HC Deb 19 February 1907 vol 169 cc723-812

Order read, for resuming Adjourned Debate on Question [12th February],"That an humble Address be presented to His Majesty, as followeth":—

"Most Gracious Sovereign,

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

Question again proposed.

*MR. HILLS (Durham)

rose to move the addition of the following words—"But this House humbly expresses regret that no reference is made in Your Majesty's Speech to the approaching Colonial Conference, and to the opportunity thereby offered for promoting freer trade within the Empire and closer commercial relations with the Colonies on a preferential basis." He said that the Amendment did not require a lengthy introduction, because in six weeks time the Colonial Conference would be held in London, and before that assembly would be laid matters of great importance. It seemed to him that the present time was opportune to ascertain the opinions of the Government on the questions which were to come before that Conference. The occasion was opportune, and the matter was important. The occasion was opportune because the object of the Amendment was to secure freer trade in the Empire and commercial union on a preferential basis. The matter was important because we now stood at the parting of the ways. We had to come to a decision of great importance, and any mistake might have disastrous consequences. He would like, in a few words, to explain the exact position of the question as it stood now, and follow the steps whereby that position had been reached. Shortly after having been given representative government, all the Colonies, with hardly an exception, adopted protective tariffs. This step was taken, in the first place, with a view to increased revenue, and secondly, and perhaps this was the more important point, for the protection of their home development. After the adoption of these tariffs a movement grew up in the Colonies for closer union between themselves and the Mother Country. The first step taken towards that end was at the Conference of 1887, which was summoned to discuss certain questions in council. It was important to notice that the question of preferential trade did not form one of those questions. The subjects detailed for discussion were those of postal and telegraph facilities and Questions of defence. But before the Conference met, three, at least, of the Premiers who were going to attend expressed their intention of raising the question of preferential trade. At the Conference it was raised by Sir Samuel Griffith, Premier of Queensland, who moved a Resolution as follows— It should be recognised that goods coming from British possessions should be subject to a lighter duty than those coming from foreign possessions. Discussion ensued, but there was no opposition. The Colonial Premiers went home with the matter in their minds and set to work to see how they could bring about such a preference. As soon, however, as they attempted to put it into practice they found that the German and Belgian Treaties of 1862 and 1865 were obstacles in their way, and a movement, in which Canada took its lead, was started for their repeal. The next step taken was at the Ottawa Conference seven years later. There all the Colonial Premiers assembled and reiterated their demand for preference, and called for a denunciation of the treaties. Accordingly a year later Lord Salisbury's Government denounced them. Immediately Canada, the Cape, and New Zealand, all granted preference to British goods. Under that preference we had a preferred position in the Colonial markets. He (the speaker) was running shortly through the history of the matter, but he wished to stop and make one point clear. He wished to impress upon the House that this preference arose out of the domestic needs of the Colonies themselves. This was a fact of extreme importance and the key to the whole position. Unless it was understood he did not think that they could take a true view of the Colonial question. The demand for preference in the first instance arose as a national demand from the Colonies for their own national needs. Then they came to the second London Conference in 1897. At that Conference the subject was very fully discussed, and certain Resolutions passed which were of very great importance as applied to the present situation. A series of five rather lengthy Resolutions were passed, but he would not trouble the House by reading them all. The first recognised that the principle of preferential trade between the United Kingdom and the Colonies would stimulate and facilitate mutual commercial intercourse. That was exactly his Amendment. It aimed at stimulating and facilitating commercial intercourse between the Colonies and the Mother Country. The second Resolution— Recognises that in the present circumstances or its Colonies it is not practicable to adopt a general system of free trade as between the Mother Country and the British dominions beyond the seas. That was a conclusion which he wished to impress upon the House. The Colonies, without exception, recognised that in their present condition of develop- ment, and the development of the Mother Country, complete free trade was quite impracticable. They could not have free trade, but he hoped they could have freer trade. The third Resolution stated— That it is desirable that those Colonies which have not already adopted such a policy should, so far as their circumstances permit, give a substantial preferential treatment to the products and manufactures of the United Kingdom. The fourth Resolution— Respectfully urges upon Her Majesty's Government the expediency of granting in the United Kingdom preferential treatment to the products and manufactures of the Colonies, either by exemption from, or reduction of, duties now or hereafter imposed. He hoped he had made the position plain. All the Colonies expressed their wish and intention of granting preferential treatment to the products and manufactures of the United Kingdom, and also asked Her Majesty's Government to consider the possibility of giving the Colonies preference either by reduction of, or exemption from, their duties. On the strength of this, Canada gave us a preferential rebate of one-third of the duties. South Africa made a rebate of 25 per cent. and New Zealand a rebate of 10 per cent. But, as the House knew, we did not make any corresponding offer, and failed to see our way to grant any reduction or remission of the duties then imposed. The effect of that had been that whilst we had stood still the Colonies had moved, and now the Empire was knit together with a network of commercial treaties, while the United Kingdom stood outside that arrangement. Canada had made a treaty with Australia, New Zealand, and South Africa; Australia and New Zealand with South Africa, and Canada with the West Indies. All these countries gave certain concessions and received certain advantages in return. At present we had done nothing, and when His Majesty's Government came to meet the Council of the Empire in April next they would meet a commercially federated Empire of which we did not form part. In all he said he wished it to be distinctly understood that he treated the matter in an uncontroversial spirit. He wished to see where the Government stood. They all welcomed the speech made by the under-Secretary for the Colonies at Leeds a fortnight ago. The hon. Gentleman then said— Another matter which might be helped forward was the system of Inter-colonial preferences, which was becoming quite an extensive system, and was making an approach to that Imperial free trade which was the goal of the tariff reformer and the free trader. Yet in his speech the previous week the same hon. Gentleman had told them that he objected to a preference between the United Kingdom and its Colonies. Why was a preference between the Colonies themselves a good thing and a preference between the Colonies and the United Kingdom a bad thing? The answer was obvious. Because the Colonies were tariff States, and therefore preference meant lower duties and freer trade; while the United Kingdom was a non-tariff State, and therefore preference meant the imposition of duties and restricted trade. The objection of the Government was not to preference itself, but to its extension to a non-tariff State like England. But was England a non-tariff State? No. We were the highest tariff State in the world. The amount paid per head of the populations in Customs duties was higher in the United Kingdom than in any other country. It was 12s. 2d. per head in England; 11s. 8d. in the United States and 8s. 2d. in Germany. Articles of universal consumption were taxed in the United Kingdom—e.g., tea, sugar, wine, tobacco, cocoa, dried fruits, and coffee. All these were articles that every household must have. [Cries of "Wine"?] Well, he would except wine. Tea and sugar, however, were necessities in the poorest households. Tea was taxed at 100 per cent. and sugar at 25 per cent. Then, again, what were the luxuries of the household? Tobacco was a luxury, indeed almost a necessity, and that was taxed at more than 100 per cent. All these taxes pressed on the people least able to bear the burden. Without going into the thorny subject of the incidence of import duties, he wished to say that when we taxed an article which we did not produce, the whole or nearly the whole of the tax must fall on the consumer, whilst on the other hand all economists admitted that a part, at any rate, of taxes on articles that we produced might be paid by the foreigner. Therefore our Customs were so arranged that they fell mainly on ourselves, and all the taxes he had mentioned were put on the poorest classes of the people. If we looked at the question of preference in the same view as that taken by the Colonies, and approached it from the standpoint of our own domestic needs, quite apart from the question of Empire and larger issues, there was an overwhelming case for a reduction in taxation. But, if we reduced our duties, why should we reduce for nothing? If we reduced our duties to the whole world, we should receive nothing in exchange. If, however, we reduced our duties in favour of our Colonies we should derive very great advantages in return. We were faced with an overwhelming case for the reduction of duties with our Colonies. How did our Customs duties affect the different Colonies and Dependencies? There were the tea duty, the tobacco duty, the sugar, wine, coffee, and dried fruits duties, all of which were too high, and ought to be, and could be, reduced consistently with free trade and the Government's pledges. Let them take a short survey and see how far we could meet the Colonies in the matter without going outside our present fiscal system. Australia sent us a quantity of wine and if she had a preferential market she would send us a great deal more. Queensland grew sugar, and if she had our market she would certainly grow a great deal more. She was also starting to grow coffee, and there again, if she had a preferential market, she would increase this industry. Then with regard to dried fruits, if a partial remission of the duty were made in favour of Australia she would also increase her dried fruit trade. Then, turning to Africa, there was Cape wine, once famous, still excellent, Transvaal tobacco and Natal cigars. As regarded tobacco, he could not see why we should not give a preference to our own possessions. Rhodesia grew tobacco, Central Africa even now exported coffee, and both Rhodesia and parts of the Northern Transvaal were well suited for fruit farms, and could, if developed, do a large trade in that kind of produce. The West Indies he would refer to quite briefly, as sugar and spirits were the principal exports. Then there was India, from which a large proportion—eight-ninths—of our tea came, and we might easily give a preference to her in regard to that article. The fruit-growing industry meant a large resident white population, and in Okanagon, the great fruit-growing region of Western Canada, five acres of land would support a man. If we started fruit-growing in South Africa, we might transfer the country from a gold basis to a basis of profitable production. A small remission of duty would develop the tobacco trade of Rhodesia, and even Ireland might have a preference upon tobacco. If they looked round the Empire it could be seen how within the limits of our present scale of duties and with advantage to ourselves we could advance to a large measure of preference. But there were two difficulties he wished to meet. The first concerned the Chancellor of the Exchequer. We should lose nearly the whole tea duty and part of the sugar, tobacco, and wine duties. He thought, however, on the other hand, we could reckon on increased consumption, which would counterbalance the somewhat lower rate of duty. He should not propose to remit these colonial taxes altogether, but only to reduce them, and undoubtedly the cheaper introduction of these articles would increase the consumption and that would increase the revenue. He quite agreed, however, that that would not meet the whole point, because the case for preference, upon a revenue basis, was not confined to meeting existing demands, but they had to look to the future and to see if they could find the money for those large schemes which were bound to come up and the progress of which was blocked for want of money. As far as he had gone at present he had, he thought, shown the Government the way in which they could, consistently with their own convictions, grant a preference within the Empire. He did not upon the whole think that the Revenue loss would be very great, but if he was asked how he would meet the revenue difficulty himself he was prepared with his answer. He should set up a general tariff. That question was, however, really outside the present Amendment and was not involved in the question of preference, for very large concessions as to preference could be granted without it. The second difficulty was that we had not yet considered the case of Canada. This country being situated in the temperate region, and our fiscal system not allowing us to tax articles we produced, our customs were mainly levied on products from the tropics. Therefore, the question arose how on the interchange of goods we could give a preference to Canada, which produced no tropical or sub-tropical articles. He supposed that the question of food taxation was entirely a question of cost, and that the most stalwart free trader would not object to a tax on food unless the effect of that tax was to raise the cost of food. He understood, however, that the argument, which he did not wish to misrepresent, was that if we taxed part of the countries supplying us with food, those countries would raise their price by the amount of the tax, while those who were untaxed would be also anxious to get the best price and would raise their price up to the level of that of the taxed products, so that in the result the price of the whole supply would be raised, taxed and untaxed. So that if we only taxed foreign wheat the effect of that tax would be to raise the price of Canadian and Colonial wheat even if it came in free. It seemed to him that that contention depended upon the dogma that import duties always raised prices. Did they? Supposing we taxed coal anything we liked—say 1s. an ounce—did anybody contend that the price of coal would be raised? Of course it would not, because our supply of coal was abundant and our imports insignificant. Moreover, the Americans had a tax of 8s. a quarter upon wheat, still grain was cheaper in New York than it was here. The question of whether a tax would raise the cost entirely depended upon the relative strength of the taxed and the untaxed supply. That import duties did not necessarily raise prices was shown by the 1s. duty which was imposed in 1902 upon corn. He quite agreed that in certain cases the bakers did raise their prices, but the effect over the whole country was that the price of bread was higher when the tax was taken off than while the tax was on. This was, of course, a very intricate subject, but he believed that the better opinion was that that tax was paid out of the cost of transportation paid to railways and steamship companies who quoted slightly lower rates when the 1s. tax was being paid. Broadly speaking, it was a question of supply and demand; it was a question of how large the untaxed supplies were; how large the taxed supply was; and how far we were dependent upon the taxed supply. The last figures which he had been able to get showed that rather more than half of our supply of wheat was grown at home or in the Empire, and if they took into account the possibilities of production in the Empire they were driven to the conclusion that we could get from it far more grain than we wanted and far more than the whole world would want. He had recently read the Report of the United States Commissioner who visited Canada four years ago, who said that the wheat land in the district tributary to Winnipeg alone would produce more than the entire world's consumption for year. Less than 2 per cent. of this one available wheat land—250,000,000 acres—was now under cultivation. He was told also by the High Commissioner for Canada that wheat production in Western Canada last year was 90,250,000 bushels, and rather more than half of that was available for export. Leaving aside the actual production and looking to the future he would like to quote Professor Mavor's Report, who was sent out by our Board of Trade, and he estimated that, taking the lowest figure in that Report, and even making a deduction from that, Canada, plus the production of India and our home production, would give us all the wheat we wanted. We sometimes spoke as if Canada was the sole wheat-supplying country in the Empire; but that was not so, as we got from Australia nearly two and a half times the amount we received from Canada. The possibilities of wheat-growing in the Empire were enormous, and Australia in good seasons could grow wheat as cheaply as it could be grown anywhere. As to India, her supply could be largely increased. It was only a question of irrigation, for which we, under a preferential system, should build the machinery. The possibilities of the Empire were so enormous that we could find not only all the food we wanted within it, but more than we required. He had put his case as moderately as possible. He had avoided the larger and more important side of the question, that of Imperial union, which he did not think was raised by the Amendment, but he had shown the necessity of commercial union. That was the great question that faced us, and he regarded commercial union as a step in the direction of Imperial union. He wished to add a word of caution. He expressed no opinion whether free trade was possible or desirable throughout the Empire. All he said was that it was impracticable at the present time, for until we had countries on an industrial equality it was difficult to start a system of free trade within the Empire with any fairness. He wished to combat the idea sometimes stated that we desired to make a dumping ground of the Colonies for our surplus manufactures, or that we were asking the people of this country to sacrifice themselves for the benefit of the Colonies. The demand for preference in the Colonies arose entirely from their domestic needs, and if it were to be a real demand it must in this country also be based on our own domestic needs. He begged to move.

*MR. EVELYN CECIL (Aston Manor)

, in seconding the Amendment, said he would endeavour to state his case as moderately as possible. He would like as a preliminary to say that he was in theory a free trader. He believed where free trade was possible all round it was the best possible solution. But his being a free trader in theory was not inconsistent with his being a tariff reformer in practice, nor was it inconsistent with regretting, as the Amendment did, that no reference was made in the Speech from the Throne to the approaching Colonial Conference. The right hon. Gentleman the Prime Minister had said that no reference to Colonial Conferences had been made in previous Speeches from the Throne; but that was not a good precedent, because in 1897 the whole idea of a Colonial Conference only sprang up during the Diamond Jubilee, long after Parliament had met, and in 1902 nothing was decided until a week after the meeting of Parliament. The idea of Colonial Conferences had increased immeasurably in importance since it was first started, and some reference should have been made in the Royal Speech to the coming Conference. He had no desire to dogmatise in this particular matter on any particular proposal. He would rather not commit himself to any absolute figures. What he asked the House to do and what the Amendment asked the House to do was to accept the general principle that closer commercial union with the Colonies on a preferential basis was desirable. He did not quite agree with his hon. friend that the question of Imperial unity did not arise. In his opinion there were two keys to political federation and national life, one was—if he might be permitted to use German words which most accurately expressed the ideas—Kriegsverein, a union for war, and the other was Zollverein, a union for customs. At the present moment the increase of communication all over the world would naturally assist a union throughout the Empire for war; but as regarded the question of a union for customs, history showed more and more the immense advantage of bringing the different parts of the Empire together. That was seen by the commercial union of Germany, to which that far-seeing statesman, Prince Bismarck, attached so much importance, and that of the United States, which had done so much to contribute to the prosperity of those countries.


That is free trade.


