KING'S SPEECH (MOTION FOR AN ADDRESS).

HC Deb 09 February 1904 vol 129 cc735-807

[SIXTH DAY.]

Order read, for resuming adjourned debate on Amendment [8th February] to 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.)

Which Amendment was— At the end of the Question, to add the words, But it is our duty, however, humbly to represent to Your Majesty that our effective deliberation on the financial service of the year is impaired by conflicting declarations from Your Majesty's Ministers. We respectfully submit to Your Majesty the judgment of this House that the removal of protective duties has for more than half a century actively conduced to the vast extension of the trade and commerce of the realm and to the welfare of its population; and this House believes that, while the needs of social improvement are still manifold and urgent, any return to protective duties, more particularly when imposed on the food of the people, would be deeply injurious to our national strength, contentment, and well-being."—(Mr. John Morley.)

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

* MR. PIKE PEASE (Darlington)

Mr. Speaker, as regards the Amendment moved by the right hon. Gentleman opposite, in my humble opinion it is necessary to ask ourselves two questions—whether it will be absolutely necessary in this country to continue a policy absolutely different to every country on earth without exception, and what our answer should be to the colonies. I also ask hon. Members of this House whether they consider it possible that it might be in the interests of this country to put a small duty on manufactured goods if it seemed certain that there would be a transference of a large amount of trade from a foreign country to our own. I should just like to mention a point I referred to last night; it was in reference to a question of a very large steel order, an order for steel approximating £100,000. If a bounty fed country quoted £99,000, and an ironmaster in this country, whose works were not working full time, who owns limestone quarries, iron stone mines, blast furnaces and steel rolling mills quoted £100,000, does it not seem arguably reasonable that it would be wise for us to put 2 per cent, duty on the foreign material and transfer the order to this country? It is not only a question of the loss of that £1,000 to the individual, but it means labour to the extent of between £60,000 and £70,000 remaining in this country, and also means rates to be paid on that order instead of not being paid at all. We have received during the last two or three months in this country a very great array of figures, and last night I mentioned one or two. They were in reference to the income-tax, and I see in the report on the few remarks that I made in The Times there is a mistake in reference to these figures. I said that the hon. and learned Member opposite had made reference to the fact that we had increased the amount obtained from income-tax enormously during the last few years, and I think that is something which may be considered gratifying. At the same time the population of this country has increased about 1 per cent. per annum, or 10 per cent. for the last ten years. The income-tax returns showed an increase of about the same. At the same time during the last ten years, the income-tax returns of Germany show an increase of 25 per cent. The great question, however, is the future. Do Members of this House believe we have a serious aspect to look to in the future; are not all our difficulties with regard to foreign competition more likely to be increased in the future than decreased? It has been said many times that we are getting over the difficulties by changing our industries. I pointed out last night the very great difficulties there are with regard to changing industries. I have had the opportunity of mixing with a very large number of business men, and, before I came into this House, I had the opportunity of managing for many years blast furnace works of considerable size; and I can assure this House that the money is practically lost if an industry stops. Of course, hon. Gentlemen opposite say and know there is considerable amount of difference of opinion on this side of the House. It would be a pity if we had lazy uniformity of political opinion, but I think the right hon. Gentleman who leads on the opposite side of the House knows they have not that unanimity on that side.

It was said by my right hon. friend, who made a great speech last night, that protection was for the benefit of the producer at the expense of the consumer. In my opinion, there never was a more false statement made. An hon. Gentleman below me says it was the Government's opinion. I said a moment ago that we did not agree entirely on this side of the House, and I think the hon. Gentleman who mentioned this fact does not agree with his friends on a great many other matters. In regard to the question of benefiting the producer, the leading ironmaster in the North of England, Mr. Hugh Bell, who has written many letters to The Times, does not for a moment admit that the benefit will go to the producer. He has often said—I know him personally very well, and respect him—that protection would ruin the iron trade altogether. Therefore, I think the hon. Gentleman below me will agree with me when I say that there is a difference of opinion among many Members who do not agree with me. Lord Rosebery said the other day that protection meant no improvement of methods in this country, but I think his Lordship cannot have taken the trouble to go to the United States or Germany. The right hon. Gentleman opposite who spoke last night, spoke in regard to technical education, and I will admit that Germany is far ahead of us in regard to technique; but, at the same time, I think he will also admit that Germany is far ahead of us in regard to methods; and it is a very simple reason why. The reason is that Germany protects her industries. A great deal has been said during the last few months with regard to dumping. I say dumping has discouraged enterprise in this country. If two men go into partnership, and cannot see a market for the future, they are not likely to spend money in a large way on plant. If they spend a great deal of money over their plant, and put up the best inventions they can find, is it not natural they should wish some security for their market? But if some foreign countries can send goods into their market at a very much lower than cost price, there is not much encouragement for enterprise. I believe the enterprise of individuals—not municipal enterprise—is dying. The hon. Gentleman the Member for Gateshead spoke with regard to the dumping of coal, at Gateshead election, and, asked if ho were in favour of it, said yes, because it was in favour of the consumer. I think he would find no other miner in favour of the dumping of coal. Some people do not quite realise the importance of industries of this country to the coal industry. I believe it is true that one small blast furnace uses as much coal as a town of 50,000 inhabitants for household purposes.

Now I should like to say one word with regard to the question of wages. It has been said truly that the average wage of Germany is less than in England, and many men work longer hours, that also is true. But I cannot see that it can be argued that if you give an impetus to industries in this country that wages would fall. It is absolutely certain that they would rise; and it is perfectly certain that some of these industries which are at the present moment receding, would benefit. It is simply a question of supply and demand. It was said two years ago that one-third of the population was on the point of hunger. If that statement is true, anyone who has watched the terrible state of things in many parts of England, and especially in London, will believe me when I say it would not be wonderful at the present time if one-half were on the verge of hunger. We had yesterday a statement with regard to retaliation, and I for one, who am a follower of the right hon. Gentleman the Member for West Birmingham, would never be satisfied with a statement such as we had yesterday. It may be there are Members on this side of the House who are satisfied with retaliation as we understand it; but 90 per cent. of the commercial classes of this country are in favour of some fiscal reform of some kind; they are not entirely satisfied with our fiscal system as it is to-day. Among the Conservative and Unionist Party in this country I believe that five out of six are in favour of the proposals of the right hon. Gentleman the Member for West Birmingham. I do not mean that they are necessarily agreed with every point. I mean that they are anxious that some arrangement should be come to with our colonies. I do not personally believe that the British star is setting, and I do not believe we are descending into a fifth-rate Power, or that all industries are decaying, knowing as I do the enormous volume of our trade. I believe also it is quite impossible that Australia would leave us. Her monetary obligations are so great that it would be impossible for her to leave us if she wished. And at the present time in Australia there is a firm wish to bind us closer together. These views are held by a very large number of Liberals in this country. Lord Rosebery, in a speech at Leeds, said that, on the grounds of commercial interests alone, the question was worthy of consideration by our great commercial community. I do not think anyone can argue against that. I stated last night that the amount of money which came in from the Colonies during the last thirty years and from the Transvaal was between £1,000,000,000 and £1,500,000,000; and I think there are a great many people who do not realise the great possibilities of the Transvaal. A preference of 50 per cent. might give an enormous impetus to hundreds of trades in this country. It is said "What will you get in return?" and I must admit that is a difficult question; but anyone who knows the feeling of the colonies, in Cape Colony, Natal, and the Transvaal, knows this: they will not demand a "quid pro quo.

I should just like to say a word or two with regard to the corn tax. I was one who was always opposed to the corn tax. I voted for it because it was a war tax, but when the war was over I refused to vote for it. I went to the then Chancellor of the Exchequer and told him how pleased I was he was going to take it off. But at the present moment I think the question has changed altogether; and I think it is for the interests of this country for us to put a duty of 2s. on foreign corn coming into this country. I think I can give this House a remarkable fact with reference to this. The average taxation and rates on land in this country which grow a quarter of wheat is practically 2s.; and, therefore, at the present time we are giving America an advantage of 2s. a quarter on all corn that comes into this country againt the home producer. Now, in reference to that, of course it will be said that we propose giving a great benefit to Canada, and that is, I believe, absolutely true; and I believe it is in the interests of the country we should do so. I have had a conversation with a Canadian of some experience during the last two days, and I believe honestly there is no question this development will not take place in Canada unless some arrangement of this kind is made; and I anyone who listened to the speech the Prime Minister made to the deputation on the 16th May last, will realise what an important thing it is for us to develop Canada, if we can. We know the large area of land there is that could grow corn, and I believe hon. Members opposite who are keen on keeping up the Sinking Fund, must agree that no better plan could be arranged for carrying out such process. Canada has taken an interest in this question for a very long time. I remember when I first had the honour of being elected to this House, I put these proposals of Mr. Chamberlain in my election address; and I received a message of more or less congratulation from a Canadian in regard to that matter, showing how keen Canadians were at that time in reference to it. [An HON. MEMBER laughed.] The hon. Member laughs in regard to that, but I think it rather remarkable that such an interest should be taken in the election of an insignificant Member, and that the trouble should be taken in Canada to read his address. Mr. Gladstone said a long time ago that this question of the corn tax and of the price of bread was not so important as the question of having the money to buy the bread. I believe there is the chance of a very great development in Canada, Australia, and in the Transvaal.

There was one question, however, dealt with very ably last night, and that was the question of Canadian iron. It is a very difficult question. I have watched it for years, and I know, by the amount of bounty, that it will become a very much more serious question in the future. I cannot see that these proposals will make the matter any worse, and it is possible some arrangement may be come to. At the present time the amount of bounty paid to the Canadian producer allows him to sendiron into this country at a ridiculously low price, and, if transit were simpler, it could be sent at a price no producer in this country could possibly compete with. The other difficulty is the question of partly manufactured goods. This is a question very difficult to get over, but it is got over by every country in the world except ourselves. It is often said we are going back to protection, to large duties on corn; but we can only go back, I believe, by the will of the people; and I should be surprised to see within the next ten years a duty on corn beyond 2s. per quarter. I think people very rarely realise what a small amount ten per cent, is; if it were altogether paid by the consumer an article, instead of costing say 5s., would cost 5s. 6d.; but I do not think that of necessity we should pay the whole tax. The right hon. Gentleman opposite, speaking of the coal tax some months ago, said the incidence of the coal tax fell upon the miner; but I think in reference to this question he has stated many times that the tax entirely falls on the consumer. These two statements do not seem exactly parallel. The right hon. Gentleman, in moving his Amendment, referred to Mr. Cobden. Many of us who have studied, to a certain extent, Mr. Cobden, naturally admire him; but whether hon. Members opposite believe that he was altogether right or not, there is not one man in this country follows him in one point and that is the question of getting rid of our colonies. I am sure there is not a man in the House who would like to get rid of our colonies. I may quote the Psalmist who said "Blessed is the man who has his quiver full of them, for in time of trouble they will speak with the enemy in the gate." I believe that practically all the Members on this side of the House realise the necessity for some alteration in our fiscal system. [MAJOR SEELY (Isle of Wight): No, no.] I can only say the gallant Member cannot have had anything to do with business during the whole course of his career. Whether we shall be successful in regard to the policy I have attempted to advocate to-day I know not. It depends a great deal on the life of one man. I believe the time will come when we shall see some arrangement made with our colonies, and I believe they will be glad when they stretch forth that hand and have it grasped in return. I do not believe that this controversy is trivial, that it is just a little ripple in the sea; I believe it is a great wave washing against the shores of this country which will affect not only our prosperity and the prosperity of our colonies, but the prosperity for generations to come. I thank the House for the kind way in which they have listened to me.

SIR ROBERT REID (Dumfries Burghs)

said that the hon. Member who had just spoken referred to many matters in which he would not follow him. He thought, however, that the hon. Member represented the real movement for fiscal reform in this country at the present time. It was the hon. Gentleman and those who thought with him who were the real representatives of the agitation which was going on in the country. He did not think that the Government were the real representatives of the movement. They were pursuing a different course. He did not know whether the question would disunite the Party opposite; but it had caused a great deal of confusion not only in the Party opposite but also in the politics of the country, generally for which he thought the Government were blameworthy. The House of Commons was unable to discuss the matter or express an opinion on it, and therefore it was left for the speeches in the country. Those speeches, especially those of the right hon. Gentleman the Member for West Birmingham, began in a lower tone and ended in sheer protection. That was a position which the right hon. Gentleman was entitled to take up. He had severed himself from the Government and had become the advocate of the doctrine so long propounded by the right hon. Member for Sleaford and the hon. and gallant Member for Sheffield. But he thought it was the duty of the Government to be perfectly frank and explicit to the House on this occasion. It would not be fair for any Government to try and ride two horses at the same time, as some of the Ministers appeared to have been doing during the recess.

The remarkable speech delivered by the President of the Board of Trade on the previous day was a perfectly candid speech although some parts of it were somewhat indefinite, but it was to be observed that when the right hon. Gentleman the Member for West Bristol gave his interpretation of the contents of the speech there was marked dissent from members of the Treasury Bench to the speech as interpreted by the right hon. Gentleman. The House was, therefore, entitled to ask for information in the course of the debate as to whether or not that speech as interpreted by the right hon. Member for Bristol was the speech of the Government as a Government. That was a very important matter upon which the House ought to know where it stood. They might rely on one thing, and that was that the Government policy excluded any tax on food except for the purposes of revenue [Mr. GERALD BAL-FOUR assented by nodding his head], and they might rely on this, that the system of free imports was to be continued unless temporary exceptions were made for the purpose of retaliation merely. Were they safe in concluding that the Government as a Government were entirely opposed to protective duties, that was to say, duties the effect of which was to tax the consumer for the benefit of the producer and to keep the home market clear for our own manufacturers. Lastly, could they feel quite confident that, so far as the Government were concerned, they had heard the last of colonial preference. If those questions could be answered in the send that the right hon. Member for West Bristol thought they were answered by the President of the Board of Trade, the controversy that had raged in the country:' or the past three or four months might be very much curtailed. It would assume an entirely different complexion, in addition to which a great many interests whose hopes had been raised by expectations expressed by distinguished Gentlemen in the Government would suffer very bitter disappointment. If there was to be no taxation of food the agricultural interest, represented for so long with such consistency by the right hon. Member for Seaford, would lose all interest in the controversy except as British citizens at large. So also would be the case with the manufacturers. Every one knew that there had been a dead set made by many manufacturers in the country to secure protection for themselves, and they had had a foretaste of what would happen if they could obtain a preference for one industry or another. All that would have to be abandoned if the right hon. Member for West Bristol had placed a correct definition on the speech of the right hon. Gentleman the President of the Board of Trade. There was likely to be disappointment in other quarters which were more worthy of respect. Appeals had been made in the country, during the recess, to the patriotism of the people, who were asked to make sacrifices for the British Empire, and if colonial preference was to be given up there ceased to be any interest it that. If the interpretation of the right hon. Member for West Bristol was right, what was left? Nothing but the doctrine of retaliation. Retaliation to be used as a purely defensive measure; not for the purposes of obtaining revenue, retaining the home markets, or for the purpose of encouraging industries we had not or keeping those we had, but simply and purely for the purpose of furthering the policy of free trade.

