FREE TRADE.

HC Deb 12 March 1906 vol 153 cc1003-52

Order read, for resuming Adjourned Debate on Question [12th March], "That this House, recognising that in the recent General Election the people of the United Kingdom have demonstrated their unqualified fidelity to the principles and practice of Free Trade, deems it right to record its determination to resist any proposal, whether by way of taxation upon foreign corn or of the creation of a general tariff upon foreign goods, to create in this country a system of protection."—(Sir James Kitson.)

Question again proposed.

Debate resumed.

MR. LLEWELYN WILLIAMS

, continuing his speech, said that by the mere natural play of economic forces they had compelled America to remain their best customer for tin-plates, and they were now exporting more of these goods to America than any other country, although the Americans had tried in every way they could by protectionist methods to keep our goods out. He wished to explain why it was that this industry, which a very short time ago was on the brink of ruin, recovered so quickly and so completely. Anyone who had studied the recent history of the tin-plate trade would conclude that the industry had recovered because it was carried on in a free-trade country, and that recovery would have been impossible in a protectionist country. Not only had they doubled the demand for these goods at home, but they had also captured every neutral market in the world. Why was it that protectionist American manufacturers, whose output was as great as the output here, could not compete against the manufacturers of this country in the neutral markets of the world? The open competition, which was a consequence of free trade, had led to a more economic production in this country, not by the reduction of wages, for wages had never been so high, but by up-to-date machinery, and other improved methods of manufacture. In every protectionist country the manufacturer looked wholly or mainly to his home markets for his profit, where he had no foreign manufacturer to fear. In 1897, when the American manufacturers were able to supply their own demands, a trust was formed to regulate the price of tin-plates by restricting the output in order that they might get inflated profits. Last year, for instance, for four months during the year, every tin-plate works was shut down in America. They had heard a great deal about the continuity of employment which protection afforded to the working classes. Last year the workmen employed in this trade in South Wales worked continuously week by week all the year round, whilst in America, where the output was as large as ours, they failed to work at all for four months in the year.

SIR HOWARD VINCENT

Can you tell us what wages they get?

MR. LLEWELYN WILLIAMS

said that they got higher wages, but the work was not continuous. What was the good of getting higher wages if for half the year they were out of employment? Besides, the American workman had to pay more for his food and for all he required; therefore, in all these respects the Welsh workmen were in a better position than the workmen across the Atlantic. The consequence was that, although the total output of the tin-plate manufacturers of America was 600,000 tons, they exported only 7,000 tons; while the South Wales manufacturers, in addition to exporting 300,000 tons to all the other countries in the word, had sent 60,000 tons to America. The House had heard a great deal about dumping. It should be remembered that steel bars were in one sense a manufactured article, but in another sense they were raw material. They were at any rate the raw material of the tin-plate industry. When steel was £7 a ton in this country the American and German manufacturers began dumping the goods at £4 10s. and £415s. a ton, and the result was that the steel manufacturers in this country had to reduce their price to £5 a ton. It was the smaller manufacturers who were more dependent upon these steel bars, and it should not be forgotten that the amount of dumped steel bars was comparatively small, although it was just sufficient to break down the steel monopoly in this country and keep the price at something like its natural level. It was common knowledge that in this country the demand for steel was greater than the supply. Twelve months ago there were some shares sold in one of the steel works near Swansea, and it was stated then that for the five preceding years those shares had earned an average dividend of 49½ per cent., and that did not represent all the profits, because a large amount was annually placed to the credit of a reserve fund which if taken into account would have made the average profit 71 per cent. So much for the injurious effects of dumping. It had already been pointed out that we had a great trade with Russia in wheat—that we were importing between nine and ten millions worth of grain from Russia. The effect of this was that when a tin plate manufacturer wanted to send a cargo of tin plates to Odessa he could do so much more cheaply, because the shipowner could always rely upon a return cargo to this country. In this respect the American manufacturers were placed at a disadvantage, and therefore these lower freights for our goods placed a distinct premium on British manufactures. The system of drawbacks had ensured for us the American market. It had been constantly urged that it was not the consumer that paid a tariff imposed upon an imported article but the foreigner. Apparently American protectionists by their action did not believe that. In 1896 the Standard Oil Trust found a very serious competitor in the English market in the Russian Oil Company, and they came to the conclusion that the only way in which they could compete was to do away with the tariff on the importation of tin plates. The Standard Oil Trust appealed to Congress and the system of drawbacks was established. Under this system a Welsh firm sending tin plates to America had to pay a 45 per cent. tariff and then in America these tin plates were manufactured into all sorts of cans for re-exportation to this country. When the Standard Oil Trust re-exported the Welsh tin plates in the shape of oil cans they were allowed a drawback of 99 per cent. on the original tariff. The result of all this was that tenders had been invited and Welsh firms had invariably captured the contracts, and they were now sending between 60,000 and 70,000 tons of tin plates to America. What measure of retaliation could have brought about that result? In this way they had compelled America to-remain their best customer without using any threats or creating any bad blood or exciting strife and without impairing the good understanding which existed between the two countries. We had compelled America, not by methods of barbarism, but by appealing to its enlightened sense of self-interest, to buy in our markets the goods they needed. The idea of a self-contained and a self-sufficient State was an old one. It was the idea that underlay the tribal system; it caused the ancient Roman to denote by the same word a stranger and an enemy; it made the Augustan poet complain that— Heaven's providence in vain Has sever'd countries with the estranging main, If vessel's ne'ertheless With impious keels the sacred bars trangress. But it was not the modern idea. To the modern world the ocean was not "the estranging main," but the great highway of the world's trade and commerce. No country, however great its natural resources or however powerful; no empire, however extensive or however varied its products, could afford to live in splendid isolation from the rest of the world. Man depended upon man and country upon country. The brotherhood of man was a Christian doctrine; the solidarity of mankind was an economic truth. The upholders of the present system had never claimed for free trade that it was a perfect system or a panacea for all the evils the people of the country were suffering from. He hoped that when the right hon. Gentleman the President of the Local Government Board came to deal with the unemployed question he would have some remedy to propose to tide over the temporary difficulty of those men who were willing and able to work but could not find employment. Free traders had never said that the distribution of wealth in this country was what it ought to be. All that they claimed for free trade was that, in a complicated civilisation like that of England with all its Various trades, to allow trade to flow into its natural channels was the best system that man had yet devised for the creation of wealth. But the distribution of wealth was altogether another matter. He was glad to think that they had now in office the most democratic Cabinet and the most democratic Prime Minister that had ever ruled over the destinies of this great Empire. He hoped the Government would not meet the propaganda of the right hon. Gentleman the Member for Birmingham by dry arguments drawn from political economy or by statistical abstracts derived from the Board of Trade. They could easily refute the right hon. Gentleman by those means, but this House expected more from the Government. They expected that they would see to it that the large measures of social reform which the House was returned to bring about would be carried to a definite issue before the expiration of the present Parliament. When this Parliament came to an end And they were face to face once more with their countrymen, they would meet them, erect and unafraid, confident in the knowledge that what they could they had done to ease the life and lighten the burdens of those who, humanly speaking, had no help but in them.

MR. SNOWDEN (Blackburn)

