KING'S SPEECH (MOTION FOR AN ADDRESS).

HC Deb 27 February 1905 vol 141 cc1399-440

Order read, for resuming adjourned debate on Main Question [14th 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. Mount.)

Question again proposed.

MR. KEARLEY (continuing his speech)

said he would now trace the record of prices from the signing of the Convention in March, 1902, as he preferred to deal with facts rather than the ingenious figures of the hon. Member, which showed that the hon. Gentleman had only a very superficial knowledge of the subject upon which he argued. Had his knowledge been more profound the hon. Gentleman would have been aware that prior to the Budget of 1902 there broke out in this country and upon the Continent a huge gamble in sugar in the anticipation of there being an increase in the duty. Every body who had any interest in sugar participated in the speculation and filled themselves up with duty-paid sugar. When the Budget was introduced, and it became known that there was no addition to the duty the market became stagnant, and some of the speculators had to make forced realisations of their stock. That was the reason for the fall in sugar at that time and so overloaded was the market that in July prices sagged away until they reached under 6s., the lowest ever recorded. He (Mr. Kearley) would prove that statement. The total imports of sugar that year—1902—were 1,578,000 tons, and more than half, viz., 785,000 was shipped to this country in the four months preceding the Budget, and nobody could deny that that was the cause of the fall in the market. But later in the year these large stocks of duty-paid sugar had gone into consumption, and in October sugar had risen 40 per cent, above the price it was when the Convention was signed. Another point made by the hon. Gentleman was that when the Convention actually came into force—in September, 1903—prices did not rise, but fell; therefore, he argued, how could it be said that the later rise was due to the Convention? The reason sugar did not rise immediately after the Convention came into force was that when the Continental countries realised that the bounties were to be swept away they intimated to the sugar refiners that all sugar declared for shipment, whether shipped or not, would have the benefit of the bounty, with the result that every ton of sugar was declared and huge stocks accumulated, in all the Continental ports awaiting shipment. These overshadowed this market and had a depressing influence. The average weekly stocks in Hamburg alone were some hundreds of thousands of tons in excess of any other corresponding period. But by April of last year those stocks had been shipped and consumed, and then for the first time the full effect of the Convention was felt. The market began to rise in April, and in the following May sugar was 60 per cent. higher than it was at the lowest point, soon after the Convention was signed. There as no mention or even a whisper at that time of the shortness of the crop, the seed was hardly in the ground and had certainly not begun to germinate, yet we had this rise. In all those commodities where there was a great market, the question of what stock there was on hand had a tremendous effect upon the course or tendency of prices. Yet this advance took place when there was a visible supply of 2,500,000 tons. Three years previously, when there was the same amount of visible supplies, and when there was no Convention, the price of sugar fell to the lowest point on record, but in May with the Convention sugar rose 60 per cent, and the visible supplies were as large as ever before. That was a matter which he would have to ask the Government to explain. He should like to know whether the drought which had not then occurred was responsible for this increase in the price. It was only in August that rumours of shortage began to be circulated, and it was not until October that it was actually known that there was a serious deficit of 1,100,000 tons in the crop. He did not argue that such a huge deficit would not have any effect on prices; so serious a deficit at any time would have made itself felt, but the point was would the effect have been anything so serious had we maintained our commercial independence, free to buy from whence we chose and with our Ports open to all? We had sacrificed that, and instead of being able to take our sugar from whence we chose, we had to take it from a syndicate of countries by whom we were ruled in this matter, and in the discussions with whom our voice counted only as one in ten.

The deficit in the beet sugar crop was 1,100,000 tons, but at the same time there was an increase in cane of 400,000 tons, so that the actual deficit in the sugar crop was only about 700,000 tons. This would occasion a rise of 1s. or 2s. at any time, but the Convention was solely responsible for two things which immensely aggravated the situation, In the first place, since the Convention had been signed the consumption of sugar on the Continent had increased by 840,000 tons. Had it not been for the Convention that sugar would have been available for us, but owing to its policy the Convention had given the continental peoples cheap sugar, with the result that they had eaten 840,000 tons of practically our sugar. In the second place, we had shut out by the Convention 1,000,000 tons of sugar from Russia. Russia had always been the second largest beet sugar producer on the Continent, so that there would have to be added to the actual deficit the effect of practically 2,000,000 tons being no longer available or visible for our market. These were made up of the 840,000 tons consumed by the Continental peoples, the Russian crop, and the Argentine crop of 130,000 tons; and if the Convention had had its way it would soon shut out every other crop, because it was only at the eleventh hour that Lord Lansdowne had entered his protest against the supply of a further seventeen other countries being ruled out among which were the Brazil crop of 190,000, tons the Hayti crop of 45,000, the Philippine crop of 120,000, so that the House would see the point to which we were approaching if we allowed the Convention to have its way. Under these circumstances, it was clear and beyond question that the normal condition of things would not in itself have warranted the market going up in the way it had done. The Continental speculators had had an eye upon the situation all the time; they saw that there was a favourable opportunity, and they initiated a highly profitable boom in sugar at our expense and the whole of that speculation which enhanced the price suddenly, and if they liked, unduly, must be attributed to the Sugar Convention. The shortage of beet would have caused a rise of some kind, no doubt a shilling or two shillings a cwt., but sugar had risen 150 percent., and all this fictitious rise was the handiwork of the Convention of Brussels.

He had endeavoured up to this point to set forth the effect of the Convention on beet sugar, and he would now turn to see what had been the effect on cane sugar, because it was really in the interests of cane sugar that this Convention had been entered into. The House remembered the tale of the terribly sad conditions in the West Indies. The Government had stated that the sugar of Germany and Austria was gradually driving that of all other competitors out of Europe. That was not the fact, because they had only to refer to the increased crop of France in order to see that it was not correct, but that was the case of the Government; but there was the other great point that the effect of the low price of beet sugar, which was sold below the cost of production in Europe, was having such an effect on the cultivation of cane that they were beginning to leave off producing it. The case of the Government was that the Convention would extend the area of production. They now claimed that so far as cane sugar was concerned, thanks to the Convention, the crop was 400,000 tons greater. Not one single ton of that increase was to be attributed to the action of the Convention. It had taken place in countries over which the Convention had no influence, in countries which were essential, under American influence, where their sugar was mainly consumed. The argument of the Government all through had been that the Convention would benefit the West Indies. How much had the West Indies contributed to the increased cane production? Not a single pound. As a matter of fact, since the Convention had come into force the production of the West Indies had declined and was continuing to decline. Those countries which produced the increased cane crops had America for a market. The Philippine production had increased by 40,000 tons, Louisiana by 124,000 tons, Puerto Rico by 25,000 tons, and Cuba by 160,000 tons. Not one of these was a country for which the Government legislated. The Government legislated for the West Indies, and in these alone of all the cane-producing countries of the world was there a decline. Java was another country which had increased its production, and had already discovered a way by which they could produce cane sugar at £6 a ton and sell it at a profit at very little over that amount, while the West Indies had never been able to produce it at less than £8 a ton. Java had steadily increased her sugar production, which had gone up in the last ten years by over 500,000 tons.

In 1904 the West Indies were estimated to produce 221,000 tons, whereas in 1903 they produced 249,000 tons; in 1902, 239,000 tons; and in 1901, 258,000 tons; so that there was a continuous decrease. The returns from Java showed that cane sugar could be produced to pay a handsome profit at a low price, provided proper appliances were used. The cause of the decline in the West Indies was economical. The estates had been divided and sub-divided to such an extent that it was impossible to carry on a large system of manufacture unless the methods were altogether changed. Sugar production in Java had been brought to a fine art, and the figures of the increase were so important and had such a bearing on this question that he, would quote them to the House. In 1894 the total Java crop was 530,000 tons, and every year there had been an increase until for the present year it was estimated to produce 1,086,000 tons. That was an instance of a country where, working with the best methods, they were able to increase their crop and make a handsome profit, although at a far lower price than the West Indies had ever been asked to accept. The prevailing idea at the time of the Convention, and one fostered by the arguments of the Government, was that the production of cane sugar the world over was dwindling, the alleged reason being that beet production was carried on at such a price, owing to the bounty system, that it really did not pay to persevere with cane. But what were the real facts? The production of cane sugar the world over during the last twenty years had more than doubled, and in the last five years it had increased by over 1,000,000 tons, while in the last five years the production of beet had decreased by 1,000,000 tons.