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

And also to protect our industries from outrageous treatment on the part of foreign nations.

SIR ROBERT REID

said of course he included that. That was all that remained. The Government were pinned to that alone. As to that policy there were two questions he would like to ask in respect to retaliation. First of all it was to be employed really in cases of outrageous treatment of our industries by foreign countries. What was the meaning of unfair competition or outrageous treatment? What did we mean by it? Bounties? Were the bounties given by foreign countries to their manufactures or their exports unfair coin-petition? They had not been told and they did not know; but if the giving of bounties was outrageous treatment how were we going to deal with the case of Canada? Were the Colonies to be allowed to give bounties? Suppose a foreign nation were to make its workmen work for very long hours or for very low wages, or sent us prison-made goods, was that unfair competition? Or suppose they proposed to employ the inferior races, the Chinese for instance, who worked for very low terms and could live on less than what would supply men of our own race, was that unfair competition which would justify retaliation? Again, suppose a foreign country had protective tariffs which would enable cartels or syndicates to be formed, by means of the influence of which on foreign markets they were able to send goods at a price lower than the cost of manufacture in this country, was that unfair competition? That we knew was the case of the cartels of Germany. Would the existence of protective duties out of which by a natural growth these cartels or combinations arose and became dangerous, be considered as outrageous or unfair treatment, justifying the imposition of retaliatory duties? If so, the country would slide imperceptibly into protection, because it would be sufficient to invoke the fact that a foreign country had cheaper labour or protective duties to demand that we should have protection for our home industries. Retaliation was the back door to protection itself, and if the conditions under which retaliatory duties could be imposed were thought out, it would be seen that that was the case.

What was to be the constitutional machinery by which retaliation should be imposed? Were the Government to come to this House, state their case, and ask the sanction of Parliament to the imposition of duties? The President of the Board of Trade had not answered that point, but it really deserved attention. The right hon. Gentleman had stated that Parliament would be required to give its assent to each retaliatory duty, but he would not pledge himself that its assent would be required to every detail. But if a general Act was to be passed authorising the Executive Government, without consulting Parliament, to impose a duty on a particular article, it would be a subversion of the ancient constitutional privileges of Parliament and of the right of the House of Commons to control the taxation and expenditure of the country. There was no more venerable part of the British Constitution than the unfettered right of this House to determine all questions of the taxation of the subject, and he thought the President of the Board of Trade had not treated the question with the gravity which a matter of such moment deserved The right hon. Gentleman the Member for Montrose had indicated that he and others would be ready, in any particular case, to consider a retaliatory measure provided it were shown that there was outrageous treatment, that the reprisals would be effective, and that the reprisals would not do us more harm than good. Members need not have much fear of assenting to that proposition, because, whatever imaginary cases might be cited, he had not yet heard of a concrete case of the kind. Doubtless there were cases of harsh usage. He thought it very hard that high tariffs should be mposed by foreign countries, but, although we might complain, they were entitled to do as they liked just as we were entitled to do as we liked.

One other point: Was Imperial sentiment to be mingled with this question of fiscal reform? The right hon. Gentleman the Member for West Birmingham had appealed to his audience to support his policy in order to counteract the centrifugal tendencies of the Colonies; and the Prime Minister had stated that hereafter colon a preference might be a step cowards federalising the Empire. The actual facts of the situation should be faced. The Colonies would deal with this question as a matter of business, and not at all as a matter of sentiment. It was true that Canada had granted a preference, but at the Colonial Conference a memorandum was submitted in which her representatives expressed the hope and expectation that there would be a return in the form of preferences in this country. He did not in the least blame them for doing that: it was the duty of the Canadian Ministers to look after the commerce and welfare of Canada, and they did so from their protectionist point of view. But the duty of British Ministers, while they also had Imperial duties cast upon them, was to look after the commerce and welfare of the British people from the free trade point of view—if they were free-traders. If, however, they were not free-traders, let them not try to base their action on the footing of sentiment; let them base it on the ground that protection was a good thing if they thought so. What were the centrifugal tendencies for which this country was being asked to made so great a fiscal change? There might be centrifugal tendencies in South Africa, but they were not due to, nor could they be removed by, fiscal considerations. He believed there were no such tendencies in the rest of the self-governing Colonies except those which arose from distance, and the gradual growth of different types of character, the results of which lay in the impenetrable future. He agreed that more commerce with the Colonies would do good in binding the Empire together, but only if that commerce were so brought about as to be free from jealousies and heart burnings. It was not in the power of the Government to bind the Empire more closely by fiscal means: it must be done by the enterprise of persons engaged in commerce acting by themselves. It was a dangerous delusion to believe that it could be done in any other way, or to imagine that it was a wise policy to mingle sentiment, however lofty, with purely business matters. This Amendment was no doubt a vote of censure, but it was deserved because of the doubtful and conflicting attitudes which Ministers had maintained during the last three or four months, the discordant voices they had used upon this vital question, and the false hopes they had raised in many quarters.

* MR. HUNT (Shropshire, Ludlow)

said that, so far as he could understand, the right hon. Gentleman who opened the debate was unable to see how retaliatory tariffs would work, or what good they would do. He therefore desired to cite a case and show the remedy. Honolulu belonged to the Americans; no British ship was allowed to land or to take away from there goods or passengers. Did hon. Members opposite still contend that British trade was free? He be- lieved the Americans thought we were very foolish to render ourselves defenceless in the commercial struggle. If, however, we told them that unless they treated us differently in Honolulu we would mete out to them similar treatment in Fiji and elsewhere, they would thoroughly understand that, and either they would give us freedom to trade with Honolulu or we should get the trade from which the Americans would be excluded in our own islands. He knew a man, a stern and firm free-trader, who went on a long tour through America and the Colonies, and came back a strong believer in the scheme of the ex-Colonial Secretary. Travel was a wonderful thing for widening one's views, as actual contact with the outside world had a way of knocking the bottom out of a good many beautiful theoretical ideas. It was a curious fact that nearly all our working men, who were free-traders at home, became ardent protectionists directly they touched colonial soil. Was it not possible that some hon. Members opposite, if they took a tour through America and the Colonies, would also become firm believers in the policy of the ex-Colonial Secretary? The right hon. Gentleman the Member for Bristol, in the very fine speech he made last night, appeared to think that we should get such great advantages by the taking off of 2s. a quarter from American wheat. Did it not seem very unfortunate that it did not occur to him before, when he was Chancellor of the Exchequer, to put a 6s. tax on American wheat. He might then have had the pleasure of taking it off again, and he would have got for Great Britain three times the advantages that taking off 2s. would give. The scheme of the ex-Colonial Secretary appeared to him to be perfectly clear, and to plain people, with only ordinary knowledge of arithmetic, it seemed as if the household expenses of a working man would certainly not be more than they were now, if they were not less. The argument of the right hon. Gentleman that the reduction of the taxes proposed by the right hon. Gentleman the Member for West Birmingham would have little or no effect seemed rather a curious one. Might he not just as well argue, and with more justice, that because 1s. on the colonial as well as the foreign wheat did not increase the price of bread, that 2s. on the foreign wheat and not on the colonial wheat would have no more effect than that. If the right hon. Gentleman argued that a tax on an article put up the price, was it not fair to suppose if a tax was taken off that it would lower the price. Was it fair that even an ex-Chancellor of the Exchequer should have it both ways. He was very thankful that after so many years of fiscal helplessness the right hon. Gentleman should at last think it well to try if they could not protect themselves in however small a degree. The right hon. Gentleman on the other side of the House said that his idea of getting our commerce better was by a better industrial system. They could not, however, get through the foreign tariff walls, and even if they trained their hunters to jump very high, they would find that those tariff walls would go higher still. He did not see how any commercial system could possibly get over those walls.

With regard to the Chinese question in South Africa, it seemed to him to be a very simple one. The black men had always been able to work in the mines, and there were not enough of them. They should remember that it took one white man to look after seven Chinese, so that after all the importation of Chinese labour would do something for the white men in South Africa. He remembered well, nearly twenty years ago, staying in the same house with the late Lord Granville, and somehow they got on to the blessings of free trade, and he remembered venturing to advocate something the same as the right hon. Gentleman the Member for West Birmingham was advocating now. To judge from the expression of his host and his friends, they appeared to think that he must be an escaped lunatic. At that same hospitable board now the majority of the guests, as well as the host, would most probably be believers in the scheme of the right hon. Gentleman the Member for West Birmingham; so that even the believers in free imports must allow that this policy of self-preservation had made great strides in late years. It seemed to him that hon. and right hon. Gentlemen on the other side of the House were so afraid of injuring the working classes of this country if they did anything that might help the manufacturing and landowning classes, but they quire forgot that there were foreign manufacturers and foreign landowners, who, with the help of their own working classes, were sucking the life blood, not only our of our landowning and manufacturing classes, but out of our mechanic and labouring classes as well. By their tariff policy they had two markets to our one, and consequently could sell more articles, and therefore make cheaper. In this way they were flooding our only market at home, ruining English manufactures, and taking the wages out of the pockets of British working men. Trades union leaders, too, appeared to be incapable of understanding that their members required protection from foreign manufacturers as well as from those at horn. Take the effect of the free importation of broken stones, as stated in the Government Blue-books. In 1902 British labourers lost in wages from the free importation of stones from four countries the sum of £234,003. It was not disputed at the Shropshire Board of Agriculture meeting the other day that land had gone down in value £1,000,000,000, that occupiers' capital had been reduced by £200,000,000, and that about half the working agricultural population had disappeared from the land. Was that good for the country towns, or good for the manhood of the people? As far as farmers were concerned agricultural Members would be quite as safe with the advance guard of the right hon. Gentleman the Member for West Birmingham as they were with the main body under the Prime Minister.

It was hardly possible that under the late Colonial Secretary's scheme the increase in the price of a four pound loaf could be more than one-third of a farthing, so that the Liberals who went round with a big and a little loaf, telling people that if the Unionists got in that their poor little children would starve, were talking something worse than nonsense. It might be smart Party politics to try to humbug the working classes, and prevent, them from inquiring into the great fiscal question, but surely it was not playing the game from a patriotic point of view. Even right hon. and hon. Gentlemen on the other side of the House must understand that the working man's weekly household expenses would not be any higher than they were under present conditions. Self-preservation was allowed to be the first law of nature, and was there very much difference between self-preservation and self-protection. A German Socialist Member, speaking a short time ago in the German Parliament, said, "For goodness sake don't irritate the British, or you will help Mr. Chamberlain." A German Minister quite lately refused to settle a commercial affair with Italy because, he said, they must have their hands free till they saw what Great Britain was going to do, and that his opinion was that the right hon. Gentleman the Member for West Birmingham would get his way because his policy was undoubtedly the best for the British Empire. In America the other day, at a meeting of the leaders of commerce, it was strongly urged that America ought at once to offer Canada the best possible commercial terms before the patriotism of the right hon. Gentleman the Member for West Birmingham had time to bind her commercially to the British Empire for ever. Practically all the rest of the civilised nations believed in preserving their own industries. Were the small and decreasing number of free importers in these islands quite sure that they were the only wise ones. "Hope springs eternal in the human breast." In the policy of the ex-Colonial Secretary there was hope, hope for these islands, hope for the colonies. There was also hope for every working son and daughter of the Empire, hope, and good hope, that old-age pensions might be found for those who had done their work in this country. But there was no hope, none for their policy, except for the lotus eaters, who wanted to sleep, and for the foreign members of the Cobden Club. How was it that these hon. and right hon. Gentlemen on the other side could not understand? Was it that their policy was so poor and so stagnant, so unlike what should be the policy of a great progressive Party, that they were afraid to change even after fifty years? Were they so tied hand and foot by fossilised theories of more than half-a-century ago that they would not even allow themselves to try to understand; or could it be that the spirit of the mighty Cobden had heard in some far-off star that his prophecies had been proved to be utterly false, that his policy had been challenged, and that his spirit had come back to hypnotise and mesmerise their judgment, and mesmerising their brains. In conclusion, might he remind them of an ancient prophecy that did come true? Seated under one of England's mighty oaks rested the Chief of the Druids, and to him came Boadicea, Britain's warrior Queen, bleeding from the Roman rods. The Druid, after foretelling the utter ruin and destruction of the Roman empire, prophesied that— Then the progeny that springs From the forests of our land, Clad with thunder, armed with wings, Shall a wider world command, Regions Caesar never knew Thy posterity shall sway Those regions, that inheritance, was ours to-day, won in bygone years by the courage and endurance of our gallant grandsires. The sons and daughters of Britain in those vast continents had, through their representatives and the ex-Colonial Secretary, asked us whether we could not find a way of uniting the British Empire commercially as well as by ties of sympathy. This might be the last time they would have a chance of deciding it. What would future generations say of the present leaders of the people if they allowed the inhabitants of these islands to lose their great inheritance, frightened by the bogey of the big loaf, and coerced by the pro-Boer and the Little Englander?

* SIR. HENRY FOWLER (Wolverhampton, E.)