quoting from the Resolution the phrase, "the people of the United Kingdom have demonstrated their unqualified fidelity to the principles and practice of Free Trade," said that that was a matter of opinion on which they were justified in differing very considerably. There were those sitting in this House who held strongly to the opinion that they occupied their present position owing to the indignation of the country at the importation of Chinese labour into South Africa. The hon. and learned member for Waterford considered that the result of the elections was an approval by the public of Home Rule for Ireland, and with that conclusion he was not prepared to disagree. The right hon. Gentleman the Secretary of State for War had told them that if there was one thing to which this House was committed more than another it was retrenchment in our national finances. He felt sure that when the Minister for Education introduced his promised Education Bill he would claim that the Government, by the verdict of the constituencies, had received an unmistakeable mandate to repeal certain provisions in the last Act. Perhaps he would be permitted to add one more reason why he thought the constituencies at the recent election expressed an opinion very different to that expressed by the electors five or six years ago. The result of the election was not so much an expression of opinion upon any one of these particular questions as the expression of a moral indignation amongst the people at the waste and mis-management which had marked the previous years. The Liberal Party had been returned by what had been more than once described by the right hon. Gentleman the Member for West Birmingham as an enormous majority. They were returned and strengthened two-fold in numbers. He was associated with a Party which placed before the electors a definite and distinct policy, and who by that policy, and therefore the approval of the electorate, had been returned to the House with their numbers increased eight times over. If the electorate of this country expressed their opinion upon any question emphatically at the recent election it was that the energies and activities of Parliament in the future should be directed wholeheartedly, in no timorous way, to the treatment of great industrial problems. Might he say to free traders on the Ministerial side that it was upon the very existence of these evils, which sixty years of free trade had failed to mitigate or palliate, that the right hon. Gentleman the Member for West Birmingham had founded his appeal to the country? Right hon. Gentlemen and hon. Gentlemen on the Liberal Benches took exception to the statement he had just made that sixty years of free trade had failed to mitigate to any great extent our grave industrial and social evils. They had the admission of the First Lord of the Treasury that one-third of our population—which meant nearly 40 per cent. of our working-class people—were on the verge of hunger, perpetually struggling to keep their bodies and souls together. It was not by the sum total of our iron exports, or tin-plate exports, or by the increase of the Board of Trade Returns that they were going to ensure the happiness and prosperity of the people. They must estimate the result of the application of sixty years of a particular policy, not by the aggregate amount of wealth it had succeeded in creating, but by the extent to which it had diffused happiness and contentment amongst the people. The Party with which he was associated, while standing as firmly as the most ardent members of the Cobden Club to the maintenance of our Free Trade policy, declined to fall down and worship this god. They were prepared to admit that there was a great deal of truth in what was expressed by the right hon. Gentleman the Member for West Birmingham as to the changed conditions of our industries during the past sixty years. Conditions were constantly changing. They agreed with the statement that the time had come when they should take stock of our industrial position. Our industrial circumstances were not what they were sixty years ago, when we practically stood alone amongst the manufacturing nations of the world. Since then other nations had become their own producers, and to a great extent they were becoming our competitors in all the markets of the world. Sixty years had falsified the expectations that foreign restrictions upon trade would be removed. There had not been a continuous improvement in the condition of the people during the last sixty years. He was prepared to maintain a statement often made, but almost as often disputed, that the rich were getting richer and the poor poorer. The Returns of pauperism presented to the House only a week ago showed that under every head of pauperism there had been a continuous increase during the past five or six years. Turning to employment Returns, they would find a decline in the average percentage of employment since the war. [MINISTERIAL cheers.] He was glad to hear those cheers; they evidently arose from a conviction that the increase of pauperism during the past five years had been due to the war. During the last five years since the war there had been an average annual increase in our foreign trade of £182,000,000. During the last two years there had been an increase in the incomes assessed to income-tax of £101,000,000 a year, as compared with the two years before the war. Could those hon. Gentlemen who believed that the increase in pauperism, and the decline in wages and employment were due to the war, explain how it was that with increasing wealth, more cotton goods, more woollen goods, more boots and shoes, and more food, there should be more starvation? He wished for an explanation how it was that while there was an increased income among the people there should be this decline of employment and wages. He agreed at least with the right hon. Gentleman the Member for West Birmingham to the extent of recognising the need for taking stock, looking round, and trying to see whether it would be possible to effect any changes in our industrial system which would enable us as an industrial nation to equip ourselves more efficiently and effectively for international competition. After that admission of agreement with the right hon. Gentleman the Member for West Birmingham he parted company with him. He disagreed altogether with the proposals put forward by the right hon. Gentleman to meet the present industrial condition, and as a means to enable us to meet world-wide competition more effectively. Although it was not capable of dealing as an active force with the distribution of wealth and the social evils and conditions, free trade was a necessary condition. He did not wish it to be understood by the statement he made just now that he denied that any improvement had taken place in the condition of the people. He was prepared to admit that a considerable improvement had taken place, but it was not due to free trade. It must not be forgotten that contemporaneously with the practice of free trade there had been other and active forces at work which were responsible for this improvement in the condition of the working classes of this country. Did free traders forget the Factory Acts, the co-operative movement, the Municipal Corporations Act, and trade organisation which had done so much for the working classes during the past sixty years? He did not believe that it was historically accurate to attribute the terrible condition of the people in the years previous to the repeal of Corn Laws entirely to protection. In the seventeen years preceding the repeal of the Corn Laws the capital wealth of this country, due chiefly to the profitable character of our manufactures, increased by £2,000,000,000. The people were poor in the days before the repeal of the Corn Laws, but not because the employers could not afford to pay higher wages. The fortunes then of manufacturers in the northern towns were made by profits of thousands per cent. His Party disagreed altogether with the proposals of the right hon. Gentleman the Member for West Birmingham for dealing with conditions which they in common condemned, but they recognised that this country had not that isolated position in the markets of the world which was ours in times gone by. The sooner we recognised that fact and adapted ourselves to the changed circumstances the better for the commercial and social interests of this country. What his Party proposed, however, was an extension of free trade, the freedom of industry from the protective monopolies which now put a greater burden upon British industry than any other commercial nation had to bear. Hon. Members with whom he was associated were able to answer the question which had been put that afternoon as to how the Government could meet the cost of social reforms to which they were committed. They could tell the Government where the means could be found for financing any and all of those schemes of social reform, and at the same time lighten the burden on industry, so as to enable our commerce to hold its own in the markets of the world for another twenty years to come. This country paid in national expenditure three times as much per head of the population as did our most dangerous rival, the United States. Instead of proposing schemes for dealing with these conditions, the right hon. Gentleman the Member for West Birmingham brought forward schemes which, if carried into effect, could only aggravate every industrial and social evil which afflicted our commerce and industries to-day. Why did not the right hon. Gentleman instead try to redeem some of the promises of reform he made in other days? The right hon. Gentleman might turn his attention to doing something to lessen the burden of £350,000,000 a year which landlordism placed upon the people of this country. If the right hon. Gentleman wanted our commercial men to compete better with foreigners let him turn his attention to the question of railway rates. By turning attention to that matter economies could be effected which would lighten the burden on industry twice as much as the right hon. Gentleman expected from his 10 per cent. duty on manufactured articles. They might go further and turn their attention to another still heavier burden—he referred to private ownership in coal supply and the system of mining rights and royalties. Upon every ton of steel rails manufactured in West Cumberland there was a mining royalty of 6s. a ton, and even with this burden British steel manufacturers were able to come within 3d. a ton of their Belgian competitors. In Belgium the unit of the royalty did not exceed 8d. a ton, and then, instead of going into the pocket of the useless and unnecessary landlords, as it did here, it went into the coffers of the State. During the course of the protectionist campaign this country had been asked to follow the example of Germany. Even if the condition of the German workmen as a whole were superior, which it was not, to that of British workmen, it did not follow that that condition was owing to the fact that they were living under a system of protection. Take the case of America. By the operation of a protective policy there, in the fourteen years preceding the year 1900, the cost of living in the United States had risen from 25 to 50 per cent., and in the meantime there had been practically no increase whatever in the wages paid to the workpeople. They were not justified, therefore, in saying that the condition of the workpeople in any country was due solely to its fiscal policy. By the operation of the protective tariff in America the purchasing power of the workman's wage there had been reduced by from one-third to one-half within the last fourteen years. If there were certain classes in Germany whose condition compared favourably with that of the workmen in this country it was not due to protection, but was in spite of protection. It was brought about by the development of the railway system, the better educational system, and other causes. While we in this country stood by free trade, we must recognise that free trade was merely a condition and not an active force. We must not be content with an increase in our trade and income-tax returns. We must recognise that grave industrial and social conditions did exist. The Government had received from the country a mandate to pass large measures of social reform dealing with such matters as the land question, the railway monopoly, the mining royalty monopoly, and to redress social inequalities by a free use of the power of taxation. The Leader of the Opposition had asked how it was possible, except by imposing a tax upon the necessaries of life, to find the means whereby schemes of social reform could be carried out. Within the last ten years a mere handful of people in this country had increased their incomes by more than £100,000,000. Unlike the 40,000,000 people referred to by the Prime Minister, that mere handful of people before their incomes were increased in this way were not on the verge of starvation. If the whole of that £100,000,000 of income had been taken by the State for the purposes of social reforms not one of that mere handful of people would have been reduced to poverty or would have been a single penny worse off than they were five or six years ago. Whether the Prime Minister liked it or not, the country had determined that proposals of that kind should receive the attention of Parliament. He had been hoping that the Liberal Party had learned wisdom during the years they had been wandering in the wilderness. He hoped the Government would turn into Acts of Parliament the beautiful sentiments contained in perorations to their speeches when in opposition. The Labour Members had been returned expressly to do something to better the lives of the common people. They wanted to put some brightness and joy into the lives of those whose days were a bitter and never-ending struggle to keep body and soul together, and who were ever confronted with the terrible nightmare of extreme poverty in their old age. In order to make more comfortable the declining years of the people, he implored the Government to realise their great responsibilities, and to make the very most of their opportunities, and he trusted that when the end of their term of office came they would have the joy and satisfaction of knowing that by their efforts they had done something to bring nearer to the poor people of this country the day of universal peace, righteousness, and joy.

MR. F. E. SMITH (Liverpool, Walton)