Then as to the effect of the Convention on the sugar-using industries, which throughout the controversy had been treated by the Government as of little account, the Parliamentary Secretary to the Board of Trade had stated that he had no sympathy with them, because they were crying out before they were hurt.

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

I said I had no sympathy with their agitation; I never said I had no sympathy with the busnesses.

MR. KEARLEY

said that that was too nice a distinction to appreciate. What was the agitation for but to save their industries?

MR. BONAR LAW

They were agitating for protection.

MR. KEARLEY

said he had forgotten for the moment that according to the Prime Minister this Convention contained the pure gospel of free trade, and that they on that side of the House did not know what free trade was. What would be the use of the industries crying out after they were hurt? But the hon. Gentleman went on to say that he did not believe they ever would be hurt. Did he believe that now, seeing that the trades employed 12,000 fewer men than before the Convention, and that at the busiest time of the year, during the Christmas season, when the sugar-using industries were most actively employed, 50,000 men were working short time?

MR. BONAR LAW

asked whether the same circumstance never occurred during the bounty period.

MR. KEARLEY

said he should say distinctly not, as the increase in these sugar-using industries had arisen in consequence of sugar being cheap and of there being no interference with our getting supplies from all parts of the world. Until recently these trades employed 120,000 men, and had an invested capital of£12,000,000, whereas in their most flourishing days the refineries, for whom the interests of the British consumers as a whole had been sacrificed, employed only 5,000 men, while the number now employed was only 3,000. The reason for the decline and fall of the old refineries, who made bad sugar by indifferent methods, was not the bounty system or Continental competition at all; it was the competition of up-to-date sugar refiners like Tate and Lyle, who were now putting on the market twice the amount of sugar the refineries produced thirty years ago, and were able to do it with 2,000 fewer men. The effect of the Convention on the sugar-using industries had been disastrous. Whereas formerly they were supreme not only in neutral but also in protected markets, they were now being excluded because the sugar-producing countries were manufacturing confectionery themselves. Holland and Germany were running up jam factories, and even Austria was sending confectionery to this country. It was entirely due to the Convention, which deprived the British manufacturer of the boon of cheap sugar and conferred it on the foreigner, that the Continental manufacturers were now beginning to invade our own market in all directions.

He desired to refer to the misleading figures given by the President of the Board of Trade as to the importations of Russian sugar into this country. The right hon. Gentleman declared that in 1901 the total amount exported from Russia was 126,000 tons, of which only 700 tons came to the United Kingdom, and that in 1902 only 1,000 tons came to this country.

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

I said they were the figures given by the Russian Government, and so they were.

MR. KEARLEY

was sure the right hon. Gentleman did not wish to convey that he had wilfully misled the House, but he was in this dilemma: either he had made statements by which he wished to mislead the House—which of course was not the fact—or he had put forward statements the accuracy of which he had not taken pains to investigate. Did the right hon. Gentleman wish to own up?

MR. GERALD BALFOUR

When I come to speak in my turn I shall be quite prepared to give my explanation of the circumstance. Meanwhile I am quite prepared to admit that there was a certain amount of sugar coming from Germany of which I was not aware.

MR. KEARLEY

said that that was only part of the case. What he was now arguing was that the Convention was obtained under false pretences, that the House was misled by not being put in possession of all the facts, and that if the attempt were made a fresh the Convention would not get even a Second Reading. From inquiries which he had made he found that the total amount of Russian sugar, refined and raw, sold by five brokers of Mincing Lane, was in 1902, 36,050 tons, and in 1901, 21,500 tons, and that one firm alone, Messrs Meyer Fr. Sohn, sold no less than 11,000 tons in 1901, and 16,000 tons in 1902. He had also ascertained from the British Vice-Consul at Danzig that the exports of Russian sugar from that port to the United Kingdom were 7,483 tons in 1901, and 9,748 tons in 1902.

MR. J. CHAMBERLAIN (Birmingham, W.)

asked whether those quantities were included in the 21,500 and the 36,050 tons previously mentioned.

MR. KEARLEY

was not certain, but probably they were. But in any case there were 21,500 tons and 36,050 tons of Russian sugar known to be sold on the London market by these five brokers alone, as against the 700 tons and the 1,000 tons stated by the President of the Board of Trade.

He would only say, in conclusion, that this policy was believed to be a first instalment of the greater protection revival of which the country had heard so much, and about which it had formed such a decided view. The right hon. Gentleman the Member for West Birmingham was proclaimed by his friends to be its author, and he was entitled to the full credit for the results of his handiwork. Those results had been disastrous to the British consumer and manufacturer. The Convention had conferred cheap sugar on our Continental rivals and dear sugar on the home consumer; it had halved the price to the consumer abroad, and doubled the price to the consumer at home. The right hon. Gentleman in his speech on the Second Reading of the Convention Bill said— I wish I could address an audience of working men. I would appeal to their pockets and their interest, and say, 'What have you done? You have destroyed a trade which might have given employment to goodness knows how many people, and you have allowed trades one after another to be thrown away, or handed over to our competitors." Why had not the right hon. Gentleman gratified his wish and addressed a meeting of working men on the Sugar Conven- tion? Was it because he was afraid that they might ask: "What have you done?" He begged to move.

SIR J. DICKSON-POYNDER (Wiltshire, Chippenham),

in seconding, said he wished to deal with the broader aspect of the Convention in its relation to our present free-trade system. After nearly a century the bounty system had been found by the Continental nations to be intolerable. It was based on the same false principle that lay at the root of every protectionist measure. The bounty system was protection in its most concentrated and direct form. The artificial stimulus given to beet cultivation had resulted in such over-production that it had had to be exported at one-fourth of its actual cost, with the result that we in this country had not only had sugar for domestic purposes at one-half the price prevailing in other countries, but had become the greatest sugar-manufacturing nation in the world, and had actually been able to re-export sugar to the very countries from which we originally received the raw material. That was the condition of affairs when the Government precipitated the abolition of bounties by joining the Sugar Convention. He did not believe the foreign countries would ever have come to a simultaneous decision if Great Britain had not joined the Convention. What would be the effect? To treble the price of sugar in the United Kingdom, while the price in foreign countries had been reduced by one-half. This result had been clearly pointed out by the mover of this Amendment. In other words, the inhabitants of the United, Kingdom had been compelled to bear the cost of abolishing bounties, instead of the inhabitants of the bounty-paying countries bearing the cost themselves. Therefore the whole loss and hardship of the reversal of the bounty system had been borne by this country, which was the one country that was in no way responsible for the system. Supposing it had been proposed that a fund should be formed for compensating growers of beet and manufacturers of beet sugar in order that by degrees they should reduce their bounties, and supposing it had been suggested that the British Government should subscribe a certain sum to that fund, he ventured to say that such a proposal would have been scouted as too preposterous for consideration. If a proposal of that kind had been seriously made by a Minister in the House of Commons it would have been defeated upon a division by an overwhelming majority. And yet it was absolutely certain, in the light of recent events, that this would have been a far more practical and economical operation than that which the Government actually compelled the House to adopt in the Sugar Convention.