After the interesting speech to which we have just listened I am sorry that in the flattering tale of hope which the hon. Member has given us he has not left one solitary ray for those who sit on this side of the House. Our doom is already fixed and our end is certain. But I was somewhat pleased to hear somebody standing up for the ex-Colonial Secretary. I felt that after last night the ex-Colonial Secretary had been apparently—I use that word advisedly —deserted by some whom he might have regarded as his friends; and I wondered whether that speech, to which we listened with so much interest, would have been delivered if he had been sitting in his accustomed place, and I wondered still more what the reply would have been, and what criticism he would have passed on that speech. But I would like, before I go more generally into the whole question, to say one word with reference to what I think of the comments of the right hon. Gentleman the Member for West Bristol upon my right hon. friend the Member for the Montrose Burghs. He took exception to his having refused the suggestion which had been made some few days ago. The right hon. Gentleman complained that we had inexplicably mixed up this Amendment with a question of confidence in the Ministry. Now, who was the cause of that? Who propounded the doctrine last year—or rather who announced the decision that there should be no discussion on this question except in the shape of a vote of censure? We understood the reason perfectly well. If there had been a vote of censure proposed last year before Parliament broke up, if we had had no statistics presented to us, and if the authors of the great change had not announced their rival policies, we should have been challenged at once with the statement that we did not know anything of what they meant to propose, and that we were simply censuring the Government without having a single fact before us on which to justify that censure. But in this session we are in a totally different position. We have had all the statistics, the Board of Trade Report on the celebrated inquiry. We have your two policies, or your policy —I do not know whether to call it in the singular or the plural number. We have had two policies brought before us. We have had Cabinet divisions. We have had the Cabinet broken up, and perhaps I may say in passing that, at all events so far as the House of Commons is concerned, we have had no statement made to us of the reason why so many Cabinet Ministers—four of the first rank and highest ability—have left His Majesty's Government. I have no doubt that omission will be rectified before this debate is over, but whatever may have appeared in the public Press, whatever may have appeared in letters, statements, or speeches, I take it to be undoubted that hitherto the faithfully followed constitutional rule has been that no Cabinet Minister should resign without telling Parliament why he had done so, and also giving an opportunity to justify the reasons which compelled him to resign.

Now irrespective of that, we have had the country, during last autumn. I may say convulsed with an unprecedented controversy. There has been no parallel to this controversy which has so affected every section of the community—I might almost say every man in the land—at all events for two generations. We have had a policy propounded by the Member for West Birmingham, and we have had a policy propounded at different times and under different circumstances by the Prime Minister. The right hon. Gentleman the Member for Bristol has come to the rescue, and the situation, he says, is a political situation. I do not want to use a phrase which has been used already in this debate, and to say that, it is a paltry manœuvre, but it is a very clever manœuvre. It is a clever manœuvre for the moment to pass over certain essential features which I shall try to show to the House are inseparable from the Government policy in order to secure what the right hon. Gentleman himself characterised as a mere Party division. The right hon. Gentleman, in his speech, after criticising the wording of my right hon. friend's Amendment, admitted that there had been conflicting declarations from His Majesty's Ministers, which, after all, is just the foundation of our complaint against those Ministers. Purged as they have been, they are still not agreed. The right hon. Gentleman went further. He not only admitted that, but he admitted that there were a great many just now who agreed with the right hon. Gentleman the Member for West Birmingham who ought to have followed him into the wilderness and with his self-denial preached the doctrine which he had propounded to the country. Then having clearly shown his complete dissent from ail the proceedings and policy which have been propounded in Birmingham and elsewhere, he went through the speech of the right hon. Gentleman the President of the Board of Trade, and extracted from that speech several distinct statements. He dealt with the proposals of the Member for West Birmingham as opposed by the President of the Board of Trade item by item. Colonial preference, he said, had been abandoned, taxation of food was dismissed; the 10 per cent. duty was also sent into limbo. The only policy that remained was retaliation, to which the Member for West Bristol himself had never objected. He went so far as to say that the result of the speech which we heard last night was a pledge—a definite pledge—on the if they won at the general election—even if they obtained a majority—they would not be entitled to carry out a policy of colonial preference.

Well, what has all the talk been about? Colonial preference is the foundation of the whole scheme. That has been trumpeted from every platform. That has been advocated by every mode of illustration and every kind of argument. The Empire according to the Birmingham programme is dropping to pieces. We have arrived face to face with a gigantic calamity. The unity of the Empire is being detroyed; and unless it is remedied at once, then that great catastrophe, which was prognosticated a hundred years ago by Cowper, in the poem read by the hon. Member about Boadicea and the Druid under the Oak—that prophecy is about to be fulfilled! But the right hon. Gentleman went a little further. He would not have been quite true to his Party if he had not taken another step; he said that there was another reason, that there was another flag to be waved—something above and beyond all fiscal questions, all commercial questions. He said that he would not, under any circumstances—he swept the whole political horizon—desire to replace His Majesty's Government by the right hon. Gentlemen opposite. [An HON. MEMBER on the MINISTERIAL Benches: Hear, hear!] I am delighted to hear that cheer, but it is rather a cheap sneer under all the circumstances of the case to say that among all the subjects of His Majesty in either House of Parliament there is nobody capable of administering the affairs of the country; nobody who could carry on either its home or domestic policy, and that like a great general—someone at the time of a revolution who was constituted a Dictator—those Gentle- men, Gentlemen on the Treasury Bench, and they alone, can stand between this British Empire and its utter downfall. That, however, we expect; but I am sorry that the right hon. Gentleman should so openly and so unqualifiedly have put his Party above his country. Well, it is good Party fighting; that I admit. But I have to say a word on the conclusions at which the right hon. Gentleman has arrived, and upon the history on which those conclusions are based. If we accept what would satisfy him, the assurance of the President of the Board of Trade, as the very last word upon the Government policy, we should confuse our intellects and obliterate all our memories. What were the resignations for? Why did they resign? Three distinguished men who were Members of this House expressed their intention, their willingness, to support a retaliatory policy to which they made no objection. Why did they resign? What did they go out for? I will ask the House to consider a few dates on that transaction, in order that we may show whether there is, or ever has been, any real or substantial difference between the policy of the Prime Minister, as propounded by the President of the Board of Trade, and the policy of the right hon. Member for West Birmingham. No information has been given to us in this House, and we must piece it up from the Press, and from what we have picked up from some of the speeches which have been made. The fact seems to be that there was a considerable difference of opinion from the time of the Budget, and the Cabinet was on the point of breaking up in the month of April on the question of free trade and protection. On the last day of last session two documents were placed before the Cabinet. The noble Lord the Member for Ealing, whom I am glad to see in his place, and who I hope will take an early opportunity of addressing the House, said— On the last day of the session the Cabinet met, and we had before us two documents—a pamphlet entitled 'Insular Free Trade,' and another document containing the proposals of the Prime Minister, which he wished officially to put forward in the name of the Government. And' says the noble Lord— Preferential tariffs and taxation of food were included in that programme. Last night we were told that that was not the policy of the Government; that it was not in their programme. Well, the noble Lord said that in the discussion they differed. That was natural enough; the Cabinet differed; and they accepted the first pamphlet on "Insular Free Trade." There was nothing to object to in the circulation of that clever and ingenious document— But we differed as to the second. The discussion was adjourned, and on the 14th September the discussion was resumed. Therefore we may gather from that that between the two dates the Cabinet did not meet again to discuss the question. But in the interval an interesting correspondence took place. On 9th September the right hon. Gentleman the Member for West Birmingham wrote his celebrated letter to the Prime Minister, and it was written in contemplation of the Cabinet that was to take place on the 14th. The right hon. Gentleman with great frankness—for he is always frank—and great clearness, put before the Prime Minister the distinct difficulites which faced him with reference to some parts of his programme and also the policy which he thought the Government should pursue. And then he said— Accordingly I suggest. —Suggestion conies from Birmingham— That you should limit the present policy of the Government to the assertion of our freedom in the case of all commercial relations with foreign countries, and that you should agree to my tendering my resignation of my present office to His Majesty, and devoting myself to the work of explaining and popularising both these principles of Imperial unity which my experience has convinced me are essential to our welfare and prosperity. Well, the Prime Minister did not reply until the 16th. But two ominous Cabinets intervened between these dates. I go back to the statement of the noble Lord. He says that when they met and when the Cabinet was over, at which they were unable to agree— The Duke of Devonshire, Mr. Ritchie and Lord Balfour of Burleigh and I met in my room. We fully discussed the situation as we understood it, and we were unanimously of opinion that we had no option but to resign. Well, those distinguished men did not resign at that time on retaliation. There was something much more serious than that which took them out of the Government. Well the next day they had another meeting and nothing came of that? We four met again, and as I was informed there was no change in the situation, I formally sent in my resignation. The right hon. Gentleman the Member for Croydon and the Secretary for Scotland did the same. Then after that break up of the Government—for it was a break up of the Government—on the 16th, and not till then, the Prime Minister answers the letter of the right hon. Gentleman the Member for West Birmingham. Everybody can see that, as is stated, the reply was a formal one, embodying the results of the conversations which had taken place in the meantime, and nothing new is added. "Agreeing as I do with you," says the Prime Minister, "that the time had come when a change should be made in the fiscal canons by which we should bind ourselves in our dealings with other countries, it seems paradoxical that you should leave the Cabinet at a time when others of my colleagues are leaving it who disagree on the very point in hand. It is astonishing that you, a protectionist, should leave the Cabinet when the free traders have left it! Then," says the Prime Minister, "if there ever has been any difference between us in connection with this matter, it has only been with regard to the practicability of a proposal which would seem to require on the part of the Colonies a limitation in the all-round development of the protective policy, and on the part of this country the establishment of a preference in favour of imported Colonial products. On the first of these requirements I say nothing; but if the second involves, as it certainly does, taxation, however light, upon foodstuffs, I am convinced with you that public opinion is not yet ripe." This, mind you, is a great national policy, involving the destruction of a system which has been in force in this country, accepted by Parliament, by general elections, by popular opinion, and ratified by the unparalleled prosperity which has extended over half a century, and this question is to be dealt with as if it were some trumpery Departmental Bill, which at the end of the session is described as uncontroversial; as if it were a matter for educating the general public to approach without shying. When Sir B. Peel came to the conclusion, in a protectionist Cabinet, that it was in the interests and for the salvation of the country that the protectionist policy should cease, he told his colleagues so, and he had only three men in that Cabinet who supported him. They were Lord Aberdeen, Sir James Graham, and the late Lord Herbert of Lea. The rest of the Cabinet were against him, and they did as Cabinets have done before, I suppose, and will do again—they asked for further time to consider and to inquire. That inquiry went on; a certain interval elapsed, and when the Cabinet met again the numbers had rather changed. A considerable number had come round to Sir R. Peel; but in the end two members of the Cabinet—one of them a Minister of the highest rank, the late Lord Derby—declined to assent to the proposal. What did Sir R. Peel do? He felt at once that he could not propose to Parliament a policy in those circumstances, as he had not the unanimous support of the Cabinet; and he resigned. The Queer sent for Lord John Russell, who tried to form a Cabinet. He found, however, that he was incapable of forming a Government. I think he was about a fortnight in Irving to form a Government, and then gave it up in despair, and told the Queen that he could not form a Government. Sir Robert Peel went down to Windsor to resign the seals of his office. The first remark Her Majesty made to him was— I am not going to accept your resignation; I want you to continue in my service. She fold him what had passed between herself and Lord John. Russell, with which, to a certain extent, he was acquainted, and when the Queen suggested that he should consult his colleagues, he said he was prepared at once to take upon himself the responsibility of serving the Crown under these circumstances of difficulty, and he asked that he might kiss hands and go back to London as Prime Minister. What did he do when he came back? He called his colleagues together and that very evening he told them he was determined to propose his policy, whether his colleagues went with him or not, and that he should form a Government. That resulted in the resignation of Lord Derby and another member of the Cabinet. That was the way in which a great statesman approached a great controversy of great importance to the country. It showed, first, that he would not attempt to go on with a divided Cabinet, and, secondly, that the Opposition must have some opportunity of showing whether they could carry the reform. If they would not do that, then he was prepared to place the whole of his talents and abilities at the service of the Crown, whether his colleagues agreed with him or not. I think that is a precedent which might have been followed in the present situation. I will now go back to one or two more dates. The noble Lord and the right hon. Gentleman resigned. But what was the position of the Duke of Devonshire at that moment? On 1st October we had the great meeting at Sheffield——

SIR HOWARD VINCENT (Sheffield, Central)

"Hear, hear!"

* SIR HENRY FOWLER

Held, most appropriately, in the constituency of the hon. and gallant Member—Simionumentum quoeris circumspice. The Duke of Devonshire had been rather doubtful as to his position, still clinging to the possibility of a policy of retaliation and nothing else. But the next morning, when he read the Sheffield speech, he sent in his resignation. It was perfectly clear to him what the position of the Government was. Ho did not leave them on the ground of that which they now propound as their policy. He left them because he saw clearly and distinctly that that was but the commencement of a policy of protection, and that the Sheffield speech was a mere makeshift for electioneering and Party purposes, and to prevent, as the Prime Minister frankly said in his speech, the breaking-up of the great Unionist Party. I do not find fault with the Leader of that Party, I do not find fault with right hon. Gentlemen opposite, in doing what they could to prevent the breaking-up of their Party. I am one of those who believe that Parliamentary Government means Party Government, and that there is no greater danger and menace to the political system and constitution of this country than the formation of separate groups similar to those which exist in the French Chamber. The right hon. Gentleman did his best to prevent that catastrophe, and no one could find fault with him. But after that the mission began. The missionary went forth, and we had a succession of clever, able speeches, most popular, received with great enthusiasm, in large centres. I am not going to belittle the talents or the anilities of the right hon. Gentleman the Member for West Birmingham. But what was the Government doing all this time? Was there any voice ever went forth from them that they differed in any way from his policy, that they dissented from what he was doing? Was there anything even approaching to what the right hon. Gentleman himself said at Bristol, and to what he said last night? On the contrary. Let me recall to the memory of the House what the colleagues of the Prime Minister were doing all this time. Was there a speech made by a colleague of the Prime Minister in which they did not, while, of course, accepting the formula of freedom of negotiation"—that was the pet phrase then—express one after another their enthusiasm for the proposals of the Member for West Birmingham, and their intention to support them when it was safe to do so? I will say that among the most outspoken and straightforward of those utterances were those of the right hon. Gentleman the President of the Local Government Board. What did he say? He said— He had no difficulty or hesitation in stating his own views as a member of the Government. He accepted, endorsed, and followed the policy of the Prime Minister, but he did not pretend for one moment that he did not believe, as he had always believed, that ultimately the policy which Mr. Chamberlain had been advancing with such marvellous ability and such wonderful success would have to be adopted by the people of tins country. [HON. MEMBERS: "Hear, hear!"] Reconcile those cheers with the speech of last night. Let me take another very outspoken member of the Government, the Postmaster-General. He said— Supposing at the next general election Mr. Chamberlain's proposals carried the field? He should be prepared then, as he was now, to follow absolutely and implicitly, in all the general, well-established principles of the Party to which he belonged. But it would probably have to be not as a member of the Government but as a private Member, because he should have to reserve to himself the right to vote against any part of the proposals. There was another distinguished Member. I regard him, without excessive compliment, or in any way wishing to flatter, as among the most distinguished members of the present Government—a rising statesman of whom, I think, the House is proud, and for whom we may look forward to a brilliant future. I mean the noble Lord the Under Secretary for Foreign Affairs. What does he say? Two distinct"— an acute intellect the noble Lord has— but not incompatible policies"— why, the whole speech of the right hon. Gentlemen the Member for West Bristol is blown to the winds if you accept that description— had been put for ward by the Government and by Mr. Chamberlain, and Members of Parliament had been compelled to descend from the fence. There could be no doubt that when a general election came, he did not see why it should come for a long time"— it is a deep-rooted conviction of His Majesty's Ministers that a general election should not come for a long time— Mr. Chamberlain's policy would be completely realised, and that the question which would be put before the electorate would be the question of tariff reform. I think the noble Lord gave us a still more interesting, what shall I say, relation of his own personal opinion, worthy of note, especially after his interpolation last night about methods and object. The House will remember the implicit, the child-like confidence with which the noble Lord said he did "not ask to see the distant scene, one step enough for him." Last night he said he did not differ from the object, but from the methods. One step enough for him. Yes, bat he knew where he was starting from and where he was going to. He knew where that step was to end, that it was to be followed by other steps, and if he did not know that, if he did not mean that, he would not have taken even the first step. The policy was clear and distinct. I do not think any policy has been more clearly put forward in our time, not with standing the mystification and muddle with which it has been environed. The Government mean, if they can, to carry out the policy of the Member for West Birmingham. They believe it to be the best policy for the Government, they believe it to be the best policy for the country, and they believe it to be the best policy for the Conservative Party. I do not hear hon. Gentlemen opposite cheering that remark. A wonderful change has come over the scene. The ceaseless cheering with which the right hon. Gentleman the Member for West Birmingham has always been greeted in this House and out of it since these proposals were produced is now hushed into silence. Ah, there has been another mission abroad besides the West Birmingham mission. There has been the mission of the by-elections, and I know few sermons that have produced such marvellous results on the convictions, and no doubt on the votes, of hon. Gentleman opposite as that significant writing on the wall.