Quite so. What this Amendment aimed at was freer trade within the Empire. If it was possible to obtain free trade within the Empire so much the better, but if it was not possible then let us get as near to it as we could. He submitted that closer connection with the Colonies by means of preference was as near as we could get for many years. Another reason for this closer connection was the question of the supply of food in time of war. If such a connection were entered into, our food supply would be less dislocated if at any time we were unfortunately at war with another nation. If the principle of this Amendment was agreed to it would elso incontestably broaden the basis of taxation. That the basis of taxation required to be broadened was admitted, and he asked the House to adopt this Amendment, if they preferred it, simply for the purposes of revenue. He was perfectly willing to advocate the change on that ground, and it would be better for the poorer classes. At present our taxation was largely on articles of universal consumption, and if the basis was broadened as desired by this Resolution more articles, not of such universal consumption, would be taxed, and in that way the taxation would be apportioned much more fairly between the rich and the poor. He had never been able to understand precisely, since we could not get free trade all round, what was the justification for the argument that no foreign article ought to be taxed unless the home producer of the same kind of article was equally taxed. Foreign nations attacked us by their tariffs, and we had no power to revenge ourselves on them by our tariffs. And in the case where we taxed foreign articles not also produced at home, the foreigner could command the price and make us pay in it the amount of any tax that we put on. With regard to the views of the Colonies referred to in the latter part of the Amendment, his hon. friend had pointed to the historical Resolution passed by the Colonies at the Conference of 1902, and since then Sir Wilfred Laurier had constantly invited us in speeches he had made in more recent years further to consider the question. The Colonies were beginning to create preferential treaties among themselves. Canada, New Zealand, and South Africa had done so, and were finding the great advantage to be derived from them. Canada took a large proportion of the sugar of our West Indian Colonies in preference be the beet sugar of Germany, mainly in consequence of the surtax placed on German goods by Canada after the tariff trouble in 1897. New Zealand had given preference to Ceylon tea over China tea, and the result was that New Zealand got tea cheaper from Ceylon, and at the same time she had encouraged a large increase in the production of tea in Ceylon, This was a direct advantage from preferential treatment which those Colonies acquired for each other. In face of the general increase of trade between the Mother Country and Canada since the granting of the preference by Canada in 1897, could it be denied that such an arrangement would be mutually advantageous? The figures showed that in years before preference was granted our exports to Canada were persistently diminishing. The moment preference was granted the trade went up by leaps and bounds, and was going up constantly still. He did not mean to say that in quoting the general figures, the whole advantage was to be attributed to preferential trade, but a great part of the figures, he thought, were affected by this cause. In 1892 before preference was granted, British exports to Canada amounted to the value of £6,870,000. They went steadily down to £5,172,000 in 1897. In 1898, the year after preference was granted, they were £5,838,000, and in 1900 £7,605,000. In 1905 they were £11,909,000. In regard to particular industries the trend of the figures was the same. Iron and steel, cotton, flax, wool, silk, textiles, all showed the same tendency. They all went down very considerably between 1892 and 1897, and began to rise after preference was granted in 1898, and were rising up to the present time. Canada, he believed, was one of the great industrial centres of the Empire, and was likely to grow and increase and be one of the greatest forces of the Empire. We could not get on without her; she could not get on without us. Preference was shown by the figures to increase her trade with the Mother Country, and that trade was a bond of Empire. Canada had just introduced a special and new tariff, and the effect of it, broadly speaking, had been pronounced by the Minister for Finance as likely to do us rather more good than the previous one did. But in the long run there were many considerations to be borne in mind. The new Canadian tariff had three scales—the general, the intermediate, and the preferential tariff. The phrase "general tariff" did not mean a general tariff on all goods. The term "general" applied to the countries against which the tariff was imposed. The "general" tariff was applied to all countries, unless by agreement and bargaining the intermediate tariff was fixed upon between Canada and any one of those countries. In bargaining, Canada might, in consideration of part of the duty being taken off certain Canadian goods landed in a given country, take off a certain amount of duty on that country's goods landed in Canada; and those countries who made such an arrangement were put on the intermediate tariff, which was lower than the general tariff. The preferential tariff, given to British goods, was below the intermediate tariff. The House would, therefore, see that by agreement many countries might be able to get the duty on their own goods reduced from the general to the intermediate scale, and to that extent the preference to Great Britain would be reduced. In the long run it might perfectly well be that a number of countries might make arrangements with Canada, and so very substantially cut down British preference. The advantages of a scientific tariff were much greater than people supposed. He had made the frank confession that he had been a free trader in theory, and he would make another confession, which was that what had altered his view was incidental evidence which had come before him in the Steamship Subsidies Committee upstairs. He observed that foreign countries, especially the Germans, put ingenious special rates on particular goods, and pushed them into our Colonies; and that some alteration must be made, unless Germany adopted free trade also. His hon. friend and he, in bringing forward this Amendment, desired in the first place to affirm the principle of giving a preferential basis to trade with our Colonies. They did not want foreign nations to be able to bargain with one portion of the Empire to the detriment of another portion of the Empire, and thereby to gain an accession of trade which of right, and in the natural course, ought to be an accession of trade to us. It was the wedge that foreign countries were pushing into British Imperial trade, and a wedge which, if this Amendment were adopted, we could perfectly well avoid. It was our duty to try to bring the Empire together as a united family. We ought to strive for the self-defence and solidification of the Empire. Speaking for his hon. friends and himself, they did not want to see the Mother Country left out in the cold, unsympathetic, when all the Colonies were drawing themselves together by these bonds. He was sure that hon. Gentlemen opposite in the bottom of their hearts could not but desire that closer union, and yet, by the logic of facts, unless they altered their present attitude he failed to see how they could prevent the Mother Country being left out in the cold. It might so easily be too late. The coming Colonial Conference would afford an opportunity to express our good will towards preferential trade, and to follow a policy which, he ventured to say, was clearly and succinctly and ably put forward by his right hon. friend the Leader of the Opposition on Friday last. They wanted to link the Empire together, not merely by bonds of sentiment, which might perhaps be volatile and evanescent, and might change with succeeding generations, as history showed, but by a closer commercial union, for which there was already a foundation, and which he trusted would long continue to grow and increase.

Amendment proposed— At the end of the Question to add the words, 'But this House humbly expresses regret that no reference is made in Your Majesty's Speech to the approaching Colonial Conference, and to the opportunity thereby offered for promoting freer trade within the Empire and closer commercial relations with the Colonies on a preferential basis.' "—(Mr. Hills.)

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

*SIR CHARLES DILKE (Gloucestershire, Forest of Dean)

said the House never had more occasion for regretting the absence of the right hon. Gentleman the Member for West Birmingham than on the present occasion, because, while speaking with the utmost respect of the ability of the mover and seconder of the Amendment, they could not help feeling what a difference it would have made if they could have had reality given to this proposal, which the Member for West Birmingham alone, he thought, was able to give to it. Among the Members present he saw the former Secretary of the Board of Trade, a special follower of the Member for West Birmingham. No doubt the hon. Gentleman would address to the House reasoned arguments on the subject; but surely he must feel, and all must feel, that a general election had passed over these islands, and no one on the other side would assert, as they had asserted with reference to Chinese labour, that on the fiscal question there had been an appeal to ignorant prejudice. He was sure that no one on the other side of the House would pretend for one moment that the discussion was not a thoroughly reasoned discussion. [An HON. MEMBER: What about the big loaf?] He would undertake to say that there had never been a general election at which more closely reasoned argument had been addressed by both sides to the constituencies than was the case at the last election on this subject, and for weeks before it took place. To start afresh that night and ask them to listen to the stale arguments not completely put, was hardly likely to induce the House to take a different view from that which the present Leaders of the House took in the last Parliament. They would leave these academic problems which had been disposed of by the general election until a very great change had come over the country—which for his part he believed would never come—in favour of preference in this particular form. As far as concerned the fresh aspect given to the matter by the meeting of the Conference under the auspices of the new Government, there was, he thought, a good deal to be said. The mover and seconder had used preference as an argument for drawing the Mother-Country and the Colonies closer together, and in the course of their speeches they had glanced at something wider than what were called the Colonies; they had looked at the Empire as a whole. Even apart from Parliament the interests of this country were amply safeguarded, but the interests of the people of India were dependent on this Parliament alone. There were also 350,000,000 people outside these islands out of the over 400,000,000 in the Empire, and as compared with the between 11,000,000 and 12,000,000 in the self-governing Colonies, who had the first call upon us in regard to this matter of free trade and preference and arrangements for closer union which had been mentioned in the speeches addressed to the House. He noticed that there had been no allusion to the general election or to any new circumstances which had arisen after two or three years of full debate—a full debate in the country but not in this House, for reasons which he need not particularise. No new arguments had been addressed to the House, and there had been no allusion to certain differences which were supposed still to prevail on the Opposition benches upon the question. Probably the mover and seconder of the Amendment did not wish unnecessarily to arouse the sleeping dogs on their own side, and consequently there was a great prominence given to such articles as sugar, cocoa and dried fruit, and a complete suppression of all references to bread and meat. There was hardly an allusion to wheat except to express the hope that some day Canada might be able to feed us entirely. Obviously the constituencies, at any rate, had been persuaded that at the present time they could not afford to do without all the present sources of wheat supply. When the question was first raised after the famous Birmingham speech, and when they were confronted in the House by the right hon. Gentleman the Member for West Birmingham himself, that very argument was pressed, and he thought they carried the House with them. Afterwards an attempt was made to deal with the question of the wheat supply from Argentina, with which country we did so gigantic a trade and where we owned all the railways, supplied the capital and directed their industries, and it was found that we could not dispense with the wheat supply even from that country, because it was the main steadier of wheat prices. An attempt was made to dispose of that argument by considering the case of war, but even that made the position of the opponents of preference stronger. When Mr. Chaplin came to sit on the Food Supply Commission, he signed a Report which contained a paragraph pointing out the truth of the argument that it was impossible for this country, with safety to dispense with any sort of source of wheat supply, because the more sources this country had the safer should we be in case of war. That argument had considerable weight in the country, and it certainly seemed a little early now to revive that controversy. The mover of the Amendment had told the House that he was going to take them round the Empire, and although it was a somewhat formidable undertaking he hoped that the hon. Member would allow him to travel again round the Empire this time arm in arm with him. The hon. Member had ventured to visit India in the course of his journey, but he visited it with an open mind, and a fresh mind, and without reference to the unanimous opinion announced by the Government of India. Both the mover and the seconder had suggested that something could be done by preference to make India happier and more contented, and it was said this could be accomplished in regard to tea. Upon this point he need only quote from Lord Curzon's famous despatch in which he killed all such arguments. Speaking of preference generally, Lord Curzon said— The balance was distinctly adverse to it and the preferential advantage we might hope to receive is neither large nor sure. Then he went on to the case of tea, which he examined with the same care as he had done cotton and wheat, and he said— In the case of tea, India and Ceylon already divide between them more than nine-tenths of the trade of the United Kingdom. For preferential treatment there is very little room. Some hon. Members thought that because it had become a little fashionable in this country to call for China tea there had been an immense increase in its consumption. He wished to point out that this was like calling for Wallsend coal. The Wallsend pit had been worked out long ago, although they still were able to get coal of that class described as Wallsend on account of its similar and excellent quality. Most of the tea which was now being consumed in this country as China tea was not China tea at all, but tea of the same kind which came from India and Ceylon. They only needed to look at the figures to see the rapid shrinkage of the China tea trade, which bad been astounding within the last two or three years, and as a matter of fact the real China tea trade for consumption in this country had almost disappeared. There was virtually no China tea and hardly any foreign tea consumed in this country with the exception of a small quantity of a special tea from Formosa. We could not offer any advantage to India by preference. It should not be forgotten that India paid £21,000,000 towards the defence of the Empire. India had 300,000,000 people for whom this country were trustees, and Members represented the Indian people in the House of Commons even more than their own constituencies. It had been said that a preference could be offered to Australia in the case of the wine duties, but how could that be done without raising a quarrel with Portugal, Spain, and France? What advantage would that be to a country which sent us only one twenty-second part of our consumption of wine? How could a policy of that kind be a substantial advantage to all Australia? Anyone who knew the Australian wine trade must know that such a policy would have to be very gradual indeed and it would be extremely doubtful in the result. The placing of preferential duties on sugar had been alluded to. With regard to duties on sugar he hoped they would be got rid of altogether. In his opinion the Sugar Convention was a breach and invasion of the principles of free trade. It had already been pointed out that India had lost her tea trade with Russia in consequence of the Sugar Convention which, in the opinion of the Government of India, had been the cause of the measure taken by Russia to penalise the Indian tea trade. Then there was the speech of the Under-Secretary made a week or two ago. There had been all through history difference of opinion among free traders upon the question of commercial treaties. With regard to making a treaty which would have the effect of reducing the duties and giving one country an advantage which would be given to all the world, the Under-Secretary knew that at the time of the Cobden Treaty there was the greatest difference of opinion upon that point. The argument was not new. The right hon. Gentleman the Member for West Birmingham had addressed it to them. It was one of his main points. He himself (Sir Charles Dilke) had, with the consent of Mr. Gladstone, used in negotiation with France, Spain, Portugal, and other countries, the possibility of re-arrangement of our wine duties, without, however, making any change, as he had failed to find sufficient advantage for doing so. But was there nothing in the speech of the Under-Secretary that went beyond that argument? He hoped not, and he thought not. The phrase about the headship of the Colonial Office had always the danger lurking within it that the Colonial Office might be tempted, and the Conference might be tempted, to consider what was sufficient for the strong men present and not what we ought to put first, namely, the real interests of the Empire as a whole which were by no means fully represented by the Colonial Conference. He wished to press a little further the questions which he and others had put to the Government to-day with reference to the representation of India. He said "India" because in this House they were conscious of the contribution which came from the Crown Colonies. There was always the danger that the Colonial Conference, even if they sometimes slipped in the word "Imperial," and even if the Secretary of State was sometimes there, might forget India. In previous Conferences India was forgotten. Attention was called to the fact in this House on the occasion of the Conference of 1902. Although India was nominally represented, the tables of the cost of the British Army showed the contributions of the different Colonies, but India was entirely omitted. The whole of the sum of £17,500,000 which India at that time paid on our bidding for war services was entirely left out. At that time, and subsequently when the tariff controversy arose, the Viceroy in Council, backed up by the unanimous Government of India, by no means showed gratitude, and on the contrary showed deep alarm in regard to this very Conference about to be held in the present year. Apart from what Lord Curzon said in the great despatch from which he had quoted a few words, he returned to the subject in the following year. The right hon. Gentleman the Member for West Birmingham having said that he thought the opinion of the Government of India was one which might be modified in the course of time, Lord Curzon used some remarkable words to which he wished to call the attention of the House. He said that their claim was that there should not in any Imperial scheme be imposed on India any system which was detrimental to their interest.

MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)

Hear, hear.


said the late Chancellor of the Exchequer cheered that statement. He did not know what the right hon. Gentleman meant by that cheer. It was on that very point that he wished to have some very clear declaration. Lord Curzon contemplated at that time insisting on direct representation at the Conference by delegates apparently from India, and he used these words— These would be the instructions with which our delegates would proceed. What he thought the House would be anxious to know was whether the opinion of the 400 millions of people in India and elsewhere in the Empire, would be heard at the Conference as clearly, strongly, and emphatically as that of the 11,000,000 of people in the self-governing Colonies. That point led him to ask whether the proposer and seconder of the Amendment were justified in the assumption that the Colonies were going to ask for one thing, or were going to agree upon a policy in this matter. Was there the slightest evidence of it? Would the hon. Member for Gravesend tell the House what were the instructions of the Canadian delegates who were coming over to the Conference? They had not yet seen the actual text of these instructions, but he did not think they could be far wrong in collecting from Sir Wilfrid Laurier's speeches what they were. There was one argument in connection with the question of preference as bearing on closer unity that required thinking out a little more clearly than had yet been done, and that was as to the direction in which we were tending and what we meant the Empire to do. Was it possible to dissociate the arguments with regard to closer union from the citizenship of the Empire, from the position of the British subject in the British Empire? That question was soterrible and difficult that they shrank from it. When they came to consider the Indian grievance in that matter was it conceivable that they should ask India to give a preference to Natal? The whole of the trade of India, according to Lord Curzon, rested on her trade with Germany. German trade with India was not a very large fraction of Indian trade, but it was in articles which exactly suited the rest of Indian trade and fitted into it in such a way as to affect her money relations with all the other countries. That Lord Curzon had proved by an elaborate argument. Indian exports were as a rule not exports that could certainly stand against those of many other countries. They were not the best. Her cotton was not the best, but she held her markets, which rested on a delicate system of freedom of trade, and of that system her German trade was an essential part. Lord Curzon had shown how easily it might be upset. If they examined the articles of exportation they found that jute was most important to Bengal, and that linseed and rape seed were most important to large portions of the North-West Provinces. Their importation was a necessity for some important branches of German industry in which large capital was invested. That trade was important to Germany, but it was equally important to India to have that connection in her trade. There had never been sufficient justice done to that aspect of the question. As one who had never approved of Lord Curzon's policy, he thought it was all the more necessary where one felt admiration for it freely to express that admiration in this House. He did not think anyone would gather from the speeches made on the other side of the question the extent to which this country still depended and must depend on trade which was not specially British. When the President of the Board of Trade and himself brought this question before the House in 1903, they pointed out that our trade with foreign America was larger—and it was still larger now—than the whole of our trade with the self-governing Colonies. The hon. Gentleman who moved the Amendment attached special importance to the export of manufactured articles, excluding bullion. The figures for 1906 were not yet completely available. In 1906, however, there had been an enormous increase all round. But even in 1905 the export of British and Irish manufactured goods to foreign America was £56,000,000 in value, while to the whole of the self-governing Colonies the exports amounted to £52,000,000 in value. Was it wise to check that trade unless we could see a stupendous advantage and not a possible chance of doing something some day in Australian wine or Indian tea? But the policy which could be put before the country and accepted by the country must have somewhat larger features than the very small ones delineated to the House that afternoon. If raw materials were rejected it was admitted that the whole of this controversy must turn on bread and meat—there was nothing worth doing unless these were included, and that fact was one of those which had caused the preferential agitation to help free trade rather than to retard it. Our trade with India was very large and increasing much more rapidly than with any other portion of the world. Already it was rivalling the trade with the self-governing Colonies. That was a further reinforcement of the argument which he had addressed to the House in favour of considering whether our Imperial interests—our trustee interests, our higher interests—rested first of all on the case of India. Preference was supposed to lead up to a closer union throughout the Empire; and the questions put forward before the Colonial Conference—or as he preferred to call it, the Imperial Conference—seemed to be connected. They were to lead to what he thought was the unfortunate suggestion of a Consultative Committee, if it was to be anything but a name, put forward in the despatch of the late Secretary of State for the Colonies. That was a very doubtful experiment, and one which the House should watch with great jealousy. He was persuaded that Canada would never look at it. He believed—and he did not think he was wrong—that the instructions to the Canadian delegates would be to oppose tooth and nail anything of the kind. In regard to any chance of such a Committee being created New Zealand did not answer; Australia answered in a half-hearted fashion, and Canada answered in a hostile way. The Quarterly Review, in an article on this subject, said— The assent of Canada and the Canadian Government is probably even more reluctant than their reply shows; and their reply itself shows that they think that the proposed Conference will become too strong and will threaten the independence of the Colonies, or that it will be barren and hardly worth attendance. They were told that the great Commonwealth of Australia, which was profoundly protectionist, was rather sceptical as to the particular advantages that would accrue from preference either as regarded Queensland sugar, South Australian wine, or Victorian and New South Wales wool. The Dominion of Canada would not look at any preferences which would involve a lowering of their protective duties on the goods which English manufacturers were most anxious to send them. Canada was opposed to the proposed Consultative Council, opposed to a contribution for the defence of the Empire, opposed to any serious readjustment of the Canadian tariff or to accepting a preference if it was accompanied by serious modifications of her own tariff. Of course all those questions would have to be considered if there was to be any future re-organisation of the Empire on the lines suggested in the despatch of the late Secretary of State for the Colonies. He maintained that that reorganisation would be dangerous to the Empire, calculated not to bring about that union of hearts which they all desired, and which many of them had worked all their lives to bring about, but be sever and to part it. It would cause hostility and friction, and undo much of the good work which had been done on both sides.


said it was a somewhat regrettable fact that the Amendment before the House would not allow them to discuss some of the questions to which the right hon. Baronet had referred in the closing sentences of his speech. He thought that the House could not do better work than consider the lines of Imperial reorganisation to which the Colonies would submit. The question before the House was how far Imperial preferences would meet Imperial and Colonial needs, and how they would strengthen Imperial organisation. The hon. Gentleman who moved the Amendment had said that every year since preference was granted by Canada the Dominion had taken more cotton manufactured goods from this country than before. He did not want to belittle the results of the Canadian preference, but he found from looking at the figures that the amount of cotton taken was exceedingly irregular. In 1899 the imports of our cotton goods to Canada amounted to 56,000,000lbs. weight; in 1900,60,000,000 1bs.; in 1901, 54,000,000 lbs.; in 1902, 69,000,000 lbs.; in 1903,73,000,000 lbs.; in 1904, 55,000,000 lbs., and in 1905, 63,000,000 lbs. The money value of the cotton goods followed pretty much the same fluctuating lines. The important thing in regard to Canadian preference was not the actual value of the goods which the Dominion took from Great Britain, but the relative value. In 1898 Canada took from Great Britain one-fourth of her imports of cotton goods; in 1904 it took under one-fourth. It was perfectly true that the Premiers of our Colonies were going to ask us to consider a preferential trade; but the question was, What did they mean by a preferential trade? They could easily delude themselves by using fine words that had no meaning; and what they wanted to discover was what were the practical business proposals which the Colonies were prepared to make which would justify the description of preferential trade. Neither the mover nor the seconder of the Amendment, when they told the House that the Colonies had deliberately and definitely adopted a preferential policy, took the trouble to inquire what the Colonial, side of the bargain was to be. They did not mention that the cry in the Dominion was "Canada for the Canadians." This was not a political but an economic and industrial cry. It meant "Canadian work for Canadian workmen." It was precisely the same in Australia, where the cry was "Australia for the Australians;" "Australian work for Australian workmen;" and there was a very determined attempt at the present time to reduce to a disappearing point the amount of foreign products which could get over the tariff protection wall. Last summer there was a Bill before the Commonwealth Parliament making certain awkward conditions under which foreign manufactured goods should be placed on the Australian market. An Amendment was moved exempting Great Britain from those hampering conditions, but it was defeated by a large majority.

The Attorney-General, speaking for the Federal Government of the Colony, said— As far as I am concerned I will not allow any goods to be admitted into Australia if the competition is intended to destroy our own industries, no matter where they come from. The learned gentleman proceeded to say— Would any loyal Australian permit that to be done even if the injury came from Great Britain? It was evident therefore that our preferential trade with Australia was going to be circumscribed within very narrow limits. The point was, how narrow were the limits going to be? The right hon. Gentleman the Member for West Birmingham said in Glasgow that part of the bargain which he believed he could strike with the Colonies was that they should continue manufacturing what they were now manufacturing, and that they should leave to us the manufacture of goods upon the production of which they had not yet embarked. There were very few wise things done in the course of that campaign, but one of the wisest was the withdrawal of that statement from the published reports of the speeches of the right hon. Gentleman. As a matter of fact, if they took the case of Australia, they found that last year the first effort was made to carry into effect these provisions in favour of Imperial preference, and then it was discovered that if, as the result of that preference, Great Britain captured the whole of the market that would be available for it it would only add to its Australian exports the magnificent sum of £900,000. As was very truly said by a critic of the proposal, Senator demons, the Ministry was trying to translate into law the cry of preferential trade, but the Bill which was introduced dealt with not more than one-twelfth of the total trade between England and Australia, and in no single case did it propose to lower the tariff in favour of Great Britain. It was not therefore a preferential admission but a preferential exclusion. That was the only attempt that Australia had ever made to carry its preferential proposals into operation. A good many people imagined that Australia was anxious that we should take her raw materials and that she would be exceedingly thankful if she were allowed to create a monopoly in our markets for them. Even that was a mistake, because one of the curious results of the complicated and extraordinary series of economic experiments that Australia was carrying on was that he had discovered that the export of raw materials was defeating the policy of "Australia for the Australians." He held in his hand the Reports of the Victorian Factory Department for 1906. These Reports, if studied from year to year, gave one a very curious indication of what legislation was going to be a few years afterwards. He found, for instance, in respect to wool and hides, that the factory inspectors told us that during 1905—this was an extract from the Report of Mr. Ingham, one of the factory inspectors—the largest fellmonger in his district had to close down his works as he could not pay the price for raw material that the foreign buyer was prepared to give. The result was that forty persons were out of work, which was a very serious state of things, because the wages were small even with full-time work. That was supplemented by the Report of another inspector upon the tanning trade. He said that trade had been better this year, notwithstanding the increase in the price of hides and the large quantity that had bean exported, but experts said that until there was an increased duty on hides and skins this industry must remain in a backward condition. Another inspector, Mr. Billingham, reported in the same sense; and as a matter of fact there was a very serious discussion going on in Australia at the present time as to whether their policy of protection supplemented by their policy of wages boards and the other enactments fixing the price of labour, must not be supplemented by some sort of method that would retain for the Australian manufacturer first claim upon Australian raw materials, because if Australian raw materials were constantly being drawn out of Australia it was impossible to carry to its logical conclusion the policy of Australian labour for Australian workmen. When they followed out the matter in every detail they discovered that the intention of Australia was to limit the Imperial preference to the very narrowest margin. And it was not content to protect itself by ordinary tariff walls. Deputation after deputation had been received by Mr. Deakin from manufacturers who wanted to manufacture more than they did now, but who said they could not compete against English manufacturers' goods under the present tariff, unless they received a bounty. They said they were prepared to allow the English to have preference, but the tariff against England must be sufficiently high to keep the Australian market for everything they wanted that market for, and if the Australian Government thought it inconvenient or improper to build up that tariff wall sufficiently high for their purposes they should leave it low and give them a bounty. During the recent campaign one of the most important points that told in favour of the then Ministry, the Ministry which is likely to be continued in office, was the agitation in favour of bounties for native industries. Let the House be perfectly clear in its mind that in carrying out these intentions, Australia is not to allow its connection with Great Britain to hamper it. The acting Home Secretary pointed out the great difficulty which they had in apprenticing their children to engineering, and he said the reason was that English machines to the tune of a million and a half were admitted to Australia last year in spite of their protection. There they had the narrow and diminishing market open for preference. It was true that in April the Australian representatives would be prepared to ask us to give them a preferential tariff, but to take advantage of the small market offered we should have to completely change the fiscal policy of our own country, and that would be absolutely unthinkable under the circumstances. It would involve protection, because there could be no preferential treatment until we had protection, and, moreover, if we were going to protect the Australians and Canadians on our markets we should have to protect the English producer against both of them and the rest of the world. He ventured to assert that the people of this country would never accept such a condition. He did not believe for a single moment that Canada was going to press us one way or another. He had read nearly all of the important speeches delivered by Sir Wilfrid Laurier on Canadian preference, and it was perfectly true that he had given a good many reasons why he offered us that preference. One reason was that we might meet them in some respect, but another was that he hoped that it would be the first step towards the establishment of free trade within the Empire. He thought, however, that free trade within the Empire was so far off that this House need not trouble about it at all. Canada's attitude was perfectly correct. She recognised her great obligations in the matter of Imperial defence, and she was anxious that this country should never have an opportunity of interfering in the slightest degree with her self-government. She was going to make no arrangement with us which would justify us in interfering in any way with her self-government, and she knew perfectly well it would be exceedingly improper if she tried to force our hands in regard to a policy which intimately concerned our own people. He did not anticipate that the Canadian offer would be anything more than a friendly offer to be withdrawn immediately the home position was stated. Therefore when they asked the Colonies what they meant by Imperial preference they discovered that it meant nothing at all, that the markets offered to us were narrow margins which the Colonies tell us frankly they propose as soon as possible to take for themselves, that it was to a considerable extent merely a political cry used for Party purposes and nothing else. When they analysed the offer to discover what the substantial business proposition was going to be, or on what industrial or economic bases it was built, they discovered that these things did not exist at all.

*MR. MITCHELL-THOMSON (Lanarkshire, N.W.)

regretted that any Party spirit had been displayed upon this subject. He would try to speak of it in a tone as far as possible removed from Party prejudice, because he realised that the discussion dealt with issues far wider than were usually debated within those walls. On these grounds he was sorry that the issues had been already confused. It was suggested that the Government had not yielded to the hope expressed in this Amendment because they believed that if we were to have commercial union on the basis suggested in the Amendment our food would cost us more. He thought that was an inaccurate rendering of what hon. Members opposite meant to convey. What they really contended was that if commercial union on a preferential basis was obtained by a readjustment of taxation, including a preferential duty on corn, then our food would cost us more. That was a subject upon which he felt it was perfectly futile to bandy words between the two sides of the House, because he was convinced he would never be able to convert hon. Members opposite, and that no matter how eloquent hon. Members opposite might be they would never convert him. Therefore, in view of the larger interests which lay behind the discussion the House ought to realise what it was they had to concentrate their attention upon, and that was, that this was a discussion not of the effect of any particular set of means, but as to whether the end was worth attaining, and whether in order to attain that end it was worth while to discuss the possible means. That, in his opinion, was the point it was most profitable to discuss. In that connection it had been said in the country by the Under-Secretary for the Colonies that though this end might be desirable in itself, and might possibly arrive in some way in the future, it was worse than useless to attempt prematurely, as it were, to force it now by any action we might take. The views of those who held that opinion were that in time, if we did not approach our ideal of preferential union on a commercial basis, we might make a large step in that direction; that the preferences we now enjoyed with our Colonies might grow and extend and mature. He wished he could think that that would happen. But we had had the strongest possible warning not only in the spoken words of our Colonies that such a thing could not occur, but tangible warnings, as in the case of Canada, in the shape of the intermediate tariff, in the case of New Zealand in the shape of a similar tariff; and in the latter case the warning was the more ominous, because it was well known already that various negotiations had been going on between the Government of that Colony and other Governments. In regard to South Africa we had had warning more clear and specific than in any other case, as was shown by the views put forward by Dr. Jameson, the Prime Minister of that colony, a little more than a year ago, when he said— The South African Colonies may at some future period abolisha preference which was always intended as a step towards free trade within the Empire, if it is found that no consideration will induce the Mother Country to follow up the experiment. It was these considerations which led him to believe that without some action on our part it was almost impossible and incredible that we should achieve the end we had in view. Had hon. Members considered the possible effect upon this country if we did not achieve that end? Had they considered the possibility, if Imperial and commercial unity were not attained, that their food would cost them more? Had they considered in that event that the loaf might be no bigger and the means with which to buy it might be less? The suggestion that we might have less money wherewith to buy the loaf touched the domestic side of the question of tariff reform, and with regard to that he would only say that if the preferences which we enjoyed at the present moment were modified, if there was less opportunity to send our exports to Colonial markets, we should have less employment for the people of this country. Was it the case that employment in this country was as good as we might desire? Was it not the fact that of our skilled trade unionists something like 4 per cent. were out of work? He wondered if hon. Members ever considered what was the number of skilled workmen unemployed in Germany and America, or if they had read the Order Paper and seen the Amendment down in the name of an hon. Member of the Labour Party? He did not, however, intend to press the subject, because it touched the domestic side of the question, which he would rather the attention of the House was not strictly confined to to-day. At the same time the House must remember what effect these preference arrangements had had and must in future have on our trade. Let them take for instance the effect of the Canadian preference on our exports of woollens to Canada. In 1893 we sent her $9,500,000; in 1894, $8,000,000; in 1895, $6,750,000; in 1897, $5,500,000, then mark the effect of preference. In 1898, $6,250,000; in 1901, $8,000,000; in 1903, $11,000,000, and in 1905 over $12,000,000. Turning to the question of the intermediate tariff of Canada he desired to point out that the duties under the tariff were about 10 per cent. below those of the general tariff. The reason for that tariff was clear. As Mr. Fielding said in introducing the last Canadian Budge, it was to show that there was something which foreign countries might obtain if they desired to do so by entering into negotiations with Canada; to show that they might obtain an equal tariff for equal compensation, and that they might obtain part by part compensation. That was the idea with which that tariff was started. It was a standing offer to Germany and to the United States of America to enter into an arrangement with Canada and obtain a larger share of the exports to Canada, with the result that we should get less trade. Let the House suppose that Germany was to enter into a treaty of reciprocity with Canada; under the intermediate tariff her hosiery for instance would go into Canada at a 30 per cent. duty instead of 46⅔per cent. as against the British 22 per cent. Would a single hon. Member opposite rise in his place and say that would make no difference to employment in this country. Then, again, the possibilities of Canada as a wheat exporter were hardly realised by the House. Very few hon. Members realised that there were in Canada awaiting the plough wheat lands which exceeded the lands of France, Germany, and Austria put together. Had they considered what might be the effect of Canada's entering into reciprocal arrangements with the United States? Perhaps some hon. Member might say there was no danger of such a thing occurring. Had they considered the strong inducement of Canada to take such a course? Wheat grown in Canada had to find its way to the sea within a comparatively short period, roughly speaking about eight weeks; and it had to pass over comparatively narrow channels of railway, through a sort of gullet. The result was that every autumn a very large quantity of wheat was left in Canada; it could not be exported, and it was stored for the most part in big elevators around Fort William, which, corresponded with the port of Duluth on the American side of the frontier. The cost of freight from each to the seaboard was much about the same; the storage of grain was practically the same, yet when they came to look at the sale of the wheat at these two different places, if they looked at the quotations for Feb. 18th on Duluth and Winnipeg Exchanges, they would find that the American was sold at 80¼ and the Canadian at 77⅝ cents per bushel. When they considered what that meant to the Canadian farmer they would see the inducement which was offered to him to enter into reciprocity with the United States. The difference, roughly speaking, regularly varied from 10d. up to as much as 7s. a quarter against the Canadian grower. Why? Because he had got his wheat on hand. He had to sell it. With the large supplies which come into the marked from every quarter of the globe it was impossible for him to continue holding it on his hands. He could not sell it in the markets at his doors, for he was barred from the United States market by a duty of 25 cents per bushel, and he was obliged to sell it to us at a cheaper price. [MINISTERIAL ironical cheers.] Yes, we bought it from him at a cheaper price; but let the House look at it from the point of view of the Canadian farmer. This was the contribution which the Canadian farmer paid towards the British Empire. How long did they think it was likely that he would go on paying? Every year the wheat lands in the United States were being more and more worked out and the crops were becoming lighter and lighter; and they knew that with a light crop in America there was a heavier discount against Canada. America, too, realised the advantages which reciprocity with Canada would bring her. If hon. Members looked at some of the literature at the Presidential elections, they would see how important this subject was felt to be, and how first one side and then the other endeavoured to impress upon the electors that they were the people who were going to bring about reciprocity with Canada. If hon. Members would look at the question from the Canadian point of view, and from the point of view of the possibilities of Canada, he thought they would see that there were the strongest possible inducements to try and open the door of the United States market to Canadian wheat, and if that ever happened the door through which our manufactures entered, Canada would be closed in a great measure, and a source of cheap spring wheat would be cut off from us. Then indeed "our food might cost us more." Some hon. Members opposite treated this question as of little concern to us, as though the interests of the Colonies were matters in which we should take no primary concern. He knew that view obtained among hon. Members opposite, and he could not hope to argue successfully with them, because they had no common ground from which to start. But there were hon. Members opposite who did not believe that the first interests of the people of these islands was to obtain the largest possible share of profit for Great Britain. There were many to whom Empire meant far more than that, who did not look upon the British Empire merely as a business proposition, a subject for haggling and squabbling in the endeavour by each part of it to beat the rest, but who looked on it as a common heritage which was also a valuable commercial asset. He and those around him believed with those hon. Members that it was our privilege and our duty to enjoy that heritage and try to develop that asset. He and those around him had their own views, and they had tried to give expression to some of their reasons as to why we should develop that asset, and how it was possible to achieve that object. They believed that those views did commend themselves to our kinsmen in the other Britains, and would ultimately commend themselves to the people of this Britain. He did not want to cry "Little Englanders" to hon. Members opposite, who thought in all sincerity that they who held different views from themselves were mistaken. But was not that the greater reason why they should agree that it was in the best interests of the Empire that there should be a conference and discussion in order to arrive at the best means of achieving what they all admitted to be a common ideal? If that were so, why should they not join in regretting that His Majesty's gracious Speech had not given expression to a sense of the importance of the forth coming conference and its immense possibilities for the furtherance of the prosperity of the Empire and the common welfare of its people?