What had happened? For the first time in fifty years there was a falling-off in the consumption of sugar in the United Kingdom and the Board of Trade Returns showed a falling off of 3 per cent. That was an alarming sign. It not only meant a considerable reduction in the consumption of sugar but a reduction amongst all the sugar-using industries. They were told that this was due to shortage in the crop on the Continent of Europe, and that this was the reason for the rise of price in England. He ventured to say that that could not be seriously contended. If it were true that there was a shortage on the Continent, it was a remarkable fact that sugar in France and Germany was half to-day what it was, and that the consumption of those countries had doubled. It was not natural causes that had brought this catastrophe, but the violent interference with trade by the Government, who had no idea of the forces they were dealing with, and the result they were going to bring about. What had been the result in broad figures? He did not pretend to uphold the bounty system, for it was obvious that that system must have come to an end sooner or later; but it was no business of ours to hasten its abolition; and had we abstained, it would probably have taken twenty or thirty years for foreign countries to escape that incubus which they had themselves created. That would have given time for our sugar manufacturers to adapt themselves to the gradual diminution of supply of beet sugar, and it would also have given time for the sugar-cane growing countries to meet the demand created by the cessation of the beet sugar manufacture. But the Government decided suddenly to effect a change which but for them must have been very gradual, and which they were now compelled to admit inflicts grave hardship on the consumer, and serious and increasing loss on many thriving sugar industries.

What was the motive put forward at the time by the then Colonial Secretary? It was the generally acknowledged desire of the Secretary for the Colonies to benefit the sugar planters of the West Indies. In short it came to this, that it was a colossal measure of retaliation for the purpose of obtaining an infinitesimal amount of preference. He challenged the Government to show any benefit which had been afforded to the West Indies or any other portion of the Empire proportionate to the sacrifice which the United Kingdom had been compelled to undergo. Those responsible for the project had ignored the economic necessity attending the transfer of a gigantic trade from one source of supply to another. Sugar was the fourth greatest of our imports of food. How could the West Indies under the most favourable circumstances expect to provide anything approaching the quantity of sugar required for the British consumers and the manufacturers of this country? Where was the capital to come from? It could only come from England; and the money market was not favourable to invest millions in the West Indies on so precarious an undertaking. How did they know that there was the necessary enterprise in the West Indies? The most energetic colonists there had already turned to other pursuits, such as coffee, cocoa, spices, and it was hardly to be expected that they would retrace their steps to the precarious pursuit of sugar growing. But assuming they were desirous, where was the labour to come from? Were they to have another Chinese Ordinance for the West Indies? He thought the Government had better get off with the old love before they came on with the new. It was really a matter of the cold calculation of supply and demand, because neither the West Indies nor all the cane-sugar producing parts of the Empire could supply us with half the sugar we required within a reasonable time. Natal was confronted with labour difficulties, and Mauritius already produced to its full capacity. In Queensland the labour law made it a negligible quantity as a sugar-exporting country. Was not this an object-lesson of retaliation and preference in full working, and showing how results differed from anticipations?

The Government supported the abolition of bounties on the pretence that it was a great measure of free trade, but why they should go out of their way to reform foreign countries in the direction of free trade, whilst they advocated precisely the same measures for industries in this country he could not understand. The Prime Minister the other day was good enough to tell them during the fiscal debate, with a wave of the hand, that none of them understood, what free trade meant. Some of them had been trying to study the fiscal question during the last two years, and although they knew more about economics than they did before, many of them were just as much in the dark as regarded certain aspects of this question as they were at the commencement. He supposed that the most proper interpretation of free trade would be a trade free from Government interference in which the trader would make his own bargain in a market which suited him best, and in which he bought his goods at the cheapest price. If that was a fair interpretation of free trade then the Sugar Convention was not a particularly successful method of enforcing that doctrine, for it shut the trader out of the cheapest market, and forced him to pay £8,500,000 more than he would have had to pay if left to himself. This £8,500,000 in the past had been the penalty which foreign countries had paid for their system of protection attended as it was with the certain consequences of cartels, trusts, and combinations. The Convention relieved the delinquent countries of this penalty, and now dumped that burden on the unfortunate British consumer. That was an expensive form of education for this country, and it was a disastrous method of arriving at free trade. Free trade, like charity, should begin at home. The best way to teach foreign countries to leave the bad paths of protection and direct them into the paths of free trade was to tell them to come over to England and see our great sugar industries which were prospering through their folly and ignorance. No Sir, foreign countries must work out their own redemption, and that was the only way in which they could be expected to adopt the system which for many generations this country had enjoyed the benefit of.

There was only one consoling feature in this unfortunte business, and it was that it was the most convincing example which could possibly be furnished of the injurious results of the Government policy of retaliation and the Birmingham policy of colonial preference. Nothing could have happened more opportunely to assist in the destruction of both of these mischievous proposals. His position in this Parliament was necessarily one of detachment, and he could and intended to vote on questions according to their merits. What a pity more hon. Members were unable to take the same course. Were other Members equally independdent, this Convention would receive the large measure of condemnation it deserved, and many who now would vote silently in its favour would vote, like he intended to, for the Amendment.

Amendment proposed. At the end of the Question, to add the words. "But we humbly represent to Your Majesty that Your Majesty's Government in committing the country to the policy of the Brussels Sugar Convention have inflicted heavy losses upon trade, diminished employment of labour, enormously increased the cost of a necessary food to consumers, without any compensatory I advantage; and we humbly submit to your Majesty that these evil results call for an immediate remedy; and that the Convention should be denounced at the earliest possible moment.""—(Mr. Kearley.)

Question proposed, "That those words be there added.

SIR WALTER PALMER (Salisbury)

said that upon this occasion he again could not agree with the Amendment which had been brought forward and supported so very lucidly by the hon. Member for Devonport. The hon. Member had stated in most explicit terms the nature of his grievance, and he hoped to show, in a very few minutes, that the Convention, whatever the views of the hon. Member might be with regard to particular trades, was not the whole question, and that he had omitted that part which might have been included, and which had been the real grievance. He was afraid that the mover of the Amendment was not altogether in favour of free trade if they accepted the older definition, namely, that free trade meant "an interchange of commodities at their natural prices." What was the alternative if they reverted to the state of things before the Convention? They would, of course, be having sugar under the system of bounties, and that was he presumed, what the hon. Member wished. The Amendment denounced the Convention as having been the cause of heavy losses in trade, and as having increased the cost of the food of the people. The hon. Member had argued that the cost of sugar had been rendered higher in consequence of the Sugar Convention. He confessed that he could not follow the arguments of the hon. Member in that respect, and he was afraid that he had failed to convince him that the Sugar Convention had, in any way, tended to make the price of sugar higher than it was before. [OPPOSITION Laughter.] Hon. Members opposite laughed, but he wished to put before them this consideration. Did the line of prices since September, 1903, justify this suspicion? The hon. Member was continually talking about the price of sugar having been 6s. per cwt., but was it fair to take one particular fall in price, the result of a very heavy crop in that particular year? They all knew very well that the price in September, 1903, was about 8s. 5d. per cwt., and it fell in the following February to 7s. l0½d., whilst in April of last year it was 8s. 7d., or about the same as it was at the time the Convention came into operation.

MR. KEARLEY

What was it in May?

SIR WALTER PALMER

said they all knew that April was about the time when people began to form their estimate of the growing crops. The hon. Member had given them a great many figures with regard to stocks on the Continent, but he wished to ask him one question upon this point. If the estimate of the crop on the Continent had been normal at that particular time would there have been any rise in the price of 8s. 7d.? The hon. Member had said nothing as to what the price would have been had the crops remained normal. Had crops remained normal, and the price had not been raised, it would have been impossible to argue that the Sugar Convention had in any way increased the price of sugar.

He would take another consideration which the hon. Member had dwelt upon, namely, had the disturbing effect of last year's deficiency caused as great a loss to the country as would have been the case without the Convention? Last year's deficiency, as the hon. Member had told them, sent up the price in December to nearly 6s., and 7s. in the middle of January, or in other words, we paid £2,250,000 more for the sugar bought in this country.