AN HON. MEMBER

Only one.

* SIR HENRY FOWLER

Only one! Twenty-six since the policy was propounded, and of those twenty-six, at the time of the general election, you had a majority of fourteen, and to-day we have a majority of two. That is a sound, straightforward fact not an illustration. And what is the policy of the Conservative Party in the provinces? What is the policy which is attempting to break up the Unionist Party, to capture the organisation of the Unionist Party? Why, to support the policy of the right hon. Gentleman the Member for West Birmingham. I doubt whether any Conservative candidate would have a chance in any strong Conservative constituency unless he was prepared to use that shibboleth. Does the right hon. Gentleman the President of the Local Government Board doubt that?

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. WALTER LONG, Bristol, S.)

I did not wish to interrupt the right hon. Gentleman. Perhaps I spoke too loudly to my right hon. friend. I was saying to him that the argument of the right hon. Gentleman appeared to be altogether inconsistent with what he had just said. The right hon. Gentleman said a moment ago that a change had come over the spirit of our dream, and that the policy of the Member for Birmingham was very unpopular with our friends. He now says the whole Conservative Party will have nothing but the right hon. Gentleman.

* SIR HENRY FOWLER

I am very glad of the interruption. I rather invited it. I never doubted the position of the Conservative Party. I said it was not popular with the country. That is the question which WE Way still got to settle. That is the one tribunal that you do not want to go to. That is the one thing you are united about beyond all question. When some one attacked Lord Melbourne on the distracted and divided councils of his Ministry and the position they were cutting in Parliament and in the country, and remonstrated with him upon them, he said— There is one question on which we are all united. He was asked what that was, and he replied— We do not mean to go out. Passing away from the history of the autumn, I come to what I must call the extraordinary speech of the President of the Board of Trade—a speech which won the vote and secured the approval of the right hon. Gentleman the Member for West Bristol. The right hon. Gentleman said that the President of the Board of Trade threw overboard the whole policy of the Member for West Birmingham. I do not think he did. He drew a very singular distinction as he went on between his individual opinion and his opinion as a member of the Government. We all respect him, and I have the profoundest respect for him personally and also on account of his talent. But I venture to say that the Minister of Commerce, the Minister of Trade in this country, so long as he holds the office of President of the Board of Trade, is not authorised to express in any shape or form in this House his individual opinion on matters so vitally affecting one trade. He must speak and can speak only as the Minister of Commerce. He was perfectly frank with the House, but when you strip from his statement last night what was the individual opinion to which he did not pledge the Government, and the opinion which he expressed as President of the Board of Trade, you will see there is a very wide distinction. Among the Members of the Government who have expressed their full concurrence, not only with the policy of the Member for West Birmingham, but with the policy of protection, unashamed and naked protection, is the Secretary to the Board of Trade. But where the President of the Board of Trade, as I think, is not entitled to have two separate opinions, one as President and one as an individual, I am quite sure that the Board of Trade ought not to speak with two voices. I am quite sure that the well-understood constitutional discipline of Government in this country does not leave it open to any Minister who is not a responsible member of the Cabinet to differ in this House from the policy of his chief.

I now come to the policy which the right hon. Gentleman put before the House—the policy of power to negotiate. Well, Sir, the Government have got that power; no Act of Parliament is necessary to give it to them. Are the legal advisers of the Crown going to bring in a Bill whereby it is to be enacted that His Majesty's Ministers are to have power to negotiate treaties with foreign countries? No. But you will observe that the point upon which you could not pin the President of the Board of Trade last night, was as to the power of Parliament in this matter. He said, of course, that no taxation should be imposed in this country without the consent of Parliament. That we know pretty well. Then he was asked whether his contention was that the consent of Parliament should be given in each individual case, and he was not at liberty to say—the Cabinet had not determined upon that. What does that amount to? Did it amount to a suggestion that the Crown might negotiate treaties involving taxation? I do not wish to carry that point any further than is fair and just to the right hon. Gentleman, but that point is not cleared up. Some responsible member of the Government must make it clear—some member of the Cabinet who has authority to say—what the Prime Minister really means about the power of Parliament. We have had a precedent quoted over and over again in these debates—the precedent of the French treaty. How was that done? Mr. Gladstone and Mr. Cobden negotiated with the French Government month after month, and all the way through it was understood that these negotiations were to be subject to the decision of Parliament. And what happened? On the first night of that session the representative of the Foreign Minister laid the treaty upon the Table of this House, and then Mr. Gladstone announced that he would take the earliest opportunity of asking the judgment of the House upon it, and that no further step could be taken—he would not bring in his Budget nor deal with taxation in any shape or form—until the House had discussed and sanctioned that Bill. What was the difficulty in doing that? The House, by an enormous majority, expressed their approval of that treaty, and gave the Crown full power to negotiate that specific treaty. The Crown had power to negotiate treaties, but Mr. Gladstone asked the House to sanction that specific arrangement, and the House did so. I am inclined to think there must be something behind—something which it is intended to remove from the purview and power of the House of Commons. So much for retaliation.

My right hon. friend the Member for Berwickshire asked in one of his trenchant speeches during the recess— On whom are you going to retaliate; on what are you going to retaliate; and how are going to retaliate? We have not had one line, one syllable, to illumine us on that question. They say, "We want to put down "dumping." You will be very clever if you can put down "dumping," if "dumping" means selling things below their cost price in competition with fair trade. There is a great deal of "dumping" done at home, and so there will be as long as men fail, as long as men have difficulties, as long as they have to go to their bankers, as long as they have to realise their stocks by selling them at far below cost. You cannot put a stop to an Englishman exporting, if he chooses to do so, goods at a less price than it cost him to make them, if he can get a market for them abroad. There is "dumping" which is very beneficial and ought not to be interfered with; there is "dumping" which supplies a large portion of our raw material. While I was in Scotland the other day I met a large manufacturer there, and was talking to him about "dumping." He told me this— I had an order to make some steel tubes for New York—for an American house. I could not tender for those tubes if I bought my steel either in England or in Scotland. I tried Germany and I could not do it there. I tried Sweden, and I could not do it there. As a last resort I tried America itself, and from New York I bought the steel ingots which were exported from New York and sent into Glasgow, and there I made my steel tubes. I employed my men, I employed my capital, and I sent the tubes out to Now York and was paid a price which was an ample remuneration to myself." That shows that "dumping" is not always a very profitable policy, even for those who indulge in it. The result of that "dumping" was to bring back to the United States, in competition with their own manufactures, manufactures that came from this country. There is another sort of dumping. We have not heard a word about it either from the Member for West Birmingham or from the Government. The Member for West Bristol did make some allusion to it last night. I mean the bounties paid by the Colonies —the bounties paid by Canada on the export of all iron manufactured goods to this country which comply with their conditions. Are our manufacturers to accept that? Is that in the scheme for having a better footing with the Colonies? Are we to accept "dumping" from them without any countervailing duty to meet it? A merchant in Wolverhampton who exports large quantities of goods to the East told me the other day that a complaint was made to him by one of the largest firms with whom he had been doing business for many years that he was not buying from them as he used to do. He said— No, I can buy cheaper elsewhere." He was asked, "Do you get the goods from Germany?" "No I do not." "Then you get them from the United States?" He said, "No, I do not." "If it is not an impertinent question, may I ask where you do get them from?" "Oh, yes; I get them from Canada. And buying cheaper from Canada he is able to send those goods to other parts of the world. I am not going to argue the right or wrong of any specific case. I want the House to see that this question of retaliation is surrounded with difficulties. I might almost quote Mr. Gladstone's words and say I believe it passes the wit of man to devise any scheme which will meet those difficulties, which will not involve this country in greater difficulties, in greater dangers, and in worse results to our trade. How are you going to retaliate on the United States? They send us about £20,000,000 a year of manufactured goods, and you send £20,000,000 to them, and all the rest is food and raw material. Retaliation to be effective must be based on the taxation of food; there is no help for it. Those who say they are strong opponents of any taxation on food and yet are prepared to accept the undefined, unexplained, and unexplainable theory of retaliation, I think are playing with double-edged tools.

What is the issue before this House? The right hon. Gentleman the Member for West Bristol, with his usual acuteness, desired to put us on to another scent. It was "confidence in the Government"; it was belief in the boundless wisdom of the Government; in the long experience of the Government; in every element that makes up a strong Administration. Upon those grounds we ought not to disturb the present position. My right hon. friend's Amendment is not a censure of the Government. There is not a line of censure of the Government. There is no saying what they ought to have done that they have not done, what they might have done and have not done, what they ought to have done but what they do not propose to do. What docs the Amendment say? It says this— We respectfully submit to Your Majesty the judgment of this House"— This House has a right to have judgment on a question of this kind. This House has a right to express its judgment on a great question of Imperial policy without restraint and without any other Party issue being drawn into it. We respectfully submit to Your Majesty the judgment of this House that the removal of protective duties has for more than half a century actively conduced to the vast extension of the trade and commerce of the realm and to the welfare of its population. Are you going to vote "No" to that? Does the right hon. Gentleman say "No" to that? The hon Member who has just spoken will say "No," and I have no doubt the Member for Sheffield will say "No," but the House of Commons would not say "No" to that. The right hon. Gentleman the Member for West Bristol says he must vote against that. What is the next point? This House believes that, while the needs of social improvement are still manifold and urgent, any return to protective duties, more particularly when imposed on the food of the people, would be deeply injurious to our national strength, contentment, and well-being. I am ready to go to the country on that issue. The man who votes against that Resolution as forming a part of his own judgment or the judgment of the House is committed to the policy of protection. He is committed to the policy of the Prime Minister of reversing, deleting, destroying, the fiscal policy that this country has possessed for the last two generations. That is the issue we challenge; that is the issue we shall take. I, Sir, for one, believing as I do in the gigantic consequences of this disaster; believing as I do in the terrible calamity in which protection would involve our trade, commerce, manufacturers, and the working classes of all shades and descriptions; knowing as I do that there is not a tittle of reliable evidence to show that any of these disasters have resulted from the adoption of free trade—I avow myself an anti-protectionist and a staunch and convinced free-trader.

* THE PARLIAMENTARY SECRETARY TO THE BOARD OF TRADE (Mr. BONAR LAW,) Glasgow, Blackfriars

The House will have noticed that there is a return on the Benches opposite to the tone which marked them on the first night of the session. It struck me that this tone bad rather disappeared after the debate on the War Amendment. It has now come back, and I for one do not regret it, for I think the jubilant tone adopted by the right hon. Gentleman will make our debates more interesting. The right hon. Gentleman incidentally used the phrase "wandering in the wilderness," and he applied it to us. It struck me while he was speaking, that perhaps hon. and right hon. Gentlemen opposite should not be too confident. I have seen them confident before, and the simile about the wilderness reminds me that the leader who conducted the people to the chosen land was not the leader who actually led them into it. There is another lesson for the rank and file of the Party opposite, which is, that of the vast host who went into the wilderness, a very small number indeed were permitted to do more than look upon the promised land.

Sir, this is a very big subject, and I scarcely know where to begin, and if I may judge from the experience of this debate it may be yet more difficult later on to know where to end. The right hon. Gentleman devoted a large pan of the introduction of his speech to an examination of the differences between members of the Cabinet and to the action of the Prime Minister in regard to them. The fact that he thought it necessary to do so is the best proof that the Party opposite made a great mistake in insisting on taking this debate when the Prime Minister could not be present, for no one except the Prime Minister can possibly answer the questions the right hon. Gentleman has raised.

Now, Sir, the right hon. Gentleman dealt largely with history. He alluded to what took place in Sir Robert Peel's Government, and he thought that we ought to have acted in the same way. But there is one marked distinction. Famine was abroad in the land at the time when Sir Robert Peel was Prime Minister, and he had to take action then and there. We have not as a Government to take any action now, and we do not intend to take any. We are putting a policy before the country, and it will be for the country to decide whether or not they accept it. But, interested as I was in the right hon. Gentleman's history, I was still more interested in the history of the right hon. Gentleman the Member for Montrose. He dealt with a period about which there has been much difference of opinion. The right hon. Gentleman brushed aside as absolutely irrelevant the prophecies which Cobden made in regard to this very question. I do not think they are very important, but I do not think they are irrelevant. What were those prophecies? The first was that the change would not injure the agriculture of this country. Does the right hon. Gentleman say that if, in the great meetings of people interested in agriculture which Cobden addressed, he had told them what its effect would be on agriculture that would have had no influence on their minds? Then take the other prophecy, which I think is more important —that every nation in the world would adopt our system in five years. It may be quite true that Cobden did not make that the staple of his speech, but it is to be assumed that since Cobden stated it he believed it, for I agree with the right hon. Gentleman that no one in English politics was ever more candid or straightforward than Cobden. If Cobden believed it, does the right hon. Gentleman or anyone say that it did not influence his mind as to the effect of the policy which he was putting before the country. If Cobden had foreseen that instead of our getting free access to every market in the world, all the great countries would be doing everything in their power to prevent our selling to them, does the right hon. Gentleman say that that would have had no influence on Cobden's mind?

