Order read, for resuming adjourned debate on Amendment [February 27th] to Main Question [February 14th], ''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.)
Which Amendment was—
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 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 again proposed, "That those words be there added."1495
§ ME. LLOYD-GEORGE (Carnarvon Boroughs)
said he did not think it would be a matter of surprise to anyone that the right hon. Gentleman the Member for West Birmingham deemed it to be his duty to come and defend the Sugar Convention Act. It was the first great object lesson of his policy—the new policy which he was trying to inculcate in this country. But there was one very significant fact, which was the most significant of all, and that was his attempt to disclaim the honour of initiating the Sugar Convention. A few years ago it was regarded as the inauguration of a new policy which was to revive our drooping industries. It was simply the first step to convince the country of the necessity for adapting it to other industries. Two years after the Convention, however, the right hon. Gentleman came down to the House, and at the beginning of his speech made it perfectly clear that he had absolutely nothing to do with the paternity of it. He offered the laurel wreath to the President of the Board of Trade, but apparently that right hon. Gentleman was not particularly delighted when the suggestion was made. On the contrary, he appeared to feel that the responsibility for the Act rested with the right hon. Gentleman the Member for West Birmingham. It was he who was responsible for this monstrosity, and it was he who ought to have the scarlet letter on his breast. The speech of the right hon. Gentleman was in some respects very characteristic of his later methods. First, there was the scorn for statistics. He poured contempt on them, and especially on official statistics. They were not reliable. The statistics which the right hon. Gentleman believed in were bounty-fed statistics, and that was rather inconsistent with his position in regard to sugar. The Board of Trade statistics were crude, and it was necessary to set up a sort of statistical-refining industry. That the right hon. Gentleman had done in the name of the Tariff Reform League. Before presenting them to the country it was necessary to purify the statistics of the grossness of free-trade heresy which they naturally possessed when culled from the free-trade field of industry and commerce by Board of Trade officials. Again, the right hon. Gentlemen omitted from his facts every element which was 1496 relevant. He carried that so far as to omit a relevant part of his poetical quotation on the previous evening—after he quoted from "Rejected Addresses." He evidently regarded that as a congenial study at the present moment, and he quoted the line, "Who fills the butchers' shop with large blue flies?" but he omitted the most important part of that quotation, the line which preceded in, namely, "Who makes the quartern loaf and Luddites rise?" As he treated his poetry, so he treated his facts. Let them take, for instance, the manner in which he treated the facts concerning the price of sugar. That went to the root of the whole matter. He said, "Why, the price of sugar on the Continent is not higher than it is here." What he omitted, however, was the very important fact that, since the Sugar Convention had been adopted, the price of sugar had gone down" one-half on the Continent, whilst it had been almost doubled in this country. One would have thought that that was a very important element of the fact. The right hon. Gentleman spoke about going to the country to talk to a working-class audience, but if it were his idea to present his case to a working-class audience in that fashion, he could quite understand why most of the members of the working-class audience arrived at the hall in motor-cars. The right hon. Gentleman said, "I am quite willing to present this thing to the country. I have a great belief in the common sense of the people." That belief was not shared in evidently by hon. and right hon. Gentlemen opposite, otherwise why were they postponing the appeal to the people?
Let them take some more facts. Let them look at the arguments at issue when that Act was before the House. He would put them broadly. Hon. Members sitting on his own side of the House said that the result of the Sugar Convention Act would be to increase the price of sugar, while the Prime Minister denied that, and so also, he believed, did the President of the Board of Trade and the Secretary to the Board of Trade as well.
§ MR. LLOYD-GEORGE
said he noticed that the hon. Gentleman repudiated it. He doubted whether the repudiation would have been so emphatic had the question been put to him when the Bill was passing through that House two years ago. At any rate, the Prime Minister denied that the effect of the Act would be to increase the price of sugar, and the right hon. Gentleman the Member for West Birmingham also said so. He said, indeed, that the price of sugar would go down in this country. The second point at issue was that, while the Government and their supporters said that another result of the Sugar Convention would be to give increased employment, the Opposition, on the other hand, declared that it would decrease it. Now they had had two years experience of the working of the Act, and what did they find? As a matter of fact, could it be denied that as a result of the operation of the Sugar Convention Act employment had decreased in the sugar industries, and that something like 15,000 persons had been thrown altogether out of employment, while about 50,000 or practically 50 per cent. of the total of those engaged in the industries were out on half-time for some weeks at any rate? So far from the price of sugar going down it had increased by something like 100 per cent., and thus it would be seen that events had justified up to the hilt all the predictions made by hon. Members on his side of the House. What did that mean? (That a prima facie case was established by the facts against the Sugar Convention Act. The right hon. Gentleman the Member for West Birmingham had endeavoured to explain away those facts, and, indeed, there was no one more competent at explaining or ignoring them than he was. The right hon. Gentleman said his explanation of the increase in the price was the drought, and that was the explanation which was current on the other side of the House generally. He, of course, did not deny that drought under certain circumstances—Convention or no Convention—was an element in raising the price, but all artificial restrictions upon trade aggravated the natural evils. He would take an illustration given by the right hon. Gentleman on the previous night. The right hon. Gentleman then 1498 took the case of corn. Corn last year went up 5s. per quarter, and the right hon. Gentleman said that was due to the short crop in the United States of America. Yes, but supposing there had been a Convention excluding Russian and Argentine corn from this country; supposing that, in addition to the American drought, they had had the Birmingham blight, the increase in price would not have been 5s.; it would have been nearer 50s. The same thing applied to other cases. Let them take the onion market. There was a shortage of onions, and this was really the reductio ad absurdum. No doubt there was an increase in the price of onions. But suppose there had been a Convention excluding Spanish onions from this country, surely prices would have gone up much higher than they had done. The same applied to cotton. There was a shortage in that crop which affected prices, but if we had excluded Egyptian cotton, would not that exclusion, in addition to the shortage in the American crop, have produced absolutely prohibitive prices which might have ruined the cotton industry?
There was another circumstance which the right hon. Gentleman overlooked. The Convention had cheapened sugar on the Continent, and had thereby increased the consumption of sugar there. That was a not unimportant element when they were dealing with the great free-trade controversy. Cheapening an article meant increased consumption. The cheapening in the price of sugar had, he believed, increased the consumption by 800,000 tons on the Continent. In France it had practically doubled consumption, and prices had gone down from the very day that the Convention came into operation by nearly one-and-a-half. He did not think anyone could challenge the proposition that the Convention had decreased the price of sugar on the Continent, and that that depression of price had had the effect of increasing the consumption. Then he came to the second element. The price here had undoubtedly been affected. He knew it was stated that the difference amounted to only about £2,500,000, but that was a very considerable sum. It was £2,500,000 practically contributed by foreigners to a British industry; we had been, 1499 in fact, making the foreigners pay that amount. Let hon. Members look at the statistics for the present year. The right hon. Gentleman the Member for West Birmingham said the increase in the cost was very largely due to the middleman. Of course that was one of the evils of increasing the cost of an article by artificial means; it meant increasing the profits all along the line. But the increase was not solely due to the middleman. Let them look at the statistics for the last month. According to the Board of Trade Returns, we imported into this country the same amount of sugar as in 1903 and 1904, but the difference in price represented a sum of £800,000 in one month. As he found that the quantity imported in January was practically the average for the whole year, it meant that if we kept sugar up to its present price—and it might, indeed, go up still higher—this country would actually lose something like £9,000,000 in the course of a year. Was not that a very important factor?
It was not merely the increased consumption of foreign countries; it was the exclusion from our markets of the sugar from Russia and Argentina and some other countries. It was stated by a great authority on this subject that the amount of sugar that came from Russia—not merely directly from Russia but through German ports before the Convention—was 100,000 tons per year. The amount from the Argentine was something like 40,000 or 50,000 tons per year. What did the right hon. Gentleman the Member for West Birmingham say? He said hon. Members forgot one elementary business principle, namely, that if we fell short by a small quantity in our supply, the increase of price was quite out of proportion to the shortage in supply. But the same thing applied to a small surplus. Supposing they wanted 1,000 tons and there were only 900 tons available the increase of the price might be double though the deficiency might be only one-tenth. There never was a greater free-trade argument, and why on earth so clever a controversialist should have introduced it into the argument in favour of the, Sugar Convention completely baffled him. In the very year in which there was a shortage 1500 in the crop they excluded 150,000 tons of sugar which they had been in the habit of getting from the Argentine and from Russia, and the result had been to increase the price enormously; it had, in fact, almost doubled it here while it had depressed prices abroad. That was what the Convention had done, and in doing so it had doubled the price of raw material for us, while it had halved the price of raw material for our competitors—that was to say, we were four times worse off in competing with foreign countries than we were before the Convention.
And what had been the effect on employment? The right hon. Gentleman the Member for West Birmingham said that in 1889 certain confectioners came to the Board of Trade and said "The price of sugar has gone up, and we ask you to abolish bounties if you can." The right hon. Gentleman was the last man who ought to taunt anybody with opinions he held fifteen or twenty years ago. He believed the right hon. Gentleman had changed every opinion he had held, except possibly his opinion of the Prime Minister. Having had fifteen years more experience of bounties, these confectioners had come to the conclusion that they were a benefit to their industry. He had in his hand a letter given to him by an hon. friend from a firm who, he thought, circulated toffee the other day to Members of the House of Commons. They said—We employ one quarter less hands at present than previously, and both our factories are running short time. Last year our turnover dropped £30,000.The letter went on—We are maintaining an export trade by selling without profit; that is to say, we are dumping.The same tale of reduced profits and reduced employment for workmen was told in regard to other trades dependent on sugar, such as jam factories and mineral water factories.
§ MR. LLOYD-GEORGE
said he was told by his hon. friend the Member for 1501 Islington that it was double what it was when the Convention came into force. He hoped that increase would satisfy the hon. Member, who would have done better not to ask the question. The Government had not abolished bounties; they had only secured a transfer of bounties which had benefited us by enabling us to get sugar cheaper than any country in the world. The surtax on sugar products had been practically turned into bounties to other countries. The sugar industries had been handed over to a Commission representing our great rivals—a Commission just as impartial as the Tariff Reform Commission—and we had armed that Commission with a power to destroy those industries. There never was such folly. The right hon. Gentleman the Member for West Birmingham said the Opposition had characterised the Government's action in this matter as nefarious. That was not the word. It was "egregious." We had entered into a Conspiracy with our trade rivals to rob our own warehouses. That was an offence for which no jury would convict a Minister. They would more probably cause him to be detained during His Majesty's pleasure. It was not folly: it was stupidity—not perhaps wanton—but the Government were blind in entering into it. They had given way to pressure from the right hon. Gentleman. He was then in the heyday of his power. He had won two elections for them; they were looking forward to winning another. They thought he brought them luck. He was, in the words of George Eliot, their crooked sixpence. He made the mistake of insisting on being taken out of the Government profits and being put on the counter on his own intrinsic value, and, of course, he lost by it. The right hon. Gentleman said truly the Convention had stopped fluctuations. That was perfectly true. Price used to go up and down; there was now no fluctuation, there was a constant rise. Of four elements effecting price, crops, demand abroad, freights, and bounty, the last was the only one that was certain, and losing that, the right hon. Gentleman contended, would stop fluctuations.
