ask the attention of the noble Lord to this quotation—in the following terms— The Imperial Russian Government having examined the terms of peace demanded of China by Japan consider that the contemplated possession of the Liau-tung peninsula by Japan will not only constitute a constant menace to the capital of China, but will also render the independence of Korea illusory and thus jeopardise the permanent peace of the Far East. Accordingly the Imperial Government, in a spirit of cordial friendship for Japan, hereby counsel the Government of the Emperor of Japan to renounce the definitive possession of the Liautung peninsula. Then in 1898, in the Manchurian railway agreement between Japan and Russia, Russia says— This railway concession is never to be used as a pretext for encroachment on Chinese territory, nor to be allowed to interfere with Chinese authority or interests. Nothing could be more explicit than that. Then we come to 1902, and what is known as the Manchurian Convention, and then we have it stated that— Russia consents to the re-establishment of Chinese authority in Manchuria, which remains an integral portion of the Chinese Empire, and restores to China the right to exercise sovereign and administrative powers as before the occupation by Russian troops. I especially draw the noble Lord's attention to that. Russia, Sir!

* MR. SPEAKER

Order, order! I would point out to the hon. Member that though, as he is now speaking of the main question, he is entitled to refer to these matters, but his present observations are not pertinent to his Amendment, and the noble Lord will not be permitted to answer them when the Amendment has been put from the Chair.

* ME. JOSEPH WALTON

The point I was attempting to make, Sir, was that our trade interests were not being protected.

* MR. SPEAKER

The hon. Member appeared to have gone beyond that, and gone into the territorial question.

* MR. JOSEPH WALTON

I had no desire to transgress, and the question on this occasion is really this: Russia undertakes to restore to China the sovereign and administrative power in Manchuria, as before the occupation by Russian troops, my point being that unless the sovereignty of Manchuria is restored to China, our treaty rights will not be protected. But we had some assurances also I in regard to the evacuation by Russia of Manchuria. On 30th April Lord Cranborne announced in this House of Commons— That the Russian Government disclaim all intention of seeking for exclusive privileges in Manchuria or departing from the assurances given in respect of that province. And then again, on the 11th of May, in reply to a Question I put to the noble Lord in this House he told us— In reply to independent friendly communications which during the last few days have been addressed to the Russian Government by the Government of the United States and of His Majesty, the Russian Government have intimated that they adhere to the engagements into which they have entered to evacuate Manchuria; though the evacuation has been temporarily delayed, I do not desire to enter into any territorial question in China, because we have no territorial questions there. All we desire, in common with the United States of America and other nations, is to maintain the integrity of China and equal opportunity for all nations to trade there. What I would ask the noble Lord to do is to give the House some proof that the Government have not been unmindful of our great commercial interests in that great Empire. It seems to me in the present deplorable condition of affairs in the Far East there should be some mediation by Powers like ourselves and America to press upon Russia the necessity of observing her pledges with regard to Manchuria, and thus avert war. On the Government at the present moment rests the most supreme responsibility, and the eyes of the whole of the civilised world are upon them as to the action they take.

But it is not only with regard to China that we have to complain. Take the treaty with Persia last year; was a more slipshod treaty ever signed? It was presented to us with only the signature of Mr. Naus, the Belgian head of Customs, on behalf of the Shah of Persia. What I complain of is that this Government, which claims to have such a deep interest in upholding and promoting the prosperity of the trade and commerce of this country, actually sanctioned a treaty with Persia which gave Russia great preferences over this country. Under the Treaty of Turkomanchai of 1828, we had equal rights and privileges, 5 per cent. ad valorem. Under the treaty of last year that 5 per cent. was raised to 100 per cent. in the case of tea and 8 per cent. in the case of cotton, while the duty on Russian petroleum has been reduced from 5 per cent. to 3 per cent. In ten years ending 1901, Russian trade with Persia increased 125 per cent. while for the same period British trade declined 33 per cent.