There is another aspect of this question. When my right hon. friend the Member for West Birmingham gave his version of the history of the Corn Laws Agitation, a howl went up all over the country from those who felt that one of their most cherished superstitions was being taken from them. But what were the statements made by my right hon. Friend to which exception was taken? The first was that the Corn Laws agitation was not a working men's agitation, that the working men stood aloof from it. The second was that it was carried entirely by the manufacturing classes. The third was that it was carried by the manufacturing classes largely on account of their selfish interests. If we are told that that is a Birmingham heresy, then at all events Cobden was one of the heretics. The right hon. Gentleman the Member for Montrose is a great authority on history, especially the history of this period, and I certainly would not venture to put my opinion against his, least of all in the House of Commons, but when I find that the opinion expressed by the right hon. Gentleman as a politician is controverted by his opinion as a man of letters, I do not hesitate. I take again those three points. The first was that it was not a working men's agitation. The right hon. Gentleman himself says, in his "Life of Cobden," that it was Mr. Bonar Law. not the working classes in whom Cobden had confidence. More than that, Cobden wrote a letter—which is in the right hon. Gentleman's book—in which he charged the leaders of the working classes with having stood aloof from that movement.

MR. JOHN MORLEY (Montrose Burghs)

Why does the hon. Gentleman try to draw a distinction between what I say as a politician and what I have said as a man of letters? There is no difference whatever.

* MR. BONAR LAW

I certainly understood the right hon. Gentleman in his speech last night to controvert the statement to which I refer.

MR. JOHN MORLEY

Oh, no.

* MR. BONAR LAW

Well, if he did not others have done so. The next point was that the repeal of the Corn Laws was carried by the manufacturing classes. Again, in the "Life of Cobden" there is a letter in which he distinctly says that that was so. The third point was, that it was carried by the manufacturing classes on account of their own interests. Perhaps the House would like me to read the passage referring to that— I am afraid that most of us entered upon this struggle with the view that we had a distinct class interest in the question, and that we should carry it by a manifestation of our will against the will of other portions of the community. [Cries of "Go on."] I have not the book with me, but I saw nothing in it to contradict that. There is another sentence in Cobden's letter which is of interest. The right hon. Gentleman addressed an enthusiastic meeting at Manchester; the spirit of Cobden seemed to permeate the atmosphere, but I think if the right hon. Gentleman had chosen to read this letter it would have had a very damping effect on the enthusiasm of his audience. Let me read it— To confess my honest belief I regard a Manchester constituency now that its gross pocket question is settled as a very unsound and unsafe one. But there is another city of which Cobden spoke in a very different way; of it he said— I have always had the opinion that the social and political state of the town is far more healthy than that of Manchester. What was that other city? it was the city of Birmingham.

MR. JOHN MORLEY

Because Manchester had rejected Mr. Bright, and Birmingham had accepted him.

* MR. BONAR LAW

I think the words I have read go a little farther than a single election. Now I wish to draw another inference from the "Life of Cobden." I am called by the right hon. Gentleman a full Hedged protectionist. It is not the first time I have been so named. I remember that in the first debate on this subject I was spoken of not only as a protectionist, but as a Canadian protectionist, which is, I suppose, a very bad species. But if I am a protectionist I say that the word has not now the meaning which was attached to it sixty years ago. My right hon. friend the Member for West Bristol last night gave a definition in which I agree, for it exactly expresses the view which I have always held. He said that those are not protectionists whose aim is to increase the export trade of this country.

SIR M. HICKS BEACH (Bristol, W.)

No, I did not say that.

* MR. BONAR LAW

I alluded to the remark made by my right hon. friend that when the right hon. Gentleman the Member for West Birmingham began he was in favour of increasing our foreign trade, and that now he had ceased to be in favour of it. At all events, whatever may be the opinion of my right hon. friend, I say that as regards this question our aims are exactly the same as the aims of Cobden. [Cries of "Oh, oh!"] Yes, our aims are the same, and just as Cobden tried to carry out the policy he believed in, in the way best adapted to the existing conditions of the country at that time, so we are trying to carry out our aims in the best way adapted to the present conditions of the country. [An HON. MEMBER: Who are we?] I mean His Majesty's Government, and our aim is to increase and not restrict the foreign trade of this country. There is to my mind a great difference between the views held by Cobden and the views which are now put forward in his name. To judge by the speeches made by those who are opposed to any change in our fiscal system, their whole object appears to be that we ought to keep things cheap. Cobden did not say that, for he said deliberately— I do not aim at cheapness at all, but what I aim at is a free interchange of commodities. He did not say he aimed at cheapness for a very good reason. He was a business man and he knew, as every business man knows now, that the times when prices are lowest are the times when working men are worst off. [MINISTERIAL cries of "Hear, hear!" and OPPOSITION cries of "No, no!"] Then I invite hon. Gentlemen opposite to study the Blue-books upon this matter. What is it that makes prices low? It is bad trade. [OPPOSITION cries of "No, no!"] Bad trade makes the prices of all commodities low, and if my hon. friends opposite will study the charts in the Blue-book they will find that invariably when prices are lowest, employment is worst in this country. It is good trade that makes high prices, and if the sole object that we have in view is to have things always cheap, there is nothing easier. To keep prices always low all that is necessary is to keep trade always bad and to do hon. Gentlemen opposite justice when they have been in power they have generally succeeded in attaining that object. Cobden expressed his view in a parable when he asked his audience to suppose this country to be separated from the rest of the world, not by the ocean but by the River Thames, in the midst of which a powerful demon prevented trade between those on one side who had raw material and those on the other who required that material for manufactures. Cobden laid the demon in his day; but he has risen again. ["Hear, bear," and cries of "Name."] True, he allows the stream of commerce to flow in one direction; he allows buying, but prevents selling. The policy of the Prime Minister is to lay that demon once more, and to give us again free exchange, to make it possible to sell freely as well as to buy freely. We are told there is no need for this: have we not got the most-favoured-nation clause? In the debate on the Sugar Convention I ventured to say that we attached to that clause a superstitious value which it did not possess. We know more about it now, we know so much about it that no hon. Gentleman opposite has ventured to put that argument forward. I shall not therefore say anything more about it at present. But we are told that retaliation is useless, that tariff wars always fail. The right hon. Gentleman the Member for Berwick has made himself specially prominent in stating this view. I wonder where he got his information. In recent years there have been three tariff wars, and the most important of these has been between Germany and Russia. In that instance the issue was clear. Russia put on high duties, and Germany, having remonstrated in vain, engaged in a tariff war and got her way. German exports to Russia which between 1880 and 1892 fell from £10,000,000 to £6,000,000 sterling, in the years 1893 to 1901 rose again to £16,000,000. A tariff war is bad, costly, and only to be resorted to in the last extremity, but because a tariff war is costly is no reason why we should stand defenceless before armed nations. An ordinary war is also bad, but we should not therefore do away with our Navy and disband our Army. The right hon. Gentleman the Member for Montrose, in a speech delivered in Scotland, said— What would the Colonies have done—what would they do now, without the protection of our Fleets and our Army? I am glad the right hon. Gentleman realises the importance of that, and I hope when the time comes when he sits on these Benches, he will not forget the importance of our Army and Navy. I do not think anyone in this country needs to go to foreign countries at all to find what is the value of retaliation. We have had under our own eyes for the last six months an example of exactly what we mean. It is an object lesson so good that if the country could realise what it is, our case would be won from that one lesson alone. Canada gave a preference to this country which Germany resented. She showed that resentment not only by putting higher duties on Canadian imports, but by intimating that if other colonies followed the example of Canada it would be hardly possible to avoid retaliation not only against those colonies but against Great Britain as well. This was at the time when Germany, like the rest of the world, thought we should never use the power we possessed; but things have happened since, South Africa and New Zealand have given commercial preferences to the mother country, but there has been no carrying out of the threat of retaliation by Germany. Germany knows better now, and she has not only refrained from retaliation against the mother country, but she has not even put on retaliatory duties against those colonies.

And now I would like to say a word about a remark which fell from my right hon. friend the Member for West Bristol. I heard the right hon. Gentleman say that he attached no material value to the preference we received from Canada, Now I know something about the trade of Canada, and I beg to protest as a member of His Majesty's Government against that statement, and I say that it is not the view held cither by the Government or the people of this country. I wish to point out how that remark of the right hon. Gentleman contrasts with the main part of his speech. The right hon. Gentleman dwelt upon the importance of new foreign markets. How then can he face the chance of losing any outside market we still have? No one can deny that those preferences, although they may not give us as much as we should like, do give us something which is really of value to this country. This Canadian preference at least is worth something. Now what are the facts? In the years 1886 to 1896 our exports into Canada fell from £8,000,000 to £6,000,000, and during the same period exports from Germany to Canada rose to the extent of 300 per cent. ["Hear, hear" and cries of "Give figures."] The rise was from £400,000 to £1,200,000. The whole case was one of percentages. Our exports to Canada rose from £6,000,000 in 1896 to £10,000,000 in 1902. It was true German exports rose in the same period, but while our rise was to the extent of £4,000,000 the German rise was £1,100,000.

* SIR CHARLES DILKE (Gloucestershire, Forest of Dean)

What are the percentages before and after preference?

* SIR. M. HICKS BEACH

Perhaps as my hon. friend is alluding to what I said I may venture to state that what I said was this, not that our exports to Canada have not risen under preference,—certainly they did —although the extent to which they did rise was de-scribed by the right hon. Gentleman the Member for West Birmingham as altogether disappointing—but what I said was I that in spite of preference to us the trade between Canada and Germany, Canada and France, and Canada and the United States had risen more in proportion than the trade of the United Kingdom with Canada.

* MR. BONAR LAW

What the right hon. Gentleman says is perfectly true; it is exactly what I said to the House. Bur what the right hon. Gentlemen omitted to say, and what I pointed out is, that until we got the preference our trade was going down, and that after preference our trade continued to increase. [An HON. MEMBER: What about the United States?] An hon. Gentleman asks me—What about the United States? Is there anyone in the House who does not know that the imports from the United States are largely raw material. They are imports that we do not want to send and could not send. What we are interested in is manufactured articles, and of these we want to increase the exports. It is ridiculous to have to argue this on the figures. If it is the case that we can compete at all in the Colonies—and 23 per cent. of our exports of manufactured goods are to the self-governing Colonies—it is surely obvious to any business man that the preference given in Canada equal to 10 per cent. on the value of the goods must enable us to compete much more successfully.

You have heard a great deal during the recess about exports and imports. I should like to say a little on that subject. The theory of everyone who is opposed to any change in our fiscal system is that it is imports which are the best test of the prosperity of the trade of a country; that if you look after the imports the exports will take care of themselves. The right hon. Gentleman the Leader of the Opposition elaborated that the other day at Glasgow. He put it in a nutshell. He said that if by any change of policy you stop the imports of a pound's worth of goods from any country, you will at the same time stop the export of a pound's worth of goods to some other country. Well, that is a very beautiful theory. [An HON. MEMBER: It is a fact.] An hon. Gentleman says it is a fact, but if it is true it should be easy to prove it. I will give the hon. Gentleman an opportunity of proving it later on, but in the meantime I will prove the opposite. You can take any series of years you like, but I shall take the series given in detail in the Blue-book, which, by the way, hon. Gentlemen say proves their case up to the hilt, though they have never attempted to show how it proves it. From 1890 to 1902 our imports of manufactured goods increased to the extent of £50,000,000 sterling; if the theory of the right hon Gentleman is true, should not our exports of manufactured goods have some kind of relation to the increased imports? [Cries of "No."] Then what becomes of the theory? The theory of the right hon. Gentleman really means that the more you buy from foreign countries, in spite of any effort they may make to prevent you selling to them, the more they will buy from you. The fact is that the more we buy from every one of those industrial countries, our competitors, the less, and not the more, they buy from us. The right hon. Member for East Fife, who has made himself the great protagonist of this theory, has put it in another way which is quite as striking and impressive. He said this, and I think they are almost his words. "The excess of the imports over the exports of any country is itself a measure of the trading prosperity of that country."

MR. ASQUITH (Fifeshire, E.)

But not the measure of difference between the exported merchandise and the imported merchandise?

* MR. BONAR LAW

I shall take the total exports in the case I am going to give. If the right hon. Gentleman's theory is true, then the reverse of it, I think he will admit, must be true also. If the excess of imports is a proof of prosperity, then if you can find any country where the exports steadily, regularly, and largely exceed the imports that country must be drifting into bankruptcy. The United States is such a country. For the last six years the total exports of the United States have exceeded the total imports to the extent of more than £100,000,000 sterling a year. If you make allowance for freight, the excess is still nearly £100,000,000. What I ask the right hon. Gentleman, or anyone else who feels competent to answer is—How is that excess paid for? I know of no way except by the transfer of capital from this or some other country to America.

SIR EDGAR VINCENT (Exeter)

Payment of interest.

* MR. BONAR LAW

Payment of interest in this case is transfer of capital. I know of no way that the excess is paid for, except by the transfer of capital, but if anyone else has another theory I shall be glad to consider it. What has been the effect of that excess of exports in the case of the United States? The effect has been that the bank rate, and the value of money in America, which used to be enormously higher than with us, has fallen until it is now practically at the same level. I know this is rather dreary, but I must say a word or two from our point of view about exports and imports. So far as I am concerned, at least I am not opposed to the quantity of imports. It is the quality of the imports that we object to. We would like to see more raw material coming in and less manufactured goods. I am not going to give the figures about this, but I will try to put in another way. If this question could really be looked upon not as a Party question —I know that is quite impossible and I do not want to alter it—I think this would almost be admitted. If you take any country whose ideal is to be a great manufacturing and exporting country, and if you find in the case of that country that over any period of years in the last thirty, taking imports first, the percentage of raw material is declining and the percentage of manufactured articles is increasing, and if, turning to exports, you find that the percentage of manufactured goods is diminishing and the per- centage of raw material is increasing, and if you find that in every other industrial country in the world the reverse is the case, that is surely an indication that our industry is not in a healthy condition. What are the facts? Let me take the five years 1880 to 1884, and contrast them with the last five years. We find this in the case of imports—the percentage of manufactured goods has risen to the extent of 7 per cent. and raw material has declined in proportion. If you take our whole exports the percentage of manufactured goods has fallen 5 per cent. and raw material has risen 5 per cent.

MR. ASQUITH

What raw material?