In suggesting that bounties on beet were destroying the sugar-cane industry, the right hon. Gentleman had not the slightest 1502 regard to facts. Cane sugar had doubled in the last twenty years, and in the last five had increased by 1,000,000 tons without regard to the Convention. It had not increased in the West Indies generally. It had increased in Java, where it was produced by Chinese labour. The right hon. Gentleman's partiality for Chinese labour, he thought, had led him into this blunder. What on earth had this to do with the fiscal question? asked the right hon. Gentleman. It had everything to do with it. It was a warning to the people of this country not to attempt interference with trade by artificial means of this character. He denied that the free-traders were supporting bounties. The bounties were not theirs. The right hon. Gentleman's policy was to tax the foreigner; but the free-trader, instead of taxing the foreigner, allowed him by these bounties to tax himself for our benefit. This Sugar Convention had exposed the miracles of a false prophet, and if the Prime Minister in partnership was to divide the profits he should share the loss. The hon. Member for Salisbury, on the previous night, said that nobody liked taxes. He feared the hon. Member was not an orthodox member of the Tariff Reform League, for the very essence of the policy of that league was that our industry should be manured with taxation, and that taxation was the real road to prosperity. The Secretary to the Board of Trade had asked, in his eloquent speech on the Second Reading of the Convention Bill, what consolation it was to the men thrown out of employment in Greenock to say that the jam industries of Dundee were prospering. Might he ask him now what consolation it was for the 15,000 men and women thrown out of employment in these sugar industries to know that a few hundreds had been added to those employed in the refining industries of Greenock and elsewhere? Every prophecy from the advocates of the Convention had failed. The Secretary to the Board of Trade, in his speech on the Convention, taunted the Leader of the Opposition and said—Our industries are submerged by the waves of foreign competition, and in the interval, when there is a receding wave, he is found clinging shivering to the rock of free-trade principles.Had the waves subsided? Had competition gone down? There had been 1503 no receding of the waves; they were increasing; and the hon. Gentleman had helped in the blasting of the rock.
§ MR. LAWRENCE (Liverpool, Abercromby)
said that the main argument of hon. Members opposite appeared to be that the prophecies made when the Sugar Convention was before the House had been falsified. The statement that there had been a rise in the price of sugar in consequence of the Sugar Convention was incorrect. The price of sugar at the time of the Convention was below the cost of production, and it was to remedy that state of things that the Convention was called into existence. What they said, and what he, knowing something of the matter, would reaffirm, was that ten years after the passing of the Convention the average price of sugar, taking one year with another, would not exceed the average price before the Convention [An HON. MEMBER: How do you know?] He did not pretend to say he was an absolute prophet, but he maintained that the Convention was certain to call into existence a greater area of land fit for the cultivation of sugar, and the greater the area the more certain would be the produce. To follow up this argument, the more the produce the better it would be for the consumer and the worse it would be for the "rings." Some hon. Members had departed from the strict wording of the Amendment, and had thought fit to tax the West Indian planter with various misdemeanours in respect of cultivation, impecuniosity, and lack of labour. There never was a more unjust analogy stated to the House than the hon. Member for Devonport's attempt to compare the planters of Java with the planters of the West Indies. It was perfectly well known that in Java sugar was grown under a system of serfdom, and was the product of forced labour. As to the American plantations in the Phillipines, Cuba, or Honolulu, did the hon. Member for Devonport know that the planters had a great advantage in entering the American market? Had he ever tried to import a ton of sugar into New York? Did he not know that the protective duty against the British planter was 40 per cent., while these American rivals 1504 were thriving under the genial influences of a wholly different fiscal system?
The hon. Member for Carnarvon had laid stress upon the fact that Russian sugar had been excluded from our markets. He thought fit to compare the exclusion of Russian and Argentine corn from these markets with the exclusion of sugar. But whereas corn from Russia and the Argentine bulked largely in the whole import, the sugar from those two countries was quite infinitesimal. The hon. Member for Carnarvon lamented the exclusion of Russian sugar, but last year the drought prevailed in Russia as much as on the Continent, and the crop was short by 250,000 tons. Therefore, whatever figure imports of Russian sugar might have bulked at in 1903, the chances were that under a drought the quantity would not have bulked so large in 1904. Whereas the import of sugar into this country was commonly 6,500,000 tons, out of that big total no less than 5,448,000 tons had hitherto been beet sugar. Last year there was an extensive drought practically spreading over the whole of central Europe from where our beet supplies were drawn. Hon. Members opposite appeared to think that that was a satisfactory condition of things for the British consumer, but as a matter of fact we were practically putting all our eggs into one basket; quite independent of any injustice that might be done to our fellow-subjects beyond the seas.
The hon. Member for Chippenham. he supposed, was so partially informed of anything beyond his own county that he thought the term "planter" meant merely a British farmer, and he taxed the planter with doing little to take advantage of the new arrangements under the Brussels Convention. But while in England a man might take a big farm, and in a fortnight stock and equip it with the best of implements, a planter on a sugar estate, in whatever part of the world he lived, had either got to create a big manufactory himself or else to combine with his neighbours in providing a central manufactory. It was not right for hon. Members opposite to criticise the planter beyond the seas who had laboured under the disadvantages to which he had 1505 alluded, and ask how it was, after thirty years of animal depression, that the planter had not been able within eighteen months of the passing of the Convention either to find money himself or to borrow if from his bankers to erect the necessary plant which alone could make his industry a success. The process would take a great many years, but already many of the estates were beginning to feel the advantage of an assured and stable market. [MINISTERIAL cheers.] If it was an assured fact that an industry was going to yield an adequate return money would never be found wanting. Now the bounties were abolished there would be certainty of a return for anybody who chose to lend money for sugar planting, and he had no doubt that money would be forthcoming at no distant date.
The only accuracy that could be claimed for the Amendment was that, owing to the abolition of the Excise duty on the Continent, naturally there had been an increased consuming power on the part of the masses. Therefore there was probably a serious miscalculation in the figures by which they alleged that there was an increased production amounting to 54 per cent, on the Continent. There was another statement made which although accurate in words amounted to a suggestio falsi. It was said that the price of sugar had doubled since the Convention came into operation. It was perfectly true that since September 1st, 1903, the price of sugar had doubled, but that was a very disingenuous argument. If they referred to the figures they saw that in January, 1903, the price of beet was only 8s. 4¾d., and that that compared with the five previous years was less than in three of them; in the following February the price had dropped to 7s. 8¼d.; in March it had gone up to 8s. 2¼d., an enhancement which was owing to rumours that there had been reduced sowing. There were some authorities who thought there might have been a shortage of sowing of 3 per cent., but there was now a full belief that practically there was no shortage of sowing worth talking of. In the following March it was only 8s. 2¼d., which was even then below the cost of production. In May the price rose to 9s. 6d., and then there came an estimate that there really would be some 1506 shortage of crop. But even in May the sugar users, if they thought there was any risk, had the opportunity of buying for October at 9s. 6¾d., and that was a fact which absolutely traversed the statement that the action of the Convention was the cause of enhancing the value. Sugar users were quite sharp enough people to fix the value as far as they could forsee it, and if they had feared any risk as the result of the Convention they could have bought, and no doubt some did buy, in May over against October, at ¾d. more than in May. In the following June they still could have bought at 9s. 1¼d., so that even then the risks of the Sugar Convention had diminished according to the estimation of the market. It was only at the end of June that the price rose from 9s. 4½d. to 9s. 4½d. Then obviously there came above the horizon a very appreciable chance of a shortage, and at that time the price went up to the figures they had since had. They could follow the action of the sugar market as on a barometer, and they could trace the causes of the rises. He had no doubt that, owing to the enhancement of prices, if they allowed a few months to go by prices would come down as fast as they went up and even faster. There was no reason to think that the sugar industry would suffer more than any other industry which was liable to suffer from special fluctuations which might occur owing to inevitable circumstances such as had occurred on this occasion. The authors of the Sugar Convention, when they talked of fewer fluctuations, never thought that the arrangement they were making would interfere with the dispensations of Providence. What they said was that this was a fiscal arrangement which would modify the fluctuations that arose from fiscal causes. They never pretended that it would be able to produce two tons of sugar where none was produced before, or make any difference in the output of sugar irrespective of the acts of Providence. Hon. Members opposite were in the ridiculous position of endeavouring to bolster up an industry which, whatever its value—and no doubt it was very great, and he wished it God speed on sound and proper lines—claimed that it should have its raw material at less than cost price, that the foreign consumer never should 1507 eat more than he had done in the past, and practically that it should be the sole industry in the world free from outside competition. He wished hon. Members opposite every joy in maintaining propositions which were absolutely absurd and indefensible.
§ MR. McKENNA (Monmouthshire, N.)
said that so far as he understood the hon. Gentleman who had just sat down he appeared to think that the Convention had had no influence whatever in sending up the price of sugar.
§ MR. McKENNA
said they would all admit that the drought had been an important factor in settling the price, but he understood the hon. Gentleman to say that even had there been no Convention, provided the drought had been what it had been, the price would have been the same.
§ MR. LAWRENCE
I said that the only accurate, or partially accurate, statement made in support of the Amendment was as to the increasing of the consumption of sugar on the Continent.
§ MR. McKENNA
said he would take that from the hon. Member. This was a question of plain figures, and anyone was capable of following the increased consumption on the Continent. It amounted to 800,000 tons.
§ MR. McKENNA
said this was given as a fact on official authority. The decrease in the crop last year which was given again on the authority of the hon. Member's own friends, amounted in comparison with the previous good years to 750,000 tons, so that the hon. Member admitted that was a factor in sending up the price. But the 800,000 tons exceeded by 50,000 tons the whole diminution in the crop due to the drought. If the hon. Member seriously did admit the truth of the contention that foreign consumption had been a considerable 1508 factor in sending up the price he must admit that that factor had been more important than the drought itself. It was certainly this increased consumption of 800,000 tons, added to the diminished production of 750,000 tons, which had had the appalling effect of sending up the price to £16 per ton. Of course, outside the House nobody had suggested that the Convention had not had, or would not have, the effect of sending up the price of sugar. In a refiner's trade circular of a distant date he found the following—If the Convention is to do the good for which it was promoted there must be a general readjustment of values, in process of which the tendency will be against the British consumer who has been paying too little, and in favour of those newly-liberated centres of consumption where the people have been paying too much for their sugar.That was the trade view at the time of the passing of the Convention. In the same circular the notion that the price would not rise was dismissed as all too ridiculous, and the increase in the European demand was given as the cause of the rise in price. There was another authority whose opinion he thought the Government would accept. He referred to Sir Nevile Lubbock. Speaking on September 8th, 1904, at a meeting of the New Colonial Company, he said—If prices keep up, and there was every reason to expect they would, he thought he could promise them a very different state of things next year.Sir Nevile was not speculating on another drought, but on the effect of the Convention in increasing the consumption of sugar on the Continent. The hon. Member did not think anyone would seriously contend that the Convention had had no effect in sending up prices. Were they to understand that in spite of that having been the admitted result of the Convention, and in spite of the prophecies of the Government at the time of the passing of the Bill having been shown to be wrong, the Government, if their hands were free now, would once again make such a Convention as this? Did the President of the Board of Trade so far stand by his policy? Would the right hon. Gentleman signify that he was so satisfied with the Convention that he would again introduce a Bill to ratify the Convention?