said that in whatever section of the House hon. Members might sit, or however profoundly they might differ from some of the economic views which underlay the remarks of the hon. Member for Blackburn, they would all at least desire to join in a tribute to the energy and ability displayed in the speech he had just delivered. He (Mr. Smith) confessed that he had been struck by the admissions which had been made by those hon. Members who had spoken in favour of this Resolution. He wished to ask hon. Members on the Ministerial side at the height of their triumph to consider for a moment what was the sum total of their criticism. The hon. Member for Blackburn had just told the House that the result of sixty years of free trade had been an absolute failure to ameliorate the condition of the working classes. That was a statement with regard to which the Opposition stood on common ground with the hon. Member. Where, however, they parted company with him was not on the unreasonableness of his criticisms as to the necessity of ameliorating the condition of the working classes, but when he proceeded to say that they could deal with these thirteen million people on the verge of starvation by a revision of railway rates, by unexplained dealing with mine owners, or by loose, mischievous, and predatory proposals affecting those who happened to own land. He would entreat hon. Members to make quite sure that they had cleared their minds of cant upon this question. When they heard vague and general proposals put forward at the expense of large incomes, without any precise explanation as to the principle upon which those incomes were to be appropriated or tapped for the service of those who had them not, he should like to make this reservation, that there were very few Members in this House, whether in Opposition or on the Benches opposite, or below the gangway, whose principal business occupation it was not to get as large an income as they honestly could. If there was one profession to which that charge could not be applied it was perhaps the profession to which he belonged. It was when one looked to see how these admissions would be followed up by some practical remedy that one became profoundly conscious of the constructive shortcomings of the Cobdenism of to-day. He was a perfectly unrepentant Member of the Tariff Reform League. He did not know how many members of the League there might be in the House; he dared say that a division might show that they were not more numerous than the representatives of the Liberal League. He had at least the satisfaction of reflecting that if tariff reform turned out not to be the winning horse they had not necessarily finally compromised their political futures. They had in hon. and right hon. Gentlemen opposite an admirable example of how to cut the painter of a similar league with the maximum of political advancement and the minimum of fidelity to a founder. He supposed the Resolution had been charitably designed to call attention to differences existing in the Opposition. He should have thought that they might have looked to hon. Gentlemen opposite for a little more charity. Hon. Gentlemen opposite had had analogous difficulties. The question of when a tariff became protective was no doubt difficult but not more so than the conundrum "When is a slave not a slave?" and the problem when, if ever, preferential treatment should be given to Roman Catholic schools. All great political Parties had skeletons in the cupboard, some with manacles on and some with only their hands behind their backs.† The quarrel he had with hon. Gentlemen opposite was that they showed an astonishing indelicacy in attempting to drag the skeleton of their opponents into the † See (4) Debates, clii., 156 open. Not satisfied with tomahawking his colleagues in the country, they asked the scanty remnant in the House to join in the scalp dance. He did not think they could complain of the tone of a single speech which had been made from the Opposition side of the House. They were particularly pleased with the remarks which had fallen from the hon. Member for East Toxteth, for he had entered the House, not like his new colleagues, on the crest of the wave, but rather by means of an opportune dive. Every one in the House would appreciate his presence, because there could be no greater compliment paid to the House by a Member than that he should be in their midst when his heart was far away, and it must be clear to all who knew the hon. Member's scrupulous sense of honour that his desire must be at the present moment to be amongst his constituents who were understood to be at least as anxious to meet him. The Resolution before the House consisted of two parts. In the first they were asked to recognise the merits of what was described on an obscure prescriptive principle as free trade, and in the second they were invited to register the proposition that the country gave an unqualified verdict in its support. The word "unqualified" was in itself ambiguous and might have more than one meaning. If they said a man was an unqualified slave they meant that his condition could be honestly described as completely servile and not merely as semi-servile. If, on the other hand, they said a man was an unqualified medical practitioner, or an unqualified Under-Secretary, they meant that he was entitled to no particular respect, because he had not passed through the normal period of training or preparation. He suggested a priori that the word was used in the first sense in the present Motion. But perhaps it was necessary to distinguish further. When hon. Gentlemen opposite were successful at the polls it was probably used in the first sense. In the comparatively few cases in which he and his friends were successful it was used in the second. Birmingham, under circumstances which would never be effaced from the memory of hon. Gentlemen on whichever side of the House they sat, displayed the rare and beautiful quality of political constancy, and voted sold for tariff reform. [Laughter]. The result was sneered at in the spirit of that laughter which they had just heard as a triumph for Tammanyism, or, more profoundly analysed by an eminent Nonconformist divine, as an instance of that mysterious dispensation which occasionally permitted the ungodly to triumph. Hon. Gentlemen opposite were very much more successful controversialists than hon. Members on his side. It was far easier, if one was a master of scholarly irony and a charming literary style, to describe protection as a "stinking rotten carcase" than to discuss scientifically whether certain limited proposals were likely to prove protective in their incidence. It was far easier, if one had a strong stomach, to suggest to simple rustics, as the President of the Board of Trade did, that, if the Tories came into power they would introduce slavery on the hills of Wales.

THE PRESIDENT OF THE BOARD OF TRADE (Mr. LLOYD-GEORGE (Carnarvon Burghs)

I did not say that.

MR. F. E. SMITH

said the right hon. Gentleman would no doubt be extremely anxious to forget it if he could; but, anticipating a temporary lapse of memory, he had in his hand the Manchester Guardian of January 16, 1906, which contained a report of this speech. He found the right hon. Gentleman said— What would they say to introducing Chinamen at 1s. a day into the Welsh quarries? Slavery on the hills of Wales! Heaven forgive me for the suggestion! He himself had no means of judging how Heaven would deal with persons who thought it decent to make such suggestions. He could only venture to express a doubt whether any honest politician would ever acquit the right hon. Gentleman of having deliberately given the impression to those he thus addressed that if the Conservative Party were returned they were in danger. The alternative construction was that the right hon. Gentleman thought it worth his while in addressing ignorant men [Cries of "No"]—in relation to the right hon. Gentleman they were ignorant; was that disputed?—to put before ignorant men an abstract and academic statement as to Chinese labour on the hills of Wales; and if that was not the impression they were meant to derive, why employ the fatal ambiguity of the reference to Chinese slavery as a conceivable prospect on the hills of Wales? Was even Manchester won on the free trade issue? [Cries of "Yes."] He heard hon. Gentlemen opposite say "Yes." He thought they must be from the South of England. If Manchester was won on the free trade issue, perhaps hon. Gentlemen would explain why repeated meetings were devoted to the less effective and attractive cry, and specialised speakers like Mr. Creswell brought down to discourse to the electors on the evils of Chinese slavery. He knew that owing to the eccentricities of geographical boundaries Salford was not technically a part of Manchester, but a Salford Member was near enough to wear the green turban of a pilgrimage to Cobden's Mecca. The hon. Member for Salford had stated that he was returned to the House pledged to urge insistently on the Government which had profited by a false cry the immediate repatriation of coolies on the Rand. Would he be told in that case that the electors were giving an unqualified verdict for Cobdenism, or for what was called in this Resolution free trade? He did not think that the hon. Gentleman who fought so strenuously in East Manchester would get up and tell the House that in his constituency the verdict was an unqualified one for free trade. He had some choice specimens of the bread that the hon. Member for East Manchester threw on the waters in order, he supposed, to elicit this unqualified verdict. He was reported in the Manchester Guardian of 13th January to have said that the Chinese had not been the means of bringing one single piece of white labour to the whole of South Africa. The hon. and learned Gentleman appeared to think that white labour was introduced in slabs. He said— You are voting, if you vote for Mr. Balfour, for the exclusion of white labour from South Africa. —not for Cobdenism. The hon. Gentleman continued— Where was that thing going to stop? which was what they would like to know to-day. Were they going to have Chinamen working in the mills at Bradford? Let the people of this division show by their votes —what? Their devotion to free imports? No— That they would have none of this wretched coolie labour in South Africa, and strike a blow for freedom to-morrow at the polls. There was an interesting point of analogy between the hon. and learned Gentleman and the "wretched coolies" of whom he had so low an opinion. To-day he was in, and they were in, and it rather looked as if they were going to remain in as long as he and his friends. It was in this way that the poorer districts of Manchester were captured—Cobden's Manchester. Did the hon. Member the Under-Secretary for the Colonies use his great and growing local influence on behalf of what in his heart and conscience he knew to be the truth? He said "on behalf of what he knew to be the truth" because the hon. Member was reported in the Manchester Guardian as having said on June 12th, 1903, that he was quite sure that supplies of native or Chinese labour would have to be obtained. He would not weary the House with the whole of the Under-Secretary's peroration. He rather thought it had been at the disposal of both Parties in the House before undertaking a provincial tour. It was all very well for the hon. Member to come to the House and state in the debate on the Address that he attempted to confine the issue at the election to the single point of Cobdenism, or to the single merits of free trade, that he had no responsibilty for an incendiary campaign. To that he replied Proximus Ucalegon ardebat, and construed it—Very close to him the hon. and learned Member for East Manchester was letting off Chinese crackers. The hon. Gentleman did not then explain that the coolie processions were merely contributions to the discussion of the problem of the unemployed or that slavery was a terminological inexactitude. He took what he could get and thanked God for it. The rôle of the receiver of stolen reputations was rather less respectable in the eyes of the man of spirit than that of the principal thief. He admitted that the question of cheap food was brought forward in many constituencies with great persistency and ingenuity. The hon. Member for North Paddington, with an infinitely just appreciation of his own controversial limitations, relied chiefly on an intermittent exhibition of horse sausages as a witty, graceful, and truthful sally at the expense of the great German nation. He did not understand what the Secretary of State for War meant by saying that the Liberal Party had no ideas. The Liberal League always was a drag upon the holy wheel of progress. He did not suppose that, now the fight was over, now that their strategy had been so brilliantly successful, and away from the licence of the platform and in the House, where their statements could be met and dealt with, hon. Gentlemen would deny that the immediate effect of a 2s. duty on corn would be an illimitable development of colonial acreage suitable for the growth of wheat. [Cries of, "Oh, oh," and laughter.] He was astonished to hear sounds of derisive dissent, for he rather thought that at the time when Lord Rosebery, from whom he was quoting, made that prediction to frighten the English farmer from tariff reform, hon. Gentlemen were in the same tabernacle, furrow, or whatever was the momentary rendezvous of the Party. At the moment they would recollect the other ship looked like sinking—there was a temporary slump in the "methods of barbarism" section. He ventured to ask them, in the candour of victory, Did any of them really doubt that Canada was equal, under judicious stimulation, to supplying the whole English consumption of wheat? [Cries of, "No, no."] Sir Wilfrid Laurier said it could, and hon. Gentlemen said it could not, and perhaps the Under-Secretary for the Colonies, whom he was sorry not to see in his place, would put Sir Wilfrid Laurier on the black list with Lord Milner, and refuse to protect him any longer. Did the House recollect La Fontaine's insect—the species was immaterial—which expired under the impression that it had afforded a life-long protection to the lion in whose carcass its life was spent? But there was hardly a Canadian statesman who did not go further than Sir Wilfrid Laurier in the direction of tariff reform. Earlier in the debate some reference was made to Mr. Fisher, and he desired to speak of Mr. Fisher's views and ability with great respect; it was not necessary to vilify any colonial politician with whom you disagreed. An official report ordered by the United States Government in 1902 found the district contributing to Winnipeg capable of supplying enough wheat to provide for the consumption of the world. If this were true, or half true, what became of the nightmare of apprehension which had made hon. Gentlemen opposite so infinitely tedious for the last few years? If an illimitable supply of Canadian corn was coming in untaxed, what became of the little loaf? Once again he recognised in hon. Gentlemen opposite their electioneering masters and he complimented them, if not on a unqualified verdict, upon an unqualified pictorial inexactitude. He must not forget that some hon. Gentleman opposite ventured upon a more ambitious line of argument, and, in doing so, permanently enriched the economic knowledge of the country. They had learned that it was not a disadvantage, but rather an advantage, that English factories should be removed abroad. He owned that hon. Gentlemen were not consistent when they did not offer a bounty to a capitalist to remove his works abroad. Let them drive from the country everybody who had work to give, and then wave banners, like the hon. Member for Merthyr Tydvil, in the "Right to Work Committee." A fortnight ago hon. Gentlemen opposite were expressing beautiful sentiments about the feeding of starving children. If the matter had been pressed to a division he should have voted with them, but he should have done so without prejudice to his convictions as to the economic system which gave rise to the necessity. He should like to know how hon. Gentlemen opposite explained the growing poverty of the poor. [MINISTERIAL cries of "The War."] Since this House of Commons met they had heard a great deal about the war. He would suggest to hon. Gentlemen, as a humble admirer of their methods, that if they wished for targets in that matter they ought not to aim at the Opposition Benches, but at right hon. Gentlemen who sat on the Front Government Bench. Hon. Gentlemen opposite should remember that the present Secretary of State for War had said that the Boers waged the war not only with the object of maintaining their independence, but also to undermine our authority in South Africa, and the present Attorney-General had said that the war could be shown to be as just as it was inevitable, and was defensible on the grounds of freedom. The circumstances of which they complained were anterior to the war. While the only panacea which hon. Gentlemen opposite could suggest was the employment of broken-down artisans to plant trees and construct dams against the encroachment of the sea, the Unionist Party need not be discouraged by their reverses at the polls. They would say of the goddess who presided over the polls as Dryden said of Fortune in general— I can enjoy her while she's kind; But when she dances in the wind, And shakes her wings, and will not stay, I puff the prostitute away. Was the verdict unqualified having regard to the aggregate number of votes polled on behalf of the Liberal Members? The votes polled at the last election for Liberal, Labour, and Nationalist candidates were 3,300,000, while those polled for tariff reform candidates and other gentlemen sitting around him were 2,500,000. He gathered that it was suggested that his figures were wrong. [Cries of "Yes."] They very probably were. He got them from the Liberal Magazine. He did not know whether the Minister of Education was responsible for them before he gave up the hecatomb line of business for the Christian toleration and charity department. He ventured to suggest to hon. Gentlemen opposite that the figures he had quoted, so far as they were accurate, were not altogether discouraging to those who for the first time in the nation's history challenged the verdict of the country on the issue of tariff reform. What would hon. Gentlemen who represented Ireland say if it were suggested that they were Cobdenites? Would one of them get up to say that Cobdenism had brought prosperity or success to Ireland, or to guarantee that representative Irish Parliament would not introduce a general tariff on manufactured articles? The jury who gave this unqualified verdict were unaccountably silent. The spectacle of the Cobdenite hen cackling over a protectionist duckling of her own hatching in Ireland would add a partially compensating element of humour even to the prospect of Home Rule. He had heard the majority on the other side of the House described as the pure fruit of the Cobdenite tree. He should say they were begotten by Chinese slavery out of passive resistance. He read a short time ago that the Free Church Council claimed among its members as many as 200 of hon. Gentlemen opposite. [MINISTERIAL cries of "Oh!"]