*MR. GIBB (Middlesex, Harrow)

said there was a common desire that the Colonies should be drawn and kept closet to the Mother Country, but was the commercial union or preferential system one calculated to secure that object? We were a free trade country, but historically we were a protectionist country, and we had experience of protection and knew what the result of the Preference system was. In the forties, the "hungry forties," British ship-building was a decaying industry. A Committee was appointed to inquire into this matter among others. The shipbuilders declared that they could no longer build ships to run them at a profit; and shipowners said that they were not desirous of withdrawing altoge her from shipping, but were investing in German ships rather than in British. The reason for that was expressed in the one word "preference." We were granting a preference to Canada over the Baltic, and it was the Baltic timber that the British shipbuilder wanted. The country was faced with a difficulty, for Canada was already expressing the very strong feeling that if the preference were withdrawn from her she would be robbed. The English people had to make up their minds, and who to-day would say that their decision was wrong or unwise? Everyone to-day would agree that it was a wise decision, and that by it an industry was saved. British shipowning had since the withdrawal of the preference made marvellous progress, being five times whet it was then. Last year we built three-fifths of all the ships built in the world, and yet shipbuilding was the industry which was decaying only sixty years ago. Of steel steamers over 3,000 tons, which would exclude those for the American lakes, we built four out of every five that were built in the world. That never could have been but for the fact that we put an end to those preferences. What was the effect in Canada? There was strong resentment, and a resolution was unanimously passed by the Legislative Assembly in 1846, and addressed to Queen Victoria, to the effect that it was much to be feared that should the inhabitants of Canada, from the withdrawal of all protection of their staple products, find that they could not successfully compete with their neighbours in the United States in the only market open to them, they would naturally and of necessity begin to doubt whether remaining a portion of the British Empire would be to them of that advantage which they had hitherto been inclined to believe. If they granted preference what advantage would the Colonies gain? Certainly not the advantage of fresh markets. The producer in Australia knew at the present time that there was a market for as much wool as he could produce. As far as Canada was concerned, this country was now taking 90 per cent. of her exports of farm produce. Therefore we should not be giving the Colonies a market which they did not already possess. All it would do would be to give them a little higher prices for their goods. But at whose expense would this preference be carried out? At the expense of the poor people of this country, because the poorer a person was the larger was the proportion of his income spent upon food. The agricultural labourer spent on an average three-fourths of his income on food, and it was food that they proposed to make dearer in order to give a preference to the colonies. If such a policy were adopted how long would it be before an agitation would arise against paying so dearly for this preference? There was not at the present moment any anti-colonial party in this country; everybody was anxious to have the Colonies drawn as closely as possible to the Mother Country. That was not always the case, because at one time there was an anti-colonial party in this country, and how long would it be before such a party would arise again under preferential treatment? The very object in view, viz., that of drawing the Colonies and the Mother Country closer together would be defeated by the system of preferences proposed by hon. Members opposite.

SIR HOWARD VINCENT (Sheffield, Central)

said the hon. Member for Leicester had just returned from the Colonies, and he had given a most interesting view of the policy about to be pursued, not only in Australia, but in Canada and New Zealand. He had shown that the policy in Australia was Australian work for Australian workmen. He had never heard a better protectionist speech, and the only thing he could not understand was why the hon. Member was not in favour of British work for British workmen. His speech had shown most clearly that there was a very strong movement in Canada, Australia, and New Zealand, and to some extent in South Africa, of a protectionist character, and they evidently feared British competition. This very fact made it more imperative that at the present time they should look at this matter from a purely business aspect. If the Colonies saw there was no corresponding movement to draw them closer than existed under the commercial basis of the present day they would begin to put their duties higher and higher, and would feel themselves free to negotiate with the United States and other countries, who would not be slow to offer those preferences which this country denied to them. The President of the Board of Trade made an absolutely non-political speech the other day at Walsall in which he said— There ought to be no politics in business; he kept his politics and his business separate. He asked the Government to act upon the principle enunciated by the President of the Board of Trade, and look upon this as a purely business matter, putting politics and political views entirely on one side. The President of the Board of Trade also said— We have to face difficulties of commercial rivalry, difficulties of tariffs, and devices to keep out our business. They had to deal with the situation exactly as they found it, and he asked the House seriously to consider whether it was not expedient for them to listen with an open and ready mind to the representations which would be made to them by the Colonial delegates at the forthcoming Conference. The mover of the Amendment had called attention to the state of affairs within the Empire, and had said that there were commercial arrangements between Canada and Australia, Canada and New Zealand, Canada and South Africa, Canada and the West Indies, Australia and New Zealand, Australia and South Africa, and New Zealand and South Africa. That being the case, was it reasonable or fair to this country to watch these commercial arrangements being made for closer commercial intercourse between all the daughter-lands of the Empire whilst the Mother Country was being left out in the cold? On both sides of politics in the United States there was a strong movement in favour of giving preference not only to Canada, but also to New Zealand and Australia. That was the business matter which they had to face. There was a tendency in all foreign countries, whether in Europe, or in the New World, to put the duties against British goods higher and higher. British trade with foreign countries had not that buoyant character which Colonial trade possessed, and there was a greater difference every year between the imports and the exports. The imports of this country from foreign countries considerably exceeded our exports. In fact, they were £150,000,000 more than our exports, whereas our exports to the Colonies very nearly equalled our imports from the Colonies. There was a reciprocal trade, and the only difference was a matter of £4,000,000 or £5,000,000, which was accounted for by the difference in freights and by the returns and the imports in British countries. It had been said that we could not deal with this matter to the exclusion of India. At the present time an import duty of 5 per cent. was levied upon all articles arriving at the Indian Customs House. He would like to know what there was to prevent the Indian Government putting a higher duty upon imports from foreign countries, leaving the duty on British goods at the level of 5 per cent. The right hon. Baronet the Member for the Forest of Dean had dealt with the trade of Germany with the Indian Empire.


said he only, quoted Lord Curzon's opinion upon it.


said that Lord Curzon was a great authority on the subject, and he hoped they would have the advantage of his presence in this House before very long. What were the facts to be derived from the books in the Library in regard to Indian trade? The imports into India during the last year amounted to £52,000,000 sterling. Of that total £44,000,000 came from Europe, of which no less than £34,800,000 came from the United Kingdom. We had an enormous preponderance of the trade, and from Germany the imports were only £1,500,000. The exports of Indian produce amounted to £43,000,000 sterling to Europe, £21,000,000 of which came to the United Kingdom and £6,700,000 went to Germany. Therefore the trade of the United Kingdom with the Indian Empire, imports and exports together, amounted to £55,000,000, whereas the whole trade of Germany with the Indian Empire was only £8,000,000 in round numbers. Those were the latest figures available, and he did not think in considering this question we needed to regard the German interests in the least. The only interest we had to regard on this subject was the British interest and the interests of the Indian people who were committed to our care. There was a duty of 5 per cent. levied on every single article ad valorem ariving at the Indian Customs House, and there had been no proposition to increase it. The only thing that would be an advantage was that that duty should be increased upon foreign articles imported. Some doubt had been expressed as to the advantage of preferences to this country. He remembered that a former Member of this House admitted that our trade with Canada had considerably increased, especially in his own line of business, since the adoption of preference. The British imports into Canada in 1897 amounted to $29,000,000 when the 12½ per cent. preference was announced, and in 1906 they amounted to$69,000,000 when the preference was 33⅓ per cent. That was a very large increase indeed. There could be no doubt whatever that one great advantage of the preference had been that it had attracted British capital to Canada to a much greater extent than previously. What was true of Canada was also true of Australia and the other Colonies. Here we had two sets of customers—the foreigner on the one side and our own kith and kin on the other. Was it not perfectly obvious to any business man that we ought to give an advantage to the people who were giving us better terms than the foreigner? We had this opportunity now. How long it would last he did not know. The Empire was enormously indebted to Sir Wilfrid Laurier for taking the line he had. The policy in regard to preference originated with the Conservative Party in Canada, but Sir Wilfrid Laurier as head of the Liberal Party took the view that this was an object to be aimed at. He was glad that there was at the Board of Trade a statesman who had an open mind on this question. He earnestly appealed to the right hon. Gentleman and his supporters to look at the matter wholly and entirely as a business question. If the right hon. Gentleman did that he felt convinced that the result of the coming Imperial Conference must be to draw closer the commercial ties which united us. Nobody appreciated more than he the sentimental feeling which there was in all the Colonies for the Mother Country. The colonists spoke of England as home, and surely if we could do anything to promote this view it was our duty to do so. Nobody, he thought, would question that he had a clear right to speak on this matter. His constituents bad returned him to Parliament mainly on this question. He would give the figures with regard to cutlery which appeared in the Board of Trade Returns for the year ended December, 1906. The imports of foreign cutlery in 1906 amounted to £109,662 or £30,484 more than in 1905, and nearly double the amount for 1904. The exports of cutlery in 1906 were £706,059, or £10,000 more than in 1904. Of this £349,724, or nearly a half, was taken by Australia, Canada, India, South Africa, and New Zealand, while other parts of the Empire took a large proportion of the £128,000 ascribed to other countries. What did foreign countries do for us? Russia, Germany, France, Sweden, Norway, Belgium, and Holland together, with a population of something like 150,000,000, took only £33,343 worth of cutlery, or £1,519 less than the small British Colony of New Zealand, with a population of 1,000,000. That showed that to the cutlers of Sheffield one New Zealander was worth in trade 150 foreigners. The late Lord Salisbury had said more then once that in his view—and he believed it was the view which had been adopted by the vast majority of the Unionist Party and of the 2,000,000 or more of their supporters in the country—it was to the trade carried on with the Empire that we must look for the vital force of the commerce of this country. He earnestly hoped that nothing would be said, on the Treasury Bench to-night to convert this matter into a political question. He hoped the President of the Board of Trade in winding up the debate to-morrow would not do anything to prejudice the question. It was essential to do something to meet the Colonies in this matter, because if we did not it was inevitable that, whatever their feeling or sentiment was, their trade instincts must induce them to open their ears to the overtures made to them by other countries.

MR. McLAREN (Staffordshire, W.)

said that neither the hon. Member who moved the Amendment, though he spoke in great detail of the concessions which we should grant to the Colonies, nor any of the other Members who had spoken on the Opposition side, had said anything to give to the House a clear idea of what were the benefits we were likely to obtain from the Colonies. He would have thought from a perusal of the speeches of hon. Members who were interested in the question that Colonial preference was to be a matter of mutual concession. Perhaps that was because they were conscious of the fact that the Colonies' attitude towards England was ably put before the House by the hon. Member for Leicester. He hoped that before the conclusion of the debate they might be enlightened by some right hon. Gentleman as to the views of the Party opposite on this subject. The Colonial Conference would meet within a few weeks, and he thought they had a right to ask hon. Gentlemen opposite to state in definite detail the mutual scheme of preference which they proposed should be raised at the Conference. He believed there was a certain misunderstanding on the subject. He believed that the Colonies when they spoke of preference meant merely the placing of higher duties on the imports of foreign countries into the Colonies. That was not the view of there who upheld the policy of the right hon. Gentleman the Member for West Birmingham. He assumed that hon. Gentlemen opposite would say that we should have fair trade with the Colonies. The Colonies were dominated by the protectionist policy and yet by preference, they would be asking the Colonies to reverse that policy. Furthermore, it should be remembered that the industries of the Colonies at the present time were infantile and some of them had grown up under a sheltering tariff wall. In all probability some of them were not industries that would have grown up naturally in the locality in which they were established but through the accident of a favouring tariff. Were we in this country to go to those interested in the Colonies and ask them to open those industries to the competition of their greatest rivals—the English manufacturers and traders? It was well known that we in England were only too ready to complain of the unfair competition of Germany, France, and the United States. But our industries had grown up under free trade principles, there was large capital at their back, and a large body of skilled labour to carry them on. And if we complained that our industries were hampered by foreign competition we had no right to call on the weaker Colonial industries to compete with our stronger. Further, it had been stated in detail by the mover of the Amendment and his supporters that the proposition was to give the Colonies a preference on the foodstuffs they sent to this country. That meant to give a preference to one class in theColonies—the agricultural class—and to ask for a very great concession from the manufacturing class. The result would be that we would place ourselves in alliance with one party in the Colonies and at variance with another—the manufacturing and protectionist party. What we were asking for the Colonies was a grave matter, and there was bound to be a difference of opinion in the Colonies as to the desirability or possibility of such a bargain being carried out, because the manufacturing element would be on one side and the agricultural element on the other. Therefore there would arise in the Colonies a discontented party who would be suffering a certain amount of loss as a consequence of the policy of preference, and who would, in consequence, view the action of the Mother Country with a certain amount of disfavour. He did not think that that would at all conduce either to the harmony or to the unity of the Empire. It might be said that that feeling was exaggerated, but some people could not realise how easy it was to get up a feeling against the Mother Country among manufacturers who saw their wares being displaced by British manufactures, and it must be remembered that the more generous the Colonies were to the Mother Country in granting a preference, the more acute and the stronger would those symptoms be. He hoped that before the termination of the debate some clear and definite scheme sought to be put before the Colonial Conference would be stated by hon. Gentlemen opposite in order that the House might be able to judge whether that scheme was likely to be acceptable to the Colonies.