§ MR. McKENNA
said there was no hope. The Government was incorrigible. Every prophecy they made and on which they founded the Bill had been falsified, and yet they assured the House that if they had the chance they would again enter into the Convention, would pass a Convention Bill, and would tie the hands of the House, and all in order to secure freer trade. What was the free trade they had secured under the Convention? As an illustration he would suppose that two ships came into the port of London, one laden with cheap Russian sugar, bounty-fed, and the other laden with confectionery made out of cheap Russian sugar. Under our new system of free trade the cheap raw material was not allowed to come into our port. The cheap sugar was shut out, but the cheap manufactured sugared goods made from Russian sugar were allowed to come in. Was that free trade worth fighting for? The other parties to the Convention to whom we had surrendered ourselves in the proportion of one to ten were all producers of sugar, and they were all anxious to secure a share, if not the whole, of the great trade we had built up in sugared goods. They had succeeded, and they would succeed still more because they were allowed to impose duties upon the import of sugar products into their countries while we were shutting out cheap raw material. Our manufacturers not having the advantage of free trade in getting cheap raw material were nevertheless handicapped in competition with manufactured goods made from cheap raw material. If we were to interfere with our present system of free trade it should be to allow all products to come into this country free. He did not wish to discriminate between raw material and manufactured goods, prohibiting cheap raw materials and allowing cheap manufactured goods to come in.
What was the effect, measured by the well-known system of the right hon. Gentleman the Member for Birmingham, of this shutting out of sugar? We were paying now at the rate of £10,000,000 a year more for our sugar than was paid 1510 before the Convention came into force. The hon. Member for Salisbury referred to the fact that the imports of sugar in 1904 cost us £2,800,000 more than they cost in 1903. Those figures were perfectly correct, they were to be seen in the Trade and Navigation Accounts. But those same Trade and Navigation Accounts showed equally that at this moment we were paying at the rate of close on £1,000,000 a month more for sugar than in the corresponding period in the previous year. What did that mean if the present prices lasted over the whole year? Upon the calculation of the right hon. Gentleman the Member for Birmingham £10,000,000 a year would mean employment for 120,000 men at 30s. a week, or a living wage and subsistence for 625,000 people. In the language of the right hon. Gentleman the Member for Birmingham we had now got 625,000 people thrown upon the streets because the price of sugar had been raised by £10,000,000 a year. But the argument applied here was a far more real argument than as it was usually applied by the late Colonial Secretary, and for this reason. The increase in the price of sugar to us was a dead loss. Before the Convention, when the price was low, a man with 25s. a week gave one week's work in the year in order to pay for sugar for himself and family. He had now to give two weeks work to get exactly the same result, and consequently we had got to pay to people out of the country for what we formerly got free from abroad. We were therefore the losers of the proceeds of a whole week's work of each mechanic on account of the Convention. We were paying higher prices for our goods, spent more money in taxation, and had so many people out of employment.
Figures had been quoted, but they could not be too often repeated because this matter was a real object-lesson in fiscal policy. He knew that the late Colonial Secretary disowned the authorship of the Convention. He remembered long ago when the right hon. Gentleman the Member for Birmingham referred to Majuba he spoke of it as one of Mr. Gladstone's messes. He had no doubt that ten years hence the Sugar Convention would be described as one of Mr. Balfour's messes. But just as 1511 the right hon. Gentleman the Member for Birmingham was responsible for Majuba. so was he responsible, for the Sugar Convention, and he must take the blame for Majuba and the Convention for what it was worth in either case. That Convention in the injury it had inflicted on the people engaged in the manufacture of sugar-products, had probably done more harm than any other single Act, of Parliament in the recollection of any Member of the House. The figures given in the Census Returns were very clear. We had engaged in sugar refining in the whole country 3,100 persons. 41,000 were engaged in the actual industries which used sugar as a raw material. That statement did not include bakers and confectioners. It was not too much to say that 60,000 persons were engaged in other branches of trade in which sugar was a raw material. So that at least 100,000 persons were engaged in industries which used sugar as a raw material. Therefore, for the benefit of 3,000 men engaged in sugar refining—the right hon. Gentleman could only fix his mind on one industry at a time—there were 15,000 persons driven out of employment and 50,000 put on short time. If these statements were correct—and they could be verified by anyone from the official Returns—he asked, was it a wise policy for us to enter this Convention. Had we in fact secured the principles of free trade on the Continent, having regard to the refusal of the parties to the Convention to reduce the surtax, and having regard to the fact that sugar products made from bounty-fed sugar were being admitted into the Conventional countries? Admitting that the drought on the Continent had had—as it must have had—a serious effect in sending up the price of sugar, could it be doubted for a moment that the Convention had greatly aggravated the effects of the drought. He therefore asked hon. Gentlemen opposite whether they would be willing to support the Government in the policy of renewing the Convention, and if not, he asked them to vote for this Amendment.
§ SIR WALTER THORBURN (Peebles and Selkirk)
said he had been connected with this industry for a great number 1512 of years. He had listened to the speeches delivered that day and had read some of those made on the previous night, but so far as he could see the only argument adduced by hon. Gentlemen opposite was an argument in favour of the principle of bounties. They were told that the bounties were of great benefit to this country. He asked hon. Gentlemen opposite if foreign countries gave these bounties purely from philanthropy?
§ SIR WALTER THORBURN
said he maintained that these foreign countries did not give these bounties on philanthropic grounds. They had one object, and one alone; and that was to kill the sugar-refining industry in this country, and also to knock off the competition of cane sugar, and after that to get the market pretty much to themselves. The, hon. Gentleman who had just sat down referred to the comparatively small number of people engaged in the refining industry. If it had happened that a much larger number had been so employed hon. Gentlemen opposite would not have been such advocates of the bounty system. They had been told by the hon. Member for Carnarvon Boroughs about the exclusion of Russian and Argentine sugar; but he might inform that hon. Gentleman that the bulk of Russian sugar formerly exported to Great Britain was now going to Egypt, which latter country was now sending cane sugar to this country. The Egyptians preferred to import beet, which cost less, and export cane sugar to England, which brought a higher price. Russia had now a market for all her surplus sugar products in Egypt and the Balkan States, Persia and other Eastern markets. Java had been referred to; but he would point out that we had a colony which could produce the finest cane sugar in the world, and but for the insane objection to the employment of tropical labour it would do so. viz., in North Queensland. Although white labour could not be employed in North Queensland in sugar cultivation, the objection to tropical labour was so great that only a small quantity of cane sugar was produced there now; that was consumed in Australia itself, and 1513 the great bulk of the land was practically left derelict from cultivation.
He hailed with the greatest satisfaction the Amendment brought forward from the opposite bench. He thought it was remarkable evidence of the sincerity of those gentlemen on the question of free trade. For months past they had denounced the Government from every platform in the country for their policy which was to make free trade freer. But in this Amendment they asked the Government to revert to one of the worst forms of protection ever devised by the wit of man. During the last session there were various occasions on which hon. Gentlemen opposite raised the question of Chinese labour, which they thought they might use in the country with some advantage to themselves. Chinese labour had become rather stale now, and when a debate upon it took place not one of the right hon. Gentlemen on the Front Opposition Bench got up in his place to take part in it. He did not know whether they would follow the some course in regard to sugar. Now, they were told by this Amendment that heavy losses had been inflicted on some classes of trade. He submitted that the present price of sugar was not so great as it had been in past times, and although confectioners may have had to submit to reduced profits as compared with the period when bounties were in existence, he denied that actual losses had been incurred. He happened to see the reports of two confectionery companies; and one of them paid 12 per cent, and the other 10 per cent. What, then, of the statements of hon. Gentlemen opposite? The reduction in labour had also been grossly exaggerated; but even if it were not, there was a shortage in employment in almost every other industry as well. Why should the confectionery trade be exempt?
The question, however, was whether the Convention was responsible for the present price of sugar. He was convinced it was not the result of the Convention, but of an act of God, Who had sent a drought over Central Europe unprecedented since the middle of the eighteenth century. There was a rock in the Elbe which had not been seen since that period, but it was visible last year. 1514 That showed that there was an enormous drought, the result of which was that the beet crop showed a shortage of 1,200,000 tons. There had been a very considerable increase in the price of wool, which was also produced by a great drought in Australia, during which millions and millions of sheep perished; wool became scarcer; and according to the laws of supply and demand the price increased until it was now nearly double what it was before the drought. He would, however, tell the House what the Convention had done. It had stimulated the growth of cane sugar in the West Indies and elsewhere, with the result that 400,000 tons more of cane sugar were imported into this country than last year. Were it not for that the price of sugar would be £4 or £5 a ton greater than it was. Before the abolition of the bounties the cane growers had no inducement to improve their land and better their machinery. Now that was all changed. According to Mr. Lamont, the Radical candidate for Bute, whose testimony hon. Gentlemen opposite would accept, immediately the Convention was signed a wave of prosperity passed over the West Indies. He was told that such was the scientific skill that was being applied to the cultivation of cane sugar that eventually it would be grown at a less price than beet sugar could be produced, He was convinced that in a very few years sugar would be cheaper in this country than it had ever been before. The Convention would put the sugar industries of the world on an equitable basis. Neither the grower nor the refiner asked for anything but fair competition and to be put on a level basis with the foreign producer; and they were not afraid to fight the world either in connection with the sugar industry or any other industry. The confectioners were not content because they were not given protection. Under the bounty system undoubtedly many large fortunes had been amassed, but if these gentlemen now said that they could not exist without protection, then they must go under. Their policy was a very short-sighted one, for had the bounties not been abolished, it was only a matter of time when refining would cease to exist in this country and the competition between cane and beet sugar would have 1515 been killed. Then they would have realised what the price of sugar would have risen to He himself had been connected with the refining industry, and he had known the price of sugar to be far higher than it was at present. The right hon. Gentleman the Member for West Birmingham pointed out that the present price was clearly temporary. At present it was possible to buy in that market sugar for delivery in October at £4 a ton below the existing quotations. He was afraid that a great many of the arguments of hon. Gentlemen opposite were used for the purpose of influencing votes in the country. He could not however, understand hon. Gentlemen opposite who professed to be free-traders supporting protection of the worst kind. They were throwing consistency to the winds. If they could only secure a temporary advantage for their Party consistency might go by the board. He was sure that all the monstrous statements of hon. Gentlemen opposite would not, however, delude the country in the long run.
§ MR. BRYCE (Aberdeen, S.)
commented upon the position which the hon. Member occupied as a champion of free trade. It was a novel position for him and one to which he hoped the hon. Member would adhere.
§ SIR WALTER THORBURN
Yes; I have never supported the position of the right hon. Member for West Birmingham.
§ MR. BRYCE
said that if they had succeeded in eliciting the opinions of one Member on that side on this point the debate would not have been in vain. There was just one remark which fell from the hon. Member which he would at once refer to lest he overlooked it later. The hon. Member said the whole object of the bounties was to kill the sugar refiners of this country, and that when that end 1516 had been attained the bounties would disappear; but did not the hon. Member know enough of protectionist countries to know that the great mainspring of protection was their own direct interests, and that if they thought they could get any benefit from their Governments, either by way of bounty or duty, they asked for it?
§ SIR WALTER THORBURN
said that what he said was that these bounties not only killed the sugar refiners, but, if persevered in, killed the cane producers as well, because it was impossible for them to compete with bounty-fed sugar.