* ME. BONAR LAW

What I want to point out is that the exact reverse of this has happened in Germany and the United States, and it is not by accident that that has happened. Those countries have used all their power to encourage the import of raw materials and to discourage the import of manufactured articles. They have encouraged the export of manufactured articles and discouraged the export of raw material. We alone of all countries in the world leave that entirely to chance and we are the one country where both in imports and exports, as regards percentages, we are going backwards.

Now I want to refer to a subject which has been jubilantly dealt with by right hon. Gentlemen opposite—the Board of Trade figures for last year. They were greatly delighted with them, and the right hon. Gentleman the Leader of the Opposition stated that these figures alone knocked down the scaffolding of the case which had been erected. The right hon. Gentleman the Member for South Aberdeen went one better than that. He said that anyone who stated in the face of these figures that our trade was not flourishing was capable of anything. Right hon. Gentlemen opposite were all agreed about one thing, namely, that it was not fair to take a single year and draw an inference from it, but apparently that only applies to a year that tolls against them. It is quite right to take a single year when if seems to help their argument. I think I shall succeed in showing that it only seems to help their argument. We cannot analyse the figures for last year because we have not the facts, and without complete analysis it is absurd to draw any large inference from them. We do know that simultaneously with the large increase in our foreign trade the percentage of persons unemployed in this country has enormously increased. How do you reconcile those two facts on the theory of the right hon. Gentleman opposite? You con not reconcile them, but I think we can do something towards reconciling them. We say that exports are a better test of prosperity—we do not go further than that—than imports. You will find on an analysis of the figures for the year that the whole of the increased exports took place in the first six months, and, as might naturally have been expected, during those six months there was no falling off in employment. What happened? In the second half of the year the exports did not increase, but the imports increased enormously, and with the increase of imports, and corresponding with it, there was an increase in the number of unemployed.

I want next to say a word as to "dumping." The House will hear a great deal more about the question, and I admit, speaking for myself, that it was "dumping" which first convinced me that some change in our fiscal system was absolutely necessary. What is the effect of "dumping" on our industries? The right hon. Member for West Bristol was right when he said that the issue we are now fighting is the same issue fought last year over the Sugar Convention Act. The effect of bounties on the sugar industry was to bring the West Indies almost to the verge of ruin, not so much on account of price as on account of the uncertainty which the bounties introduced into all the conditions of the industry, and the effect on our manufacturers to-day is exactly the same. Every manufacturer in this country is threatened by a competition which does not depend on natural laws, on cost of production, on supply and demand. It is a competition the extent of which no amount of prudence can foresee, and against which no amount of skill can prevail. The fact is that our manufacturers are paralysed. [OPPOSITION cries of "Oh, oh!"] They have not that confidence in their trade which is the spring and the soul of industry, and they are afraid to spend money in improving old works or to build new works. I would like to illustrate this point from the position of the iron and steel trade of this country. The Board of Trade issued last year a paper which gave full details of the production of iron and steel in the United States, Germany, and the United Kingdom. I leave the United States out which has enormous resources in raw material, but what about Germany? Germany has no such advantages; she imports as we do, a large part of the ore used in making steel, and as to coal, which is the basis of the manufacture of steel, she has no advantage over us, for she imports every year a large quantity of coal from us to make the steel which she sends back to us. That is not all. We actually send to Germany every year a considerable quantity of pig-iron which she sends back to us in the shape of finished steel. A few years ago we made the iron and steel for almost the whole of the world. In 1902 we made approximately the same quantity of raw iron as was made in Germany, but in the manufactured article in steel the German production was nearly twice as great as ours.

SIR HENRY FOWLER

They have the cheap ore.

* MR. BONAR LAW

I myself sold to Germany hundreds of thousands of tons of ore which came from our own colonies. It is a fact that we are being left hopelessly behind in that which is regarded in almost every country as the best index of the industrial prosperity of a country. How is that accounted for? I can see in no way except that it is due to the supineness of our manufacturers or to the lower wages which prevail in Germany. The right hon. Member for East Fife says that it is due to some "defect" in our manufacturers. Well, is the right hon. Gentleman quite confident that he is a competent judge. I have been in another place occasionally where I have seen familiar faces from both sides of this House disguised in an unfamiliar way. I have heard them speaking fortunately for us at an unfamiliar length and when I have heard them droning away as though they would never stop and been told what the fees were which they received for that dreary performance I have said to myself what a splendid profession? What an easy way of making a living. I really know that it is not so. I know that it only seems easy to me because I do not know enough about it to understand the difficulties. Might it not be possible that the right hon. Gentleman is exactly in the same position? Well, I will say this as regards the iron and steel trade that I know all the manufacturers in Scotland and many of them in England; and I do not know one large firm which does not know, generally from observation, everything that is done in their trade in America or in Germany. Our manufacturers have adopted a great many of their methods, and if they have not adopted all of them it is because our manufacturers think the risk greater than the chance of profit. It is not defects of manufacture or lower wages. The ground lies deeper than that. In modern production the thing which tells most in cheapness is quantity produced; and you cannot produce largely unless you have a large market. We have not a large market. Germany has her own market, which she keeps to herself, and she has access to our market. Then in London iron goods are being brought from Germany at a lower rate of freight than it costs to bring them from Scotland. I ask the House to consider what the effect of a policy of retaliation would be on this trade. Either we would obtain better terms from Germany and access to her markets, in which case our market would be increased, or at the worst we would make it difficult for them to obtain access to our market and their market would be decreased. [Cries of "Hear, hear!"] Hon. Members might sneer at that, but manufacturers did not.

LORD HUGH CECIL (Greenwich)

Do I understand—I only ask for information —that when these duties have failed in their object they will be permanently kept on?

* MR. BONAR LAW

That is a question which I at least do not intend to answer—[Laughter]—and hon. Gentlemen cannot expect any other answer from me. The effect of this policy would not only be to stimulate our own manufactures but to handicap our competitors. It would make it difficult for them to produce as cheaply as they do so as to compete with us not only in our own market but in the [neutral markets of the world. How does it strike observers from the other point of view? The Finance Minister in Germany lately made a speech in reference to this development of German trade helping the country to tide over a bad year, in which he said that the German exports largely to our markets had made it possible for German manufacturers to keep their works open. There is another question as to dumping. What is the effect on the men who are engaged in industry? Take the case of steel forgings for shipbuilding which come from Germany. Workmen are thrown out of employment, machinery gets out of repair, and even when prices improve the works are not resumed because there is no security that the improvement will last long enough. But does anyone believe that when our productive capacity has been permanently reduced, Germany will continue to send us these goods at below cost price? In the long run we must pay very dearly for having allowed our own productive capacity to be destroyed. [Cries of "Oh, oh!" from the OPPOSITION Benches.] Hon. Gentlemen opposite may sneer at the idea of a monopoly, they did so in connection with the Sugar Bill last year. I know a particular instance where a monopoly exists just now. I admit that it is a very small one. Wire nails are used to a considerable extent in this country. They are made in Germany and the United States. For a long time we got them cheaply because they competed against us, but, having combined, they sell them to the people here at a high price. You can now only buy them wholesale from an individual in London who quotes these nails for the United Kingdom at £7 10s. delivered in London, but the price for Japan is £5 5s. free on board Antwerp. You can verify the facts. There is no doubt about them. The price for Japan is £5 5s. Why? Because the Japanese are making them themselves, and have a duty which makes it necessary to sell them at a low price, or otherwise they could not be sent in. Then what becomes of the theory that the importer always pays the duty? In this case, it is in a sense true. It is the importer that pays the duty, but it is the English importer who pays the Japanese duty. The right hon. Gentleman who spoke last said he always learnt something when he went to Scotland, but I can assure him that he teaches us something also. He is a great believer in this theory that the importer pays the duty. Let me read an extract of what the right hon. Gentleman said in Glasgow. I do not think it will be necessary to make any comment on it. If some happy state of circumstances should arise in Scotland in which some proposition could be made that the 10s. duty per gallon should be retained on all foreign spirits, but that it should not be charged on spirits distilled at home, the price of spirits would not go down. It would remain exactly where it was, but the distillers at home would put the duty into their pockets. Here is an article the cost of which is about 1s. a gallon, the duty being 11s., and the right hon. Gentleman says that in the case of an article like that the force of competition would not prevent distillers still selling it at 12s. a gallon, even if the duty were removed.

SIR HENRY FOWLER

What I said was that where a revenue duty was levied and no corresponding excise duty was levied to an equivalent amount, that was protection to the native producer, and that he would put the money into his own pocket.

* MR. BONAR LAW

The right hon. Gentleman's interruption makes no difference to the argument. The favourite doctrine of Gentlemen opposite, on which their whole theory rests, is the doctrine of the transfer of industry. We know that the bringing in of goods below cost price deprives particular men of employment. Hon. Gentlemen say that when a man is turned out of one job he soon gets another. Let us take the tin plate trade. I think it has been cited by the right hon. Gentleman in proof of this theory. The right hon. Gentleman said at Glasgow— Look at this industry. Look how when one door is shut another door opens. What is the door that is shut, and what is the door that opens? In 1890 the right hon. Gentleman admitted that the tinplate trade received a knock-down blow. But look, said the right hon. Gentleman, how it has crept up again. The right hon. Gentleman must be thankful for very small mercies. In fourteen years the tinplate trade has crept up, but it is not yet up to the level of 1890. But what about the men who were employed in this industry; the men who in 1890 knew how to make tinplates and did not know how to make anything else, were they to stand idle while the trade was creeping up? The right hon. Gentleman says that many of them went to America. That is perfectly true. They had to go to other countries to secure employment denied them at home. Many of them did something else. They joined the great army of casual labourers, which according to the right hon. Gentleman the Leader of the Opposition is constantly on the verge of hunger. I want to put a clear issue on this question of the transfer of industry. Last year we imported iron and steel goods to the value of over £10,000,000 sterling. The President of the Iron and Steel Institute said in Glasgow that there were still works and workmen in this country capable of turning out every ton of that iron and steel, and that if it had been turned out in this country it would represent £5,000,000 in wages. Surely in this case the burthen of proof lies not on us but on the defenders of the present system. The workmen lost all that amount of wages, and will the right hon. Gentleman tell us what they have, got in exchange? It is said that dumping cannot last. The right hon. Gentleman the Member for East Fife went further. He said that universal experience proved that it could not last, and that it led to discontent in the country that dumped and ultimately to the abolition of protection.

* MR. ASQUITH

No I did not say that. I said it led to discontent and to a reaction of opinion in the country which dumped which sooner or later would be fatal to protection.

MR. BONAR LAW

I am very sorry I cannot find at the moment the extract from the right hon. Gentleman's speech, but what he has just said is quite good enough for my ease. I would ask the right hon. Gentleman to give the House any single instance in the world where the dumping of an article has begun and has stopped. There is no such case. Why then does the right hon. Gentleman speak of "universal experience?" He probably means that that is his opinion. Perhaps he means that it will be the experience of the future. But that is prophecy; and, as somebody said, you cannot argue with a prophet, you can only refuse to believe him. I do refuse to believe him. Why should this dumping end? It is impossible to get out of the right hon. Gentleman's mind the idea that because an article is sold below cost price that therefore it is sold at a loss. Nothing of the kind. If the House will bear with me I will show exactly what it is that happens. Suppose there is in America a steel works capable of producing 100 tons of steel per day, and suppose the American demand is only seventy-five tons per day. It costs £5 10s. to make seventy-five tons; but the maker finds that if he makes 100 tons the cost of the whole is reduced about 10s. per ton. What happens? He formerly sold seventy-five tons at £6 per ton, making a profit of 10s., but by making 100 tons, and still selling at £6, he makes a profit of 20s., and has £37 10s. additional profit in the seventy-five tons. He has 25 tons left over to dispose of; he sends the twenty-five tons over here, and sells it at £4 a ton, or a pound below cost price, and makes a profit of £12 10s. on the transaction. Who is going to stop that? No one in America suffers in the least in consequence of it. The consumer there does not pay a penny the more. The steel maker makes a profit and, this above all, the workmen get full wages on 100 tons instead of on seventy-five tons. Who suffers? The British steel maker and the British working man. Who is likely to end it—those who gain by it, or those who suffer from it? It never will be ended until we end it.

* LORD GEORGE HAMILTON (Middlesex, Ealing)

I had not intended to say anything concerning the incidents connected with my resignation. I fully ex- plained those circumstances in a public speech, and I see no good now in reverting to the matter. There was undoubtedly a misunderstanding, but it is one to which I do not now care to allude. I left the Cabinet because I declined to be associated with a movement which then, although it was euphemistically called "fiscal reform," meant in my mind "protection." But even if any misunderstanding which then existed between me and the Prime Minister had been removed, I certainly should never have remained a member of the Government after the speech which the Prime Minister delivered at Sheffield. I felt in a position of considerable difficulty at the commencement of this debate. An Amendment has been moved from the other side which accurately describes, as far as it goes, my views on this fiscal controversy. I may say that I have held during the whole course of my political life principles identical with those contained in the Amendment of the right hon. Member for Montrose, and I have for more than twenty years sat upon that Bench, and for thirty years I have been connected with what, in my belief, may be truly called fiscal reform in India. I have spoken on behalf of the Governments of Lord Beaconsfield and Lord Salisbury, and with the absolutaly unanimous approval of my colleagues, have laid down principles to regulate Indian fiscal policy identical with those contained in the Amendment moved by the right hon. Gentleman opposite. For me now to turn round and repudiate those principles would not be merely to subordinate my own opinions; it would practically be to make the whole of my past political life, and the policy which, on behalf of the Imperial Government, I have enforced on India, a subterfuge and a fraud. Now, my right hon. friend the President of the Board of Trade opened his speech by saying that there was nothing in this Amendment if you excluded the first sentence, to which he could not subscribe.

MR. GERALD BALFOUR

No. I said I did not think there was anything in the latter part of the Amendment to which free-fooders would not subscribe and I said there was very little to which I could not subscribe.

* LORD GEORGE HAMILTON

My right hon. friend is reported to have said, "there was little to which he could not subscribe." Now let us see what are the doctrines to which my right hon. friend can with little difficulty subscribe— We respectfully submit to Your Majesty the judgment of this House that the removal of protective duties has for more than half a century actively conduced to the vast extension of the trade and commerce of the realm and to the welfare of its population; and this House believes that, while the needs of social improvement are still manifold and urgent, any return to protective duties, more particularly when imposed on the food of the people, would be deeply injurious to our national strength, contentment, and well-being. Those are the words to which my right hon. friend says he can without much difficulty subscribe.