MR. CROOKS (Woolwich)

He is doing no harm.

MR. F. E. SMITH

said that the Free Church Council gave thanks publicly for the fact that Providence had inspired the electors with the desire and the discrimination to vote on the right side. He did not in the least mind being cheated at cards; but he found it a trifle nauseating if his opponent then proceeded to ascribe his success to the favour of the Most High. What the future had in store for right hon. and hon. Gentleman opposite he did not know. He, however, heard that the Government proposed to deny to the Colonial Conference of 1907 free discussion on the subject which the House was now debating, so as to prevent the statement of unpalatable truths. He knew that he was the representative of an insignificant numerical minority in this House, but he ventured to warn the Government that the people of this country would never forget or forgive a Party which in the hey-day of their triumph, denied to the infant Parliament of the Empire one jot or tittle of that ancient liberty of speech which their predecessors in that House had vindicated for themselves at the point of the sword.

MR. LLOYD-GEORGE

We have now been debating the Motion of my hon. friend the Member for Colne Valley all the afternoon and evening, and we have not ye1 heard from the other side of the House a single word in support of the merits of their case. When I heard the hon. Member who has just sat down proclaim himself in a very brilliant speech "an unrepentant member of the Tariff Reform League," I thought that at last we were going to have a clear announcement of the principles of fiscal reform. But the great Amendment, framed after so much consideration, has not yet been moved.

MR. A. J. BALFOUR

There is plenty of time.

MR. LLOYD-GEORGE

No, no; the right hon. Gentleman is not in command of the House now. We have been the victims for years, and it is our turn now. The last word on fiscal reform, the last compromise, the outcome of the great Valentine treaty, has not yet been forthcoming. I do not know whether the Amendment is going to be moved.

MR. A. J. BALFOUR

Of course, certainly, if we get ordinary freedom of discussion.

MR. LLOYD-GEORGE

I am afraid that the right hon. Gentleman's ideas of freedom of discussion have altered very considerably since the time when he sat on this side of the House. I remember that his notions then were such that we could not get a debate on fiscal reform at all; and when by the fortune of the ballot we succeeded in securing an evening of three hours, the right hon. Gentleman grudged us even that, and, rather than listen to us so long, ran away. As far as I can see, fiscal reform is still running. The right hon. Gentleman was eager to make a speech on the subject; but not a word did he say about the latest development of his great theory. We have not had a syllable from the other side of the House as to their proposals.

MR. A. J. BALFOUR

It is your Resolution.

MR. LLOYD-GEORGE

But there are seven Amendments on the Paper from the other side of the House. They can truly say, "We are seven"—seven different policies. Now what is the right hon. Gentleman's policy? The only indication he gave was this. The right hon. Gentleman said that, in his judgment, the Motion of the hon. Member for Colne Valley was a vote of censure on the Opposition. So we have got to this—that a declaration against a general tariff and taxation of food is a vote of censure on the Opposition. Now, at any rate, we have got the view of the right hon. Gentleman as to the position of affairs, but that is all we have had.

MR. A. J. BALFOUR

And the questions.

MR. LLOYD-GEORGE

The right hon. Gentleman, it is perfectly true, put a series of questions, and some of them were answered by the Prime Minister—[Opposition cries of "Which?"]—and some of them I propose to answer before I sit down. At any rate the right hon. Gentleman has not yet given his view. He has performed the greatest of all dialectical feats. He has gone through two elections, in the course of which he made a considerable number of speeches, and tariff reform, according to his right hon. colleague, was the chief issue of the election. He has performed all that without giving the slightest indication to the House or to the country what his views really are on this question. [An HON. MEMBER on the LABOUR Benches: That is clever.] I do not think that anyone will deny the right hon. Gentleman's ingenuity; but I do not know whether he is in favour of a tax on food or whether he favours a general tariff. He says that he could not oppose either a tax on food or a general tariff on principle, but they are not popular. The right hon. Gentleman says that he is not opposed to a tax on food on principle or to a general tariff on principle. But he believed the principle was not popular, and therefore he was against it.

MR. A. J. BALFOUR

No.

MR. LLOYD-GEORGE

I have done what the right hon. Gentleman has evidently not done—I have read all his speeches. What the right hon. Gentleman said was this— At the present moment a tax on food, for various reasons, is unpopular, and therefore, I am against it.

MR. A. J. BALFOUR

I said that at Sheffield.

MR. LLOYD-GEORGE

At Sheffield! Yes, that came from Sheffield. The right hon. Gentleman says that at the present moment a tax on food is for various reasons unpopular, but that if the con science, intellect, and conviction of the nation ever demands a tax on food then he would vote for it. This is another way of saying that if it were not unpopular he would vote for it. [An HON MEMBER on the OPPOSITION Benches: When it becomes necessary.] That is the same thing. The only statistics that will influence the right hon. Gentleman are the statistics of the division lobby. But we are entitled to know what the view of the Opposition is. Is the Amendment that they have put down the official Amendment? If there is any scheme to protect British industries against illegitimate competition without raising the price of raw material or of food we should all vote for it; but we want to know what is that scheme, where is it? The right hon. Gentleman has at any rate said that this fiscal reform question is the first great constructive measure which the Unionist Party will devote themselves to. What is the scheme; what is the proposal? The right hon. Gentleman said there was obscurity in the Motion on the Paper. Where is the obscurity? I should have thought that the Motion of my hon. friend was perfectly clear in its declaration of the policy of the Government and of those who support them. He says that he is against a tax on food, and against a general tariff, and then the right hon. Gentleman asks why not introduce the words, "or otherwise"? Because these are the only proposals made up to the present moment. What other proposal has he got?

MR. A. J. BALFOUR

The right hon. Gentleman forgets that he is in office. He asks me whether any other proposals have been made. I say emphatically they have—bounties, for instance.

MR. LLOYD-GEORGE

By whom? By what responsible person are they suggested? The only suggestion made is a vague and nebulous one by the right hon. Gentleman himself in favour of what he calls retaliation. How does he propose to interpret that without a general tariff and taxation of food? These are the only proposals, and I think his right hon. colleague told him over and over again, though the right hon. Gentleman has not learnt the lesson yet. The right hon Member for West Birmingham even wrote a letter to Lord Ridley a few weeks ago to tell the right hon. Gentleman that nothing would be of any good without either a general tariff or a tax on food. The right hon. Gentleman said so at Bristol, and, though he may have forgotten speeches made fifteen years ago, he surely cannot forget speeches made by himself a few months ago. The conclusion come to by the right hon. Gentleman, therefore, was that nothing would avail except a general tariff and a tax on food. The right hon. Gentleman the Member for West Birmingham and we are absolutely agreed that no protection will be of the slightest use to our industries unless there is both taxation of food and a general tariff. Then I ask the Prime Minister [loud laughter]—force of habit, I am sorry to say, of course I mean the Leader of the Opposition—does he take that view? The Motion is as clear as words can make it, and condemns protection by a general tariff and by taxes on food.