*MR. MOLTENO (Dumfriesshire)

regretted that the mover of the Amendment had introduced a Party element into the discussion. As one who had resided in the Colonies, he had some experience of the views held there as to making their affairs and their relations with the Mother Country a subject of Party struggles here. He remembered that they were reminded last session by the right hon. Member for Croydon that the Opposition were weak in this House but were strong in support of the Colonies. He was afraid that the Colonial cloak was again to be used to cover the political nakedness of the Opposition. It was a matter of regret that that which had been used on more than one occasion by Mr. Disraeli and the Member for West Birmingham as a mantle of Imperial purple, had now shrunk to the dimensions of an article of the most ordinary domestic use. He rather distrusted this excessive deference to the Colonies which appeared again when the Leader of the Opposition spoke of the susceptibilities of Australia in the Now Hebrides question, and the ruffled feelings of Natal last year. Did this mean that they had learned the lesson by experience that they had lost much by refusing to regard Colonial advice in the past? He would refer to matters of the first importance now. For example, the war in South Africa had been one of the matters which had brought the Unionist Party to their present position, particularly when regard was had to the failure of the results of the war to equal the expectations held out when it was begun; such, for instance, as the statements that it would open up boundless fields for British enterprise and British emigration. The two self-governing Colonies most nearly concerned in South Africa—the Cape and Natal—had made most urgent representations that they should not be precipitated into war, but their protests had been disregarded, with the result that the country had been plunged into a war which he believed to be one of the most disastrous upon which this country had ever been engaged. To take another occasion when it was a question of the settlement after the war, when the question of Chinese Labour, arose, all the self-governing Colonies had protested against it, and particularly that Colony most concerned—the Cape Colony. The Unionist Party owed their position largely, according to their own admission, to the question of Chinese Labour, which had been one of the principal causes of their undoing, and would have been avoided had they accepted the advice of the Colonies. There had been a series of resolutions and protests, extending over a number of years, by Cape Colony against the introduction of Chinese labour. Yet so little effect did those representations have that it had been stated by the Leader of the Opposition that there was no authority for saying that there was sufficient labour without the introduction of Chinese labour. When, however, the Prime Minister of Cape Colony spoke to this effect he did so on behalf of a large body of people who had experience in regard to these matters.


The hon. Member is permitting himself a good deal of latitude on this subject. I do not think that the question of Chinese labour is relevant.


said he bowed to the ruling of the Chair, but pointed out that he was only referring to the matter as showing the loss which was entailed by not having regard to the opinion and following the advice of the Colonies in reference to questions of this kind. He merely wished to illustrate how the Party opposite had suffered by not having regard to Colonial opinion in matters of importance. By yielding to such opinion on another occasion they were saved from the disaster which would have followed a suspension of the Cape Constitution. Did the Party opposite believe in self-government as a system for maintaining the harmony and good government of our Empire and particularly the good feeling between the Mother Country and her Colonies? Did they desire to discharge their debt to the Colonies for the sound advice they had given? It was difficult to judge them by their words and arrive at that conclusion. They must be judged by their deeds, and one could not forget past experiences. By many actions in the past they had failed to show appreciation of the importance of self-government in the Colonies. They had put forward a proposal which overruled a self-governing Colony and they wanted to take away its powers altogether. When they had it in their power to confer self-government upon the new Colonies did they go to a pure and untainted source of self-government for their Constitution? No; they went back to the mouldy and musty Constitutions which existed before any self-government at all. They had gone back indeed to a debased period in Colonial history, and given a Constitution which was the negation of self-government, which would have, in short, done everything to accentuate the differences between the British Colonies and the Mother Country. So recently as last year they found the Leader of the Opposition making a strong attack upon the free Constitutions granted by the present Government because they were too free, they were therefore bound to ask what special claim the Opposition had to the confidence of the Colonies in the past. They bristled with horror at the mention of Home Rule for Ireland, and yet every Colony had passed a resolution in favour of the principle. Therefore the Party opposite could not be said to represent Colonial feeling. The Colonies did not like the introduction of their affairs into British Party struggles. Going back to Natal he recalled a difficulty last year between the Government and the Colony, in which this introduction was strongly deprecated and the Premier of Natal gave strong expression to it. He said— They in this country had become the object of Party politics in the Mother Country, and it was very regrettable that when the Natal Government thought it necessary to enter a forcible protest with regard to the conduct of the Imperial Government they did not anticipate that their action would be fixed on by political Parties at home to make capital of. They did not anticipate they were to become the plaything of Party politics, and he felt in the interests of the Colonies that it was highly undesirable that matters affecting Colonial Governments should become an object of division between the parties at home. That was a representation which he was sure would be endorsed by every Colony in the Empire. Returning to the Amendment, the case for which was opened with a very ample, not to say an elaborate survey of the Empire, he asked what was this desire for preference. It was the old "sole market" theory which at different times had possessed and dominated every European nation having Colonial possessions. It had dominated the Spanish and the Portuguese, and the Dutch in the East Indies and ourselves. It was that theory which had separated us from and lost us our American Colonies. Ireland was the worst case of the application of the "sole market" theory, because it was held in her case that she was not to engage in manufactures, but only in agriculture, and that she must get no manufactured articles from anybody except this country. That was an extraordinary application of the "sole market" theory, as it denied to Ireland all rights to trade and the "sole market" policy then attained the result which the hon. and gallant Member for Sheffield thought should be produced, namely, an increase in our Colonial and a decrease in our foreign trade. The folly of destroying foreign trade in order to create a Colonial trade was long ago demonstrated by Adam Smith. He said— The Colonial trade has been continually increasing while many other branches of foreign trade have been continually decaying. The capital of Great Britain was turned from an employment in which it would have maintained a greater quantity of manufacturing industry to one in which it maintained a much smaller. The monopoly of the Colonial trade, therefore, like all other mean and malignant expedients of the mercantile system, depresses the industry of all other countries, without in the least increasing, but on the contrary diminishing, that of the country in whose favour it is established. As he had said, the war of American Independence was the result of an attempt to impose the "sole market" theory upon the American Colonies, and when we considered our great Colonial Empire we might well pause before we tried to impose it again.

We had to day very excellent illustrations of this "sole market" theory. It was applied to the colonies of Germany, France, and Portugal, but he did not think that anybody would attempt to compare the prosperity of the colonies of those countries with the prosperity which undoubtedly prevailed in our own. He would show how it operated in his own experience. He was a director of a line of steamers which traded with Madagascar. Some time ago his company gave Madagascar a service once a month and a French line also gave them a service once a month, and the produce of the Island was regularly transported. The French were jealous of the English line, so they put on a ten per cent. duty as against this country. What was the result? His company had to drop their line of steamers, the people of Madagascar lost their bi-monthly service, and, the official French service proving un-remunerative, they finally lost a regular service altogether. He thought that was a very good illustration of what happened when an attempt was made to apply the "sole market" theory, and he was certain that our South African Colonies, and we ourselves, were better off when the Colonies had the services of France, Germany, and Portugal as well as a British service than they would be if they had only the latter. The truth was that our Colonies had gained far more from the neglect of the Home Government than from the intervention of that Government in their affairs. He remembered discussing this question with a distinguished Australian, who said "You have your hot fits and your cold fits, and the hot fits mean fever; we prefer the cold fits." Our Colonies had prospered because they were free and because they were established by the enterprise and energy of individual Britons, and not by Government action, and never were the relations between the Colonies and the Mother Country better than they are to-day. They would not consent to part with this freedom. Sir Wilfred Laurier said on the 11th of this month— The legislative independence of the Colonies which had existed for the last sixty years had been the closest Bond of Union that could be achieved between Great Britain and her Colonies, in fact he might say it had been the Bond of salvation or creation of the British Empire. The English-speaking countries would not take such an advanced step as was proposed when no actual grievance existed. He was happy to say that Canada had no grievance whatever as far as relations with the Mother-Country were concerned. He did not think that he remembered a period when there was less friction obtaining between the Colonies and the Mother Country than prevailed to-day. We could not have a hard and fast line. Edmund Burke had well described the true bond with the Colonies— My hold of the Colonies is in the close affection which grows from common names, from kindred blood, from similar privileges and equal protection. These are ties which though light as air are as strong as links of iron. There must be perfect freedom to all parts of the Empire to manage their own affairs while they should all give a common support for common objects. He believed those words of Burke's to be as true to-day as they were then. That gentleman had compared our relations with the Colonies with that of air, he (Mr. Molteno) would compare our relations with our Colonies with ether, which was a perfectly elastic and frictionless fluid for some purposes and a rigid solid for others. He would say let all the different parts be perfectly free to make and control all those things which concerned them solely, let them join together and resist, like adamant, all agression from the outside. That was the true relation that we should have between the Colonies and ourselves. He asked the House in all seriousness to look back to what was said by the late Lord Salisbury, who, speaking in the maturity of his judgment, in almost the last speech he made, laid down certain rules and gave certain warnings which had great value to-day. He said— We cannot safely interfere by legislative action with the natural development of our relations with our daughter States. All kinds of difficulties are there before us, difficulties as to the burden of finance, difficulties as to the duties of defence, difficulties as to the rights and duties which the Mother Country should retain, and unless feeling is rising very high and we have a great force behind us, I look with some apprehension upon any attempt to anticipate events or to foreclose the results, the precious results which if we are only patient and careful the future has in store for the Empire. Then he proceeded further and said— There is nothing more dangerous than to force a decision before a decision is ready, and therefore to produce feelings of discontent, feelings of difficulty, which if we will only avoid, if we will only wait, will of themselves bring about the results we desire. He earnestly urged the House not to make this a Party matter, as that might tend to injure the relations now existing between the Colonies and ourselves, and that was a thing which no Member of the House desired.

*MR. REMNANT (Finsbury, Holborn)

said he desired to address himself to the second part of the Amendment, because he believed that if it were possible to carry out the second part the first must necessarily follow. He had listened attentively to the debate in the expectation that some hon. Gentleman on the Treasury bench would have given the House some idea of the feeling of the Government on this great question, because, as he judged from the speeches not delivered of hon. Members sitting on the Ministerial side of the House, there was a great divergence of opinion amongst them. It had been constantly stated that no offers had been made to us in this matter, but these statements had been made by those who did not remember the details of the proceedings of the Colonial Conference of 1902. If hon. Members read the Blue-book published in regard to that Conference they would find it stated therein that if Canada could be assured that the British Government would accept the principle of preferential trade, she would do everything in her power to meet them. Hon. Members would also know that at the time of that Conference the registration duty of 1s. was upon wheat. When Canada made the suggestion of preference she made special reference to that 1s. registration duty on wheat, and asked especially for exemption from it, promising in the event of our conceding it to consider the granting of further preferences to us. Everybody knew that that concession was refused by the Government, and he did not believe that there was a single Member in this House who thought in his heart that such refusal was a good thing. That duty made no difference in the price of bread, and it was quite certain that that which we should have obtained from Canada was well worth any sacrifice that we might have made. Since that time Canada had made considerable concessions to us in the shape of useful preferences to some of our manufactures, which in some cases had largely increased our trade with Canada. Where it had not increased the trade it had had the very desirable effect of stopping the alarming decline which was taking place when the preferences were granted. He would that an unfettered discretion were given to the supporters of the Government to vote as they pleased on the Amendment. It was clear that very little real difference existed between the two sides of the House as to the necessity for a closer union with the Colonies. As to the means only they differed, and not as to the end. What was needed was a declaration of the views of the Government. So far nothing had been said to show that they sympathised with the anxiety of the Colonies for some means being devised for bringing them and the Mother Country into closer commercial relations on a preferential basis. Did the Government intend to take no measures for the defence of the Empire against the hostile tariff attacks of foreign nations? The worst thing that could befall this country was that matters should be allowed to remain us they were. Trade was now being conducted by the nations of the world in ways totally different from those which prevailed thirty or forty years ago. We could not go on with a policy of isolation, which had been discarded by every other nation of the world. For his part he thought we ought to adopt at the earliest possible moment some plan by which we could successfully battle against the injury done to our industries by hostile tariffs. It was necessary that we should develop and give preference to those markets which had not only shown us the greatest sympathy, but the greatest indulgence. He for one welcomed the splendid spirit of Imperial enthusiasm for the Empire which we had inherited. He was sure that the necessity for the development of our industries would arouse even those who were called "Little Englanders"—at all events those who had not shown much appreciation of our Colonies—to endeavour to secure our Colonial markets for our home goods and also to impose taxes which would enable us to deal effectively with the great problems with which we were confronted and to limit the mischievous influence of foreign tariffs. We had been asked by our self-governing Colonies to enter into treaties of commerce with them. He did not know how long the Government proposed to ignore those entreaties. He would recall to the House recent words of Mr. Fielding, who said that if the British Government and people would not show appreciation of the value of preference, they must not complain if the Colonists saw fit to modify the preferential tariff. An hon. Member had referred to his experience of the Cape. He would also refer to a recent utterance of Dr. Jameson this year. Talking of the preference which had been given to us, he said— I may even go so far as to say that the South African Colonies might at some future day abolish preference, which wax always intended as a step towards free trade in the Empire, if we find that no consideration will induce the Mother Country to follow up the experiment. He ventured to think that this very faithfully represented the feeling of Cape Colony. Then it was said that this preference could only be conceded by taxing food. More nonsense had been talked about this subject than almost any other. The Chancellor of the Exchequer got up the other night, and in the most emphatic way in which he could speak had said, "I will never put a tax upon food."


No, no.


That was the impression that his words gave to me.


What I said was that, so far as I am concerned, I shall never depart from the governing principle of our fiscal system by taxing any article of food.


said he had accepted the right hon. Gentleman's denial that he had said that he would never put a tax upon food. He and a good many others, at all events, said that they could not have preference without taxing food. That was all he had said, and he failed to see the object of the interruptions of the right hon. Gentleman. But this country to-day taxed food to the tune of something like £60,000,000, of which £18,000,000 came from taxes on purely food products. By a little readjustment our Colonies might be relieved, and the foreigner made to pay the duty. A small tax of 2s. a quarter on wheat, levied only on the foreigner, would impose no hardship on the poor. Month after month the price of the 4 lb. loaf varied from 4d. to 6½d. in this country, and the price of the loaf was never the same in different centres of industry. Even on the assumption that the whole 2s. a quarter fell on the consumer, it would not make a difference of two-thirds of a farthing on the quartern loaf. The talk about dear food was a bogey. Canada asked, as part of the scheme for working on a preferential basis, that we should levy a 2s. tax on foreign imported corn and admit corn from the Dominion free. He believed it was not denied that this tax could in the early days of its imposition only fall partly on the consumer, and, as the corn-growing industry of our Colonies was developed, none of it would be borne by the consumer, and all of it would be borne by the foreigner. He would ask Members of the Labour Party, though there was not a single one present, important as this question was to them, if they know of a solitary instance where a man had given up employment in another place because the quartern loaf was dearer there than in the place where he proposed to live. They know that the reason a workman changed from one place to another was to get work, which he would do his best to get in spite of the fact that the price of bread varied a little in different places. It had been said that self-government which had been granted to the Colonies was one of the principal means of binding the Empire more closely together. He did not think any of them would disagree with that; but there were others who went on to say that, supposing the scheme of tariff reform made possible free trade within the Empire, they would be prepared to accept that policy. As a matter of fact, free trade within the Empire was incompatible with the complete autonomy of its constituent parts. Free trade within the Empire would involve an Imperial excheqer with, a central authority for the allocating of the revenue raised by the duties levied against foreign countries. That was to say, that if the Colonies wished to achieve free trade within the Empire, it would be necessary for them to abandon some of their self-governing powers, which he did not think those who had experience of them could expect them to do. At all events, his idea was this: that we should have a scheme of Imperial preference, based on moderate revenue duties, which would develop the agricultural and other industries of the Empire, and leave the self-governing powers of the Colonies intact. He also believed that the preference which they were anxious for, and which they hoped the House would eventually enable them to carry out, would take them a step further, making it possible for them to have on a great scale Imperial unity. He ventured to hope, though it was he feared an empty hope in this instance, where the Parliamentary Whips would not allow hon. Members opposite to exercise their discretion, that if they did not vote for the Amendment, they would at least show their sympathy by abstaining, and so help one step forward the great ideal of Imperial unity.