MR. GERALD BALFOUR

No, I said there was little in it to which I could not subscribe. [Cries of "What is the little?"] I thought I had explained yesterday that I personally should be glad to see a state of opinion in this country which would allow preferences with a moderate tax on food, and to that opinion I adhere.

* LORD GEORGE HAMILTON

I will take my right hon. friend's exact words. The Amendment exactly describes the position of the Unionist Free Food League, and therefore my right hon. friend admits that our position and the principles we hold are such that he has little difficulty in subscribing to them. Now that is a most remarkable admission. It is a great change since—when, I cannot say—but it does mark a distinct departure from the language which hitherto has been used by those who spoke on behalf of the Government. My right hon. friend, having prefaced his observations in this way, then proceeded to mike a further series of statements. I must enumerate them because they are so important. The Government policy was not that of protection; it was not that of my right hon. friend the late Secretary for the Colonies; therefore, putting two negatives together, I think an affirmative proposition can be made out. He went on to say that it does not involve the taxation of food, and it is not connected with a 10 per cent. duty on manufactured goods; that nothing was to be done until the next election, and that then a mandate was to be asked for from the people to confirm a power which the Government at the present moment possesses, and that when the country has given this peculiar mandate any proposition made is to be submitted fully to the discussion and control of this House. Well, now, I really ask my right hon. friend, has the whole country been turned upside down, has a state of disquiet and apprehension been spread through every great industry in this country, has an interference with those natural recuperative processes which a great nation like ours can go through after heavy exactions been caused by this agitation, and have so many resignations occurred that ex-Cabinet Ministers are tumbling over one another in search for seats by this gangway and is the end of it all this —that the Government only want confirmation of an inherent power which they possess, which they can make use of and which I who have seceded from them was the first to make use of in imposing counter vailing sugar duties in India? I feel rather ashamed to resort to so hackneyed a quotation, but is it not true, parturiunt mantes nascetur ridiculus mus? It is, I must say, a triumph for us poor free-fooders. We have been attacked; committees of our own constituents are even trying to hound us out of the representation of the places for which we sit; we are looked upon as renegades and sectaries; and yet the first time there is a discussion in this House that first time we stand triumphant. We have knocked food taxation out of the programme of the Government.

MR. GERALD BALFOUR

No food taxation was in the Sheffield programme.

LORD GEORGE HAMILTON

No, Sir; but perhaps my right hon. friend will look at the correspondence between the Prime Minister and the late Secretary for the Colonies, and if he will look at that he will see that the pith of the letter is in the postcript, of which this is a fair paraphrase—"I would suggest that for tactical reasons it might be advisable to exclude taxation of food from the Government Party programme."

Therefore, I say, if the right hon. Gentleman will reflect and carry his mind back a little further, I think he will admit that I am accurate in saying that it is the Unionist free-fooders who have prevented the Government from being committed to the taxation of food, with which they now see it is hopeless to persevere. My right hon. friend made a very able speech, and he laid down the proposition that this fiscal controversy was not a contest between free trade and protection. Sir, I manitain that it is a contest between those two principles, and, able as was the speech of my hon. friend the Secretary to the Board of Trade, I wholly deny that protection has changed its character. What does free trade mean? I think I could give a definition of it which nobody will dispute. Free trade means the removal, in the interests of the consumer of legislative restrictions upon the free exchange of commodities. I believe that to be an accurate description of free trade. Protection is the reverse. Protection means the imposition of restrictions for the benefit of certain interests and individuals at the expense of the community. In their conception, in their operation, and in their effect the two principles are absolutely irreconcilable, and I protest, and have all along protested, against the use of the phrase "fiscal reform." What does it mean? In the eyes of a protectionist, is a free trader a fiscal reformer? In the eyes of a free trader, is a protectionist a fiscal reformer? Twice only in my life has there been an attempt to carry a great revolutionary change through this House. One was the attempt of Mr. Gladstone to carry Home Rule for Ireland; and now we have had fiscal proposals made to us which involve a revolution, in my judgment, quite as far-reaching and as dangerous as Mr. Gladstone's Home Rule proposals. Now, suppose at that time the Unionist Party had adopted on the question of the Union the same attitude as they have done on the fiscal controversy. Suppose that the Leader of that Party had said: "It is an entire mistake to assume that this is a question between Home Rule and the maintenance of the Union. Unless any one can say that the system of government in Ireland is perfect and carries with it no future danger, he must be an administrative reformer; and, moreover, recollect that the Union is nearly a hundred years old, and recollect Mr. Pitt; were all Mr. Pitt's prophecies fulfilled in connection with Ireland? The question before the country is administrative reform in Ireland. We will go to the country, and then when we get our mandate it will be quite time to determine whether administrative reform should be in the direction of Home Rule or not." Would not every one have said, and properly said, "It is gross trifling with a serious subject?" I contend, therefore, that the use of the phrase "fiscal reform" in the sense in which it is so constantly used from the Front Bench is a trifling with this grave subject. My right hon. friend last night made one statement which I admit was to me. He said that the proposal to put a 10 per cent. duty on all manufactures imported from abroad was not a protective tax, but was purely a revenue tax.

* MR. GERALD BALFOUR

No, Sir; my noble friend really misrepresents me. I never made any statement of that kind. What I said was that if the proposals of my right hon. friend the Member for West Birmingham involved the necessity of making good a deficiency caused by the transference of taxation from certain food products to certain other food products, the question of the mode in which that money should be raised was a question of revenue.

* LORD GEORGE HAMILTON

I understood him to say that 10 per cent. was a revenue tax. I want just to follow that up. Ever since that 10 per cent. tax has been before the public there has been a hunt after ruined industries, and in every part of the country inducements have been held out that if this 10 percent duty was imposed in some way or other industries which were suffering from foreign competition or otherwise languishing might be beneficially affected.

As several speakers, including the last have expressed a strong opinion in favour of a policy of preferential treatment towards the Colonies, I want just to put before the House what the cost will be upon the consumer of the only scheme before us. My hon. friend who has just spoken referred to the Canadian figures, and he said that there had been a large increase in our exports in recent years. There has been an increase of two or three millions. [Sir H. VINCENT: Double.] No, pardon me; I am too well up in these figures. What happened was this—that the Canadians raised their tariff against us and our imports steadily fell for a long time; then came a Government who reduced the tariff, and our imports at once rose quite independently of any preferential treatment; and since then there has been a very large increase of Canadian exports, and that has naturally corresponded with the increase of our imports into that country. What are we going to get in the way of increased trade by preferential arrangements with the Colonies? So soon as my right hon. friend the late Secretary for the Colonies started his proposals, I, being of a somewhat prosaic character, sent for all the latest statistics relating to the trade of these colonies and the tariffs there in force. The fact is that those colonies have got very little to give us. They are clear and emphatic on this point, that no reduction will be made which will in any degree enable our manufacturers to compete with their native industries. Therefore we start with this—that we shall get no benefit in that direction. All we can get from preferential treatment is the absorption of imports which go to the Colonies from other countries. As a matter of fact the British Empire and the United States have almost a monopoly of the imports into Canada. The same state of things exists as regards Australasia. Out of £42,000,000 imports into Canada £37,000,000 come from the United States and from the British Empire, and the same proportion holds in Australasia. As a considerable amount of these imports come from tropical countries it follows that we cannot, do what we will, absorb the whole of those foreign imports. Therefore the very outside profit we can look forward to is an increase of our trade from preferential treatment of about £7,000,000 a year. Now put against that the cost. It has been calculated that this taxation of food and this 10 per cent. duty, which is part and parcel of a preferential arrangement, will impose upon the consumers of this country a burden of not less than £35,000,000 sterling, and possibly £50,000,000 sterling, a year. Therefore you start with this extraordinary proposal—that in order to increase our trade with the Colonies we are to submit to a burden which at the very outset is seven times as heavy as any problematical expansion of our export trade.

That is not all. My objection to the fiscal reformer is that he takes so narrow a survey of the situation that he is always wearing blinkers. Attention has been directed to the export trade mainly, but our export trade only employs a very small proportion of the labour engaged in this country. It is, I think, about 16 per cent., but the export trade from this country to the Colonies, which alone would be benefited by preferential treatment, only constitutes a small portion of the export trade, and so you come round, if you work it out, to this—that it is proposed to tax the food of 97 per cent. of the working population of this country in order to benefit 3 per cent. Is that business?

I should like to say a word or two upon one part of the British Empire to which no fiscal reformer has yet alluded; and it is somewhat satisfactory to me to find that on this, the second day of this very important debate, the views which I hold on fiscal matters generally, have been endorsed by my right hon. friend the President of the Board of Trade, and that the opinions which I put forward on my own responsibility as regards India are entirely accepted by the Government, of India. It is the fashion now to sneer at cheapness, and some extraordinary doctrines in reference to it were laid down in that very able speech to which we have just listened from the Secretary to the Board of Trade. I do not pretend to be an authority on any particular trade, but I have had a great deal to do with the cotton trade of Lancashire, which is by far the most powerful and best organised trade in this country, and by far the largest exporting trade. Nearly 25 per cent. of the whole of our exports from this country consists of cotton manufactured goods, and half the exports from this country to India consist of cotton manufactured goods. The export trade of this country to India is in excess of that of all the self-governing Colonies who are likely to benefit under this preferential treatment. I laid down, with the approval of my colleagues, the principle that in India there should be no protective duties, and that perfect equality of treatment should prevail between Lancashire cotton goods and the native industries. I received a deputation during last summer composed of leading men in that industry, and they asked me to remove the Customs duties on cotton. I replied that I could not do so, but I undertook that, so long as I was Secretary of State and those Customs duties were in force, the excise duties should also remain. I have been much attacked for attempting to establish this equality of treatment between India and Great Britain; but so long as free trade is the policy of this country and we believe in it, so long is it possible to establish that equality of treatment because it is beneficial to India as well as Great Britain. But the moment you depart and turn round to protection, it will not be possible for my successor to take the position which I have taken; and if protection is to be the policy of this Empire, and if those colonies who choose to establish protective tariffs are to have special favour shown them in tariff arrangements, can you deny to India that which the rest of the British Empire obtains? And if you cannot deny it to India, at once some £20,000,000 of your export trade is more or less in peril.

That is not all. I believe that the great danger to which the trade of this country will in the future be subject is an increase in the cost of production. That is practically the unanimous opinion, so for as I know, of the leading men in the cotton trade. There are enormous exports to the Far East exclusive of India, in which the exported article has to compete with native industries in localities where the raw material is grown and where there is an abundant supply of cheap labour; and they all tell me that although the turnover is large the profit is small and any legislation or alteration which sends up the price of food or increases; the cost of living will in the long run be fatal to the volume of that gigantic trade. Would it not be madness and unqualified folly for us to accept this idea of preferential treatment which has never been worked out, and the effect of which has only been considered in one small portion of the British Empire?

Just let me say one word on a matter which I think is very germane to this discussion. We are constantly told that we are Little Englanders because we object to the increased cost of these proposed schemes. I have been an Imperialist all my life, but I have always held that the extent to which Imperialism can be pushed must be limited by the expenditure which it entails. Our expenditure during the last ten years has increased nearly £50,000,000 sterling, and mainly in connection with the great services which the Government very properly have thought it necessary to bring up to that high state of efficiency to enable them to discharge more adequately Imperial duties. We have recently for Imperial objects fought a war in South Africa, and we have had to borrow enormously. The consequence of the burden of that borrowing is felt directly and indirectly by the taxpayers, because one of the ablest financiers in a masterly analysis of the money conditions of the City shows that, in consequence of the war expenditure and the raising of loans, almost for the first time in the history of man, money was dearer for two consecutive years in London than it was in Paris and Berlin. Think what that means. It means not only that there is additional taxation to pay for the interest on those loans, but every industry and every trade which at all relies upon the loan of money or requires assistance has to pay a higher-rate of interest than it paid before. I contend that the two pillars of our gigantic trade, commerce and merchandise are cheap food and cheap money, and looking at the disadvantages with which we have to contend against foreign nations through longer hours and lower wages, and the far larger proportion of the raw material and food which they can supply and their larger home markets, it seems to me that we should be fools and madmen to throw away one of these great advantages which we have in con-sending with them—namely, cheap food.

And, Sir, whilst I readily admit that a country can flourish under protection still I contend that as has been the case here, where a country for fifty years has had the benefit of free imports you cannot convert a system based on free trade into one of protection without a fearful dislocation of business and without inflicting a terrible amount of misery and distress upon those who would never have remained in these islands had it not been for the free import of food. The only practical proposal therefore that the Government adhere to is retaliation. I listened with some alarm to the speech of the Secretary to the Board of Trade as to the very wide interpretation which he gave to this word retaliation. Just let me give an illustration. There has been three great tariff wars in Europe recently. My hon. friend mentioned three but he has picked out the only one which is favourable to his argument, but I am going to take the other two.

* MR. BONAR LAW

If you take Switzerland you get the same result.

* LORD GEORGE HAMILTON

No, no, let us go into that. I will first take the case of Italy and France. Italy and France were doing a great business amounting to £30,000,000 a year. Somebody came and said to the Italians, "put up your tariff," a similar appeal was made to the French, and up went the French tariff, and so the war went on for nearly ten years. At the end of that time the two countries had lost at the very owest calculation over £120,000,000 of trade. Peace was then made, and the trade of those countries has never got up to within 50 per cent. of what it was before the war. The same thing happened in Switzerland, only to a less extent, and the figures never reached the total at which they stood before, and why? If my hon. friends on this side of the House attach great importance to preferential treatment let them beware how they hastily rush into retaliation, because so soon as you declare war against another nation—and if we begin a war we must go on with it—as soon as you declare war up goes the tariff against you, and up goes your tariff against it. But it does not put up its tariff against the whole world and therefore it gives to all other countries, while it is fighting you, preferential treatment in its own market. And when the war is over, and you go to your conquered market, you will find it in the occupation of foreigners. I do not agree with my hon. friend that the tariff war between Germany and Russia ended with entire satisfaction to Germany. It was a terrific war. They began with 30 per cent. ad valorem, then 50 per cent. and then it went up to 70 per cent., and discontent and hardship was so intense in both countries that both Governments became frightened and had to come to terms, and although Germany has gained more than Russia there has been since that time permanent discontent amongst the Agrarian Party who look back with longing eyes to the high tariffs then imposed. On the other hand in Russia a false impetus was given to a large number of industries which have ever since been almost a source of danger to the Empire. Not only this but the United States and Argentina for the first time got a certain amount of position in the wheat markets of Germany. Therefore, I say, we ought to be very cautious how we hastily embark upon retaliation. I have no objection to it myself as a matter of principle, but my hon. friends behind me who are protectionists very keenly support retaliation, and no doubt an adroit Prime Minister will persuade the House of Commons that in order to extend the area of free trade he must have recoups to protective duties, but when the time comes to take them off what then will happen. If the contest is prolonged for a certain time the vested interests which have grown will become so strong that the Government will hesitate to take them off.