§ MR. BRYCE
Yes. [An HON. MEMBER: Impossible] The hon. Member would have an opportunity of proving that it was impossible later, but he (Mr. Bryce) would give some reasons why he thought it was possible. The hon. Member had spoken of a rock in the Elbe and had said that when it was exposed to view Germany wept, but in this case it would, be the other way about, because Germany was using more sugar than ever before, and instead of weeping the people would be smiling, as instead of one lump they would be sweetening their coffee with two.
The speech of the Member for West Birmingham did not seem to him to have added much to what the House previously knew on the subject. The right hon. Gentleman's chief argument was that the rise in the price of sugar was not due in any way to the Convention, but to natural causes, and that it was ridiculous of them to complain of a Convention against foreign bounties. He admitted that the statistics they had had about sugar from all quarters had been conflicting End-difficult to deal with for anyone who was not an expert. But he thought there were some broad results which were incontestable, and which were not disputed by the right hon. Gentleman the Member for West Birminghm a 1517 Sugar was dearer, contrary to the predictions made by members of the Government. It was twice as dear as it was at the time of the Convention, and we were paying £8,000,000 or £9,000,000 a year more than we paid before, and from what he gathered the consumption was decreasing. The consumption of sugar, which three years ago had reached 90 1bs. per head of the population, had now decreased to 80 1bs. The prediction that employment would increase after the Convention had also been falsified, the balance of the changes which had taken place being towards the diminution of trade. True there had been an increase of labour amounting to 400 or 500 hands in the sugar-refining trade, but there had been a diminution in the other sugar-using trades calculated at about 12,000 men out of work and between 40,000 and 50,000 working half time.
The Member for West Birmingham had contended that an explanation of the state of the sugar trade was to be found in natural fluctuation, as in the case of some other commodities. But in regard to cotton and grain there had been no State interference. Here we had a Convention which was intended to have effects, and which had had effects. It was inevitable that we should ascribe some of the alteration of price to a measure which was intended to produce that result.
The House Was told that owing to the abolition of bounties less beet was planted in Germany, France, and Austria. That was at any rate a result of the Convention. In those countries, too, the price had fallen and the consumption had increased. Then there was the fact that we had excluded from our market certain exporting countries. The cutting off of the Argentine and Russian supply must have had an effect upon our markets. He had thus pointed out three causes directly due to the Convention, which had no doubt had the principal influence in raising the price of sugar. He was interested to see the Government in the new and unfamiliar character which they generally tried to fix upon the Opposition—that of being the friends of every country but their own. They had benefited the people of Germany and France by giving them cheap sugar, 1518 whilst our people had certainly suffered—not merely as consumers, but also as manufacturers using cheap sugar. Why when the Government were entering into these negotiations did they not carry out the policy of making commercial treaties, so strongly recommended by the Member for West Birmingham, and adopted by the First Lord of the Treasury, for the benefit of British sugar products? Instead of that, those industries were now in a worse position than before. Another result of the Convention was that we had lost the advantage of having open ports. Our system of open ports was one of the things that had made our mercantile marine the greatest in the world. For the first time within historical memory we had subjected ourselves to the control of foreign authorities. We had become members of a board, all the other members of which were more or less protectionist and had interests adverse to our own, and we had bound ourselves for the period of the Convention to submit to the deliberations of that board, in which we generally found ourselves in a minority. Then we had made it easier for what were called corners or syndicates to be formed in sugar. It would be obvious that the more the source of supply was restricted the easier it became for a trust or syndicate to create a shortage.
What had been the object of entering into this Convention? First of all, it was suggested that it would stop dumping. After all, the sugar trade had benefited by dumping all these years, and if we suffered from protection in other countries in so many ways, might we not get what little benefit there was to be gained from it? We had been getting some little gain from the mischievous fiscal policy which prevailed on the Continent, but now we were to suffer all the evils and get none of the benefits. He knew the favourite argument was that if dumping was allowed to go on for a certain length of time it would ultimately crush our own industry out of existence; that if any kind of goods, was habitually and persistently sold in this country below cost price the foreigner would get a monopoly of the market and would be able to raise the price of those goods and sell them to us at any price he liked to fix. 1519 But sugar was not produced in this country, though it was produced in some of our Colonies. At any rate, English interest were not affected by this dumping. No one could say that it was doing any harm to England at all comparable to the benefit of getting the sugar cheap. The Convention might have been intended as a measure of retaliation. If so, the retaliation had taken the form of making sugar cheaper for the foreigner and dearer for ourselves; in fact, it had turned out to be a retaliation on ourselves, for the tangible result was the greater dearness of sugar in this country and the consequent damage to our own industries. He did not understand what hon. Members meant by saying that they, on his side of the House, supported bounties. They had never supported them.
§ MR. BRYCE
denied that they had ever said a single word in defence of bounties. They had recognised that the bounties enabled people in this country to get sugar cheaper than they could without them, but they had never advocated bounties. Liberal statesmen had always held that bounties were bad and would oppose them in this country, but they had never attempted to go as missionaries to other countries and ask them to abolish bounties. When the Liberal Government in 1881 or 1882 was urged to approach foreign Governments on the subject, no one opposed the suggestion more warmly than the Member for West Birmingham. In 1887 or 1888, when the late Baron de Worms urged the entering into negotiations with foreign countries with a view to stopping the bounties on sugar, Mr. Gladstone held that, although bounties were wrong, it was no business of ours to interfere.
The real reason for entering into the Convention was the furthering of the interests of the West Indies, and the prime mover was the right hon. Gentleman the Member for West Birmingham. Those who remembered the debates when the Act ratifying the Convention was passed would remember the strenuous vigour with which the right hon. Gentleman supported their case. But the House must not suppose that 1520 this was a question on which the prosperity of the West Indies turned. It was a question of importance only for a very few of the islands. If they had given bounties to those particular islands, it would have been far better business for this country than paying the additional price for sugar which we now had to pay. The reason why the West Indies had not succeeded with cane sugar was not solely owing to the competition of beet, but because they had neglected improvements in their methods of production. He had visited Jamaica and Cuba, and knew that wherever there were new plantations equipped with good machinery they were doing well and making a profit. He agreed that it was a wise policy to send out a competent botanist to see how improvements could be made in the cane. That was a decided benefit, and he hoped the Colonial Office would continue a policy of that kind. From what had been said the House might very well suppose that the cane-sugar industry, under the blighting influence of bounties, was dying out, but what were the facts? In 1882–3 the production of cane sugar in the world was 200,000 tons. In 1902–3 the world's production was 4,300,000 tons. The cane contained a greater quantity of sugar in proportion to the expenditure than could be produced by beet. All that was needed was to open up these tropical countries and give them the benefit of the best machinery and scientific appliances, because they already possessed great advantages of climate. What he had said of Cuba could be said of Java and other places, where the production of cane sugar was enormously increasing, and when American capital went into the Philippines the same thing would happen there. His complaint against the Government was not that bounties were a good thing or that the Government should have taken any steps to keep them up, but simply that they should have left them alone. They ought to leave trade and commerce alone, because nature was wiser than they were in these matters. The Government appeared now to be animated by a philanthropic desire to benefit the people of Germany and Austria and give them their sugar cheaper, and in this they had succeeded. He did 1521 not think, however, that that was a policy which any sensible commercial country should follow. There never was a case in which it had been shown so clearly that this country was receiving a maximum of inconvenience in return for a minimum of benefit to the West Indies. The whole moral of this was that they should leave trade alone.
§ MR. BONAR LAW
said this was a subject which had been very much discussed, but there was a large number of arguments which could be regarded as stock-in-trade arguments. He would deal with them, but before doing so he would refer to some of the points brought forward in which individual hon. Members had more of a proprietary interest. The first point he would refer to was the remarks which had just been made about the West Indies. It was a familiar argument that what was wrong with the West Indies was antiquated methods and the want of improved machinery. If the right hon. Gentleman the Member for Aberdeen referred to the right hon. Baronet the Member for Berwick, who was a member of the West Indies Commission, he would learn that because of the bounties the manufacturers of beet sugar could afford to have the best machinery, and that by the abolition of the bounties the West Indies, being placed in a position of equality with their rivals, would be able to obtain the most improved machinery also.
§ MR. BONAR LAW
I think the right hon. Gentleman is mistaken. I think the right hon. Baronet was in favour of the abolition of bounties.
§ MR. BONAR LAW
said the right hon. Gentleman opposite and the hon. Member for Carnarvon Boroughs said to the Government, "Look what you have done! You have not only doubled the price of sugar here, but you have reduced it by half on the Continent." He never had the slightest desire to prevent any other 1522 country from getting an advantage if they could get it without doing us any harm. Now did the fact that they were getting sugar cheaper on the Continent do this country any harm? The hon. Member for Carnarvon thought it did, but he appeared to be under a misapprehension. What was the chief cause of the lower price? It was because the interval duty had been lowered, but that did not affect competition with this country. In all the countries concerned a drawback was given, and they all competed upon equal terms in regard to the price of sugar. England went into the Convention not merely as a consuming country but as a country producing sugar. If the effect, of the Convention was not to stimulate the production of cane sugar in the British Empire, it had been a failure, and if it did stimulate this production then it would be a success. Another point alluded to by the hon. Member for Carnarvon was that we had prohibited sugar from our ports, but the real apos le of this doctrine was the hon. Member for West Islington, who contended that three-fourths of the rise in the price of sugar was due to the shutting out of sugar from our markets. He wondered whether the hon. Gentleman realised what that argument came to. It amounted to this, that as far as three-fourths of the rise was concerned, if this country had done what other countries had done, that was to put on counter-vailing duties instead of prohibition, that rise would not have taken place.
§ MR. BONAR LAW
said that other people saw it. The result of that contention was this, that owing to prohibition the Government had made the price of sugar dearer than it would have been had our markets been open to sugar from Russia and Argentina. But the largest market for Russian sugar was the East, where it went in very large quantities, and where it competed with Austrian and German sugar. Was it not obvious that when Russia was thus selling a large part of her production, all that was necessary to sell any surplus was to take a smaller price than that of her competitors? If the market had been open, Russian sugar 1523 would not have been sent here at a lower price than could be obtained in the East What object could they have in it? He could think of only one. If the Russian Government were as anxious as hon. Gentlemen opposite to turn out this Government they might have sacrificed the price of sugar, but that was the only reason he could conceive for a policy so completely unbusinesslike. There was another point. Switzerland was one of the countries which were open to receive the Russian sugar. It could go there if it was really capable of being sold at a price materially lower than our price. Why was it that sugar was not cheaper in Switzerland? That reminded him of a rather curious incident. The hon. Member for Devonport had made the strongest case hitherto against the Convention, but he was able to do so only by throwing overboard three-fourths of all the speeches and pamphlets which had been delivered on this subject during the recess, in every one of which it was stated that, owing to the prohibition, confectioners in Switzerland were able to get their sugar cheaper, and were so able to beat us in our own markets. The hon. Member for Islington wrote a letter to a newspaper in which he implied that sugar in Switzerland was 5s. cheaper than in this country, but did he only imply this on the platform or did he state it as a fact?