Now, let me turn to the question of British treaty rights with Madagascar. No one rejoices more than I do at the establishment of the entente cordiale between the great French speaking nation and ourselves. What are the facts in regard to British trade with Madagascar? Formerly we had 95 per cent. of the trade; now we have 5 per cent., and the falling off is due to the absolute surrender by the Government of British commercial treaty rights with Madagascar. Moreover, our trade has been curtailed in Tunis, and I say that in view of the present friendly relations between the two countries, His Majesty's Government will be failing in their duty towards the trade and commerce of the kingdom if they do not make vigorous efforts to secure better treatment for us. Turning to the West Coast of Africa, I submit that the Government have failed to uphold the rights and interests of British traders in the Congo—especially the French Congo. At a time when it is said that our trade is going to the dogs, I suggest that the measures I have indicated—the reorganisation of the Consular Service, the making of it more effective for the promotion of British trade, and the maintenance and extension of our just commercial treaty rights all the world over—are practical means for increasing the prosperity of British trade, and I hope that the noble Lord will be able to give us satisfactory assurances on these matters. If he would assure us that, instead of asking for a loaded revolver with which to enter upon a fiscal war with the whole universe, the Foreign Secretary will devote his earnest attention to remedying the defects I have pointed out, he would secure much more practical benefit to British trade than by any illusory schemes of fiscal retaliation. The question of British trade and commerce is not a Party question, for surely Members on both sides and their constituents are equally interested in upholding and extending the prosperity of the trade and commerce of the country. I beg to move.

MR. RIGG (Westmoreland, Appleby)

formally seconded the Amendment.

Amendment proposed at the end of the Question to add the words— 'And we humbly represent to Your Majesty that it is essential for the safeguarding and promotion of the commercial and political interests of the British Empire that adequate steps should be taken to maintain and extend our commercial treaty rights, and that the Consular Service should be reorganised and strengthened on lines calculated to make it more effective for the promotion of the trade of the British Empire.'"—(Mr. Joseph Walton.)

Question proposed, "That those words be there added."

* EARL PERCY

The hon. Member has dwelt with great insistence—and with a pessimism which is not frequently reflected in the speeches of his Party when dealing with our fiscal policy—on the importance of British trade, especially in China. We all recognise the great importance of our trade interests in China. It is almost a common-place. The loss of the Chinese market would be a severe blow to our present trade; the loss of the prospective markets of China would be a still more serious blow to our trade of the future. We all admit the premises of the hon. Gentleman, but when upon those premises he proceeds to build an argument implying that it is the duty of the British Government to maintain, and increase British trade, I must demur from his proposition. So long as we adhere to cur present fiscal policy, that is not only not the duty of the British Government, but it is beyond our power. Hitherto we have de- liberately adhered to our old system of drawing a clear line of demarcation between the province of the State and the province of the individual trader. We have deliberately adopted an attitude of laissez faire, or at least, of benevolent neutrality towards the efforts of British commercial enterprise. We altogether decline to use State credit for the purpose of financing or aiding industrial or commercial undertakings abroad; and we do not use our tariff for the purpose of imparting an artificial stimulus to our export trade. Foreign countries adopt the very opposite policy. They not only act as the fester-mothers of their own trade, but they might almost be said to be traders on their own account. By a great variety of expedients—the protection of the home market, bounties on exports, drawbacks, preferential railway rates, subsidies to shipping, and guaranteed loans for railway enterprise abroad—they do everything in their power to maintain their hold on existing markets, and to capture new ones; and they test the success of that policy, not by the burden of taxation which it throws upon their own subjects, but by the resultant increase of their export trade. It is well that we should understand one another. The right hon. Gentleman the Member for West Birmingham recently impressed upon an audience the necessity of learning to think Imperially. I think it is equally important that we should learn to think clearly. I should very much like to know what is the policy of the hon. Gentleman opposite. Does he desire that we should change our policy, and adopt that of foreign countries in these matters? If the Party opposite desire that, let them say so, and we shall be prepared to discuss it.

* MR. JOSEPH WALTON

Change your policy of "drift."

* EARL PERCY

If, however, they are perfectly satisfied with improved technical education, with more Charlottenburg schools, with a remodelled and extended Consular Service, then all I say is—thai, measures of this kind, however desirable, form but an insignificant part of the machinery on which our foreign competitors rely to take away our trade, and as complete remedies they would not be effective. Unless we are prepared to go very much further, what is the use of indulging in all this hollow rhetoric about the British Government not affording the same amount of support to their nationals that is afforded by foreign Governments to theirs? I entirely deny that the decline of British trade, such as it is, is to be traced to the causes to which the hon. Member refers. As I have said, so long as our present fiscal policy is adhered to, it is not the duty of the British Government to maintain and increase our commerce; that is the duty of British traders. The duty of the Government is to keep clear the avenues and to increase, if possible, the opportunities for commerce, and to see that the open door is really open, and not merely ajar.

* MR. JOSEPH WALTON

But you do not do it.