MR. KEARLEY

The price of sugar to the consumer has risen to just double what it was before the Convention. It was l½d. per 1b. before the Convention and it is now 3d. per 1b. That represented a sum of over £8,000,000.

SIR WALTER PALMER

I prefer to take the figures given in the Blue-book.

MR. J. CHAMBERLAIN

You are quite right.

SIR WALTER PALMER

said that if they paid only £2,250,000 more for sugar, what became of the statement made by the Leader of the Opposition that the Sugar Convention had cost this country over £8,000,000 a year? If the Leader of the Opposition spoke upon this question he would like him to show how he made out that this country had been charged £8,000,000 a year by the Convention.

There was another consideration he wished to point out. Was the rise in price last year less or more than during similar years when bounties and cartels existed? According to the estimate of the hon. Member for Devonport the deficiency last year was 750,000 tons of sugar. That was a fact generally known, but the hon. Member did not state that the deficiency in the production of beet sugar was the worst which had been known for the last forty years, and it was this that had caused the rise in price of 6s. and 7s. per cwt. Let them now compare this variation in price with the variations of other years. In the year 1888–9 sugar rose from 13s. 2d. to 27s., which was more than double the rise which took place last year. That rise, he need scarcely point out, was due to the deficiencies in the crops, mostly in the West Indies, which also affected the United States supply, and led to a great deal of speculation and a very great rise in prices. He would take another rise in price which occurred in 1892–3, for in that year the price rose from 12s. 9d. to 18s. 9d. The variation in that crop was vastly less than was the case last year. If the crop last year was the worst they had experienced for forty years, if it was worse than in 1892–3, why had the price not now gone up very much more than it had done? The reason why the price had gone up only 6s. was because the systems of cartels and bounties abroad had been abolished. Take the year 1893–4 when the price fell from 18s. 9d. to 8s. 3d., or a fall of 10s. 6d. per cwt. That was entirely due to over-production in the previous year. He wished to ask the hon. Member if he thought these extraordinary fluctuations were good for trade; at any rate those interested in the trade did not think so. The average price for last year worked out at about 12s. 3d. per cwt. for refined sugar, and that was an increase of 1s. 4¼d. on the previous year. But even then the average price paid in 1904 was less than in any year before 1901. In fact previous to the years of the sugar duty, sugar had always cost more than it had since without the sugar duty.

He thought the hon. Member for Devonport had very much failed in his argument respecting the sugar industries of this country. The dead-weight upon those industries had been the sugar tax, and he would give the House figures to prove this. The Treasury Returns showed that the yield from the sugar tax for 1901–2 was £6,399,000; in 1902–3 it was £4,478,000; and in 1903–4 the amount was £5,725,000. He would next take the Board of Trade figures. In 1901 the importation of sugar was just over 33,000,000 cwts.; in 1902 it was 31,451,000 cwts.; in 1903, 31,134,000; and last year it was 32,294,000 cwts. What he was contending was that there had been a falling-off in the importation of sugar owing to the sugar tax. He would next take the quantity of sugar consumed per head of the population. In the year 1901 the percentage per head of the population was 88.9 1bs.; in 1902, 83.9 1bs.; 1903, 82.2 1bs.; and for last year he had not been able to get the figures. There was one fact which he particularly wished the hon. Member for Devonport to notice, and it was that the duty imposed upon sugar had raised the price nearly to what it was ten years ago. The average price for the five years 1890–1894 was 16s. 9d.; for the seven years 1895–1901,12s. 6d.; and for the four years 1901–1904, 11s.5d., but, adding the amount of the sugar duty, this became 15s. 7d. Therefore the cost of sugar to the buyer had come back to what it was nearly ten years ago. He entirely disagreed with the expression of opinion made by the Chancellor of the Exchequer to the deputation which recently waited upon him. The right hon. Gentleman said that the tax on sugar was only sensible because of particular circumstances which had occurred last year. He entirely disagreed with that statement, for the sugar tax had raised the average price of sugar during the time it had been imposed more than 3s. beyond the average which had existed during the previous seven years. The mover of the Amendment, in stating that the Convention had inflicted heavy loss on trade, had diminished employment, and so on, was entirely beyond the mark. The hon. Member had failed to show that the Convention had really affected the price of sugar, and he omitted altogether to keep in view the fact that the rise had really been caused by the sugar tax. In support of this he ventured to quote the statement made by Messrs. Icke and Sharp, Limited, who said— As regards our own firm, we have been unable, since the tax of 1900, to pay any dividend to the ordinary shareholders, and is it to be wondered at, considering that the tax has been the means of reducing our turnover by over £50,000 a year? It was a little extraordinary that the hon. Member should come forward, as he had done again and again, asking for the abolition of the Convention on these grounds. Of course it was useless to refer him to the well-known opinions of the authorities on his own side—Mr. Gladstone and Lord Farrer. The right hon. Gentleman the Leader of the Opposition, speaking in 1899, said that bounties were only another form of protective duty. The late Sir William Harcourt had also expressed a similar view, and the Trades Union Congress had twice done so. The depressed state of the various trades using sugar had not been due to the Convention, but he believed, nevertheless, that the working of the Convention and the abolition of the cartels had prevented the excessive rise in price which had happened on previous occasions, and had probably saved the country a very large amount of money. That, at all events, was his opinion. He believed that the abolition of bounties would in a short time be recognised as an enormous benefit to this country and the Colonies. Might he give one parallel? This year in the United States there was an enormous deficiency in the wheat crop, and he believed England had received very little wheat from the United States. But we had received enormous supplies from India and other places, and the consequence was that the price of wheat had been very little interfered with. The hon. Member opposite deprecated the encouragement of the cane industries, though this year, owing to a deficiency in the beet harvest, prices were sent up comparatively high because of that deficiency, and because we were not yet able to get our supplies from the cane producers. The hon. Member referred to the large increase in production which had taken place in different parts of the world. He himself had been to Java, though not to the West Indies. Java, he believed, was cultivated entirely by Chinese coolies. It had been mentioned that in Cuba there had been an increase of 1,000,000 tons within a certain time. There had been in Cuba an increased production from 485,000 tons in 1882 to 1,250,000 tons at the present tune, owing to the encouragement given by the United States. He believed that the situation alluded to in the Amendment was due not to the Convention but to the deficiency in the crop together with the sugar tax, which was not before them that night. The depressed state of the trade of this country was also a matter which should be taken into consideration. He looked forward to better times when the finances of the country would be regulated in another way. He hoped the House would not be led astray by the statements which had been made by the mover of the Amendment.

MR. EDMUND ROBERTSON (Dundee)

said he was glad to be able to follow the hon. Gentleman who had just sat down, because he represented a constituency which was largely interested in sugar industries. In Dundee there was a large number of people whose wages were small, and many of these were women who were self-supporting. In the immediate neighbourhood of the city there was a great fruit-growing industry which served the sugar-using industry. His constituency, therefore, was hit three times over by the Convention. The poor, who were the consumers, were hit, the confectioners who manufactured the sugar into confectionery, were hit, and the fruit growers in the neighbouring districts were also hit. The head of the greatest confectionery business in Dundee informed him that the price of sugar had risen 100 per cent. The authority of Sir A. Jones, however, was good enough for him, because he stated that— It is to Mr. Chamberlain we owe it that sugar has risen from £6 to £16 per ton. That statement, he admitted, did not appear in the revised report; if it had been suppressed by the author he was only following the distinguished example of another who had spoken on fiscal matters. In connection with the effects of this sugar policy in general, he regarded the case of the working people as by far the most serious, and he agreed with the hon. Gentleman who had just sat down that they could scarcely consider the Sugar Convention alone in this debate. The sugar policy of the Government was divided into two branches—the part which imposed a tax and the part which dealt with the sugar bounty question in the Convention. He condemned them both, and regarded them both as diseases acting concurrently. He agreed with the hon. Member for Salisbury in condemning the sugar tax. They could not separate the two branches of the Government's sugar policy, because if the effect of the Convention was to impose a burden on the people, however small, it was an aggravation of the burden caused by the sugar tax. He read the other day in a Board of Trade Blue-book that the average wage of an Irish agricultural labourer was something between 10s. 6d. and 11s. a week. If the sugar tax and the Sugar Convention had the effect of increasing the price of sugar in the least degree, then he said, no matter how low the degree, that a wage of 10s. 6d. was one that could bear no diminutions, and to take from a man who was earning that wage the smallest scintilla of a farthing was not a change that could be defended.