In that most interesting speech of the Secretary to the Board of Trade allusion was made to the enormous development of the United States and German export trade in recent years, and he seemed almost, to indicate that we might take a lesson from German methods. Well the export trade may have increased, but it would be interesting to hear the opinion of the consumers inside those lands as to the methods by which that export trade has been developed. After all their methods are the most selfish and unpatriotic that can be well conceived. [A voice. "Not unpatriotic."] Not unpatriotic? What happened. They mercilessly fleeced the home consumer, and, having fleeced the I home consumer, out of the profits paid by that unfortunate individual they supplied his foreign competitor with goods cheaper than they could get them themselves. My hon. friend alluded to the enormous amount of cheap German steel that had recently been "dumped" down here for shipbuilding purposes. But I do not think he gave as the result that—unless I am mistaken—almost for the first time the tonnage of English shipbuilding exceeded that of the rest of the world. I quite agree, and I always have felt that this question of "dumping" is a subject that has to be most carefully watched, and I do not believe that if a strong case were made, such as I have been able to make in reference to putting on countervailing duties in India where undoubted by bounty-fed sugar from Ger-nearly crushed a vast national industry, that any Government would have much difficulty in getting the House of Commons to assent to the proposition.

I have detained the House too long, but I have only one thing more to say, and I say it to my hon. friends on this side of the House as well as to the other side. I am very sorry to be in disagreement with the majority of my Party on this question. All who have gone through that process know that however kindly meant the cheers of former opponents may be, they are no consolation for the loss of the esteem of one's old friends, but I rejoice to think that protection is not to be at the next election the Party cry of the Conservative organisation. I am old enough to recollect when I first stood for Parliament what the impression made upon the working classee was in that great contest which resulted in the abolition of the Corn Laws. Protection is a good starter but it is a bad finisher. The moment the flag of protection is raised all those who have failed, and all those who can get anything out of it, at once simultaneously hasten to its flag, but there are vast latent forces and a large number of quiet persons who do not ordinarily take part in our contests who have succeeded on a system of free imports, and who will assert themselves in a way which is very remarkable when the polling day comes; moreover, I speak as an old electioneerer, it is a fatal mistake, however apparently popular your Party may be, to put in the mouths of your opponents arguments which are either unanswerable or are extraordinarily effective with the great mass of the people. For what can an opponent of protection at once say? He says "Do you approve of a system by which a man is returned to Parliament to benefit himself by taxing others." It is a simple, and if you like, a brutal formula, but it is effective in every form or shape, and in view of the fact that few electors can be Members of Parliament and all are taxpayers they feel very much the force of observations of that kind. I believe in a Party system, and I rejoice that the Government are beginning to assert themselves, as I understand, and to make their will felt on this question. The Party system is only workable if the head dictates the policy. The policy should govern the machine and the machine should never be allowed to dictate the policy. The result of the inaction and dilatory tactics employed by the Prime Minister has been, as we all know, that their control and power over the organisations has become less and less, and those organisations have been asserting themselves in a way which I say unhesitatingly will, if it goes on, tend to produce a political disaster in this country. I make every allowance for the difficulties of the situation, and I am prepared to make sacrifices to the organisations on whose efficiency I believe rests the moral and material welfare of our country. That being the feeling which animates these people how much the more must it affect the Prime Minister when he has to deal with controversies such as those which arose last summer. Therefore, I make all allowance for the Prime Minister. I think he was perfectly justified in making use of his rare diplomatic powers, and I can understand that he is justified in using his great powers of diplomacy and finesse in this direction. I think he was justified in trenching upon his own personal convictions if he believed that by delay he could keep in efficient working order the organisation in which he is the gifted chief. Those tactics have failed, and I could not help thinking that the clear and manly utterances to which the President of the Board of Trade gave expression last night were an indication that the wiser heads in the Government had come to that view. If in the continuance of this debate other speakers maintain the attitude and endorse the statements made to us by the President of the Board of Trade, we have gained very great concessions. If I can be assured definitely by subsequent speakers that that opposition to a tax on food is based not on tactics but on principle, and if I am further told that they will have nothing to do with this protective 10 per cent. duty, then I think that the differences between us are very small. If a clear and definite statement to that effect is made, and if the Government policy is brought down to its very small dimensions, and freed of all those excrescences and extravagances which the unauthorised programme tacks on to it, then, although I am in entire accord with every word of the right hon. Gentleman's Amendment, I could not vote against the Government. I have no desire whatever, although I agree with right hon. Gentlemen opposite, to see them oust my friends from that Bench, but what will assuredly oust my friends from that Bench and what will assuredly bring disaster and ruin upon our great political Party, will be a continuance of the dilatory tactics of the last six months, and, therefore, I do implore them—I hope I will not give any offence to my old friends —to screw up their courage and to put their foot down, and even go further than the President of the Board of Trade, and repudiate protection in all its aspects.

SIR. JAMES KITSON (Yorkshire, W.R.,) Colne Valley,

said he had been for a very long time connected with the iron trade, which had been prominently mentioned in the discussion of the fiscal question, as one of the industries which was threatened. He had completed now nearly fifty years of active service, and, like the Parliamentary Secretary, he had had some experience in the manipulation of steel. He thought that his experience was somewhat more extensive than his hon. friend's. The Parliamentary Secretary had dealt at length with what people had said on the free-trade question; but he ventured to say that Cobden in his wildest dreams never thought that this country would build up its present magnificent condition of manufacture and commerce. The Parliamentary Secretary had wandered into small points about steel in order that he might make large percentages. He would deal with the general figures of the trade with regard to which it was news to him that it was not successful. That, he said, was news to him at the end of a long career, the latter years of which had, to his mind, been the better years of the half century. What the House of Commons had to deal with was the whole tenor and volume of the trade and industry with which he was connected. All branches of the iron and steel exports in 1880 amounted to £32,700,000, and in 1903 they had increased to £55,100,000. If they turned to the returns of the income-tax in the Blue-book, they would find that the assessment of the trade from 1892–7 ranged a little under and a little over £2,000,000; but in 1900 it rose to £3,000,000, 1901 to £5,000,000, and in 1902 this alleged declining and. decaying industry was rated at £6,600,000

* MR. BONARLAW

I presume the hon. Member is aware that the returns to which he alludes relate only to pig-iron.

SIR. JAMES KITSON

replied that that was why he was alluding to the point. He was astonished at the smallness of the figure recorded. He wrote to the Board of Trade, and received a letter from Mr. Llewellyn Smith, who said that the figures given under the heading "Iron Works" represented, generally speaking, the profits of that section of the iron trade which was concerned with the smelting of the ore, whether such profits arose from smelting, or smelting carried on conjointly with other industries such as coal mines, etc. Yes; but coal was used in the manufacture of pig-iron. But did not the Parliamentary Secretary see that on this one section of the trade there was a return of £6,600,000. The total figures of the iron trade, estimated by competent authority, indicated that there was a turnover of £150,000,000 annually. He would venture to say that if they were to collect the income-tax returns from this trade, they would find that it was not £6,600,000, but nearly £20,000,000 at which the trade was rated for income-tax. What had been the advance in wages? He took the other day the rate of wages paid in his engine-works forty years ago. For fitters, moulders, pattern makers, smiths, and platers, the average rate of wages in 1860 was 28s. 3d. weekly; and in 1903 it was 37s. 9d., being an advance in the rate of wages of 9s. 6d. weekly. But that was not all. In 1860, the hours given were sixty per week; in 1903 they were fifty-three per week. That was not all—there was the increased purchasing power of money to-day. They were told that these changed conditions were owing in large measure to the action of the trades unions. No doubt the trades unions had been able to force the position; owing to their combination they had been able to obtain a large advance of wages; but that, of course, would have been impossible unless the condition of things and the advance in trade had enabled that trade to pay it. Just in support of his statement that employment had been abundant, and that the iron trade had been active, he would quote from a Government Report which had been circulated recently to both Houses of Parliament on the East Indian Railway. The Director-General of Stores in the India Office reported— That the period covered, viz. three years, 1900, 1901, 1902, was certainly one of the worst that they had experienced for many years in getting prompt delivery of goods. As they were well aware, there had been a great boom in engineering work in this country. Every shop of importance was full of work, and materials were only procurable at the expense of considerable delay. That he knew from his own experience was a matter of common knowledge. But to-day the iron trade was said to be declining. Last year (1903) the total make of pig-iron was 8,750,000 tons, and that quantity had only been exceeded in one year when it was a little over 9,000,000 tons. The United States, notwithstanding its enormous production, was not giving as much iron per head of the population as this country was producing at this time. The iron and steel trade was a trade which was essentially based on free imports. It was considered by everyone as an indigenous trade; but, as a matter of fact, out of the 21,000,000 tons of iron ore required for this production of pig-iron 7,000,000 tons were brought in from abroad. Where were the Government going to begin? Were they going to place a tax on iron ore? Well, that was raw material, and that, of course, was admitted to be impossible; but he could not help remarking on the patriotism of the Duke of Devonshire in taking the line he has done when his own interest as a great manufacturer of steel, and as the possessor of native ore, would lead him to throw in his lot with the retrograde policy which had been advocated on the other side. Now the question of the manufacturing capacity was very well measured by the quantity of coal which we raised per head of the population. The United States, notwithstanding its enormous output of 263,000,000 tons, only produced 3⅓ tons per head of the population, while the United Kingdom produced 5½ tons per head of the population. He could hear someone say, "Oh, yes, but we export 46,000,000 tons of coal." There were 46,000,000 tons of coal exported, and if that amount was deducted from our production we still had 4½ tons of coal per head of the population for home manufacturing processes. As to the production of pig-iron: in the year 1902 the United Kingdom produced 8,500,000 tons of pig-iron; and the imports of pig-iron were 227,000 tons, and of finished iron and steel expressed in terms of pig-iron, on which the Parliamentary Secretary to the Board of Trade laid so great stress, 1,260,000 tons—or a total of 10,000,000 tens. What did we do with these? We exported of pig-iron 1,102,000 tons; of steel and finished iron 2,800,000 tons; machinery, 524,000 tons; wire and tools, 200,000 tons—a total export of 4,626,000 tons—the balance of 5,374,000 tons being retained at home for the use of our shipbuilders, for engineering, machine making, and all the rest of it. This showed a magnificent home trade based on our imports of raw material. A very striking point which he would like to emphasise had reference to the public stores of pig-iron in the United Kingdom which they were constantly referred to. In 1887 there were 2,500,000 tons in store, whereas in 1902, when we had imported all this material, there were only 255,000 tons in store. If it had not been for that importation of pig-iron and raw steel there would have been actually a dearth of materials for our great shipbuilding and engineering establishments and we would not have been able to employ a large amount of high-priced labour. He thought that, in these days, it was vain to imagine that such a policy as had been advocated would not be disastrous to the great constructive trades of the country. It was our interest to get as much raw material as possible on which men who were paid high wages could work, and that our trades should be more widely spread.

Now, whence did this demand for protection arise? He did not deny that some branches of the steel trade had suffered; some had been almost extinguished. But that had been caused by the progress of invention. Steel rails produced by the Bessemer process were much more durable and were ultimately produced at a much cheaper price than under the old process. A Bessemer steel rail had a life three or four times that of an iron rail, and therefore the demand for the latter necessarily fell. Therefore the old puddling furnaces and rolling mills were destroyed. That was very unfortunate for the owners of these mills. The hon. Gentleman the Parliamentary Secretary to the Board of Trade had, with his family, greatly to their credit, done something in fostering the adoption of the Bessemer process; and no greater benefit had been conferred upon the world than the introduction of that process. No fewer than 9,000,000 tons of Bessemer steel ingots had been produced in one year in the United States, and he had heard an American gentleman say that the benefits conferred on the United States by the introduction there of the Bessemer process were equivalent to a sum which would have paid off their National Debt. Of course the community at large had benefited although the unfortunate sufferers were those who cried out for protection. Again, the introduction of the open-hearth steel process had destroyed the iron boiler-plate and the iron ship-plate trade; but it had enabled all those magnificent structures, battleships, merchant ships and the like, to be constructed at a capacity and a price which would have otherwise been impossible. He had been speaking only that day to Sir William White, late Chief-Constructor to the Navy, who told him that, but for the invention of the open-hearth process, it would have been impossible to make the constructions we had produced of late years. Although the boiler and ship-plate trade and the puddling furnace trade had been destroyed, the community at large had benefited. Were they going by protective duties to maintain these ancient processes?

A great deal had been said about dumping of steel billets and steel bars from Germany and from America. In 1902 the total amount of unwrought steel introduced into this country was only 280,000 tons, a mere bagatelle compared with the 10,000,000 tons to which he had referred. He would tell the reason why these billets and bars were dumped. The ancient process was to cast the pig-iron from the furnace into the sand. The "pigs" were allowed to grow cold; they were then reheated, melted in the converter, the ingots cast and allowed to grow cold. Then the ingots were reheated and rolled in the mills into bars and billets. The modern method now was, by a very ingenious device, to run out the metal from the blast furnace into a huge ladle, from which it was poured into a great vessel called a mixer, containing perhaps 150 tons, and thence to the converter, from which the ingots were cast. These were carried by an electric crane to the soaking pits and thence to a close chamber, and next picked up, placed in the rolling mill and converted into bars. There was no reheating, the natural heat was conserved, and repeated handling was saved. How was the man who had not got these new devices to compete with the man who had? Were they going by protective duties to foster and maintain the old processes which wasted the great forces of nature? Were these provided for the service of man to be wilfully cast away? Great Britain was not devoid of works where these improved processes were carried on. We were a little behind the rest of the world, but were not quite so slow as we were sometimes represented to be. He was represented in his constituency by the right hon. Gentleman the President of the Board of Trade, whom he had met on other neutral occcasions, such as the meetings of the Chamber of Commerce. He had always admired the manner in which the right hon. Gentleman had refused to take a pessimistic view of British commerce. He commended the right hon. Gentleman for that. He, a trader, also refused to adopt the policy of decrying his own wares. He was a member of a great trade, and he refused to discredit it. He believed, with the right hon. Gentleman the Member for West Birmingham, that those men who were continually coming to Parliament whining for assistance were mistaken. We must rely on our own energy and on our own resources, and then, he was convinced, we should still continue to be, as in the past, the first commercial nation in the world.

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