* EARL PERCY

It is by that test, and that test alone, that our policy must be judged. The hon. Member will forgive me if I do not follow him into such ancient history as that of our commercial treaty with Madagascar. That has been often discussed in this House, and I think everybody is perfectly aware of the circumstances of the case. When the French first went to Madagascar and established a Protectorate, we did obtain a definite assurance that they would continue to respect the treaty rights which we had obtained from the native Government. Subsequently, when they converted the protectorate into annexation, they held that by the act of annexation they had dispensed themselves from the necessity of acting any longer upon assurance. We did not hold that view at the time, and we not hold it now; we protested at the time, and we have continued to protest. I do not know that there is anything more to be said about it except that it is an experience by which we should do well to profit when we are engaged in negotiations of the same kind, so that, knowing the view the French Government take of the effect of annexation, we may avoid similar misunderstanding in the future.

Then the hon. Member passed from Madagascar to Persia, and criticised our commercial treaty. To begin with I should like to make two corrections. The hon. Member seemed to think that the mode in which the signatures were appended to the treaty constituted a departure from precedent. It did nothing of the kind. The document was signed in the French text by the English plenipotentiaries, and in the Persian text by the Persian plenipotentiaries. Then he said we had gratuitously prevented our Colonies from giving to the mother country preferential treatment. We did nothing of the kind. On the contrary, we took care to obtain a special assurance from the Persian Government that nothing in the treaty would prevent the Colonies from giving preferential treatment to the mother country.

* Ms. JOSEPH WALTON

That assurance is not in the treaty.

* EARL PERCY

No, and there is nothing in the treaty which binds the Persian Government regarding the preferences given by the colonies to the mother country.

* MR. JOSEPH WALTON

Oh yes, there is.

* EARL PERCY

At all events, the Persian Government takes a different view from the hon. Gentleman. Then he says that in that treaty we are worse off than we were under the old treaty. Yes, and I am very glad he has drawn attention to the fact; it is an admirable illustration of the value to us of the most-favoured-nation clause, which hon. Members opposite seem to regard as the sheet-anchor of our commercial prosperity. For something like half a century, up to last year, British trade in Persia depended exclusively on most-favoured-nation treatment under the Russian treaty. The time came when the Persian Government was in need of money, and wished to substitute a now commercial treaty for the old one, and the Russians in negotiating the new commercial treaty took very great care of their own interests and were not specially careful to safeguard the interests of Great Britain. No one can say that that was satisfactory to us, but the blame attaches to both Governments—Liberal as well as Conservative. I think the hon. Member might have given the present Government the credit of having been the first Government who have taken the trouble to put our commercial rights in Persia beyond doubt and secure for us not only the same rights as the Russian Government obtained, but also a definite security that the rate of duties cannot be again raised on British commerce without our consent. I am happy to inform the hon. Member that although, on the face of it, that that treaty did seem likely to have an injurious effect on British trade, it has not had that effect so far as we have been able to ascertain. I have got out the figures of the imports during the first quarters of 1902–3 and 1903–4. I give them in quantities and not in value. The Customs returns show that in the period March to June, 1903–4, the import of Russian tea increased by 398 maunds, while the import of tea from the British Empire increased by 92,855 maunds. The increase in cotton tissues from Russia was 140,288 maunds whilst the increase for the British Empire was 268, 738 maunds. So far as we are able to ascertain the facts the Treaty has not had any really serious effect in diminishing British exports to Persia. The hon. Member went on to discuss the position in China. He referred to our trade there, and he seemed to think that it had steadily and even rapidly diminished. I do not want to weary the House by quoting any more statistics, but I assure the House that that is not so, but British trade, on the contrary, is now steadily rising. There was a period just after the Boxer trouble when there was a certain diminution, but since then it has more than recovered its former level. The hon. Member dealt with the question of railway concessions. If we consider merely the mileage obtained by British as compared with foreign concessionaires, our record compares very favourably with theirs. It is quite true that there has been a regrettable delay in materialising those concessions, and so far as that is due to the action of the Chinese Government, we have lost no opportunity of urging them to accelerate the proceedings, and I am happy to say that, at the present moment the prospects of British railway enterprise in China are better than they have been for a long time past. In August last year an understanding was arrived at with Prince Ching under which the Pekin Syndicate's line north of the Yellow River is to have a Chinese Government guarantee, and the promise obtained by the British and China Corporation to construct a railway from Pukon opposite Nanking to join the Luhan line at Sinyang has been confirmed. We have also obtained a promise from the Chinese Government that whenever the time arrives when they wish to have a railway built from the Yangtze to Szechuan and they are not able to find the funds themselves they will apply to British capital. The hon. Member has alluded to the question of railway material and he seems to think that there are certain clauses in the contracts made by foreign companies with the Chinese Government compelling them to order all their railway material from a particular source, which would constitute a violation of the most-favoured-nation treatment. As far as we are aware, there is no clause of such a character in those contracts and we shall be glad if the hon. Member will give us any definite information on that point. He has also alluded to the commercial treaty signed by ourselves and China last year, and he is much aggrieved that we did not insert in that treaty a clause asserting our right to most-favoured-nation treatment. As I said before, there is no need for such a clause, because it does not supersede the Treaty of Tientsin, and under that treaty our right to the most-favoured-nation treatment is safeguarded. The new British commercial treaty came into operation in July last year, and not January of this year as the hon. Member said. Article VIII. will come into force when it has been accepted by the other Powers. With regard to treaty ports Kongmoon has been already opened by Imperial decree and has been a port of call ever since the West River was opened to steamers. Nanning Fu has also been opened by Imperial decree. It was discovered that steamers cannot easily reach Nanning Fu, and that as regards trade it is not the important place it was at onetime supposed to be. Therefore no steps have been taken either by the Chinese Government or our own Government to establish a Customs House or Consuls there. As regards ports of call on the West River eight ports have been opened for passenger traffic. Rules for inland navigation have been issued by Sir Robert Hart, and provisional regulations for carrying out the stipulations of the Treaty have been approved by the Chinese Foreign Office. There was no prevision in the Treaty for the creation of a conservancy at Canton, but a survey of the harbour has been carried out by a Chinese revenue steamer with a view to the removal of obstructions. At Whangpo a Board was to be formed. It has not, however, been constituted yet owing to the delay of the Chinese Government in appointing their representative. We have made frequent representations on the subject; and it will become necessary if the Chinese Government do not appoint their representative to proceed with the constitution of the Board without him. I do not know whether the hon. Member expects me this afternoon to go into a comparison of the advantages between the British treaty and the treaties made with the United States and Japan. I dispute entirely that the United States treaty is superior to ours. On the contrary, the United States treaty omits provisions of the utmost importance to British trade. As regards their two treaty ports, it is the intention of His Majesty's Government to appoint and send out Consuls to both Mukden and Antung.