The hon. Member for Salisbury condemned the sugar tax and praised the Convention. He found that was very common with protectionists. One hon. Member had candidly given the reason. The reason was simply this, the whole of the proceeds of the sugar tax, hardly as it bore on the poor, went into the Exchequer, and not a farthing went into private pockets. In the case of the burden laid on the people by the Convention not a farthing of it went to the Exchequer, but the whole of it went into private pockets. Part of it went to the agricultural interest, because it was the West Indian equivalent of the English agricultural dole, part of it went to a small branch of the sugar trade in this country, and the rest, and by far the greater proportion, went to the consumer in foreign countries. There was a very useful institution connected with the Press which, he was told, supplied leading articles free gratis and for nothing to country newspapers. One of these denounced the tax and praised the Convention. The writer of the article asked what good the tax did, seeing that it all went to the British Exchequer. That was the real reason why gentlemen of the fiscal persuasion, like the hon. Member for Salisbury, made the discrimination which they did. He himself condemned bounties as much as any one. But here was a bounty paid by a foreign Government for the export of raw material which was not produced in this country at all, and that kind of protection he was prepared to take lying down. He should lie on his back, open his mouth, and ask for more. But what he desired particularly to draw attention to was the case of sugar products. He recollected the astonishment and dismay which spread over the House when it was stated, on behalf of the Government, during the discussion of the Bill of 1903, that bounty-fed sugar was to be excluded but bounty-fed sugar worked into products was to be admitted. It was pointed out that if that were allowed British confectioners would be exposed to unfair competition from foreign manufacturers, who would be able to procure bounty-fed sugar. The Prime Minister then said that the Government did not believe that there would be any chocolates or similar products made from bounty-fed sugar imported into this country, but if that did occur it would be the duty of the Government to stop it by legislation. In other words, they would increase the burden on the poor. Did the Government still hold to their belief that these products did not and would not come in?

MR. GERALD BALFOUR

Hear, hear!

MR. EDMUND ROBERTSON

said they did and would come in. He himself believed that imports of that sort had increased and were increasing, but it was now clear that the Government took an opposite view; and he presumed, therefore, that the legislation projected, under certain circumstances, by the Prime Minister two years ago would not be brought in to stop this particular import. He took it there was no intention to do so this session at any rate?

MR. GERALD BALFOUR

Hear, hear!

MR. EDMUND ROBERTSON

said he would now refer to sugar products coming from countries which were not parties to the Convention. They were told that British confectioners would have the benefit of the limitation of the surtax proposed in the Convention. What had been the history of this question? Here it was in a report by Sir Henry Bergne— A vote was then taken on the question, Whether the contracting States had the right to levy on sugared products a surtax higher than that fixed by Article III. of the Convention. The result was: eight votes in the affirmative; one vote in the negative (Great Britain); two abstentions (France and Italy). The further question was then raised whether contracting States were bound to penalise sugared products containing bountied sugar; and after a debate in which various views were expressed, it was decided to postpone any settlement of the question until sufficient time had elapsed to enable the Commission to perceive whether the existing laws of the various contracting States in regard to this matter gave rise to difficulties in practice. That was the result so far of failing to have a recognition of the principle that the limitation of the surtax fixed by Article III, of the Convention was to apply to sugared products as well as to sugar. At another sitting of the Convention Sir Henry Bergne drew attention to the decision of the Commission that the limitation of the surtax stipulated by Article III, of the Convention was not Applicable to sugared products and submitted the following question— The question arises whether by Article I Contracting States have power to levy a surtax on sugared products sufficiently high to give rise to a bounty. Article I of the Convention is as follows:— The High Contracting Parties engage to suppress, from the date of the coming into force of the present Convention, the direct and indirect bounties by which the production or exportation of sugar may profit, and not to establish bounties of such a kind during the whole continuance of the said Convention. For the application of this provision, sugar-sweetened products, such as preserves, chocolates, biscuits, condensed milk, and all other analogous products containing, in a notable proportion, artificially incorporated sugar, are assimilated to sugar. "The preceding paragraph applies to all advantages derived directly or indirectly, by the several categories of producers, from State fiscal legislation, and in particular to … "(/.) Advantages derived from any surtax in excess of the rate fixed by Article III. Sir H. Bergne is convinced that the Commission will decide this question in a negative sense. It is necessary to settle this question definitely before it is possible usefully to approach the question of the application of the penal clause to sugared products, and the British delegate has been instructed by his Government to ask that the matter be put to the vote. Great hesitation was manifested in giving a direct reply to this question without further explanation, and as none of the delegates were prepared at the moment to make any statement, the discussion. … What was the end of it all? In the last White Paper which had been published they found that Sir Henry Bergne offered a compromise, and that the following declaration was agreed upon by nine votes to two— Should one of the Contracting Parties believe itself to be able to prove the existence of an appreciable bounty on sugared products, arising from an excessive surtax, it shall have the right to submit this proof to the Commission which, if the facts are found to be correct shall give its opinion as to the measures to be taken to put a stop to bounties of the kind in question. The Commission was to express a pious opinion!

MR. GERALD BALFOUR

Not necessarily.

MR. EDMUND ROBERTSON

said it would have no executive power.

MR. GERALD BALFOUR

It is assumed.

MR. EDMUND ROBERTSON

said this was not one of the things that were obligatory on the Commission, and any executive action in the matter would be ultra vires. Here was how Sir Henry Bergne reported this very important fact that all those countries would be barred out by this foreign tribunal sitting in Brussels— Rates of countervailing duties were fixed as being applicable to the following States: Bolivia, etc; and he added:— No appreciable amount of sugar from any of these countries appeared to be now imported into the United Kingdom. How much sugar did these countries, produce? He believed it to be very much more than people imagined; it must be something very considerable. Sir Henry Bergne merely reported, however, that these countervailing duties had been fixed for these countries. That was on October 26th. What happened? Six weeks after, on December 2nd, the Foreign Office suddenly woke up, and a telegraphic despatch was sent by Lord Lansdowne to Sir Constantine Phipps to this effect:— You should hand in to-day without fail to the Belgium Government a Note appealing under Article VII. of the Sugar Convention against the decision arrived at by the Commission at the recent sittings as regards all the countries named except Brazil. To appeal against the exclusion of these seventeen States! Sir Henry Bergne reported the fact of their exclusion, and seemed to justify it, but the House was entitled to know whether he voted for or against their exclusion; to know what our delegate did when this important matter was under discussion. If he voted against their exclusion, why did he not say so; if he voted for it, why did he not tell his Government? Surely unless this was a mere farce——

MR. LOUGH (Islington, W.)

Oh! it is a farce.

MR. EDMUND ROBERTSON

But it was a tragedy as well. Unless this was a mere farce they in that House were at least entitled to know what our delegate did when this important question was under discussion. If Sir H. Bergne voted for the exclusion of these countries, as he was entitled to assume he did from the slight reference to it in his own report which suggested, as an excuse for it, that very little sugar came here from those countries, what position was this great country in whose Foreign Minister appealed against the decision of his own subordinate officer? The Secretary of State called it an appeal, but it was not an appeal at all. It was something in the nature of a re-hearing, and a re-hearing before the same judges. And what was the reason given for this appeal? The report was still more mysterious in regard to that. Here was what Lord Lansdowne said in another dispatch— The appeal lodged by His Majesty's Government only covers the case of countries in which they are in a position to offer positive evidence that no export bounty does in fact exist. Had the Government evidence? Of course they had. Did Sir H. Bergne have it when the question was before the Commission? Did he lay it before the Commission? If he had it, and did not lay it before the Commission, then he did not do his duty. All these were mysteries that wanted clearing up. Now he thought this thing, this Convention, had once been called a "working model of Protection" He pitied the industries, and he pitied the dignity and honour of this country, if proceedings like this, which had become applicable to one great trade, should be extended to all other trades.