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

said the hon. Member for Holborn had described the object of the Amendment as being to draw from the Government a clear statement of the policy they intended to pursue in regard to the question of preferential tariffs. Two years ago he had the honour on behalf of the then Opposition of seeking to draw from the then Prime Minister a statement explanatory of the views of the Government upon the fiscal question. On that occasion the then Prime Minister withdrew himself, his Government and his followers, and left the Opposition to talk to themselves. On this occasion the Opposition had no reason to complain that the Government were shirking the question. How was it possible to make a satisfactory arrangement, on a preferential basis, between a free trade country and highly protectionist Colonies? From the very nature of things, until they all started from the common basis of free trade, such a policy was absolutely impracticable. Reference had been made to the case of Canada. What were the exact trade relations to-day between this country and Canada? This country gave to Canada the only free market she had for her produce. Canada sent £25,000,000 worth of produce to this country, and England imposed no taxation whatsoever upon it. He was aware that Canada had given this country a rebate of 33⅓ per cent., which he appreciated very much, but that was only a generous recognition of the fact that this country had given her a free market. The Canadian Manufacturers' Association had declared that under no circumstances must the import duties on goods imported into Canada be reduced to a point at which they would not fully protect Canadian manufacturers. It was said that our iron and steel trade with Canada had increased. It was true that the enormous virgin country of Canada had been developed in an amazing manner during the last few years, and her prosperity had increased by leaps and bounds. It was true that since Canada had given this country a rebate our trade with her had increased, but we had to day a less percentage of the total trade of Canada than before the rebate was given.


That has nothing to do with it.


said the trade of the United States of America with Canada had increased more largely than the trade of Canada with this country in the last few years. Not only had Canada imposed high import duties against British goods, but she had also given large bonuses to the Canadian iron and steel manufacturers to enable them to make in Canada all the iron and steel railway material and other goods they required. When he last visited Canada he was told by leading politicians that in connection with the Grand Trunk Pacific Railway the Bill could never have been got through Parliament if it had not provided for the bounty system, which secured that the material would be manufactured in Canada. Even after making allowance for the rebate British imports to Canada were taxed to the extent of 20 per cent. In addition to this, bounties were given to Canadian manufacturers amounting to 1,509,000 dollars a year. That was how Canada treated their trade, whilst, on the other hand, this country gave Canada an absolutely free market for her produce. What basis for preferential treatment did such a state of things afford? He did not complain of the action of the Canadians in this matter, because he agreed that they ought to have absolute freedom to make their own fiscal arrangements as they thought best.

MR. LUPTON (Lincolnshire, Sleaford)

called attention to the fact that there were not forty Members present. House counted; and, there being forty Members present—


said that certain words had been quoted from a speech made by Sir Wilfrid Laurier. It had been said that unless we were prepared to give bounties to the Colonies on the goods and produce they sent to England the bonds of Empire would be weakened, and we should be in danger of seeing the Colonial trade pass to other countries. Was there the slightest foundation for that statement in the attitude of the Colonies? The hon. Member for Dumfriesshire had quoted Sir Wilfrid Laurier to the effect that it was the legislative independence that had existed for the last sixty years which form the closest bond of union between Great Britain and her Colonies. They had it on the authority of Sir Wilfrid Laurier himself, who was more entitled to speak on behalf of Canada than any other man, that unless the British Empire was willing to approach this question on the common basis of free trade between its component parts it was an impracticable proposal. He thought everyone would support free trade within the British Empire, but he did not think there could be found in the House of Commons a single advocate of a proposal to use undue influence to compel the self-governing Colonies to arrange their fiscal system otherwise than according to what they thought was best for their respective Colonies. It seemed to him strange that in drawing up this resolution, India, with its 300,000,000 people, should again have been omitted. The resolution merely dealt with creating freer trade between Great Britain and her Colonies, and there was no mention of India whatsoever. The right hon. Baronet the Member for the Forest of Dean had pointed out how absolutely the Indian Government was against any such proposals as had been made. They had not yet had from the Opposition a definite statement of what the proposals were. By what scheme did they dream that they would attain the object in view? Certainly no proposal to tax the food of the people of this country would be passed during the present generation. He was certain that the people realised that our commercial salvation depended more upon free imports than upon any other circumstance. The people of India had unanimously condemned the suggestion that they should enter into preferential trade arrangements with either the Mother Country or the Colonies, simply because India sent three-quarters of her exports to foreign countries. She would be absolutely quarrelling with her best customers if she mixed herself up with any preferential trade either with the Mother Country or the Colonies. He hoped this debate would clear the air once more. In his masterly speech the hon. Member for Leicester had demonstrated, how absolutely impracticable it would be to apply any such scheme to the Commonwealth of Australia. What we needed was not preferential tariffs with the Colonies. While he did not undervalue such concessions, he contended that the true bond of union of the Empire was to leave each component part absolutely free to manage its own affairs. It was on commercial fiscal freedom and on the energy with which we developed our trade in the great free markets of the world, such as China and India, with their 700,000,000 of population, that the continued prosperity of our country mainly depended.

*MR. JESSE COLLINGS (Birmingham, Bordesley)

said he wanted to say a few words on the labour side of the question. Representing as he did a very large manufacturing constituency, and being concerned with the interests of the working classes, he never could understand why the question of whether our system of trade was the correct one or was capable of improvement should be treated on Party lines. It was possible that a discussion on preferential tariffs at the Imperial Conference might come to nothing; on the other hand, it might show that there was some possibility of mutual benefit, of increased, trade, and increased labour. It was well known that Mr. Cobden, and those who worked with him, would have been glad to get rid of our Colonies, and they had no particular affection for India, "Perish India" having once been a current expression. He traversed the statement of the right hon. Gentleman the Member for the Forest of Dean that this question was thoroughly threshed out at the time of the general election. That was a most audacious statement for any one cognisant of the facts to make. On the other hand, he asserted that the men of the Unionist Party who went in most thoroughly for tariff reform came out more successfully than those who discarded the question or wobbled about it. And then about the cry of "dear food," he was old enough to remember the price of food in the so-called "hungry forties," and bread was then as cheap as it was for forty years after the "hungry forties." Almost every article of common consumption, with the exception of some groceries, such as tea and sugar, was far and away cheaper than it was afterwards or now. He had many a time gone for milk at ½d. a pitcherful. [An Hon. Member: What kind of milk?] Separated milk. [Laughter.] It was not a subject to be laughed at, when at present milk was almost unobtainable by the children of this country. In those days a pitcherful of skim milk was not milk which had been skimmed by a separator which took all the fat out of it as was done at present. The skim milk was then as good as much of the new milk which was sold now. He had also gone many a time and got a pound of beef, a pound of pork, and a pound of mutton for 1s. If hon. Members could deny these statements, let them do so. But if they could not, let them avoid in future going about telling audiences who were not so well informed as to the facts that tariff reformers wanted to increase the price of the food of the people. The hon. Gentleman who seconded the Amendment had said that he was a free trader in theory. He (Mr. Collings) had always been and was now a free trader. He signed Mr. Cobden's petition for the repeal of the Corn Laws, and he ventured to say that if Mr. Cobden had lived to find that his dearest hopes of reciprocity from other countries were all falsified, he would have reviewed his position. The right hon. Baronet the Member for Forest of Dean had spoken of the views and opinions of Sir Lewis Mallet, the colleague of Cobden and a great free trader. Both Sir Lewis and Mr. Cobden were certain that other countries would follow us in adopting a free trade policy, but years afterwards Sir Lewis Mallet wrote that we had obtained enough free trade to allow the higher and middle classes to acquire more wealth, and spend it in vulgar ostentation; but we had not obtained enough free trade to feed and clothe our poor people. Some who were convinced free traders had been waiting for sixty years in the hope of getting free trade, but we were farther from it than ever. He traversed the statement of the right hon. Baronet the Member for Forest of Dean that this question of preference and protection was sufficiently debated at the last general election. The question was not dead, but would come again to the front at the next general election. The right hon. Baronet had asked what would become of this country if Argentina and other wheat producing foreign countries were stopped from supplying us with wheat. They did not need to discuss what would happen in time of war, for in any case the decayed state of our agriculture was such that our Army and Navy could not carry on a war for six months with any first class European Power, not to say two Powers, for the simple reason that our people would be starved out, and the working classes, rather than suffer the misery of starvation, would demand that peace should be made at any price. The annual consumption of wheat in the United Kingdom was 34,000,000 qrs., of which we grew only 7,000,000. India and the Colonies sent us another 7,000,000, and we were dependent on foreign countries for the remaining 20,000,000. His own belief was that there would be no difficulty whatever in doubling the supply of wheat grown at home, and more than doubling the supply from the Colonies.


In case of war?


Yes, if this policy of preference were carried out the Colonies could feed the United Kingdom for eight or nine months, instead of as now for only three or four weeks. He always paid great attention to anything said by the right hon. Member for Forest of Dean, who invariably spoke after great study of a subject. But the burden of the right hon. Baronet's speech was that we should not enter into these preferential arrangements as to Colonial wines because we might offend Germany. Were we always to be afraid of the bluff of the Germans in respect of the Army, the Navy, and tariff reform? He was surprised to hear such a poor argument from the right hon. Baronet—that we could not hold our own in this matter mainly on the ground apparently that we must accept every knock-down blow from Germany, while not in any way retaliating. When Canada gave us a preference of 33⅓per cent. Germany bluffed and Canada answered with a surtax. The right hon. Baronet had spoken of our exports to the Colonies as if they were a bagatelle compared to those to Argentina. As a matter of fact, our exports to Argentina amounted to £13,000,000, whereas those to Australia, New Zealand, and Canada amounted to £35,000,000, and to British India to £42,000,000. The total exports to British possessions reached nearly £115,000,000 sterling. He believed that by granting preferences, our exports to the Colonies could be increased by £15,000,000 or £20,000,000. That would largely increase employment for all our people, which he supposed would be acknowledged to be a very important thing. Up to 1897 our exports to Canada were steadily and rapidly going down, but since that year when Canada granted the preference to British products they had been steadily and rapidly going up, and that meant a considerable amount of employment to the people of this country. Was Canada always to give her preferences without any return being made by this country? Canada might at some future time withdraw her preferences because of disappointment at receiving no return.

MR. MADDISON (Burnley)

We give Canada a free market.


said that supposing 500 men came from Belgium to this country, and offered to work for 5s. a week less than the recognised rate of wages, what would the trade unions do?


Ask the House of Lords.


said that this was a very serious matter, and for a Labour Member to intervene in such a way showed a want of consideration the trade unions would very properly denounce the employers of those 500 Belgians as sweaters, and the men as blacklegs. To his mind it would be better if the work was done here, because in that case the foreign workman would at all events pay rates and taxes, but at present they allowed the product of the sweated labour to come here free but not the labour itself. What did Sir Wilfred Laurier say only one year ago? He said— We sat at a colonial conference when we were ready to discuss with you —that was the British Ministry— articles upon which we could give you a preference; we were willing to make with you a treaty of trade. [An HON. MEMBER "The date?"] 28th September, 1905. Again he asked were there any men on the other side who would respond to Sir Wilfrid Laurier, who was no mean person, and say he would not discuss the question with him and see if we could make a treaty? If we could not make a treaty, well, there was an end of it, but if we could, so much the better. But Sir Wilfrid Laurier had asked that the question should be discussed in that way. Several Members had alluded to the new Canadian tariff, and some had said that it was less advantageous to England than the former tariff. That was true, but it still gave us some advantage, and in the new tariff there was that remarkable provision which came under the heading of the "Empire Free Schedule." It contained a schedule of goods which, coming from Great Britain to the Colony, passed in without duty, but which, coming from other countries, had to pay duty. That really was a very important feature in regard to this new schedule, and it meant that anyone might get the benefit of this 33⅓ per cent. reduction on any article in the production of which 25 per cent. of British labour had been employed. The Canadian Government hoped that that would be of advantage to British labour, and they were wise to speak of the concession in that sense. He knew some of the most respectable and leading manufacturers of Walsall, one of whom had told him recently that a large percentage of the goods sent out from that town were German—were repacked in that town and sent from there oversea and so got this advantage of 33⅓ percent., but in the end it was Germany who got the advantage. What he wished to point out was that this was a labour question, and that the proposals that they made were in favour of labour. Every Labour Member who opposed them, although he might be acting powerfully, politically was an enemy—unconsciously, perhaps—of labour, and he was prepared to maintain that view on any platform in the country and to give reasons for it. He agreed with the right hon. Baronet the Member for the Forest of Dean that before the next general election this question would have to be settled. It would have to be settled by the majority of the working classes, even if it was not settled by their leaders. When the Colonial Premiers met in 1902 they passed a resolution, which was not much spoken of by the so-called free trade journals, to the effect that a perferential treaty between the United Kingdom and the Colonies would stimulate commercial intercourse and strengthen the Empire. They also said that under existing conditions in the Colonies it was not practicable to establish free trade universally, but it was desirable that such Colonies as had not already given a substantial preference to the products and manufactures of the United Kingdom should adopt that policy. What we wanted more than that he was at a loss to understand. In connection with the gun industry in Birmingham, there were men out of employ. Why? [An Hon. Member: Gun licences.] Gun licences had nothing to do with it, as anybody would know who knew anything about the trade. The depression was caused because guns came over from Germany or Belguim, which were in the main made by the labour of those countries, but in which there was not sometimes 10s. worth of British labour. He handled a gun of that discription the other day. Some few years ago an English firm laid down some thousands of pounds of capital to compete with the barrels which came from the Belgians. What happened? The Belgian manufacturers combined, and for twelve months sent barrels at 20 per cent. less than cost price in order to shut this firm up. As there was no barrier against these Belgian barrels the firm had to shut up, and the price of the barrels went up higher than before. One had, to understand it, to go into this matter not from the masters', but from the workmen's point of view. There were so-called makers of guns in Birmingham who did not make guns but were simply dealers. They bought in Belgium and made their profit in that way, but in the meanwhile there were dozens of rooms in which men used to be employed standing empty, and only the fitting work was performed in this country. How long were the English people going to stand this state of things? Surely they were not afraid of Belgium as well as of Germany. He was speaking from the labour point of view, and the Labour leaders were not true leaders. They would have to recant before long, when they saw the distress in which our towns were plunged, when the trade was taken out of our hands, not by fair competition, but by absolute fraud, dishonesty, and unfair competition.