§ MR. BONAR LAW
said that illustrated in a most striking way a fact which he had noticed in the debate of the day before. With one exception, none of the hon. Gentlemen who spoke mentioned Switzerland, and when the hon. Member for Dundee, who did not know so much about his subject, incidentally mentioned that country he noticed a solemn frown gather on the faces of his friends. Why should the hon. Member for West Islington not mention Switzerland for months? It was because he had found that sugar was dearer in that country than here. Hon. Gentlemen opposite talked about the competition, or they did until three months ago, which we suffered from with Swiss manufacturers. What was the fact? If they competed 1524 with us in this market or in neutral markets they had to pay in this market not only an equivalent of the sugar duty which our manufacturers had to pay, but they had to pay their own duty of 3s. in Switzerland for which they did not get a drawback. In competing with us, either here or in neutral markets, the Swiss manufacturers were handicapped to the extent of fully 20 per. cent, on the price of their raw material.
He would now refer to what were the common stock arguments on this subject. They were very eloquently put by the hon. Member for Carnarvon. The hon. Member said that in the Convention they had a working model of what fiscal reform meant. Whatever might be said about the Sugar Convention, he did not see how anyone could possibly say with truth that it was a step in the direction of protection. The fact that it was so described illustrated the great change which had come over the minds of those who considered themselves the representatives of free trade as to what free trade really is. It is just the difference between two opposing theories—the theory of free trade and the theory of free imports. To the free-importer cheapness was the one thing necessary, everything else was unimportant, whereas to the free-trader freedom of exchange was the one thing necessary, and everything else, even cheapness, was unimportant. Cobden said that cheapness was not the basis of his policy, but free exchange at natural prices. What, in the opinion of hon. Gentlemen opposite, was Cobden's idea in making that distinction? He did not think it was very difficult to find. Cobden knew, as everyone knew, that cheapness, though it might be a good thing, was not necessarily a good thing but was often a very bad thing. Take an illustration from the present time. If hon. Gentlemen were in the habit of reading the commercial journals, or the commercial articles in the daily Press, they would find a good deal of talk just now about the revival of trade, which, however, he thought was rather premature. In those articles they would see that the expectation of better trade was based on the fact that prices were a little higher than they had been—that there was a slight rise in the price of 1525 commodities. That meant that low prices meant bad trade and bad employment, and that a rise in prices was regarded as an indication of better trade and better employment. The right hon. Gentleman who had just sat down tried, he thought somewhat disingenuously, to show that Mr. Glad-s one looked on bounties as bad only for the countries that gave them. He knew that was not the view of Mr. Gladstone.
§ MR. BRYCE
said everyone knew that Mr. Gladstone condemned bounties as bad economically. He must ask the hon. Gentleman not to misrepresent him; he thought his language was discourteous. What he said Was that Mr. Gladstone always steadily refused to have anything to do with any negotiations for the abolition of bounties on the basis either of retaliatory duties or of prohibition.
§ MR. BONAR LAW
said if he had said anything which the right hon. Gentleman thought was discourteous he was sorry, and withdrew it. He would quote the following passage from a speech of Mr. Gladstone's—We do not regard with any satisfaction the system under which an artificial advantage is given in our markets to the products of foreign labour. Some people say it is a good thing because the consumer gets the benefit of it, but I do not think that any benefit founded on inequality and injustice can bring good even to the consumer.But it was not necessary to go so far back even as Mr. Gladstone. There was a debate on the subject in the House in 1899, when the Leader of the Opposition said—These bounties appear to me to be bad.But he did not stop them. If he had done so, he might have meant what is his present contention that they are bad for the country which gives, and not for the country which receives them; but he added they are bad because—They disturb trade and hinder the development of the country.It was, then, our trade which they disturbed, and our country whose development they hindred, so that even he had become a very recent convert to the new theory of what free trade was.
The question for consideration was whether the Convention in itself was 1526 a good or bad thing. If it was bad it was bad only because and to the extent to which it had raised the price of sugar. If the Convention were the cause of the rise in price there were two questions which he would like to put. Why did not the rise occur earlier, and why was it not plain from the course of prices that the Convention was the cause of the rise? There were two periods in this connection which must be taken into account—the date when the Convention was signed, and the date when it came into operation. In regard to the first he was bound to say that in connection with any article the moment it became apparent something was going to happen to raise the price was the time when the increase would begin. What had happened? The Convention was signed in March three years ago. What was the average price of sugar for those three years as compared with the average price of the previous three years? The price had fallen in the last three years to the extent of more than 1s. per cwt. Many hon. Gentlemen opposite claimed that the Convention was the sole cause of the rise in the price of sugar. [OPPOSITION cries of "No, no."] Well, he had read a, speech of the Leader of the Opposition in which he had practically said so, and stated that the result of the Convention had been to add £8,000,000 a year to the cost of sugar. Well, he had wondered where the right hon. Gentleman had got those £8,000,000 from; but probably it was from a speech of the hon. Member for Islington, where he found the Increased cost was £16,000,000, and the right hon. Gentleman had divided that sum by two and thought that he would be comparatively safe.
So much for the first period; he came now to the second period. The Convention came into operation on September 1st 1903. Did the price immediately rise? On the contrary, it fell; and six months after the Convention came in o operation the price had only risen to that figure at which it stood the day before the Convention came into operation. He repeated that if the Convent on was the cause of the rise, the rise must have occurred earlier; it would not have taken six months to bring about that change in the price. Now, as to the criticism of the hon. Gentleman opposite; he hoped to put it fairly.
1527 That hon. Gentleman's contention was that, as regarded the first period, there was a great deal of speculation in anticipation of a new duty being imposed here on sugar, and that when a new duty was not put on the price fell to counteract the rise which; would otherwise have been occasioned by the Convention. What were the facts? Immediately after the Budget there was a rise instead of a fall. On April 21st a large sugar broker's circular stated that since the Budget had set at rest the fear of an increased duty, a greater demand; had been experienced, and the consequent result was not a fall, but a rise of l½d. lb. He was surprised that the hon. Gentleman should have put forward that theory at all, because the hon. Gentleman knew better; probably than most Members of the House that sugar was an article in the, world's market, that the price was quoted f.o.b. Hamburg, and that the effect of an English duty could only be local. As a matter of fact, the duty was really a "bear" point against the market instead of in its favour, because it would have the effect of diminishing the consumption, and, therefore, a tendency to produce a fall rather than a rise. What possible answer was there to that? The hon. Gentleman told the House with a flourish of trumpets that the Parliamentary Secretary to the Board of Trade had a very superficial acquaintance with the sugar business. He personally did not object to that; he did not pretend to a knowledge of all the details of the trade possessed by the hon. Gentleman. But the hon. Gentleman had omitted something; he had shown a want of knowledge of the general principles which affected every trade. The hon. Gentleman had put forward another argument, which he admitted was a better one, about the price not falling after the Convention came into operation. He admitted that there was something in that argument, which amounted to this, that the Continental Governments had ear-marked a large quantity of sugar to receive the bounty and to be shipped after the date the Convention came into operation. That, he admitted, would have an effect on prices; but he maintained, on the other hand, that is ought not to have had the effect 1528 of counteracting the expectation of increased prices owing to the bounty. He had had a large experience in other articles that fluctuated more than sugar. He had seen immediate statistics dead against a rise in price. He had seen stocks increasing month after month, and yet the price steadily rising. Why was that? Because people who knew most about the trade believed that better times were coming in the future, and were quite willing to lie out of their money in expectation of a rise and of the higher profits they would get when that, expectation was realised. He maintained that exactly the same thing would have happened in regard to sugar if there had been that belief in the Convention raising the price.
What was the cause of the rise? There was no difficulty in answering that question. Admittedly there was an unexpected shortage in the beet supply of more than 1,000,000 tons. Did anyone for a moment deny that that shortage in itself was bound to produce a big rise in price? He did not say that it might not be possible that the rise had been accentuated by the Convention. He was ready to say something more; that before the Convention was carried out it might have seemed reasonable to anyone that, while the change was taking place, there would be a slight rise in price, but that the change would not have been a permanent one. It was therefore quite possible that some part of the rise was due to the Convention; but there was no evidence whatever of that. In fact, the whole of the evidence was in the contrary direction, for while the crop of beet sugar had decreased, the crop of cane sugar had increased to the extent of nearly 400,000 tons. He wanted the House to notice the way in which hon. Gentlemen opposite dealt with this matter. They said that whenever there was a rise in price, or anything favourable to their contention, that was due to the Convention; but that whenever there was a fall, that was due to other circumstances. Take jam, for instance. They knew that the price of jam was low, and they said that was not due to the Convention, but to the big supply of fruit; that the price of confections was high, 1529 but that was not due to the bad crop of beet, it was due to the Convention! In the same way hon. Gentlemen opposite now said that the Convention had nothing whatever to do with increasing the supply of cane sugar. He did not think they could get anyone to believe that. He insisted there was not the slightest doubt that the fact that the Convention was signed did encourage the production of cane sugar all over the world, and that, as a consequence, some part at least of the increase was due to the Convention, and that it counteracted the effect of the shortage in the beet supply.
There was another aspect of this question which should be regarded. Hon. Gentlemen opposite had made a great outcry on behalf of the confectioners. It was said that they were going to be ruined by getting their sugar at the same price as other people. There was something he would like to say in regard to this question of the ruin which was falling on the confectioners. His right hon. friend the Member for West Birmingham had pointed out the previous night that so recently as May of last year the confectioners could have bought sugar for delivery at the end of that year at 9s. per cwt., or only 6d. per cwt. above the price the day before the Convention came into operation, or they could have bought it up to the end of this year at only 6d. advance on that price. Now, a gentleman had been writing very violent letters to the papers on this subject who signed himself as a managing director of a confectionery company. If he was as certain that the Convention was going to raise the price of sugar as he now was that it had raised the price, why did he not buy in advance? If he did not buy under such circumstances it showed he was not a very skilful managing director and was not likely to write any wise letters on that or any other subject. But why did he not buy? There could be only one answer to that question. He did not buy because he did not believe that the Convention would have the effect of raising the price, and neither did anyone else. The people who made their living by buying and selling sugar did not expect it, or they would not have been willing to sell at the lower price, and the fact that they were willing was proof that the rise was not due to something 1530 that could have been foreseen, but to something which was absolutely unforeseen—viz., the drought on the Continent. In this direction he wanted to deal with an argument used by the hon. Member for Monmouthshire. That hon. Member said that owing to the Convention sugar had been cheaper on the Continent, and that consumption had largely increased there, and that the supply available here had been in consequence diminished. He admitted that that, was an important consideration, but the answer was that in every one of the brokers' circulars as to the price of sugar issued during the months while sugar still kept low, reference was made to the increased consumption. That, therefore, was a factor that was taken into account, and yet did not cause an advance. He understood the hon. Member for Devonport to say that there was no rumour about the drought until August. In that the hon. Gentleman was wrong. He had looked into the circulars and found that the first reference was June 16th, and on July 14th it was given; as an explanation of the slight rise that had taken place. All these facts clearly bore out that the rise was not due to the Convention, which could be foreseen, but to the drought,which could not be possibly foreseen.