MR. J. CHAMBERLAIN

It is quite true, Sir, as one of the preceding speakers has said, that I take a very great interest in this matter. But I cannot admit the soft impeachment of the hon. Member for Plymouth that I was the author of the Convention which he has so strenuously condemned. That honour, as I think it, must be given to my right hon. friend the President of the Board of Trade and to my right hon. friend the then Chancellor of the Exchequer, the Member for Bristol, both of whom were really, in the first place, responsible for the measure. But that I concurred in the measure and that I am glad to accept any responsibility in connection with it is absolutely true; and I am perfectly ready to defend the measure against all comers even in an assembly of working men, if I could find an assembly interested in the subject. [OPPOSITION ironical cries of "Hear, hear"] It will be evident to hon. Gentleman opposite that even in a public meeting you cannot deal with all subjects at the same time; and when I attend a public meeting with a special object, I am generally inclined to confine myself as far as possible to the object for which I have undertaken to speak. I think, therefore, the reproach of the hon. Member for Devonport that I did not reply to the interruption of a single gentleman in a meeting consisting of 6,000 people, and did not divert myself from the object of the meeting to a long discussion on a perfectly separate subject, is, on reflection, I think he will feel, quite unnecessary. I can hardly believe that he would be quite so discursive as he suggests that I should have been.

MR. KEARLEY

That was not my point. I referred to a fervid passage in a speech delivered in this House more than two years ago, in which the right hon. Gentleman said he would like to address an audience of working men on the sugar question. I wanted to know why the right hon. Gentleman has never gratified that desire.

MR. J. CHAMBERLAIN

I repeat the statement that when anything of importance turns upon this question, and if I am invited by working men, nothing would give me greater pleasure than to address them. Meanwhile I have matters to deal with that seem to me to be of greater importance.

I am anxious to deal to-night with the general aspects of this question. Before I do so I will touch upon one or two observations of the speakers who have preceded me that would not otherwise have come into my general argument. I need not dwell long on the speech of the hon. Member for Dundee, to which we have just listened, although I admit it has for me a particular and special interest, because, although during the whole time that we have been colleagues in the House of Commons I have never found a single subject upon which I did not profoundly disagree with him, and I have never observed in him a train of sentiment with which I have the slightest sympathy, to-night in one observation which he made I really felt inclined partially to agree with him. The hon. Gentleman said that he could not separate the question of the sugar tax from the question of the Convention. But with great determination and courage he proclaimed that he was opposed to both. He is one of those hon. Gentlemen whose rôle it is to be "agin the Government." Consequently, I am not at all surprised that on this occasion he was against two things which the Government have done. But where I felt a certain inclination to join him was in his statement that he did not approve of the sugar tax. I admit I do not approve of the sugar tax. I regard it at the present time as a necessary means of raising revenue. But if the hon. Gentleman will suggest any satisfactory alternative to the sugar tax—I am almost afraid to say it, but I think I might find myself in the same lobby with him. He will remember that I have proposed an alternative scheme. He will, no doubt, recollect that I have felt that a tax like the sugar tax, which comes, every penny of it, out of the pockets of the working men, might be advantageously abolished in favour of a tax which, in my opinion, comes in part out of the pocket of the foreigner. As to the rest of the speech of the hon. Member, it appeared to me to deal with the details of a discussion which took place before the Convention was agreed to.

MR. EDMUND ROBERTSON

I did not say a word about the discussion before the Convention was agreed to; I was referring to the discussion by the Commission.

MR. J. CHAMBERLAIN

I beg the hon. Gentleman's pardon. He quoted Sir Henry Bergne and other members of the Commission. However, I do not think that any one will feel that the technical point which he raised regarding the discussion of the Commission was very important, or bore any particular relevancy to the discussion in which we are engaged. [OPPOSITION cries of "Oh."] Hon. Gentlemen opposite, who were very attentive during the speech of the hon. Gentleman, were more fortunate than myself if they really understood its bearing upon this discussion.

Now Sir, I come to the speech of the hon. Gentleman the Member for Devonport, and I will deal with it in my general argument. There was one point at which, I admit, I did not quite understand what he said. The hon. Member said that by the Convention we had deprived our own in market of cheap sugar and had presented it to Austria.

MR. KEARLEY

I never made any such statement. I do not know what the right hon. Gentleman is referring to. I cannot make those words fit in with any of my statements.

MR. J. CHAMBERLAIN

I took down the hon. Member's words. He said that we were depriving our market of cheap sugar and presenting it to Austria—[Mr. KEARLEY dissented]—and then followed the statement that the hon. Member had somewhere or other met an Austrian confectioner.

MR. KEARLEY

If I made such a statement it was by a slip of the tongue. I had no intention of making any such statement. I did say that, as a result of the Convention, we had deprived the users of sugar in this country of an advantage and had conferred an enormous benefit on the users of sugar on the Continent by making the article cheap there.

MR. J. CHAMBERLAIN

That is exactly what I said, except that I used the word Austria and the hon. Member applies his statement to the whole of the Continent. And it certainly does so apply if it applies at all. But I deny the statement. I say that at the present time sugar is as cheap in this country as in any country on the Continent. [OPPOSITION cries of "Oh."] There is not a single country in which sugar is before and since the Convention cheaper row than in England.

MR. KEARLEY

What is the relative position before and since the Convention?

MR. J. CHAMBERLAIN

I will come to that a little later, but bear this in mind: what the hon. Gentleman is claiming is that we should have an unnatural price of sugar. And he calls himself a freetrader! Then the hon. Member for the Chippenham Division of Wiltshire, from his great knowledge of colonial affairs, declared that this Convention had given no advantage whatever to the West Indies. [Cries of "No" and "Yes."] I assert that he said so. Let the hon. Member deny it if he can. I quote from the hon. Gentleman's words, that this Convention had given to the West Indies no benefit. Now, what I have to say to that is that the hon. Gentleman is entirely and utterly mistaken. I was not going to deal with the West Indies. The question to-night is whether this country has been injured. But as it is charged that the Convention has done no good to the West Indies, I venture to tell the hon. Gentleman that there is not a single person connected with the West Indies who will agree with his statement—whether he be a Tory, a Liberal Unionist, a Radical, or an independent person, as the hon. Gentleman calls himself—something like Mahomet's coffin, between heaven and the other place. None of these people connected with the West Indies will justify the statement the hon. Member has made; and if he wants an illustration I will refer him to the Radical candidate for Buteshire, Mr. Lamont, who is. I believe, connected with the West Indies, and who told his constituents—[An HON. MEMBER on the OPPOSITION Benches: Hear, hear! They will be]—in a speech only the other day that no greater boon had ever been conferred on the West Indies than this Convention.

SIR J. DICKSON-POYNDER

I never argued that the existing cane producers had not profited. I tried to point out that there had been no increase or extension of cane production in the West Indies as the result of the Convention.

MR. J. CHAMBERLAIN

From that statement also I am obliged to dissent. But it must, be remembered that after-such a great change as the abolition of the sugar bounties represents you must wait a little time to see a natural effect.