MR. A. J. BALFOUR

And not on other things.

MR. LLOYD-GEORGE

We are condemning the scheme put forward at the last general election by the Opposition. I am not sorry there has been a discussion upon this subject.

MR. A. J. BALFOUR

Hear, hear!

MR. LLOYD-GEORGE

If the right hon. Gentleman agrees with us on these two points he will help us perhaps in the division lobby. I am, as I said, not sorry that there has been a discussion on this subject, because it shows that even in this Parliament the Opposition are not prepared to suggest any definite and clear scheme. They did not do it when they constituted a Government; they are not prepared to suggest an alternative now. That proves exactly what every defender of free trade has always stated, that the moment you begin to put protection into the shape of a definite, concrete scheme it must necessarily break down. It is all very well to say foreign tariffs are damaging our trade. What is your remedy? It is you who raised the question. What is your definite scheme? The right hon. Gentleman the Member for West Birmingham raised this issue, and declared that that was the issue on which the election would be fought. It was largely fought on that issue; and we are entitled to ask the House of Commons, on the first opportunity it has had since the general election, to record its conviction that a proposal of that character is injurious to the interests of British trade. The hon. Member sitting below the gangway opposite in a very eloquent speech declared that, although he was a free-trader, he did not think free trade sufficiently dealt with all the evils of our social system. I do not believe any Member sitting on this side believes that either. But we do say that free trade as a fiscal system is infinitely better than protection for the purpose of creating and accumulating wealth in the country. Distribution is a totally different matter. The hon. Member went on to schedule a number of reforms which he should like to see introduced. Some of them I agree with. Such questions as railway rates, the taxation of ground rents and values, land reform, mining royalties—all these have been put forward by hon. Members now sitting on this side for many years, and I hope before this Parliament separates that they will be dealt with and very effectively. The hon. Member, however, further said that, after sixty years of free trade, the working classes were no better off.

MR. SNOWDEN

said he was prepared to admit there had been improvement; but still free trade had only slightly touched or modified many social evils which existed in the protection period.

MR. LLOYD-GEORGE

At any rate, before you change a great system which has been in operation for sixty years, which the trade of the country has adapted itself to, you ought to give overwhelming reasons for the change. Exactly the same thing applies to a protective system. There are industries which are based upon it; and you cannot change a protective into a free trade system without damaging those industries which are based upon protection and protection alone. So, in connection with free trade, the great industries which are dependent upon cheap material, and upon cheap half-manufactured goods, imported from foreign countries, would undoubtedly suffer, and very severely, if you changed your free-trade system, which gives cheap material for those manufactures, for a protective system, which would increase the price. Our two great manufacturing rivals are Germany and the United States of America; we send more manufactures to the world's neutral market than both of them put together. We leave Germany, this dangerous competitor, about 100 millions behind. The right hon. Member for West Birmingham seems to doubt that—

MR. J. CHAMBERLAIN

No, I did not.

MR. LLOYD-GEORGE

But is not that a very important fact? Here you have two great protective countries, one of them with double our population, the other with a population greater by 17,000,000 than ours, and still we export more manufactured goods to neutral markets than both of them put together. I think we are entitled to say that that has grown up under a free-trade system, it is due to cheap material, it is due to the cheap half-manufactured articles. Why, after all, do foreign countries buy from one country more than from another? Take China, or the Argentine Republic. In China we sell more manufactured goods than the United States, Germany, France, and Russia put together. In fact, our sale of goods to China is greater than that of the whole of Europe put together. Why, what advantage have you got if you get a preference, that which is suggested by the right hon. Member for West Birmingham? We go there on equal terms, so we do to the Argentine Republic, and so we do to all neutral markets. Why then do we sell more goods than all these great manufacturing countries put together?

MR. J. CHAMBERLAIN

I would ask the right hon. Gentleman why it has happened that in the last thirty years the proportion which we sell to these neutral countries has become so much less [MINISTERIAL ironical cries of "Oh oh!"]—in proportion to the sales from protected countries.

MR. LLOYD-GEORGE

The right hon. Gentleman had really better give up statistics.

MR. CHAMBERLAIN

I dare say you think so.

MR. LLOYD-GEORGE

I am very glad to see he has started to withdraw some of them; the worst of it is that he withdraws the statistics, but never the deductions. So far from the proportions getting less, as a matter of fact we are increasing our exports to these neutral markets in a greater proportion than any other foreign country. Why, the increase in our ex-ports to China, is greater than the increase in the trade of Germany, of the United States, and of France put together. Really, the right hon. Gentleman had better take his statistics from the source whence he got them when a free-trader. Why do they buy? It is not because the Chinese prefer Britishers to Frenchmen and Germans.

SIR HOWARD VINCENT

Yes, they do.

MR. CROOKS

Is that the reason the Rand mine owners like the Chinese?

MR. LLOYD-GEORGE

That bias has very little to do with purchase. I do not know whether the right hon. Gentleman has ever observed how very little the bias of a country influences the sales to that country. We have quarrelled—at least the right hon. Gentleman has—with most of the countries of Europe, with Russia, with France, he tried to pick a quarrel with Germany—[OPPOSITION cries of "Oh" and "When?"]—my hon. friend has forgotten the "mend your manners" speech. At that time there was considerable ill-feeling between the countries—here, and in France possibly, and in Germany. But if anyone studied the Board of Trade Returns of exports and imports he would find that the business transactions between those countries were not influenced in the slightest degree. It is not a thing that influences trade. Countries buy from one country in preference to another either because they get the same quality of goods at a cheaper price, or because they get a better quality of goods at the same price, or they are influenced by the current of trade and by accessibility. Now Germany has the advantage over us in European markets as far as accessibility and propinquity are concerned. She can send her trucks to almost any of the European countries without any change at all. But take the great markets of the world, the three dominant considerations which influence trade—cheapness, quality at the same price, current of trade—are all in favour of the free trade country against the protectionist. The result is that, as long as we maintain our system of free imports, not only are we holding our own in all the neutral markets of the world, but we are beating all our competitors by an increased difference. Has the right hon. Gentleman really followed the statistics with regard to our trade in South America and in China? I could give statistics to the right hon. Gentleman which show that we are enormously increasing our trade in those countries, but I have only a limited time at my disposal. [Cries of "Give them."]

MR. J. CHAMBERLAIN

Let us have the figures.

MR. LLOYD-GEORGE

I will give the figures.

MR. CROOKS

Are they facts or illustrations?

MR. LLOYD-GEORGE

The right hon. Gentleman wants figures. I will give him reliable figures. Take China. The value of the total exports of domestic produce from Germany in 1904—

MR. J. CHAMBERLAIN

Oh!

MR. LLOYD-GEORGE

If the right hon. Gentleman can restrain himself—I am quoting 1904 because it is the last complete figure for Germany. If I take 1905 the disparity will be still greater, so I am taking a more favourable year to the right hon. Gentleman. In 1904 the total exports from Germany to China were £3,380,000, from France £316,000, from the United States £4,834,000, and from the United Kingdom £13,146,000, and this ran up during the last year to £17,000,000. I will take the Argentine Republic. Germany has made a special study of the Argentine Republic, and has made special efforts to capture the trade of that Republic. She does things which we would not dream of doing. She sends out commercial travellers. When I was in the Argentine Republic the general complaint was, "We get German commercial travellers everywhere, and they ask us what we want. "You Britishers don't take the least trouble to reach us. 'Here are our goods,' you say: 'take them or leave them, as you like.'" And they do take them. Well Germany has run up her trade there to £5,134,000, France £2,900,000, the United States of America £3,500,000, and in 1904 we ran up to nearly £11,000,000. What about the increase? And here comes the proportion. I am taking a ten years period. In 1895 we only sold £5,000,000 to the Argentine Republic. In 1904 we leapt up to £10,000,000—an increase of £5,000,000. No other country can show the same increase. That is the test of free trade in comparison with protection. Your tariff does not help you. Your tariff may protect your own particular market—no one denies that—but when you go outside and face your competitors armed with tariffs up to the teeth, scientific tariffs, too, more scientific than anything that has yet been suggested in this House, we beat them all without the slightest difficulty. Why? Simply because our system of free imports enables us to get the cheapest and best materials. Germany is our most formidable competitor, not because she is a greater manufacturing nation—the greatest manufacturing nation in the world is the United States of America—but, in order to compete with us, in order to be able to make up for the dearest material, Germany has to reduce wages. The United States tries both high tariffs and high wages, with the result that she is no competitor, practically, of ours in the neutral markets of the world. She produces twice as much as we do in the way of manufactures, and yet she sells to the world only one-third of the manufactures that we do. Why? Because she is trying dear material and dear labour. Germany sees that, in order to compete with us, she must be able to put an article on the market at something approximating the same price, and so she makes up for dear materials by cheap labour. That is why we are able to beat them. The third consideration which influences trade is the current of trade. After all, you buy from a country, and that country buys from you. It is just like a market town. The farmers come in to sell, but they remain to buy. The same thing applies to countries. All that is in our favour as a great free-trade country. Now this is what I want to ask the right hon. Gentleman opposite. Take our great manufacturing industries, our textile industries, our engineering trades, our shipping—which is never mentioned. Everything else is mentioned, even pearl buttons, but shipping! de minimis non. The greatest mercantile marine the world ever saw never finds a place in a tariff reform pamphlet. How is it that we have succeeded in all these great industries? Purely because we have cheaper material, which enables us to pay higher wages, to give shorter hours, and at the same time to put our commodities on the market at a cheaper price than protectionist countries. That is the advantage we have. Now supposing we put on a tariff of 10 per cent. A 10 per cent. tariff at least means 7 per cent. put on to the cost of your material, of your food, and of your clothing. Does any one doubt that that is the inevitable effect of a purely protectionist tariff? It has been the effect of it. We are told about Germany. Do hon. Gentlemen know that during last year there were a considerable number of failures in the iron trade, and that they were all attributed to the effect of the dearness of material? Now, supposing you had a protectionist tariff in this country of 10 per cent. It would increase the price of material The right hon. Gentleman says, "Oh, but you would increase your wages." Very well, let us look at that sum as a means of enabling us to compete in neutral markets. You put the increased price on to your material. To begin with, in order to enable your workman to get the same advantage from his wages you must increase them by at least 5 or 6 or 7 per cent. If you increased them to that extent he would receive only the same under the protectionist as he was receiving under a free trade system. By what margin can we maintain our trade in neutral markets? It is not by a margin of 12 per cent. that we are able to hold our own. It is very often by a much narrower margin; and the result will be that we shall destroy a very considerable portion of our trade in these neutral markets by the simple process of increasing the cost of production. Now the cheapness of our production enables us to capture trade. The hon. Member for Blackburn referred to the improved condition of the working classes under free trade. Well, now, I should like to give a few figures. I agree with him that if free trade simply increases our production and our imports and exports and does not bring any benefit to the workmen of this country it is not a system which is worthy of acceptance. But I think that is not giving free trade the credit which is its due. I will compare the condition of workmen twenty years ago with their condition now. I take the centres of quinquennial periods, for it is the only way of really getting a fair test. For every 87s. a workman earned then he earns 100s. now at the same job. That is an increase of 15 per cent. in his wages. Now let me take the purchasing value of his wage. Food, which cost 137s. then, costs 100s. now. That is a decrease of 40 per cent. in the price of food and an increase of 15 per cent. in wages. Surely that is a very great improvement in the condition of the working man.