The hon. Member for Carnarvon made a great point of his having said that in his belief employment in this country would be improved if the Convention were carried, and referred to the fact that there were several thousand people in the confectionery trade out of employment at the moment. Supposing they admitted that, did anyone on the opposite side of the House really maintain that the whole of that want of employment was due to the high price of sugar, whatever the cause of that high price, He would point out that employment had been bad for some time. At a time when there was a great want of employment the trades which suffered first were those which supplied the luxuries. Sugar for tea or cooking was a necessity, but confectionery was a luxury, and the trade which must suffer most was the trade which supplied luxuries consumed by all classes of the community. In 1889 the confectioners were suffering in exactly 1531 the same way as they were suffering now. There was want of employment, and they said they were being ruined by the high price of sugar. Then they attributed their misfortunes to the existence of the bounties. Now they attributed them to the abolition of the bounties. It was obvious that the present high price of sugar could not be a lasting price. Hon. Gentlemen who quoted the present price, and told them that it was exacting £10,000,000 a year from us, really knew that they were talking nonsense. If they read The Times to-day they would find that sugar could be bought for the last quarter of this year at 4s. per cwt. below the present prices. They knew that the present high price was temporary and that it could not permanently injure the sugar-users in this country.
Hon. Gentlemen opposite looked at this matter as if our whole interest in it was as consumers—as if it did not matter to us where we got the sugar so long as we got it cheap. That was a very shortsighted policy. What would be the effect of the abolition of the bounties? The prosperity of the West Indies was admitted by every one. It was admitted that money was pouring into the West Indies to an extent which had not been experienced before. With new machinery and more scientific methods they would be able to produce sugar cheaper than they had ever done before. That was, no doubt, an advantage to the West Indies but hon. Gentlemen opposite imagined that in addressing working men they should appeal only to their direct personal interest. That, he thought, was a mistake. He recently addressed a large working-class audience on the subject, and he thought the working-classes had as strong a sense of fair play as any one in that House, and that they realised that Parliament ought to prevent injustice to our Colonies, just in the same way as it would prevent injustice to any trade in the United Kingdom. Another direct effect of the abolition of the bounties was that the sugar-refining industry in this country, which had suffered from unfair treatment for thirty years, was showing signs of reviving. It was said that the 1532 sugar-refining industry was small. It was; and that explained the attitude of hon. Gentlemen. If it were large, if it commanded more votes their attitude would be different. But it was reviving. At Greenock 25 per cent, more raw material passed through the refineries last year, as compared with the previous year. That was not bad for one year. One of the indirect effects of the abolition of the bounties would be the increase of employment in this country. What would now have been the increase of our trade with the West Indies and our Colonies if the enormous increase in our consumption of sugar had been supplied from cane-producing countries, from countries largely within the Empire, instead of from beet-producing countries, from which we got no advantage? In his own time machinery for the West Indies was one of the most important industries in his constituency. Look at the sugar machinery alone, which we would have supplied, but that was not the whole of it. In exchange for their exports of sugar, the sugar Colonies would have required supplies of all kinds, and our factories would have been busy and the men employed in them would have found work in producing these supplies. Consider also what the effect in our shipping trade would have been if ships had been required to bring home that sugar and take out those supplies. That indirect increase of trade would have given employment to an enormously greater number of people than the whole number employed in the confectionery industry. That increased trade we had lost entirely owing to the bounties. Now the bounties had been abolished, and we were gradually regaining it. He was told in Glasgow that the sugar machinery firms were working night and day. What had they gained by importing beet sugar from Germany and Austria? This country did not supply them with any of the machinery they required, and so far was it from being the case that, in consequence of our increased purchases of sugar from these countries they bought more manufactures from us, as a matter of fact, our exports of manufactured goods to Germany were less now that fifteen years ago.
Any one, he thought, who took all those considerations into account would 1533 feel that Mr. Gladstone took a wiser and a more far-seeing view than the Gentleman who now sat in his place. They would feel that Mr. Gladstone was right, that the right hon. Gentleman the Leader of the Opposition was wrong now but had been right in 1899 when he declared that bounties were bad because "they disturbed trade, and hindered the development of the country."
§ MR. LOUGH
said his only quarrel with the hon. Gentleman was his statement that he (Mr. Lough) had stumbled into a difficulty with reference to Switzerland. That was not the case, as he had visited the country and knew. The hon. Gentleman said that his hon. friends could not be free-traders and free-importers. He, himself, was willing to admit that he was as much a free-importer as he was a free-trader. The only object any Government could have in forming an exchange was to establish cheapness. Why should the Government object to cheapness? Cheapness meant plenty: dearness meant famine. The hon. Gentleman stated that trade was improving everywhere, and he attributed that to the fact that commodities were getting a little dearer. He denied that altogether. Improvement of trade occurred when the purchasing power of the people was increased. The hon. Gentleman was quite candid in his defence of the Sugar Convention, and stated that its main object was to improve a declining industry.
§ MR. LOUGH
said that the hon. Gentleman referred to the refining industry, but it was of a very limited character. Then the hon. Gentleman spoke of improvements in the West Indies; and he laid down the extraordinary: theory that this country did not receive anything in return for the sugar imported from the Continent. What nonsense it all was! The hon. Gentleman ought to remember that the House expected from him some economic doctrine; but if he suggested that imports from the Colonies paid for exports more than imports from foreign countries he was mistaken. Ministers would be 1534 judged more by their treatment of sugar than that of any other commodity. The right hon. Gentleman the Member for West Birmingham opened up a vista with regard to many commodities. His policy was vague and distant; but, so far as sugar was concerned, he had had his way. They had now an opportunity of considering the result; and many hon. Gentlemen opposite, who supported the Sugar Convention, would find themselves on a black list as the enemies of free trade when the general election occurred. Any free-trader who had helped forward the Convention might be likened to a soldier who secured an entrance to a beleagured fortress on the pretence of defending it, and then used his position to hand over the citadel to the enemy.
He had been accused of making extravagant statements as to price, but who would now dispute that his view was correct? He did not think the House would agree with the Parliamentary Secretary's treatment of the question of price. To argue that if the Convention was signed to-day, and there was no rise in price tomorrow, the Convention had not affected prices was an absurd way of dealing with the question. Markets were not immediately effected by legislation. It was not until the people engaged in the business concerned had actual experience of the trend of events that the House could tell what results its legislation might have. The question of price should be looked at broadly. He did not quarrel with the list of prices the Government had put forward, for they admitted that in July, 1902, three months after the Convention was signed, the price was 6s. per cwt., and that was a good price to take. Fifteen months later, when the Convention came into operation, the price was 8s. 4½d., a rise of 40 per cent. After the lapse of a twelvemonth the price was 10s. 10½d., a rise of 80 per cent.; while at the end of last month the price had still further risen to 18s. 7¼d., or a rise of 160 per cent. An increase of one penny per 1b. on the sugar imported represented £15,000,000; therefore, as the increase was more than a penny, his estimate of £15,000,000 had been fully justified. In addition, there was the £6,000,000 of extra taxation, making a Total of £21,000,000 upon this commodity, which must necessarily have dealt a staggering blow to the 1535 industries affected. But while his statements as to price had been borne out by the event, how did the prophecies of the Government stand? The President of the Board of Trade declared that the Convention would bring about an era of moderate and comparatively stable prices, and expressed the belief that the average price would not be raised at all, while the right hon.Gentleman the Member for West Birmingham said he had never admitted that a rise would take place, and denied also that Sir Henry Norman had ever made any such admission. He did not suggest that these statements were not made in good faith, but how extremely foolish the authors of the Convention appeared in face of the tremendous rise of 160 per cent. There had never been so long and so pronounced an upward movement in the price of sugar during the whole of the period over which these discussions had ranged.
But were the Government quite as innocent with regard to the probability of a rise as they pretended to be? Did they really think the price would not go up? Incidentally he might express his belief that the Government were shaping their plans for a Colonial Conference on the model of the conference at Brussels. During the sittings of that conference the Cabinet held meetings at home, and were constantly telegraphing instructions to the British representatives in Brussels. Early in 1902, after urging that the Convention should be pushed forward, they stated that their main reason "for desiring to terminate a system which for a time had tended to cheapen the price of sugar," was their conviction of its injurious effects on the sugar-producing Colonies in the West Indies. That was a remarkable admission in the face of the Prime Minister's declaration that it was no part of his policy to raise the price of food. In February, Lord Lansdowne wired that if the Convention was not arranged the British Government would take steps to safeguard British interests, and, later on, that it was important that a decision should be arrived at without delay, Those despatches created a situation as dramatic as any recently seen. Publicly the Government were declaring against the taxation of food, while in the secrecy of the Cabinet they were working to terminate the period of cheap sugar, and 1536 demanding the right to subsidise the Colonies and grant them a preference. To complete the picture, the policy of the Government was now seen in full operation, and the people of this country were suffering grave evils owing to the experiments that had been made. In the face of these facts, it was impossible to come to any other conclusion than that the Government expected a rise in price to follow the Convention, that they did the whole thing deliberately, and that nothing had occurred except what they had anticipated and did their best to promote.
The contention of the Government was that although the prices had gone up they had at any rate established a better system of trade and put the sugar industry on a sound footing. He had grave suspicion of any defence of free trade from the Parliamentary Secretary to the Board of Trade or the right hon. Gentleman the Member for West Birmingham. The position of the Opposition on this question ought to be clearly understood. They did not mix up the questions of the abolition of bounties and the Brussels Convention. The former could have been easily secured without the instrumentality of the latter. As free-traders they were and always had been in favour of the abolition of bounties, but that was a very different thing from supporting such an instrument as this Convention. The nature and effect of the bounties had never been really understood in this country, but the results of their abolition had thrown a new light on the question. There had been a great increase in consumption in every beet-producing country. Free-traders had always maintained that the abolition of bounties would result in great blessing to the bounty-giving countries themselves, and this contention had been abundantly borne out by the facts. What had occurred proved that bounties and tariffs were exactly the same in their incidence, nature, and effects, and should therefore be opposed by all free-traders. It had been too readily assumed that the bounties had made sugar cheap in this country. If a French importer produced sugar at a cost of £8 a ton, and received a bounty of £5 for exporting it to this country, would it be sold in Mincing Lane at £5 10s.? Not a bit of it. If the price was £11 the Frenchman would 1537 take every penny of it; he would not sell the sugar a farthing the cheaper because he had received a bounty. The object of foreigners in getting their Governments to organise a system of bounties was to put money into their own pockets, not to give anything to the British, but to enrich themselves The reason sugar fell was that the buyer always found some other sugar on the market which he would have taken if the other had not agreed to meet his wants. The price was settled by the law of supply and demand, and had never been settled by bounties or by any consideration given beforehand to the grower. If that were true, it was also true that the present rise in price was due, not to the bounties but to something else, and hon. Members, putting aside the sophistries of the Parliamentary Secretary to the Board of Trade, ought to search patiently for the real reason of the rise in this absolute necessary of life. Much had been made of the difference between the cost of production and the price at which the article was sold being met by a bounty. That was a most dangerous doctrine. What had we to do with the cost of production in any great market? Which cost of production did the Government mean—the highest or the lowest? Sugar was produced in forty-two countries, in some of which the cost of production was as low as £5 a ton. If that question were taken into account at all a stop would be put to all improvement in methods of manufacture, and there would be great difficult in preserving the commercial supremacy of this country.