Well, now, what is it that we are discussing to-night? We are discussing a phenomenon which is a perfectly common phenomenon—namely, a very great and sudden rise in an article of general consumption. It is a thing which is continually happening in every trade which depends in any way upon a production which itself is subject to variations of climate. Now to most the rise in the price of sugar would appear to be a matter very much to be regretted, but at the same time not to be at all a subject for Parliamentary discussion. It is happening every day. It is happening in all sorts of trades. Why, just think for a moment of our own experience. Last year, was it not, a tremendous rise in the price of cotton took place—a matter of infinitely more importance than the rise in the price of sugar, a matter paralysing the whole of the vast trade of the biggest industry we have, except the industry of agriculture. Was there any kind of Party, what you may call political, discussion during the whole course of the dearth of cotton? It was due to the same cause as the rise in the price of sugar. It was dues to the diminution of the crop in America, and to the natural consequences of such a diminution, the attempts of monopolists to control the crop. Well, I do not take that alone. I heard some fear of something of the kind now—I am not really informed on the subject—but again and again a failure in the crop of potatoes in Ireland has been infinitely more serious. That has not touched merely the question of a slight rise in price of a necessary of life; It has been the question of the existence of a people. But there, again, has anybody ever charged, has even the most bitter opponent charged the Government with having, by artificial means, caused a catastrophe which was due to the act of God? Those are big things, but there has recently been, from the same cause as that affecting the price of sugar, a drought—there has been an enormous increase of 400 per cent. in the price of onions. I wonder whether anyone who knows anything about English or Irish affairs is going to speak with contempt of a thing which is really a matter of serious importance to a vast number of poor people. There again, does any one say—[An HON. MEMBER: "Pickles"; and cries of "Order."] Well, Sir, that may be offensive, but it has nothing to do with the argument. There again, I ask, has any one read a debate in this House on an increase in the price of onions? I will take another thing in which the rise is less; I will take the rise in the price of corn. It is well known to every one that in the last year the price of wheat has risen by 3s. a quarter. Why, good heavens! we are told that the skies will fall if a duty of 2s. is put on it, and here by purely natural causes there is a rise of 5s., and no one lifts a hand or speaks a word in reference to it. I say in all these cases—and I might quote many others—the matter is treated as regrettable, no doubt, but as due to causes which are beyond human control. But now from causes which I shall show to be the same, there is a rise in the price of sugar, and the Opposition no longer attribute it to these ordinary and natural causes, but to the indescribable malignity of the men who sit there. "the worst Government that the world has ever known," and they say it is due entirely to their infamous, nefarious action. [An HON. MEMBER on the MINISTERIAL Benches: Stupid.] "Who fills the butchers' shops with big blue flies?"—The Government. Now, Sir, really it is all very well, but I do not believe in the long run that that is good political strategy. This attack upon the Government is sup ported, or attempted to be supported, by the grossest mis-statements and exaggerations. I will not say hon. Gentlemen, but their supporters, have in defence of this ridiculous proposition gone almost as far in the way of reckless mis-statement as they have done in the case of Chinese labour. Now, Sir, I have always a great belief in the common sense of my countrymen. I believe in it, and I show it. I think sometimes hon. Gentlemen opposite may believe in it, but they do not show it. But I am certain that in the long run this grotesque exaggeration does harm to the cause which employs it. We are told, for instance, by no less a person than the Leader of the Opposition that this thing is going to cost the country £8,000,000 a year. It is ridiculous. The difference in the cost of sugar between 1903 and 1904 was, as stated by the hon. Member for Salisbury, who knows something about this matter, a little over £2,000,000. Then comes the hon. Member for Devonport. He cannot deny that that is the cost, but he says that when you come to the consumer it is £8,000,000. I really am unable to accept his statement, but if it be correct what are we to say of the middlemen? This increase in price amounting to something like £2,000,000 was almost entirely confined to the last months of the year. Up to the last months of 1904 there was practically no rise at all, and yet this Convention which has had this fatal effect had been in operation twelve months. The fact that it was coming into operation was known before, and really therefore the trade had had a period for preparation much longer than twelve months. The Convention brought practically no rise. ["Oh!"] Out of the rise of which I have spoken—out of the £2,000,000, more or less, I do not know the exact amount, and I suppose nobody can give it—£1,900,000 belongs to the later months of the year. And mark this—that rise was coincident with the reports which were coming in from the Continent that there would be a short crop; and it increased just as it became certain that these reports, which were only rumours in the first instance, were being confirmed day by day, and that the results would be even -worse than had been in the first instance anticipated. That is significant. That suggests—and I am going to prove it—that the rise in the price of sugar is due to the natural cause of the loss of production owing to the drought, and had nothing whatever to do with the Convention.

Then let us go to another point. We are told that this rise—for the moment I leave out of sight to what it is due—has ruined great trades in the country—jam and confectionery—and thrown out of employment numbers of people. It is very difficult to follow the argument. I take jam. Here is a curious fact. At the end of 1904 the wholesale price of jam was lower than it was before the Convention. ["No."] I do not attempt to explain it. That seems to me to be inconsistent with the argument that the Convention has ruined the jam trade. If, after the Convention, and even after the rise, jam manufacturers are able to sell their jam at a lower price than they did long before the Convention came into operation, for the life of me I do not see how the Convention is answerable for the ruin of the jam trade. Now take sugar. No doubt the experience of different firms is different, but this is undoubted, that well-managed firms have during recent years made gigantic profits. On the other side of the House it is a constant part of their argument, brought in on every occasion, that we ought to disregard any representations which come to us from South Africa, from the people who are really assuring the prosperity of South Africa because the dividends are so large there. But the dividends of the confectionery manufacturers here, have gone up 37½ per cent. I have not heard of anything like that on the Rand. I do not grudge them their profits, and I think that the explanation of them lies in the condition of the trade itself. You never find profits of that kind permanent. You find them in a trade in which there is fluctuation, and in fact a fluctuating trade could not go on unless it had very good times to make amends for the very bad times. If you carry the illustration out, you will find that in the coal trade, when there is a boom in the industry, the colliery owners are all making large profits, and then there comes a series of years in which they find it difficult to make both ends meet and keep the mines open. If that is the case, why should not the sugar people have made preparation? They know that their trade has been—it is not now—has been, ever since it existed as a trade, subject to great and violent fluctuation. Why did not they make preparation out of the good years for the bad years which were certain to come? Why are they ruined the moment a bad year comes? If the coal owners behaved that way there would not be a coal-mine open at the present time in England. Let us see what these confectioners could have done. Only last May—only a few months ago—they could have bought sugar at 9s. 6d. a cwt., or 88 per cent. less than now. That is something more than a moderate price, for it is a price at which it is hardly possible that sugar can be produced in any country without a loss. They could have bought sugar then at 9s. 6d. per cwt., and that price is 11d. lower than in 1900, 6d. lower than in 1899, and in 1899 you had not even heard of the Sugar Convention. They could actually have bought a few months ago lower than the price at the time when the bounties were in full force, and when sugar was considered to be at a starvation price. They did not do it. It is not for me to criticise the action of private firms; but I think, at all events, the point wants explanation before we accept as true the statement that the jam trade and the confectionery trade have been absolutely ruined because they have had one or two months of excessively high prices.

Another point I want to emphasise is this. The conditions are not new. To hear the hon. Member for Devonport one would suppose there had never been fluctuations in the sugar trade before, but nothing is more contrary to the fact. The sugar trade has been one continuous series of fluctuations of price; but it must be borne in mind that the disturbance has always been temporary, as it will be now. Trade has gone on and prospered because people engaged in the trade have, in times when high prices were threatening, taken care to buy something in advance. We shall all admit that a trade with fluctuations of this kind is rather to be pitied. I think all of us in trade would rather have a business which gave security for a moderate return, that a business which at one time gave us a very large profit and at another time involved us in a very considerable loss. Therefore, our object should be, if we want to benefit the sugar, jam, and confectionery trade, to reduce the amount and the number of these fluctuations and to secure more regularity. Surely that is a desirable thing to do. The fluctuation we are considering now is not an exceptional circumstance. This particular fluctuation is no more due than any of the previous fluctuations went to the Convention. The fluctuations in the sugar trade in the past have been due to the bounties, and by removing them we have removed the great cause of fluctuation, and we may hope in the future the sugar trade will be more regular. It is too early to expect that by a stroke of the pen or the movement of a wand you can immediately make this great change; but we shall do it if we have patience, and we believe it will have this effect before very long. The old traders in sugar, as well as in everything else, did not desire these fluctuations. They wished to avoid them, and they did not approve of the bounties. The modern confectioners, the clients of the hon. Member for Devonport——

MR. KEARLEY

Not my clients, but your constituents!