MR. RAMSAY MACDONALD (Leicester)

What about rent?

MR. LLOYD-GEORGE

I am coming to the rent. When you come to the clothing you find that there is not quite the same improvement. There is a reduction from 110 to 100, but when you come to the urban rents you find that they have gone up. Well, here is a direction in which the right hon. Member for West Birmingham might be able to do something for the workman. Let him grant taxation of ground values and ground-rents. Let him do something to let the workman get his cottage cheaper than he does now. During the last five years the price of food has gone up. There was a constant decline down to the year 1900, but in that year prices went up. To what was that attributable? To the taxation brought about by the war. That ought to have been an argument for taking taxation off food. With regard to unemployment, the fluctuations are considerably less in each successive cycle of trade. This shows that we are getting unemployment within the compass when it can be the more readily dealt with. But that is not the case in any protectionist country. The fluctuations are greater and the depressions more considerable in Germany, France, and the United States. Taking all these tests the House must come to the conclusion that free trade has succeeded. The right hon. Gentleman still believes in a tax on corn. The only industry which has been at all affected disastrously by free imports is agriculture.

MR. WILLIAM RUTHERFORD (Liverpool, West Derby)

Slates.

MR. LLOYD-GEORGE

I know more about slates than the hon. Member. I represent a constituency that lives on slates, and the electors of that constituency returned me as a free importer. Agriculture is the only industry that may have been injuriously affected. But Under free trade there is always a tendency to an increase in the number of those employed in the best-paid trades. In the highly paid trades of engineering, shipbuilding, building, mining, and furniture-making there has been an increase out of all proportion to the increase of population. That is the natural tendency where you have free imports of half-manufactured goods. I was asked the other day why the flax industry had been destroyed in Yorkshire. Because it was a trade that paid low rates of wages, and as the woollen trade prospered men rushed from the trade which paid low wages to that which paid higher wages. Is a 2s. duty on foreign corn going to restore agriculture? Even if half the duty went into the pockets of agriculturists, it would mean only about £3,000,000. Is £3,000,000 going to save our agriculture? The right hon. Member for West Birmingham once held the office which I now hold. Then he had reliable information supplied him by some of the best and ablest civil servants the State ever had. Now, the right hon. Gentleman receives random conjectures from any one who likes to fire these things at him, and that has made him a tariff reformer. He then pleaded for great social reforms; he then realised that there was a good deal to be done. I agree with the hon. Member opposite in that. There is a good deal to be done. The right hon. Member for West Birmingham thought so then; he thinks so now. But I venture to say that the methods he is now adopting are methods which will aggravate these evils and not remedy them, and if it is not too late I appeal to him to return to his earlier and better mind on these subjects.

SIR EDWARD CLARKE (City of London)

I do not rise to reply to the speech which has just been made, but I hope that the House will allow me to make my contribution to the debate from a somewhat different standpoint from that of the preceding speakers. I recognise that this debate is probably the only opportunity we shall have for some time of dealing with this large question of fiscal policy, and I am by no means sorry that this opportunity has been given to us for dealing with this matter frankly and fairly. It is the only opportunity we shall have for some time of discussing the matter, because the policy of the Government, naturally, will not relate to the policy which has been advocated by those who sit on the Opposition side of the House, and the Opposition will not have the opportunity for some years of making proposals. As to the policy of the late Government there was no doubt; that policy I heartily supported and upon it I based my candidature for this House. I look back upon the history of this controversy, and I want to see where the Tory Party stand with regard to this question. When this controversy began, it was practically opened, as far as the responsible Government was concerned, by the speech, of my right hon. friend and colleague the Member for the City of London, who said at Sheffield on the October 1st, 1903:— Two other questions, and only two others, have to be asked. Will the remedy you propose be complete? To that I answer that it will not be complete even if it can be tried in its integrity, because I believe the country will not tolerate a tax on food. The policy then declared was the polioy of freedom to negotiate, and if necessary to retaliate against hostile tariffs. Exactly the year later at Edinburgh, my right hon. friend declared that he stood by the Sheffield programme, and said— I have seen nothing to alter in what is now known, in the technical language of public controversy, as the Sheffield programme. The fiscal policy that I recommended at Sheffield is not a compromise and is not a half-way house. It is a logical, self-contained whole, defensible in itself. Between the dates of the speeches to which I have referred an important and formal declaration was made on behalf of the Government. In February, 1904, my right hon. friend the Member for the St. Augustine's Division of Kent said when his right hon. friend the late Prime Minister was absent through illness— I should like to state again, to my hon. friends especially, whit is the policy, as I define it, laid down by the Prime Minister. I will state it in the fewest and clearest words I can use. The principles of policy are—that the Government, when conducting negotiations with foreign Powers, should have the power, when necessary, to threaten retaliation, and when the threat is insufficient, they should have power to carry it out. The Government have no intention of taxing raw material, and their policy does not include the taxation of food. Neither do the Government propose the imposition of any taxation for the purpose of fostering a home industry which is subjected only to natural and legitimate competition. It was observed in the House that the statement made was that the Government programme did not include the taxation of food, and thereupon Sir Sir John Stirling Maxwell asked— Is the Government opposed to the taxation of food as proposed by the right hon. Gentleman the Member for West Birmingham? I understand that proposal is not part of the Government's policy, but I beg to ask whether the Government is or is not opposed to that proposal? Thereupon my right hon. friend the Member for the St. Augustine's Division of Kent said— I have said that the Government are opposed to any duty on raw material or food. That was definite and clear enough; but if there had been any doubt as to its authoritative character that doubt was soon removed, Lord Lansdowne, in the House of Lords, on February, 19th 1904, also made a clear, authoritative, and explicit declaration of the policy of the Government. He said— I am afraid it would be absolutely impossible for me to say anything more distinct than that I accept Mr. Akers Douglas's statement, to which the noble and learned Lord drew my attention, and I may say that we, as a Government, and we cannot speak except as a Government, are opposed to a duty on raw materials or food stuffs. Why is it that we are told that our policy leads inevitably down an inclined plane to the Birmingham abyss? I say, on the contrary, our policy is a self-contained policy. It is quite within our power to stop short at it. It is a policy which is intelligible without the assumption that it involves anything that it does not already comprise. And I may say more; I say not only is it a self-contained policy, but I believe that instead of leading to Birmingham, it leads, if anything, in the opposite direction. That policy was never withdrawn or qualified in the least during the existence of the Government. It was the policy of the Unionist Government up to the very last day they held office. In that policy I believe, that policy I support, that policy I have advocated on platforms in the country, and by that policy I stand. But at that time there had been going on the advocacy of an unauthorised programme. It was advocated with great energy and courage and resource by the right hon. Gentleman the Member for West Birmingham, and he was supported very vigorously and generously by persons of large means who were interested in the increase of their commercial prosperity, and who lent themselves to the advocacy of that programme, but that policy was never accepted by the Government. It never became the official policy of the Party, nor is it now. [Cries of "Yes" and "No."] As the general election drew near the then Prime Minister became very uneasy. Formidable differences were developing in his Party, and creating great difficulties in the selection of candidates and the arrangements for the contest, and at Newcastle on November 14th, 1905, he made a most urgent appeal to his Party to forget the differences which were outside the practical politics of the hour and to associate themselves in the common support of a policy which all could accept. My right hon. friend added— If you reject my advice, disaster will certainly overtake your cause, as it overtakes every cause whose supporters are not at one with each other. That emphatic appeal of the Leader of the Party met with no success at all. Cold and critical articles appeared in the principal London papers which were supposed to be supporting the Government. A Resolution was carried at the Newcastle conference not easily reconcileable with what the Prime Minister had said. A speech at Birmingham did not help the situation. Shortly afterwards, at the end of the first week in December, the Prime Minister found that the position was impossible. He resigned office. At Leeds, after he had ceased for ten days to be Prime Minister, he made his final appeal to his followers. He said— Protection may be right or it may be wrong. I belong to the section of our Party which is free trade and not protect on. He went on to say— We have no general tariff at the present time, and if a general tariff is to be constructed upon protective lines, then, as I have already told you, that seems to me to be outside the scope of the fiscal reforms which I am proposing to my countrymen for their acceptance. You do not require a general tariff, protective or non-protective, to deal with this question. That was the last word of the late Prime Minister before we went to the general election, and we took the verdict of the country upon that. The opinion the late Prime Minister had expressed as to the fate that would befall the Party was absolutely justified; the warning he had given to his followers in the most definite terms again and again that the country would not submit to a tax on food was proved to be absolutely true. No doubt many votes were obtained upon education and upon Chinese labour, but, although there were strong currents of popular feeling against the Party that would probably have led to their defeat apart from this question, still what turned that defeat into an absolute and irretrievable disaster was this lamentable advocacy of a tax on food. In many constituencies—I spoke in many and I know exactly what happened—the unionist candidates as the polling day came near had to put out posters "Vote for—,and no tax on food. The misfortune was that the very form of the disavowal reminded the voters that the question of the taxation of food was a living and real issue in the election and I am not surpaised that they preferred to vote for people whom they believed to be definitely, and as a Party, pledged against a tax upon food rather than for those who, while they disavowed it themselves, were associated with others who were making a tax on food a part of their programme. This pressure, I think, was felt in somewhat unexpected quarters. The late Chancellor of the Exchequer must have felt the pressure a little. On the 3rd of November, 1906, at Stirchley the right hon. Gentleman the Member for East Worcestershire said— When we mention preference we are met with the old cry of the big and little loaf. That has absolutely no connection with the question before the nation. I could conceive of a very considerable preference being given to the colonies in wines and spirits, meat, dairy produce, market garden produce, and various articles other than corn which might be an advantage not only to our Colonies but to many of the smaller cultivators and workers on the land of this country. But that did not go far enough, for on the 18th of November, 1905, at Catshill, the ex-Chancellor of the Exchequer said— He thought it would be possible to construct a preferential system without placing any tax on food.

MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)

This is an unusual proceeding, and I regret that my intervention should be necessary. I should have thought that my hon. and learned friend would have communicated to me his intention to refer to my speeches. My hon. and learned friend has accurately quoted part of what I said, but if he had told the whole truth to the House ["Oh!"] he would have added that in every speech on the subject to the electors I defended the tax on foreign corn to secure a preferential arrangement with the colonies. I said, in the terms my hon. and learned friend has quoted, that I could conceive that considerable preference could be given without putting a tax on corn, but I believe that in every speech I made I definitely announced, as I did in my address, that I was prepared to vote for a tax on foreign corn, and my constituents returned me with full knowledge of my views.

SIR EDWARD CLARKE

I am very sorry, and offer the fullest apology to my right hon. friend for not having mentioned the fact to him, but at the same time I may mention that I made the quotation some time ago, and the words were accurately quoted; the only point was that my right hon. friend, while supporting the tax on food, did at the same time suggest that it was not essential to colonial preference. Many of my friends found before coming to the end of the election that it was impossible to maintain the tax on food, and so this part of the cargo was thrown over to save the ship, and in two many cases both cargo and ship were lost. The returns at the election were in my belief a deliberate, emphatic, and final decision against a tax on corn and meat. It is useless to suggest to poor people a tax on corn and meat and to explain to them that the taxes on tea and sugar will be reduced. They regard those taxes as war taxes, and they are looking forward to relief from them. It is impossible to argue in that way with the poor people to whom appeal has to be made. The canvasser says to the agricultural labourer, "This new tax that we are going to put on will cost you sixteen and a half farthings a week, but if we take off all these other taxes, you will be relieved of seventeen farthings a week, so that you will really have the benefit of half a farthing a week." He says to the artisan, "The cost of this tax will be nineteen farthings a week, but you will save nineteen and a half farthings a week, and so there will be a clear gain." It is not much use addressing that sort of thing to poor men. We are told that— High heaven rejects the love Of nicely calculated more and less. and the working men of the country took the same ziew. There is this further point that the man to whom this is said is expecting that the taxes on tea and sugar will be taken off. He is looking forward to this relief. Do you expect him to listen with contentment or even with patience when you tell him that the taking off of those taxes will bring him no advantage because you are going to put taxes on corn and meat which will leave him no richer for the whole transaction. Sir, this unshakeable resistance was clearly foreseen by my right hon. friend. He warned his Party that these taxes on food were so closely associated with the bitter controversies of 1846, that their renewal would be of infinite danger to the Unionist Party. He was quite right in thinking that there was an ingrained prejudice against these taxes. In my own belief it is not a prejudice, it is not a superstition; it is an expression of a fixed and reasonable belief that by putting these taxes on corn and meat you will be making the poverty of the country pay for the increased prosperity of the most prosperous class. While I do not mind ducal landlords looking forward to increased rents and great manufacturers looking forward to an extension of their business, I do not want the poorer people of the country to pay for them. In dealing sometimes with these questions as they affect the living of the poorer classes or the middle classes, when those interests are urged they are sneered at as "bread and butter politics." But in considering these questions in the aspect of increased rents and the growth of industrial undertakings, we are told it is "Imperial expansion." I differ from my right hon. friend in this way. My right hon. friend looks upon this matter as a question of expediency merely. I look upon it as a question of principle. I am going to ask the indulgence of the House to allow me to make make a quotation from a speech of my own. Sometimes an opinion is as important in relation to the time at which it was spoken as it is in itself. On November 13th, 1903, in a speech delivered at Brighton I said— As to the first of the two fiscal questions, I am heartily with Mr. Balfour and the Government in the declaration they have made, that in future we are not to be bound hand and foot by the rule that tariffs shall only be imposed for purposes of revenue, but that we are also entitled to handle tariffs and deal with them for the purpose of securing fair treatment for our trade in other lands. But when I pass to the second part of the question (the other fiscal question) a very serious difference comes into view. There is a difference, not in degree, but in substance and in character, between a tax upon foreign manufactured articles and a tax upon food. A tax upon foreign manufactured articles is to a great extent a voluntary income tax. The consumer here, who finds that by the imposition of a tax the price of the foreign manufactured article was raised, would consider whether he would spend a larger sum upon that article or whether he would be content with some cheaper substitute which the industry of his own country could provide for him. A tax upon manufactured articles is also a tax which falls upon people in exact proportion to their wealth. The richer people pay it, and pay it without trouble; the poorer people don't pay it at all, for to a great extent the poorer classes of this country do not employ and do not use manufactured articles from abroad, and if they do they will be able to find an economical substitute in the products of our own labour. But the moment you turn to articles of food the rule is entirely changed. The poorer a man is the larger the proportion of his income he is obliged to spend upon articles of food, and the consequence is—and this should never be forgotten in discussing a question of this kind—that whereas a tax on food would fall very lightly upon the people who are well to do, exactly as you go down the scale towards the point where poverty steps in, the heavier the burden of a tax upon food becomes. But now there are two more observations which I want to make upon this. If there is to be a tax upon food at all, there is no intelligible reason in not putting a tax upon every article of food. If, as has been said, the producer who sends the food here will have to pay the tax, then you may as well put it upon everything; for the more he pays the better. If he does not pay the tax, there is no difference in principle whatever between one article of food and another. But there is another observation I should like to place before you, and it is this. If a tax is to be put upon articles of food, there is no intelligible reason why it should not be put upon the raw material of manufacture as well. Again, if the tax is to be paid by the foreigner, it does not matter. You may just as well say let him pay the tax upon raw material as well as upon food. If it is to be paid by the people of this country, your food is the most important raw material you have got, and there is no intelligible reason that I have ever hear stated by anybody that will justify the taxation of food, and at the same time exclude the taxation of raw material. Just one word more which cannot be challenged. If you are going to deal with your colonies so as to give equal advantage to all your colonies, you must tax raw material as well as food. If some of your colonies send you food and some send you raw material, and if you are going to give advantage to all, it will be necessary to equalise the taxes all round. I say, as Mr. Loder has said, that I do not accept, and I cannot accept, the proposals to put taxes on the food of the people. That was a declaration made during the existence of the late Government, and it was a declaration by which I stand at the present time. Other questions have been raised. I do not stop at this time to discuss the question of retaliation, or of a general tariff. With regard to retaliation, in the sentences I have just read I expressed my entire concurrence with my Leader in the pro- posals he had made. I do not believe there is any real and serious difference between the two sides of the House on that subject. When this matter of retaliation was mentioned my right hon. friend the Chancellor of the Duchy of Lancaster discussed it in a speech at Wolverhampton on the 15th of November, 1905, and he stated three conditions on which he would not be indisposed to consider it. The right hon. Gentleman said— Whatever views others might take of the retaliation question we ought, before consenting to any thing of the kind, to be satisfied, first, that there was a reasonable prospect of its being effective for its purpose; secondly, that it would not injure other branches of trade requiring raw materials; and, thirdly, that specific retaliatory duties must be subject to the assent of the House of Commons. These three condition; are perfectly acceptable to anybody. As one would suggest a tax which was not reasonably likely to be effective or would injure other industries, and the idea that the House of Commons would ever delegate to a Committee, or to any Government in power, the imposing of duties without the consent of the House is one which has never entered anyone's mind. My right hon friend the Secretary of State for India on another occasion said— If a foreign country set up a tariff against the manufacturers of this country he was not at all averse to accept for a time the doctrine of 'an eye for an eye and a tooth for a tooth.' Yes; but he wanted to be quite sure that it was not his own eye. That is the lax talionis in its oldest and simplest form. I think it will be found hereafter that things are, ob-secured and discussion rendered sometimes almost meaningless by the use of terms which have half a dozen interpretations. "Protection" is one of them, and "Free Trade" another. It may not come at present, but I believe that this country will yet know how to protect itself, and that the judgment of the country will approve of steps being taken in order to make other nations understand that they cannot run to all the lengths they choose in invading and crippling our markets by putting on taxes against our goods while we leave our ports open to them. As to the general tariff: which people interpret in many different ways, I understand it to be a list of a large number of articles, each with its own special duty of from 5 up to 35 per cent., so as to meet competition of manufactured articles from abroad. To such a general tariff I am absolutely opposed. I can hardly imagine a Government setting to work to deal with such a tariff; and the extent to which influences—I will not say corruption, but very unpleasant influences—will be brought to bear on the Government is a thing which will bring into our commercial system evils from which we are at this moment free.