But what was the real reason of the great rise in price? The hon. Gentleman opposite had made out that it was largely due to the shortage in the beet crop. But to what was the shortage in the beet crop due? The reason was that when, instead of allowing the bounty system to die a natural death, the Government resolved to take part in the Brussels Convention, and to give a certain day for the termination of the system, they caused a diminution in the sowing of beet to the extent of 6½ per cent., which represented a falling off in the crop of about 400,000 tons. Then came a dry summer, for which of course the Convention was not responsible. But then 1538 there was the increased consumption in Continental countries for which the Convention was directly responsible, so that two out of the three great causes of the shortage of beet sugar were immediately due to the Convention. It was true there had been an increased production of cane sugar, but it could certainly not be traced to any effect of the Brussels Convention. For the last twenty years there had been a steady increase in the production of cane sugar, notwithstanding the existence of bounties, but we had been prevented from taking advantage of the last increase of 400,000 tons by the very arrangement made under the Convention. But the Convention had brought into operation something a great deal worse than prohibition. In the place of the free market which formerly existed in this country, the Convention had created the greatest combine the world had ever seen, and what hon. Members forgot was that this combine was working day after day in Brussels against the interests of this country. There were sent by each country and attached to the Permanent, Commission one or two gentlemen called "trade experts," whose business it was to discuss the quantities of sugar sent from every country, who knew exactly what we wanted in our markets, and who were fully aware that to send up and maintain prices it was only necessary "to feed us low," to give us a little less than we wanted. The Government had actually called those competitors together, and enabled them to form this great combination against this country. It might be asked whether our own expert was not protecting the interests of Great Britain. It was only necessary to mention the name of the gentleman to answer the question. The British expert was Mr. George Martineau, whose very name suggested sugar refining and producing, and he had joined with other producers to work out a plan by which prices should be kept up steadily. He did not make the slightest attack on Mr. Martineau. Sir Nevile Lubbock also was sent as an expert a year or so ago. He did not at all blame these gentlemen; they were producers; and it was their business to make dear the article they had to sell, and they had done it very 1539 effectively. The very words of the Convention stated its object as being "to equalise competition between producers." Why should we equalise competition? The object of buyers was to keep competitors apart, and to buy from the one who would sell the cheapest; whereas the object of the Convention was to bring the competitors together, and pan out the trade of the United Kingdom in this most important article between them. By the creation of this European combine the Convention had indeed been a most powerful instrument in raising the price of sugar in this country.
Then there was prohibition. Prohibition was the invention of Great Britain and was her contribution to this precious instrument. The principle of the Convention was countervailing duties, to the merits of which the whole of the speech of the President of the Board of Trade on November 24th, 1902, was devoted. The House had never heard why that method was abandoned; he would now reveal to them the secret. About four months after that debate there was issued a White Paper, containing the names of forty-two countries from which sugar was exported to this country. It also showed that the value of Great Britain's export to those countries was £201,000,000 or 60 per cent, of her total exports, and seventeen of those countries had treaties containing the most - favoured - nation clause, and absolutely forbidding the policy of countervailing duties. That White Paper killed the first suggestion of the Government, and they then brought forward the idea of prohibition, which in his opinion was worse than countervailing duties. In the Court set up under the Convention there were eleven judges, ten of whom were appointed by foreign countries. What right had foreign countries to pronounce decisions as to where our commerce should go? Never in history had anything so undignified been assented to by Parliament as the position in which Great Britain was placed in this matter. A more wretched or contemptible mockery of a Court had never been set up. It had no rules of procedure; there was no system of cross-examination of witnesses; evidence was not sifted; everything seemed to be upside down, as the House would see from the decisions 1540 which had been arrived at. At its first meeting in June, 1903, its business was to examine the trade systems of the various countries. Why should this Court of foreigners examine our trade system? Their own trade systems were not pure, and they themselves were protectionists. Not only was this surtax retained, but three Powers were actually permitted to give bounties. The Court, under the Convention, had to pronounce decisions upon the purity of every trade system in the world. In June, 1903, this Court condemned six countries. Now the Convention contained a provision that the moment condemnation was pronounced it was the duty of each contracting party to act upon it. With regard to those six condemned countries this country only prohibited from three of them, and not the sugar from Japan, Spain, and another country. The Government said that we got no sugar last year from those countries, but then they might get some from them next year. They should either have prohibited the sugar from all those countries or else have expressed their contempt for the Convention by not prohibiting from any. The American Republic had been condemned, and in July, 1904, they started prohibiting from America. Later on twenty more countries were condemned by the Court, and why did the Government not prohibit from all those countries? Why was our own Government the first to set itself up in rebellion against the law the Government had created? Simply because the whole thing was ridiculous and intolerable. What evidence had the Government to justify their appeal against the decision of the Court in regard to those twenty countries? This question of appeal wanted some attention. The Convention provided that appeals must be heard within thirty days, and if any country included in the Convention took exception it had to appeal within eight days. Our Government appealed within eight days, but they never took any pains to get their appeal settled within the thirty days. The whole thing was an intolerable farce, and this postponement of the decision of the Court was a great injustice to British commerce. The intolerable nature of these proceedings was only realised when it was recognised that this 1541 nation was the only country in the Convention that did any trade with the condemned countries, and that was the reason why by a majority of ten to one the Court decided not against the trade of their own countries but against the trade of Great Britain. That was an ignominious position for the trade of this country to be placed in. Who were the judges? Why the people who were interested in the supply of sugar. It was very easy for them to tell us to close our ports against this sugar. At the present time we were paying £800,000 a month more for our sugar, and it was not costing any more to produce it. Where was this money going to? The sum of £400,000 a month was going to Germany, £200,000 a month to France, and £150,000 a month to other European countries. Those judges, therefore, had got very good reasons for closing our ports. He wished most seriously to ask the President of the Board of Trade why had they set, the decision of the Convention at naught? Why did they refuse to prohibit from certain condemned countries and not from others? Why did they not refuse in all cases and tell the Convention plainly that the ports of England would be kept open by Englishmen?
He wished to say a word or two with regard to the treatment of Russia. Russia was one of the first countries condemned. The President of the Board of Trade rashly contradicted a figure of his, but the right hon. Gentleman had now admitted that he was entirely wrong, and if he was not absolutely right, at any rate he was much nearer the truth than the right hon. Gentleman. Russia was one of their best customers in the world, but they were ordered to prohibit from Russia. The Convention received a Russian deputation on the subject, and after the matter had been fully discussed there was nobody opposed to the Russian demands except Sir Henry Bergne. Why did he oppose? There was not a country in the world that it was more unwise for this country to oppose at the Convention than Russia. And what did Russia do? She immediately put a duty on our tea. The President of the Board of Trade had 1542 admitted that the Government did not know what sugar they got from Russia and what amount of tea we sent to Russia. Upon this the right hon. Gentleman had admitted that he was entirely wrong. The Government had not in every case taken into consideration the question whether a bounty was given or not. The Government claimed the right to judge for itself with regard to Russia, but it had no right to do so under the Convention. It was the Permanent Commission which was to decide these matters. Russia had been treated differently from Dominica by the Government. At this moment the decision of the Permanent Commission with regard to Russia had been postponed. Surely if the Government was disposed to open our port with regard to Russian sugar it could do so.
§ MR. GERALD BALFOUR
said Russia did give a bounty. The countervailing duty originally fixed was objected to by Russia, and it was subsequently reduced by the Permanent Commission to the amount at which the United States fixed the countervailing duty for Russia. The ultimate decision as to the amount of the countervailing duty had been postponed.
§ MR. LOUGH
said that was a perfectly candid statement, but he claimed that as the decision was postponed we also should postpone the prohibition. We should act as cautiously as possible before we closed our ports. He thought it was time that this country asserted itself in regard to this matter in order to get the whole thing put on a better basis. The results of the present policy were most alarming. It was all very well for the Secretary to the Board of Trade to say that sweetmeats were a luxury, but that did not help the people who were making a living by the manufacture of confectionery. It was difficult sometimes to draw the line between a necessary and a luxury. There were 3,500 factories, great and small, in the country engaged in this business, and £30,000,000 of capital was invested in it. The president of the Association of the Sugar-using Trades said that the mineral water trade had been brought to the verge of ruin by the increase in the price of sugar. The Aerated Bread Company in London was one of the companies engaged in the 1543 distribution of liquid refreshments, and it stated that the sugar given out in cups now cost £5,000 more than a year ago, and £10,000 more than ten years ago. As a result of the sugar policy there had been a decrease in the employment of the people of this country. He thought it had been shown clearly that all the forecasts which the opponents of the Convention made had been proved to be true and that everything the Government said had been falsified. He believed it was utterly impossible to administer the decisions of the Court set up; most important industries had been brought almost to the verge of ruin; and great distress had been caused among certain classes by the rise in the price of sugar. These were things they might expect when the freedom of the commerce of the country was interfered with. This Convention would, he believed, be a lasting monument to the want of foresight and wisdom of the present Government.
§ MR. DAVID MORGAN (Essex, Walthamstow)
said there had been enormous speculation in sugar. There were a great number of people in this country who would raise their hands with horror if asked to go into the Casino at Monte Carlo, but who did not mind having a few tons of beet sugar in the Produce Clearing House in Mincing Lane. That speculation had been very heavy indeed. When the Sugar Convention was foreshadowed beet sugar was at a price below the cost of production. In July, 1902, it was 5s. 11d. The Sugar Convention came into operation in September, 1903. Beet sugar in Mincing Lane on July 3rd, 1903, was 7s. 8½d, and on the July 31st it was 8s. 0¼d. On August 7th, it was 8s. 3d. The total visible supply in Europe and America in July, 1903, was 2,696,296 tons; in Feb., 1904, 3,787,130 tons; in July, 2,594,335 tons, and in September, 1,527,613 tons. From February to July, 1904, the consumption abroad increased a million tons, causing a rise in price from 7s. 8d. in February, 1904, to 9s. 8d. in July, 1904, and 10s. 8d. in September. The sales of 88 per cent, beet sugar registered in London Produce Clearing House during August-January, 1903–4. were 3,261,000 bags; August-January, 1904–5, 11,188,000 1544 bags; but the quantity actually tendered in those periods was only, 1903–4, 630,000 bags; .1904–5, 744,000 bags. They had heard a great deal of the opinions of people on the political side of this question. He should like to quote the opinion of one who, he supposed, was the best informed gentleman on the sugar question in London, namely, Mr. Cæsar Czarnikow. Speaking at the yearly general meeting of the London Produce Clearing House he said—Without wishing to introduce any controversial element, I should like to give you my opinion, as one who has had the closest connection with sugar all his life, that the much-abused Brussels Convention is not responsible for the rise we have had. I might as well add that the Convention came just in time to save the cane-sugar industry from ruin, not only in our West Indian Colonies, but in other parts of the world as well, and if it had not been carried through we should have had under present conditions an even greater scarcity and probably much higher prices.That was the statement of a man who had a lifelong experience of the sugar trade and whose views were infinitely better than the amateur opinions of many who had addressed them on the subject.