*MR. CHIOZZA MONEY (Paddington, N.)

said they had all listened with the deepest interest to the able speech of the much respected Member of the House who had just resumed his seat. He was sure they shared with the right hon. Gentleman his regret that the Member for West Birmingham was not present to give actuality to this dull debate. He must point out, however, that the greater part of the right hon. Gentleman's speech was scarcely relevant to the Amendment. He had been defending with great force a frank scheme of protection, but it was not even a policy of protection which was shadowed forth in the Amendment before the House. Hon. Members opposite were apparently unable to make up their minds whether the preference should be argued as a matter of business or as a matter of sentiment. The general reply to most of the speeches made by hon. Members opposite was that good sentiment could not be founded on bad business. As a master of fact the policy of preference was neither good free trade nor good protection. It demanded from the parties concerned two strongly contrasted sacrifices. From the protectionist Colony it demanded that it should abandon protection, and from the Mother Country that she should abandon free trade. A long line of distinguished economists, commencing with John Stuart Mill and ending with the right hon. Gentleman the Secretary of State for War, had held that there was a good deal to be said in favour of a Colony's developing itself in a many-sided way. This country having inherited liberal traditions and freedom as well as free trade, had always conceded to the Colonies the right to make up their own minds and so decide on their own policy. This Amendment was against the deliberately adopted policy of the Colonies and of the Mother-Land. It satisfied neither the free trader nor the protectionist. The right hon. Gentleman in his speech had not taken into account the future development of the Colonies. Already we got £20,000,000 worth of manufactured goods from our own Colonies, and in years to come that amount was likely to be multiplied again and again. One of the most significant things to be noticed in the speeches of hon. Members opposite was the remarkable fact that in the absence of the right hon. Gentleman the Member for West Birmingham, the cause of which all deplored, no one had given the House any details with regard to these schemes. What had become of the Glasgow programme, produced after great deliberation by the right hon. Gentleman? Scarcely three years had elapsed and the proposals of that programme had faded into thin air. Why? Because as a matter of business those definite proposals would not stand examination. The right hon. Gentleman who had just sat down had stated to the House what had taken place between the Colonies and ourselves and what he thought to be our obligations in the matter. He (Mr. Money) would remind the House that at the Colonial Conference of 1902 the right hon. Gentleman the Member for West Birmingham himself stated that the Colonial Premiers' proposals were made without any reciprocal obligations; that they were made by them because the United Kingdom offered them the largest and most open market of the world. The right hon. Gentleman himself pointed out that if there was any obligation it was on the side of the Colonies and that any proposals they made did not involve any reciprocal obligations on us. Some arguments had been used by an hon. Member based on our present taxation but it was not fair for any one to get up now and make proposals for preference based on our present system of taxation. It must be remembered that our present taxes on food were war taxes. In the year 1899, before the South African War broke out, we derived from the taxation of food a revenue of only £5,000,000–£4,000,000 from tea and £1,000,000 from coffee, chicory, raisins and the rest; and when the hon. Gentleman who opened the discussion referred to the tea and sugar duties, and proposed to make a bargain with certain Colonies or Dependencies producing those commodities, he had overlooked the fact that we had a debt to repay to the poor in this matter; that it was absolutely futile to base any suggestion for preference on the present system of taxation until the debt was paid, and that we must argue this question from the normal, and not the abnormal, state of things. With regard to the broadening of the basis of taxation, in his opinion it was not a broadening, but rather a narrowing, of the basis that was required. What was really meant by broadening the basis was the increase of the taxation of the poor. Indirect taxation was levied on articles commonly consumed, and by broadening the taxation on those articles a greater call was made upon the poor and a smaller call upon the rich. Then as to the distribution of British trade. Of the exports of British trade last year, according to the figures given by the Customs, £255,000,000 was distributed to foreign ports, and £121,000,000 to British Colonies and British Possessions. The total trade exports were to the Colonial exports as three to one. Those figures were valuable because they reminded this country of the distribution of its trade, and of the danger of making arrangements which would interfere with the larger part while we had only a shadowy probability of obtaining an advantage on the smaller part. The hon. Member for Leicester had described the practicability of free trade within the Empire as a far-off dream. He did not agree. It was a fact, not commonly recognised, that we nearly possessed free trade within the Empire as it was. So far as this country was concerned we had absolute free trade. So far as the remainder of the Empire was concerned, the larger part of our exports to British Possessions went to India and to Crown Colonies, over the Customs duties of which we had control and which, for practical purposes, possessed only a free-trade tariff. [An HON. MEMBER: Was it a revenue tariff?] The right hon. Gentleman the Member for West Birmingham had himself pointed out that where duties were put on for revenue purposes that was no derogation of the principle of free trade as he understood it, and the right hon. Gentleman was perfectly right. With regard to the Colonies, a very large part of them were scattered communities, and they had to put duties on manufactured articles to get revenue; that was to say, no small part of the duties were imposed, not for protective purposes but for revenue; so that altogether we had a very considerable amount indeed of free trade within the Empire. The reference to "freer trade," he thought, did not take sufficient account of those facts. While fiscal reformers had been urging their case up and down the country, while the right hon. Gentleman the Member for West Birmingham had been assuring the country that the Colonies alone would save our trade, and that our trade was falling off, what were the facts? While these very speeches were being made, it turned out that our trade was going up, though not chiefly with the Colonies, whose trade, however, was growing satisfactorily, but with foreign countries. In four years our foreign trade (he referred to our exports in deference to hon. Members opposite, who believed that in trade it was mere blessed to give than to receive) had increased by over £80,000,000, and with British Possessions by over £12,000,000, the latter increase being chiefly through India. Now as to the practical value of the Canadian preference. Any man who urged that a reduction of duties—which, in some cases, were fairly high, in this case being one-third or one-quarter of the whole—was not of some kind of benefit to the country, was wrong. It was an absurd proposition. If there were any truth in it there would be no truth in free trade. It was undoubted that there had been a certain gain to our trade with Canada because of preference. But let them not exaggerate that gain. If they examined the trade for twenty-five years before 1897, they would find this remarkable fact, that the general imports into Canada practically did not vary, averaging all round about 100,000,000 dols. per year. They showed no decided tendency up or down. What happened then? By one of those curious changes in the history of countries, which were not peculiar to Canada, but which had happened to every other country in the world, Canada began to move forward; she began to be a great producer of food, and she began to be a very considerable exporter of many things. She again began to import, with the result that the imports of Canada were now three times what they were in 1897. When Canada began to show this remarkable expansion in her trade, every other country began to share in that expansion, and this showed that the granting of preference coincided with what they might call a turning point in the industrial and commercial history of Canada. It would le found that in the year 1897 the total imports of Canada were 111,000,000 dols. Preference was granted—12½per cent., in the following year 25 per cent., and in 1900 33⅓ percent., and by the time 1900 had arrived the imports of Canada had nearly doubled. In that period our import trade with Canada had risen from 29,000,000 dols. to 45,000,000 dols, and that of America to 109,000,000 dols. The increase in the case of America was much, greater than in the case of this country. Since 1897 British imports into Canada had increased 137 per cent., while those from America had increased 167 per cent. While it was true that preference must have had some share in this increase from America, yet the advantages of that country's geographical position, and other advantages, were greater than those conferred by the preference given to it, and the trade of America had gone ahead more rapidly than our trade with Canada. That was not a thing which the House should repine at, for Canada was the gainer. So much for the hard facts of the hard side of the case, which he regretted to have to argue at all. It was not his fault; it was that of hon. Members opposite. But there was another side to it. He was one of those who would be quite ready to sacrifice something of material gain to this country if they could do something to cement the relations of the Empire and make it a greater instrument for good in the world than it was now. But happily it was not necessary to offer a preference to the Colonies. Mr. Fisher, the Canadian Minister of Agriculture, said on the 25th January last— We farmers of Canada want no preference in the English market. Why is it that the farmers want no preference? England, in existing conditions, takes and absorbs everything in food products that we can send. If I were an elector in England, I would be a Liberal free trader, and all Liberal free traders there have my sympathy and my belief in the right of their cause.…Canada is neither disappointed nor discontented with the decision of England. He thought the farmers of Canada would re-echo those not ignoble words, which should have weight in the House. He thought that if he and others had been able to show that, judged on business principles, the policy of preference fell to the ground, it fell to the ground no less on considerations of patriotism and of their duty as citizens of the British Empire.

MR. HUNT (Shropshire, Ludlow)

said it seemed to him very unfortunate that something had prevented them from having a straightforward Amendment on the whole fiscal question. It seemed to him that the question of fiscal reform was going to be muddled for the second year running. The House would remember that on the hon. Baronet's Motion with regard to free trade last year the Opposition Whip asked the tariff reformers to allow the House to be adjourned on the understanding that they should be permitted to speak next day on the Amendment of the Member for Sheffield. But when the Amend- ment came to be considered it was found that it was so worded that it was impracticable to talk about free trade or protection at all. He dared say that hon. Members would recollect that Mr. Speaker was obliged to request five or six hon. Gentlemen to resume their seats. The hon. Member for Leicester, who had spoken earlier in the evening, was rather inclined to tell them that preference was of no use. In his county there was one firm which got a contract for £25,000 or £30,000 entirely through the existence of preference, which came to £3,000. This contract kept in regular employment 500 men for two years.

*MR. REES (Montgomery Boroughs)

May I ask the hon. Gentleman what industry it was?


It was an industry carried on close to the town of Wellington. He could not tell what the industry was, because it had gone out of his head for the moment. The hon. Member for Leicester had referred to the feeling of the colonies upon the question of safeguarding their industries, but it should not be forgotten that all nations believed that an exchange of products benefited both buyer and seller, and there was a great difference between a home and a foreign market. He agreed with President Lincoln that if America went in for free imports they would have to buy their manufactured goods and the foreigners would get their money, but if they went in for safeguarding their own working men they would get the goods and the money too.

MR. CROOKS (Woolwich)

If they have the goods and the money too, then they must swindle somebody.


said he did not think the hon. Member for Woolwich had made a very sensible observation. There were two different people, one a buyer and the other a seller, and they both got an advantage. Did the hon. Member see the point now? Perhaps he would now say where the swindle came in. [An Hon. Member: Apologise, Crooks.] Let them take as another instance a case in which one German bought from another German in Germany, and both buyer and seller were Germans. In that case home commerce doubly profited. In that way foreign countries developed their industries and kept down the wages of British working men. [MINISTERIAL laughter]. Hon. Members opposite laughed at his argument, but that was the argument of the great manufacturing millionaire, Mr. Carnegie. A man born in his division who emigrated early to Canada, had told him that he was in Canada at the time the Canadians sent a deputation to Washington to ask the Americans to give them preferential trading, but the Americans would have nothing to do with it. But directly after the right hon. Member for West Birmingham loosed his thunderbolt which set the continents talking, the leaders of commerce in America met together, and said—"This is a serious thing; we must as soon as possible offer Canada the best terms of trade we can give; otherwise the patriotism of Mr. Chamberlain will bind Canada to the British Empire for ever." The American Press were most emphatic in telling the American people that if the right hon. Gentleman's scheme came off it would be a terrible blow to American trade and a most excellent thing for British trade. A friend of his who had travelled in the Colonies representing a Birmingham hardware firm had told him that wherever he went he was followed by a foreigner who was ready to offer the same goods five or ten per cent. cheaper. America made no bones whatever about this matter. The Americans practically said—"Of course, we are going to take all your trade from your Colonies. We are getting such good prices in our home market that practically any of the surplus goods we sell are profit or nearly all profit." This bore out what Mr. Carnegie told the students of St. Andrew's in 1902 in regard to American competition, when he said that the nation with the largest and most profitable home market was bound to win in the competition for the trade of the world. In regard to agricultural machinery Mr. Carnegie pointed out that America had a large and profitable market, while Britain had only a small market, and that therefore, the American manufacturer was bound to win in competition. Mr. Carnegie was a most violent opponent of the scheme of the hon. Member for West Birmingham, but it was very difficult to get Liberal gentlemen who were free traders to take any notice even of what those on their own side said. His brother who had been in America for some years wrote to him a few weeks ago stating that he never met an Englishman who did not say that unless we in this country adopted some form of protection we were bound to go to the wall, and that Americans simply laughed at us for being such fools. Americans said that they could remember the years when they tried a so-called free trade system, and they had told his brother how hard it was for working men to get any job at all, and that soup kitchens had to be started in all the towns to keep the people from starving. If we did not take our opportunity now, we might lose it for ever. Already our Colonies were making trade treaties among themselves; surely we were not going to be left out of the trade of the British Empire. We must be able to see what the Colonies had told us, that unless we made treaties with them they would be compelled to enter into arrangements with other nations. Then we should be rubbed out of our Colonial market just as we were rubbed out of the markets of foreign protected nations. In 1894 the present Chancellor of the Exchequer stated that English trade was being carried on under great and increasing difficulties, and that the wall of tariffs which excluded us from foreign markets was every day getting higher. The right hon. Gentleman the Secretary of State for India, speaking at Manchester in October, 1903, stated that it was a matter of life and death to us to persuade foreign nations to rally round the free trade flag and to come round to the open door. It had all gone the other way since these two right hon. Gentlemen spoke. Was the country for the sake of the sixty-year old policy of a dead man going to give up the chance of becoming a great Empire? They would have to decide during the next few years whether they were going to be mice or men. Might he point out a few of the reasons why the policy of colonial preference failed at the last election? The Liberals wanted to get the Chinese out of Africa; the Labour Leaders wanted to get their feet firmly planted in the House of Commons, and of course they could not do it without the assistance of the Liberals; but the heaviest drag on the wheel—the man who more than any one else held back the policy—was the right hon. Gentleman whose personal charm and great intellectual gifts and great power of debate were acknowledged on all sides of the House. [Cries of "Name."] The Leader of the Opposition had come in just in time to hear what he had to say. Before the last general election the right hon. Gentleman declined to put forward any policy which any ordinary person could understand, or which could appeal to the Imperial instincts of the British people. The consequence was that they had a good many of the constituencies full of wonder, and they could never give a straight answer to a straight question. Hence the right hon. Gentleman caused the great defeat of the Unionist Party. When the election was over the right hon. Gentleman was squeezed by the tariff reformers; and taking, as he thought the right hon. Gentleman generally did, the line of least resistance on this question, they got their valentine; and he confessed that for a short time he thought that things were going all right. But for about a year the right hon. Gentleman never said one word about colonial preference. Then when he did say something at Hull, he gave the tariff reformers something to cheer over, and, as usual, took it back with the other hand. On these questions it appeared to be always the same. The right hon. Gentleman, he supposed— Thought of the great free traders, And thought of Cousin Hugh, And so do all the wobblers, Who begin to wobble too. The great London papers mostly came over to the side of the right hon. Gentleman, but there were two very ominous exceptions. One was the Spectator, which claimed the right hon. Gentleman as a free trader, and said he was all right now, but that he should be watched to see that the tariff reformers did not tilt him over the fence. The other was Mr. Punch, who exactly represented the opinion of the right hon. Gentleman. He thought the right hon. Gentleman had what the old Romans called vis inertiœ. He was fond of standing still and doing nothing. The right hon. Gentleman's position was very strong in the House of Commons, and, as he was strong, he hoped he would be merciful to the trail reformers, who after all were the great majority on his side of the House. There was no doubt that the right hon. Gentlemen on the Front Opposition Bench were all tied by the time-honoured British principles of honour and loyalty, and they were afraid of the frown of the right hon. Gentleman, the first whipper-in. He was only saying in the House of Commons what nine people out of ten were saying in the country. Whether they were Liberal Unionists, or old fashioned Tories, old or young, rich or poor, men or women, they declared—"We must have a leader who knows his own mind, who will say what he thinks, and give us a lead in Imperial policy, and in the policy of social reforms." They would not follow a leader who had not a definite policy, and whom they could not understand. If colonial preference was to win at the next election, its advantages and necessity would have to be advocated and explained inside and outside the House. There must be a lead from their leader, pious opinions were no use. There were only two remedies for curing the poverty and wretchedness of the poor of the country—tariff reform or colonial preference, and socialism. He entreated their leader to come down from the Olympian heights of philosophy and golf. Let him remember the misery arising from want of employment in this dear old country of ours. As the hon. Member for Merthyr Tydvil had said, misery was caused from a want of well-paid employment. Let the right hon. Gentleman lead his Party to victory in the only possible way. He supposed that in expressing his views as he had done he had got himself into frightful hot water on his own side of the House, and probably on the other side also. He begged to thank the House for being so kind as to listen to what a poor countryman had to say, although, he could not expect that the right hon. "first whipper-in" would be satisfied.