On this matter we have had an over, whelming defeat, and the question, to my mind, now is, "What is the proper line for the Tory Party to take?" I wish to say to my friends who believe in such a policy that not only will it exclude them from office for many years; but if they adhere to it, it may imperil things which are more important than any tariff question, because they can put a tax on corn and take that tax off, but when institutions of the country are broken up they cannot be re-made. If the Church be once over-thrown or our system of religious education be destroyed it cannot be set up again, and the evil done will never be redressed. At all events it will involve a very long and embittered contest, then look at the question of Home Rule. Declarations have been made by the most important members of the present Government—declarations honestly made, and which I believe will be honestly observed—that in the present Parliament no proposals will be made to set up a Parliament in Dublin with an Executive responsible to it; but if some years hence we go to a general election with on the one side a Party proposing a policy of Home Rule, and on the other side a Party proposing to impose taxes on corn and meat, I believe that the people of this country will rather accept the political risks of Home Rule than submit to these odious taxes. In 1852 there was an appeal to the constituencies, which was the last election in this country which turned on the matter of a tax on corn. The Ministers were defeated, and Mr. Disraeli and Lord Derby made statements in Parliament in regard to the decisive results of that election. Mr. Disraeli said— With the consent and the concurrence, not only of the House but of the whole country, it was determined that the question of protection should be left to the decision of the country to be declared by a general election. The verdict of the country has been of an unmistakable character. We have bowed to that unequivocal declaration. … We were of opinion that no opposition should be made if some resolution was brought forward which was in its character quite unequivocal as to the fact that the country had decided in favour of the system of free trade, and that it was the duty of the Government hereafter to adhere to the principle of unrestricted competition in their financial and commercial legislation. The language which Lord Derby used was perhaps stronger. He said— The country, by a very large and undoubted majority, including a very considerable number of the representatives of the agricultural districts themselves, has declared that whether it might have been desirable or not as matter of policy, yet that in the present state of affairs they are determined not to depart from that system of legislation which has been established—that the country will not agree to the imposition of any tax on the introduction of articles of provisions. And there was an interesting passage a little later on in the same speech— If I understand," said Lord Derby, "the meaning of the expression free trade, it is that you will not impose taxes for the purpose of protecting individuals or local interests, but that you would impose them for the purposes of revenue, and of revenue only; and that in the imposition of those taxes you will have especial regard to lightening the burdens which may be imposed on those articles which mainly enter into the consumption of the great mass of the community. … On the part, then, of myself and of my colleagues, I bow to the decision of the country; and having so bowed I declare, on their part and on my own, that while desirous of mitigating to the utmost of our power that unavoidable injury which the adoption of that policy has inflicted and must inflict on important classes, I do not adopt it with any reserve whatever. I adopt it frankly as the decision of the country, and I am prepared honestly and fairly to carry it out as a Minister of the Crown. Those were the declarations made in 1852, and from then till now the policy of the Tory Party has been that which was then declared by Mr. Disraeli and Lord Derby. These are not obsolete shibboleths or discredited declarations. They are the declarations of the leaders of the Tory Party which have been acted upon during the past half century by the leaders of the Party. For fifty years they have represented the unquestioned creed of the Tory Party. Through the thirty years of Mr. Disraeli's leader ship in our councils, through the fifteen years of Lord Salisbury, through the ten years of my right hon. friend, they have been the creed of our Party, and I stand firm to that creed to-day. The cry of the big and the little loaf had almost died out in the country. It had for years been scarcely heard except in some country constituency where probably the name of the candidate revived old antagonisms. Now that ill-omened spectre has been summoned from its grave, and I believe that a generation may pass before it will be laid to rest again. At any rate, there are some of us who will stand firm in the creed which has for so long been the creed of the Tory Party, and will resist now, and at any time, any proposal to put a tax on the corn or meat of the people, unless, indeed, in circumstances of so terrible a national necessity that we are compelled to sacrifices of the bitterest and deepest kind. But as a matter of administration and taxation, there are a good many of us who will never be parties to its introduction into our financial system. I hope—it is almost hoping against hope, but I do still hope—there may be found amongst those who have served in the ranks of the Tory Party for many years past many who respect the decision that has been come to by their greatest leaders and are prepared to stand by the policy which seemed to them good for the country. I do hope that the Tory Party will regain its influence, for I believe its principles are an important and even essential part of our national life. And I trust our leaders will recognise that when we are anxious to extend the area of our trade and gain for ourselves Imperial renown, we must never forget that the first duty of a statesman is to the poorest of the people, and that to every statesman worthy of the name the welfare of the people is the highest law.

MR. BRACE (Glamorganshire S.)

said he was not surprised at the manœuvres that had been made to prevent the discussion of the issue of whether our system was really a free trade one; but he did not intend to take up the time of the House in debating whether it was one of free trade or of free imports. The mere matter of name was of no account, as the merits of the question constituted the touchstone. He stood there as the representative of a great organisation whose desires he wished to convey to this House, although he had no special interest to preserve or protect. It was because he was convinced that neither protection nor retaliation could touch the great economic questions which were now involved that he stood up as an opponent of those proposals. It had been stated by the hon. Gentleman who last addressed the House that, after all, the great question which must be considered was the comfort and status of the people of a country, and that whatever other factors might be taken into account, the question of the cost of food was the prime factor to be considered by the Government of the country. The Board of Trade returns for 1902, 1903, 1904, and 1905, showed the wonderful advantage which this country enjoyed over all other countries. Did it not show that there was some sound fundamental case for our system when a corner in wheat never seriously increased the price of food in these islands? Our system protected us by making the world our granary, and that enabled us to give our people cheap food. In 1902, according to the Board of Trade Returns, the wheat imports into the United Kingdom in millions of hundredweights were: From the United States of America 43.3; Argentina 4.3; Canada 9.5; Russia 6.5; Australia 4.2; and India 8.8; altogether the total from the above and all other places was 81.0 per cent. In 1903 the imports were: United States 24.2; Argentina 14.1; Canada 10.8; Russia 17.2; Australia nil; and India 17.1, a total of 88.1 per cent. from the above and all other places. In 1904 the imports were: From the United States 7.1; Argentina 21.4; Canada 6.2; Russia 23.5; Australia 10.3; India 25.5, the total from all sources being 97.8. In 1905 the similar figures were: United States 6; Argentina 23.2; Canada 6.5; Russia 24.7; Australia 10.1; India 22.8; a total of 97.6. It had been asked whether our Colonies could not produce sufficient wheat to supply us, but these figures showed that instead of Canada, at all events, being able to send us more wheat she had been sending us less. He was quite aware that the proposers of the system of tariffs thought that in the event of the failure of a harvest or the establishment of a speculative corner, they could withdraw the tariff barriers, but what advantage would it be for us to withdraw the tariff barriers, when we ourselves had discouraged corn growing in the countries upon which we were dependent for a supply of wheat? Immediately the English agriculturists found that they could not grow corn at a profit they devoted a large amount of their resources to stock growing. Would not the United States of America, Argentine Republic and Russia, if their corn was shut out by a tariff wall, do the same? He said that it would be tempting Providence if this House were to depart from the present fiscal system of the country and not allow us to make the world our granary, as it was at the present time. They heard a good deal about "dumping" but we were the greatest "dumpers" in the world, as we insisted upon sending our products into every other kingdom. Of the South Wales coal trade, which he represented, nearly 80 per cent. of its output was "dumped" into other countries, not the least consumer of that coal being Germany. Last year we sent to Germany 7,600,000 tons of coal from Great Britain, and it would be as well to remember that the German market was as free to British coal as our market was for German steel bars. In 1903, the export of coal to Germany amounted to 6,100,000 tons; in 1904 it was 6,400,000 tons, and in 1905 it was, as he had said, 7,600,000 tons. When we talked about retaliation we ought to remember that we had a particularly sensitive point here. If we talked about placing a tariff upon steel bars did the House not think the Germans would place a tariff upon British coals, which could not fail to mean a great reduction of wages and great distress. In 1904, the export of tinned plates and tinned sheets of British manufacture to Germany was 20,801 tons, the money value of which was £289,705. Last year that trade had increased to 29,706 tons, of the money value of £391,451. If we could have the use of the German steel bar as raw material for working into finished products he said that that was the kind of increase that they should like to have. They were told sometimes that trade followed the flag, but as a matter of fact trade followed the ship, and the country which possessed the greatest shipping tonnage in the world must have the greatest control over the industry of the world. If our free trade policy was so wrong as some hon. Members would have it to be, was it not remarkable that this country had been able to get control over more than half of the shipping trade of the world? We not only recognised that trade followed the ship, but the Germans did so because under the new German tariff "steam boilers for ships" were admitted free, as were also other materials in connection with ships. This one great country, whose example they were told the United Kingdom should follow, instead of increasing their taxes were abolishing the system of taxation in connection with the ship-building industry because they knew that England under free trade had the power of doing the shipbuilding for the whole world, including Germany. He supported the Motion before the House, not because he believed it was the only means, but because he readily joined with his hon. friend opposite in declaring that they wanted the taxation of mining royalties, ground values, and a system of nationalisation under which they would be able to place the railways on the same principle as they were in other competing countries.

Debate to be resumed to-morrow.