MR. J. CHAMBERLAIN

—seem to have changed. I think they do desire bounties. Now let us see what that means. This is an entire reversion of any argument we have ever had in this House. Here are people who want bounties and who are free-traders. Why do they want bounties? There is only one reason, and that is because bounties have in the past from time to time given them sugar at a lower price than it could possibly be made at anywhere. Two years ago sugar was at 6s. and something—I forget exactly—per cwt. Does any hon. Member believe, does the hon. Member for Devonport believe, that sugar under the most favourable circumstances in any country could possibly be made at that price? It is absolutely impossible. Every cwt. sold at that price is sold at a direct loss to the producer. That is an unnatural price. It is an artificial and temporary price; but they want it because when sugar is at this unnatural price they make large profits. I want to remind you of this—if this great trade depends on unnatural prices and on the gigantic and unnatural profits which are made at times when sugar is sold, as under the bounty system, below cost price, then according to the doctrine of free trade it has no right to exist. According to every doctrine of free trade no trade under these conditions has a right to exist. I have spoken of fluctuations. In 1887 there was one of them. What did sugar come to then when there was no Convention? It went up from 11s. to 28s. 3d. a rise, therefore, of 17s. 3d. in a single year. The confectioners approached the Government and said that the trade was paralysed, which was perfectly true. One of the greatest of them complained of this violent fluctuation, pointed out its consequences, and asked for a remedy. What was the remedy the confectioners asked for? They asked that the bounties should be abolished. They said that that was the only true remedy—that until you got rid of the bounties you would never have regularity in the trade. It is quite true, absolutely true. It has been proved by the Convention, and yet the Convention, as I have said, has not had time to show what it can do; but already, although it has only been in existence twelve months, and it takes time to bring new machinery into operation, 400,000 tons of cane sugar was added last year to the world's production. Even that made an enormous difference. Some people seem to me to be in the most absolute ignorance of business principles. I will lay down a business principle. Let us see how many will deny it. I say that in these questions of alternation of prices the amount of difference in the production is altogether disproportionate to the amount of rise and fall which is caused by that difference. If there are buyers for 1,000 tons and there are 1,100 tons to sell the goods will be cheap, although there is only 100 tons surplus; and if there are buyers for 1,000 tons and only a product of 900 to sell goods will be much dearer. The 400,000 tons of cane sugar has prevented the rise in price; great as it is, from being infinitely greater. What is wanted in order to change the state of things which we all deplore is a greater area of production. What is wanted also is a greater variety in the sources of production. The tendency of the bounties was to make the world's supply dependent on the beet—to give the beet a monopoly, and the beet was all subject to the same conditions. If there was any unfavourable climatic condition it affected the whole crop; and the monopolists had the matter almost in their own hands. But the tendency, since the abolition, is to increase the supply of cane, for you have two supplies under different conditions, and you are not liable to the same fluctuations.

I fear I am getting to the end of my time, and I revert to the argument of the hon. Member—that the Convention is responsible for the increase of price because we have prohibited sugar from Russia and the Argentine. Now, I do not like prohibition. I prefer retaliation. You owe prohibition to my right hon. friend the Member for Bristol, who would be admitted by everybody to be a true free-trader, and you owe it to free-trade influence; and as I was indebted to the initiative of my right hon. friend for a reform which I believed was a very great advantage, I respected his view, although I do not agree with prohibition. When the time comes for reconsidering the Convention, if the hon. Member objects to prohibition I shall be with him in a strenuous endeavour to substitute retaliation. That by the way. The influence of the Russian and Argentine import is infinitesimal. I was surprised that the hon. Gentleman attacked my right hon. friend the President of the Board of Trade on an absolutely trumpery difference, and made a point which, to people not acquainted with the figures, might seem a good one, because of imperfect information—not surprising, in the circumstances of the case, and in view of the difficulty of obtaining true statistics of which we have had large experience. I do not profess any infallibility, and I do not grant any infallibility to you, but having had occasion lately to deal with statistics much more than at any previous period of my life, I have found—indeed, I have stated in public in reference to the Board of Trade Returns—how extremely difficult it is in the complicated circumstances of trade to obtain reliable statistics. My right hon. friend admits the error the hon. Gentleman referred to. The error is absolutely insignificant in comparison with the whole amount in question. Let us see what it is. During the last five years the imports into Great Britain of Russian sugar have been 3,000 tons a year, and from Argentina 25,000 tons, 28,000 tons altogether. Now, what does the hon. Gentleman say with his extra information? He said that in 1901 the importation from Russia was 21,000 tons, and I say the average has been 3,000.

MR. KEARLEY

said he mentioned the result of his inquiries from five brokers.

MR. J. CHAMBERLAIN

Oh, I am not going to deal with imaginary figures. In 1902 the amount was 36,000, and I take the two 57,000, as compared with what I suppose is the average, 6,000. Now, what is the consumption of Great Britain? 1,600,000 tons. What, then, does it matter whether the total is 36,000 or 3,000 a year, either of the amounts are absolutely insignificant in the total consumption? It is really unworthy of the hon. Member to introduce a little petty correction of that kind. In the same way with Argentina. It cannot be a large amount. The Russians know what they export, and the amount is 160,000 tons to all countries, and Argentina exports 30,000 tons. In these circumstances it is ridiculous to suppose that there has been any considerable increase in price owing to the stopping of these imports. The real fact is, it makes not the slightest difference, for what they would have sent to us has been went to the Mediterranean, setting free German sugar for importation into this country.

But I must conclude. Not a word would have been said about this matter if the Opposition had not thought they could make political capital out of it. They thought they could mix it up with the fiscal controversy. But it is absolutely irrelevant to that controversy—it has no more to do with it than the Goodwin Sands have to do with Tenterden Steeple. If anything, the Convention is an obstacle to my policy, as it prevents me from giving a preference—I speak as if I had the power—the Convention prevents the giving of any preference in regard to sugar; and I hope that may be altered when the Convention is revised, for I think it would be a wise thing to give a moderate preference to our Colonies to stimulate the production of cane sugar. Why, the Convention is a free-trade in- stitution; it aims at what Cobden desired to secure, that commodities should find markets at their natural prices. Applied to sugar it means that we do not want sugar made artificially cheap; we want it at its natural price. Bounties have been declared to be protection by every free trader until within the last year or two. They were so described by Mr. Gladstone, by Sir William Harcourt, by Lord Farrer, by Lord Avebury—who is the last of these great free-traders living. They have described the system as the worst form of protection. The hon. Member for Chippenham said the right course for us would be to allow bounties to gradually extinguish themselves and not to hasten the process, but what an opinion for a free-trader. No man who called himself a free-trader in the past ever ventured to make a suggestion of that kind. For forty years every Liberal Government has denounced bounties and declared an earnest desire to remove them. During the same period Chambers of Commerce have again and again voted unanimously for a penal clause to remove bounties, and trade unions have done the same thing. I may call attention to the fact that my hon. friend the Member for Morpeth (Mr. Burt) introduced a deputation on the subject, declaring opposition to bounties because, he said, the deputation were free-traders. Because we have succeeded where Liberal Governments have failed these free-traders—new free-traders—turn round on their policy and denounce ours.

And, it being Midnight, the debate stood adjourned.

Debate to be resumed to-morrow.

Adjourned at one minute after Twelve o'clock.