The hon. Member asked me a general question with reference to the situation in Manchuria as bearing on the treaty rights of this country. I do not want to discuss that subject in detail for very obvious reasons, but I may say that no effective steps have been taken to carry out the evacuation of Manchuria since the House rose. After the notification by Admiral Alexieff in May that the province of Shingking was to be evacuated, as the hon. Gentleman is no doubt aware, Mukden was again reoccupied by Russian troops. As regards Niu-chwang the hon. Gentleman has correctly stated the position. The maritime Customs are still paid into the Russo-Chinese bank to the credit of the Russian Government. As regards the native Customs which also form part of the security for the Indemnity and were to be administered by the staff of the Inspector-General, we are informed that they have lately been placed under a Russian nominee and the representative of the Imperial maritime Customs has been removed. A Blue-book will shortly be published, which will deal with Manchuria alone, and which will contain a very full account of all the historical events and of our action in regard to them from the date of the Boxer rising. The hon. Member has referred to the assurances given by Russia. On the 8th January the latest of these assuraness was made to Lord Lansdowne in the following declaration by the Russian Government— In order to prevent all misunderstanding and misconstruction Russia considers it indispensable, independently of the conditions which will in the future definitely determine the character of her relations with Manchuria, to declare from this day forth that she has no intention whatever of placing any obstacle in the way of the continued enjoyment by foreign Powers of the rights acquired by them in virtue of treaties now in force. Count Benckendorff subsequently explained on 19th January, in answer to an inquiry by Lord Lansdowne, that this assurance meant that whatever changes might hereafter be introduced in the relations of Russia and Manchuria the Powers would preserve the rights which they enjoyed under existing treaties. I will only say one word in conclusion in answer to the hon. Gentleman's enquiries with regard to the Consular Service. The, recommendations of the Committee that sat last session to consider the new regulations to be drawn up for the Consular Service have been under the consideration of the Secretary of State, and the general principles of these recommendations have received ids approval. We hope very shortly to be able to make a more distinct statement on the subject. If these recommendations are carried out we hope that the Consular Service in the future will contain a larger element drawn from the commercial class. A certain number of vacancies will probably be set aside for candidates who have had a commercial training, and they will spend some time subsequent to their examination in the Intelligence Department of the Board of Trade. In regard to the Consular Trade Reports which the hon. Gentleman finds so unsatisfactory, a circular was issued to Consuls in the course of 1902 drawing attention to the point the hon. Gentleman has mentioned, that these Reports are too often overloaded with matter which is not properly commercial to the exclusion of matter which is of special interest to the mercantile community, and also defining the points on which information is required.

* MR. JOSEPH WALTON

asked leave I to withdraw the Amendment.

Amendment, by leave, withdrawn.

Main Question again proposed.