§ SIR JAMES JOICEY (Durham, Chester-le-Street)
said the gambling in sugar to which the hon. Member opposite had referred was very detrimental to the interests of the importers and the consumers. These gambling operations were in the nature of bets, there being no compulsion to deliver the goods. It was customary to have a clause inserted in the contracts to the effect that only the differences in the buying and selling prices must be paid. He would not trouble the House at any great length, but there were one or two general considerations which, as representative of a large sugar-consuming constituency, he thought he ought to allude to. He was an opponent of the bounties which were given in various ways by foreign countries. What he could not understand was, why the Government should have only dealt with one class of bounties, that on sugar, and should have ignored others which caused this country very serious harm. Take the bounties given by the French Government to shipping. Every French shipbuilder who built a ship in France received a bounty, 1545 and every French shipowner who sailed a French ship manned by a French crew received a bounty. These bounties affected the shipping industry in this country very prejudicially. A customer of his own had forty-three sailing-ships trading to Chili, and the bounties he received from the French Government amounted to £43,000 a year. Why did not His Majesty's Government, which professed to be very anxious to abolish the system of bounties as against the principles of free trade, try to get the abolition of these shipping bounties which injured this country very seriously instead of dealing with sugar alone from which we received very great benefit? Now, undoubtedly this Convention was intended to raise the price of sugar, because it was from the first seated that it was agreed to in the interests of the West Indian Islands. [MINISTERIAL cries of "No."] If it was not intended to raise the price of sugar he failed to see what was its object, or what good it could have done. But now the Government saw the evil effects of raising the price of sugar in this country, and they naturally wanted to show that it was never intended to raise but to reduce the price of that commodity. He confessed he had never been much against the sugar bounties, because he had always seen that they were a benefit to this country and injurious to those countries which gave them and placed huge tariffs against the goods exported from this country. He had always looked upon the sugar bounties as some sort of compensation for these high tariffs. He knew that for years the bounties given in Continental countries had been increasing, and that these countries had felt them to be a very serious burden on their population. They did not know how to get rid of them until they induced His Majesty's Government to give them their support. He was satisfied that when the five years for which the Convention was to last came to an end, that Convention would not be renewed by this country, and the Continental countries would not be very keen to renew the bounties. The result would be that instead of our getting the very great boon of cheap sugar, that article would remain cheap on the Continent and would enable their manu 1546 facturers to compete effectively against ours.
He had listened very carefully to the speeches on both sides, and confessed that any rational line of argument—to use a favourite expression of the Prime Minister's—had been all on one side, and that against the Convention. He could not understand why His Majesty's Government, which was always anxious to got this House to give them the power of making their own bargains in regard to tariff questions—to give them a free hand in short—had handed over the control of the sugar industries of this country to a Commission of ten members, of which only one was an Englishman. Why should His Majesty's Government have tied their hands in every form, and practically handed the control of our sugar industries over to our commercial opponents? It was a mad policy they had pursued in regard to this Sugar Convention. There was no doubt whatever that the open ports which had been maintained in this country for the last fifty years had been a great advantage, had brought cheap food to our people, and given large employment to our workmen; and he could not understand why the Government should have given power to the Sugar Commission to prohibit the entry of sugar into this from other countries, such as Argentina, which was a very rich agricultural country, and would enormously increase its production of sugar if its sugar - growers could only get into our market. This country was entirely dependent on a foreign sugar supply, and why should the importation of sugar be prohibited from certain countries? The result would be that these countries would give up producing the very articles we were anxious to buy from them.
He had been very much interested in what fell the previous night from the right hon. Gentleman the Member for Birmingham, but thought that the right hon. Gentleman was labouring under great difficulties, because he saw clearly that he had a very bad case. Consequently the right hon. Gentleman was not so clear and incisive in his argument as was his usual wont. However, the right hon. Gentleman had 1547 made as much of his case as he possibly could, although he did not answer a single one of the arguments put forward so strongly by the mover of the Amendment, the seconder, and the hon. Member for Islington. The arguments of these hon. Gentlemen were overwhelming in showing the folly of the Government in entering into the Sugar Convention. The increase meant an added expenditure of from twenty-two shillings to twenty-six shillings per annum to every householder maintaining a family; and that was important. He was very interested in a statement published by the President of the Mineral Water Manufacturers' Association; and he confessed he had no idea that the association represented such an enormous capital or had such a large number of employees. That industry depended largely on cheap sugar; and it would be a very serious matter if it were interfered with. He failed to see why the Government should have overlooked these considerations. He thought they had not been fully aware of the case in all its bearings. He was satisfied that as time went on the Government would begin to see, notwithstanding the eloquence of the hon. Gentleman the Parliamentary Secretary to the Board of Trade, that they had made a mistake in this matter, and that they would have to retrace their steps. Whether that was the case or not, he was satisfied that when there was an appeal to the country there would be great difficulty in persuading large co-operative societies and other large consumers of sugar that the increase in the price of the commodity was not to a great extent owing to the Convention. Only 50,000 or 60,000 tons were sent from the West Indies; and it was amazing that the Government should have entered into such a scheme on their behalf. How could any such scheme benefit this country? As had been pointed out by his hon. friend the Member for West Islington, the great benefit which was being conferred by the Convention was given to Germany, France, and Austria.
The right hon. Gentleman the Member for West Birmingham alluded to the various fluctuations in the price of sugar which had taken place, and said that 1548 the Convention would have the effect of preventing them. He wished he could hope that that would be the case; but he was afraid that gambling in sugar would continue in the future as in the past. What the Convention would do would be to create a large stock of ready material, and if there was an enormous stock the price would be subject to very serious fluctuations. He thought, therefore, that the Convention would not prevent fluctuations. Again, it would be found that the countries to which this country sent large exports sent back large imports, and that this country sent large exports to the countries from which it received large imports. If, therefore, they prevented imports from any particular country, that country would take less goods from this country; and would take its supplies from other countries. The Convention was a most foolish thing; and it showed the great danger of a Government interfering with questions of tariff. If the Government obtained a free hand to interfere with other trades and manufactures in this country as they had interfered with sugar, the country would never know where it was. He believed, however, that the country would not allow the Government to gamble with its interests as they had gambled with the sugar industry. He protested against any such policy being carried out. He would prefer to trust the traders and manufacturers of the country whose industries depended on free sugar, rather than trust the hon. Gentleman the Member for the Blackfriars Division of Glasgow or the President of the Board of Trade. It appeared to him extraordinary that the Government should have handed over the control of sugar to competing countries and commercial opponents, whose interests it would be to control the trade to their own advantage. He hoped hon. Gentlemen would make clear to the constituencies the serious injury which the Convention inflicted on this country. They ought to have been satisfied with the old conditions.
§ MR. JAMES REID (Greenock)
said there was one point which seemed to have been overlooked by every Member who had spoken in this debate, namely, that we had no guarantee that foreign nations would continue these bounties 1549 after they had crushed our sugar refiners out of the trade. What they would no doubt do then would be to keep their cheap sugar for their own consumption and send their dear sugar to us. The firms of Tate and Lyle had been referred to, but the House must remember that the trade of both those firms was exceptional; Messrs. Lyle struck a speciality in syrup, and Tate's in cubes. It was impossible to point to any other refiner in the country who had done such a trade, or anything like such a trade, as either of those firms. In Greenock ten or twelve sugar refiners had been crushed out of the trade, and the four or five who were left were, up to the time of the Convention coming into operation, living from day to day, although there had been some improvement since. The manufacture of sugar-refining machinery and the shipping trade with the West Indies, both good trades in times past, were now gone or almost gone, although it was to be hoped, with the resuscitation of the sugar-growing industry in the West Indies and the arrival here of cargoes of sugar from those islands, there would be a return of prosperity to those trades.
He had no new arguments to place before the House with regard to the fluctuations in the price of sugar, but contended that the Convention could not be held responsible for them inasmuch as sugar, before the Convention came into operation, varied in price from 6s., a price which could not pay the producer, to more than 28s., and again fell to 10s. in the same year. The consumption on the Continent at the time of the drought was largely the cause of the small supply and the high prices. These, however, were temporary, and would pass away owing to the larger area which would be planted in the future. Switzerland had been said to have benefited by admitting Russian and Argentine sugar, but he did not know that sugar was cheaper in Switzerland than in other parts of the Continent. Jams were no doubt dearer, but he could not believe that trade was so ruined as had been made out, for he noticed that one of the firms engaged in the jam manufacturing industry distributed a dividend of 37½ per cent, in 1903. The confectioners wanted their 1550 raw material at under cost price, and he made bold to say that any trade which could not exist unless it could obtain its raw material under cost was a rotten trade and one which ought not to be allowed to survive. All the sugar refiners asked for was a fair field and no favour. They were quite prepared to meet fair competition, but said that so long as bounty-fed sugar was allowed to be imported into this country in competition with them they would clamour for relief. That relief they had now got, at all events for five years, by means of the Convention. The outcry of the confectioners was inconsistent, because in 1889, when sugar was 28s. 3d. per cwt., they said the high price was caused by the bounties put upon it, and now they were crying out that the bounties were killing them. No one could be blamed for the fluctuation of prices. Wool, for instance, had recently risen 100 per cent., there was no bounty there, and all that could be done was to face the difficulty and wait for better times in the hope that things would come round in time. He trusted that this Amendment would be rejected by a large majority, and that our sugar trade would be no longer crushed, for he believed that as a result of this Convention we should see a very largely increased supply of sugar both from Europe and the West Indies in the near future.
§ MR. ASHTON (Bedfordshire, Luton)
thought the Parliamentary Secretary to the Board of Trade, in his anxiety to prove that the Sugar Convention was not responsible for the rise in the price of sugar, had proved almost too much. If the hon. Gentleman's contention was correct, what became of the argument that the Convention was for the benefit of the West Indian planters? Various reasons had been given for the rise, and doubtless the drought on the Continent had occurred most conveniently for hon. Gentlemen opposite. But it was practically admitted that £11, the price of beet for future delivery as against the present price of £15, was a fair price after discounting the drought, and he submitted without hesitation that the whole of the difference between the former price of £6 and £11 was due to the Convention. The fact that the average prices 1551 for the three years preceding the Convention, and for the three years since, were very much the same, proved nothing. For years past, until the Convention, there had been a gradual decline in the price of beet owing to the bounty system, but from 1902 the price had steadily increased. Was it not probable that the rise was due to the discussion of the; question, and the introduction of the legislation which culminated in the Brussels Convention? It could not be a question of crop, as the crop was wrong only last year, and prices had been steadily rising for two years before. The various prices were as follows: July, 1902, 6s.; November, 1902, 7s. 7d.; February, 1903, 8s.; September, 1903, 8s. 6d.; January, 1904, 8s.; June, 1904, 9s. 3d.; September, 1904, 10s. 11d; and at present it was about 16s. He thought that was proof positive that the main part of the rise was due to the Convention. If the shortness of the crop had been the reason, why had not prices risen on the Continent as well as here? Prices on the Continent had declined just as they had risen in Great Britain. To what could it be owing but the altered circumstances brought about by the legislation complained of? Prices had gone down abroad because the duties had been lowered, and they had increased here because Great Britain was no longer a free market. Regularity of price was no doubt of enormous importance in all trades, but it was certainly not secured by the Sugar Convention. The Government ought to have left the foreigners to stew in their own juice. It was admitted that the system could not go on for ever, and that the abolition of bounties would have come without any outside interference. There would then have been a gradual rise, and little harm would have been done as compared with the destruction of industries caused by the sudden enormous increase of prices. It was an easy thing to get prices down, but a very difficult thing to get them up, and this Convention had greatly increased the difficulty.
And, it being half-past Seven of the clock, the debate stood adjourned till this Evening's Sitting.