MR. BONAR LAW (Camberwell, Dulwich)

said that in speeches delivered during the debate some points had been emphasised which did not form essential parts of the question raised by the Amendment. The right hon. Baronet the Member for the Forest of Dean, for instance, had spent much time in pointing out the difficulties of colonial preference, but he agreed with the hon. Member for Leicester in saying that the first point was not whether it was difficult or easy, but whether the policy was worth our while; the difficulties came for after-consideration. Of course, nobody contended that there were no difficulties. Great, indeed, would be the difficulties if they were approached in the spirit of the right hon. Gentleman, who had pointed out that preference could not be given on tea, as nine-tenths of it came from India, nor on Australian wines, as the quantity imported here was so very small. The right hon. Gentleman had incidentally spent many minutes in defending the consistency of the Under-Secretary for the Colonies as displayed in a speech on colonial preference. He had read that speech with a good deal of surprise; for, apart from economic considerations which made it incompatible with free trade as understood, for instance, by the Chancellor of the Exchequer, there was something else in it that needed explanation. The Under-Secretary said he had complete sympathy with any attempt to secure closer trade relations between the different parts of the Empire. But at the general election, in the hon. Gentleman's mouth and in the mouth of everybody on the Ministerial side of the House, these bonds were sordid bonds and bonds to be avoided. Circumstances evidently altered cases. Bonds which were sordid for the parent became very desirable for the children, just as a system of indentured labour applied to grown-up men in South Africa was slavery, while another system of indentured labour, far worse in its details, which applied to women and. children in the New Hebrides was a great improvement on the existing situation. Most of the hon. Gentlemen who had spoken from the Government benches had tried to make out that the whole question was one of the imposition of a corn duty. It was nothing of the kind. The Amendment committed them simply to the principle of colonial preference, and he advised those who imagined that that in itself was not a great deal, to recall the words of the Colonial Prime Ministers, who had asked that the Mother Country should extend to them a preference on existing duties or on any duties she might afterwards impose. He did not say that it might not be desirable that a duty should be placed on corn. More than that, they could not in principle object to it, because they once imposed it for the sake of revenue. Nor could the Party opposite object to it, because it was kept on by them for more than ten years after a complete system of free trade had been adopted. The question of the imposition of a corn duty really depended on what they would get in return for it. When it was argued from the Opposition benches that it was possible that a small corn duty would partly be paid by the farmer there was a smile on the faces of hon. Gentlemen opposite. Did they think that by necessity every import duty must be paid by the consumer? [MINISTERIAL cries of "No."] Then why had they smiled? There was no economist, living or dead, who had ever made such a statement. Let them assume if they liked that such a duty would be a bad thing for the country. But could any one doubt, in face of the statement of the Chancellor of the Exchequer yesterday in reply to a question, that £50,000,000 sterling of indirect taxation were already raised by food and drink—a system, by the way, which taxed a man not in proportion to his capacity to pay, but in proportion to his capacity to eat and drink—that it would be possible so to adjust that indirect burden as not to inflict it upon the poor? The question of Colonial preference had been put before the country by hon. Gentlemen opposite in this light: "Why should we impose a burden upon ourselves for the sake of imaginary political benefits and for the advantage of colonists who individually are better off than our own people? No statement could be further from the truth. If he were perfectly certain that the effect of this arrangement would be to add to the national strength, and also to do material good to the country in the future, even then he would not support it if he believed its immediate effect would be to add to the burdens of the poor of this country. So long as under our beautiful fiscal system one-third of our population, as they were told, was on the verge of hunger, it was obvious that that proportion at least of the people could not afford to pay any premium of insurance, however small, for the future. He would look at the question entirely from the point of view of what we could gain materially by it. What we chiefly needed was an outlet abroad for our manufactured goods which gave employment to the labour of our people at home. The Chancellor of the Exchequer had made innumerable speeches in the country in which he had pointed out that the distinction between raw materials and manufactured articles was idle. In one speech he argued that coal should be regarded as a manufactured article because it took so much labour; if that were true, it applied also to wheat, which in proportion took more labour. The right hon. Gentleman had also pointed out that what was the raw material of one trade became the manufactured article of another. That might be a plausible theory had we no experience to guide us, but every industrial country in the world and all our Colonies had made the distinction, and it worked smoothly in practice and without complaint. The real answer to all these subtleties was that given to similar refinements by Burke. Using a fine image Burke said— No man can tell the exact moment when the daylight fades into darkness, but the difference between night and day is fairly distinct. The theory which formed the staple of the right hon. Gentleman's speeches was, "Take care of your imports and your exports will take care of themselves." That was a perfect theory if it would only work; too perfect, indeed, for our imperfect world. It really meant that there was no trade problem at all, that we need not worry about technical education, that all we had to do was to sit on our office stools and buy freely and nature would do the rest: they put a penny in the slot and the machine worked. He thought they had got beyond that stage, although he was not sure that the Chancellor of the Exchequer had, for he moved slowly. But his Government had, or they would not introduce the Patents Bill, whose effect would be to make foreigners who took patents in this country manufacture the goods here. Why compel them to do so if, according to the right hon. Gentleman's argument, when they manufactured such goods abroad, we could buy and pay for them with something else made by us which would suit us better? According to the right hon. Gentleman's argument the Government would do positive injury to the people of this country by such a Bill. ["No."] He was glad to see, then, that that particular kind of nonsense was abandoned by the Government. Where was the foreign market to be obtained which we needed for our manufactured goods? During the last twenty-five years our exports of manufactured goods to the great industrial countries of the world had actually been growing less rather than greater, and last year the tariffs, which were already very high, were still further raised against us. In normal times, therefore, we could not look for an increase in our exports of goods to countries who deliberately tried to exclude our manufactures and to buy from us only raw materials. Then where were we to find a market for our manufactures? It was a fact that we were not holding our own as regards manufactures in the neutral markets of the world. The Board of Trade return issued by the present Government last year showed that both in South America and in China the exports of the United States and Germany were increasing not only at a more rapid rate than our own, but had increased in actual volume more than the exports of the United Kingdom. The most important market at the present moment was the market within the Empire. The Member for North Paddington, who had given the House a lot of statistics, agreed with the Chancellor of the Exchequer, but the hon. Member made no distinction between manufactured goods and other exports. The Board of Trade returns for the last year for which we had details showed that of our total exports of manufactured goods over 40 per cent., or nearly one-half, went to countries within the British Empire. [MINISTERIAL cries of "Oh," and "India?"] Was not India within the British Empire? Although India took nearly one-third of our manufactured exports, our exports to India had not been increasing—it was only to our self-governing Colonies that our exports showed any increase. The Board of Trade official document said— It appears from these tables that our exports of manufactures to British possessions consist of more finished goods than to foreign countries, and that the rate of increase of most-finished goods to British possessions has not only been much greater than those of other classes of goods to those places, but much greater than that of finished goods to foreign countries. Anyone who would take the trouble to look at these tables in the fiscal Blue-book would agree with him that, from the point of view of labour employed, more than one-half of our exports of manufactured goods went to countries within the British Empire. During the last twenty-five years there had been practically no increase in the export of manufactured goods to foreign countries, including those great and undeveloped markets. The increase had been solely with our own Possessions. Not only was that market important now, but we had to look at what it would become. He appealed to the Labour Members, who although they were against him on this question were able to approach it with an open mind, to consider this matter. Let them take Canada alone. It was stated by Sir W. Laurier some time ago that what the nineteenth century had meant for the United States the twentieth century would mean for Canada. If we were sensible business men, conducting our business on business lines, should we not try to keep that market which was now the most important and which was going to be so much more important in the future? How was that market going to be kept without a preference? Hon. Gentleman knew in their hearts that it was difficult for us to compete against foreign countries in manufactured goods, even in our own home markets; how could we hope to compete successfully in markets where we had no advantages such as we possessed at home? We knew from experience what a preference meant to this country. It was ten years since Canada gave us preference. Up to that time our exports to Canada had been steadily falling, while those of foreign competitors had increased; but since that time they had been steadily increasing, a circumstance which the hon. Member for North Paddington had not mentioned. The moment prefer- ence was granted our trade with Canada jumped up by leaps and bounds until now it was a great deal more than it was at the time the preference was granted. He knew that in spite of this increase a distinguished Member sitting opposite had stated that preference was really of no practical benefit to the people of this country. He put it to any business man in the House. The Canadian preference meant for us something like 10 per cent. on foreign goods; if it was possible to compete without a preference, obviously we could compete better with an advantage of 10 per cent. He would put it in an elementary way; he said "elementary" because he wanted to convince distinguished right hon. Gentlemen of high intellect on the other side. Locomotives some eighteen months ago were being exported to Canada. Their value was about £4,000 here at home. Preference meant that on each locomotive we had to pay £518 less duty than any foreign country. If we quoted for a locomotive £4,500 and any other country quoted £4,000 we got the order, and not the other country. He had said before and he would say again, that if there were a larger proportion of business men in our Government he was perfectly certain that the kind of argument they heard would not, and could not, be used. Now he came to the point raised by the hon. Member for Leicester, which was also largely dealt with by the Chancellor of the Exchequer. The Chancellor of the Exchequer put the case in this way. He said, "The Colonies mean to be Protectionist, and therefore will not give us an effective entrance into their markets." The same argument was used by the hon. Member for Leicester, who put it with great force. It had been stated, and the hon. Member had referred to it, that the Member for West Birmingham had stated it as part of his plan that the Colonies should cease to develop their manufactures. He heard the right hon. Gentleman's speech in Glasgow, and he certainly said without any hesitation that he did not derive any such meaning from it. In any case the right hon. Gentleman had denied that he meant it, and nobody did mean it, nor could mean it for a moment. We all knew that the Colonies did mean to develop their own manufactures, and, speaking only for himself, he was not sure that if he had the power he would prevent them from so doing. If we were to treat the whole Empire as one, our desire should be to develop as rapidly as possible the manufactures of the Colonies, and if they were going to be developed most rapidly under the present system, then it was to our interest as well as theirs that they should be developed in that way. There was no hope of the Colonies stopping their development to take our manufactures; and all tariff reformers hoped was that the Colonies, when they had to buy from abroad, as they inevitably would, would as far as possible buy from us. The hon. Member and also the Chancellor of the Exchequer had spoken as if what the Colonies could buy in that way was very small. But did they not remember their own arguments? Countries like Canada must be great exporting countries; goods must be bought with goods—they must be exchanged for what was exported. Would it not be well worth our while now, if we could secure the trade for that growing quantity of things which they must buy from abroad, to ensure that they would buy them from us? We were on the eve of the meeting of a Colonial Conference. Every one now knew that this question of preferential trading had not been brought forward by the right hon. Member for West Birmingham. It had been brought forward by the Prime Ministers of the different Colonies, and had been persistently pressed by them ever since. In 1897 the only substantive resolution adopted was that the question of preferential trade should be considered; and in the Conference of 1902, a great many other subjects were discussed—projects such as the Secretary for War in other days dwelt on—other modes of getting closer union within the Empire. The Prime Ministers passed a resolution that for the present at least nothing could be done in that year; and the only substantive result of their meeting was that they undertook, as far as possible, to give preference to British manufacturers in their markets, while urging us to give a corresponding preference to their manufactures in our markets. That was the position. The Prime Ministers of the Colonies were coming again. What would they find? They would find that the Party opposite, the dominant Party in this country, had absolutely pledged itself, for no reason that he could see, to refuse even to consider this question. But there was another Party. The Unionists were not very numerous in that House, but even in the last election, judging by the total number of votes polled, they represented very nearly half the nation. These Prime Ministers would come and they would find that fact, and they could say, "The present Government is against us, but those who succeed them in office will be in our favour. We can afford to wait." On the other hand, if the Prime Ministers had to go back saying that one Party was absolutely hostile and the other Party was not really in favour of preference, then they would have to say, "This has been our ideal; we have believed in it; we believe in it still, and if the Mother Country will not have it we must look elsewhere." He spoke seriously when he said that this ought not to be a Party question, but ought to be looked at from a broad point of view. The House must, therefore, look at the question seriously, and must seriously regard the result in regard to Canada. He did not believe that there was a thoughtful Canadian who did not realise that, as the hon. Member for Paddington had pointed out, the natural trade destiny of Canada was to have closer relations and close commercial treaties with the United States. He did not think there was a single Canadian who did not know that to increase the Dominion's development most rapidly, the best thing was to have a close commercial treaty with the United States. A few years ago the Canadians were keen for such a treaty; the Americans would not have it. The position now was entirely changed. The United States were keen for such a treaty; the Canadians held off on the ground of sentiment alone, fie knew Canada pretty well, and he did not mean to put the Imperial idea above what it was worth. Canadian sentiment was not entirely towards the Mother Country or the Empire; the sentiment was partly Canadian; but it was a sentimental ground, and this accounted for the fact that they refused at present to have a reciprocity treaty. If the Prime Minister of Canada returned home and said, We have no hope of any preferential arrangement with the Empire as a whole," it was inevitable that the material interests would predominate and that Canada would sooner or later arrange a commercial treaty with the United States. They had already arranged a tariff which made it specially easy for them to make such a treaty, and if those close relations between Canada and the United States were once begun was it not morally certain that they would grow more and more complete in every direction, and that on trade grounds alone, apart from other considerations, it would be found that Canada would be of no more value to this country, as a market in proportion to her population, than the United States now were to us in proportion to their population?


The hon. Gentleman has recalled us to the fact that a serious issue is before the House of Commons; and I think we shall all agree that, in view of the Amendment which has been placed upon the Paper, the speech which the hon. Gentleman has delivered is of especial significance and importance. What was the character of that speech? I will not attempt to make any comment upon its excellence, or the close reasoning that characterised it. But I say that it was from beginning to end a frankly protectionist speech. Let the House contrast for one moment the arguments to which we have just listened—the strong, vigorous, full-blooded protectionist arguments—with the preference by hypodermic syringe advocated by the mover and seconder of the Amendment. If the hon. Gentleman's contentions were true, we should, indeed, be in a very difficult position. According to him, we are oppressed from day to day with the great difficulty of finding an outlet for our trade. I assert there is no difficulty in placing the exports of this country—["Oh"]—that is not experienced in a greater degree by every other country in Europe. And the proof of that statement is surely to be found in the fact that per head of the population—and, after all, the productivity of a single pair of human hands must be the test—the exports of this country are twice as great as the exports from France, and three times as great as those from Germany or the United States; and even in the present year this country, which according to the hon. Gentleman is oppressed on every side with the difficulty of placing its exports, has succeeded in increasing its exports by something like £46,000,000.

I do not desire to argue the long protectionist controversy in which the hon. Gentleman is so well fitted to take a part. I wish to say a few words on the Amendment which has been moved, and which constitutes a direct vote of censure on the Government. There are two parts in that Amendment of very unequal importance. The first is the complaint against us for not having mentioned in the gracious Speech from the Throne that there would be a Colonial Conference this year. That point was raised by the Leader of the Opposition when the House reassembled, and in reply my right hon. friend the Prime Minister said, with meekness but explicitly, that on the two last occasions on which there had been a Colonial Conference no mention had been made of it, under Imperialist Governments, in the Speech from the Throne. One would have thought that such an answer was tolerably conclusive and that some new line of attack would have been adopted; and it is still more remarkable that we should he blamed for not having mentioned the Conference this year in the King's Speech when we reflect that on the previous occasions the Conference was an extraordinary institution, just coming into being, a new, far-reaching unmeasured departure. But it is not so now. Now it is a regular, permanent, and, I trust, will become a continually more intimate part of, our constitutional machinery; and if the King's Speech is to mention not only what is new and original, but all that is regular, formal, and recurrent in the business of the year, then the Speech will attain dimensions which will be exceedingly inconvenient. But, after all, the gravamen of the charge is not a matter of form. If I understand the charge made against the Government in regard to the King's Speech, it is the suggestion that we have not taken the Colonial Conference seriously and tried our best to do full justice to that most grave and important constitutional function. I submit that such a suggestion is wholly unmerited. We have approached the question of the Colonial Conference in a different spirit, I think, from that in which it might have been approached by those who sit opposite. It is not a plank in our platform. We do not wish to make Party capital out of it. We only want to use it in an earnest, sober spirit, to improve the good relations between Great Britain and her Colonies, and to settle some serious, practical questions which we think are ripe for settlement at the present time. All the arrangements for the Conference have been the subject of the most careful thought, not only upon the political side, but also upon the social side. When I lay on the Table of the House in the present week the agenda paper, and the despatch relating to the subjects which will be discussed at that Conference, they will, I think, convince hon. Gentlemen, whatever side they may sit upon, that the charge which is made against us of treating the Colonial Conference with disrespect or with levity is not sustained by any reasonable or fair-minded study of the actual facts.

But, Sir, I really do not suggest for a moment that the Opposition, the Official Opposition, the Conservative Party, would have attached so much importance to this wretched quibble about whether the Conference was mentioned in the King's Speech or not if it had stood by itself. They wanted it for another purpose. They wanted the unimportant part of the Amendment as a peg on which to hang the more important part which was to follow. The resolution increases in importance as it proceeds, and I must draw the attention of some of those who sit on the benches opposite to some aspects of its importance. There was a time, not very long ago, when I used to follow, with the very closest attention, the speeches of the Leader of the Opposition. I think I have read, or heard, almost every speech he has made in the last four or five years, and they were very important speeches, because, as the House will remember, we are always assured, on the authority of the daily papers, that every utterance which the right hon. Gentleman makes is an epoch-making utterance. And there have been so many epochs made by him in the last two or three years that it has been almost bewildering to the plain man who would keep up to date. But there has been this about the right hon. Gentleman's utterances, and it was noticed by the hon. Gentleman the Member for Shropshire in his illuminating speech, that one epoch-making utterance was singularly like the other, and that the resulting product of different speeches, in which very different expressions and very different arguments were apparently used, was almost exactly the same. I was reminded, in studying those speeches, of the words in the Bible, "Tabitha, which is, by interpretation, Dorcas"—a statement which, although complete, conclusive, and authoritative, does not add very much to one's information. And I largely sympathise with the hon. Member for Shropshire in the severe, complaint he just addressed to his leader—I suppose he is his leader—on the subject. But I am ready to admit that there were some statements for which the right hon. Gentleman made himself responsible which constitute a distinct advance upon the position which, in the earlier days of this controversy, he assumed. There was the valentine letter. That was a distinct advance; but this Amendment is a further advance upon the valentine letter. Let me read to the House what the right hon. Gentleman said in the valentine letter— I hold that fiscal reform is, and must remain, the first constructive work of the Unionist Party. The objects of such reform are to secure more equal terms of competition for British trade and closer commercial union with the Colonies. Yes, Sir, but this Amendment goes a step further— For promoting freer trade within the Empire and closer commercial relations with the Colonies on a preferential basis. I ask the House to mark those words— "on a preferential basis." We have to consider them in relation to the character of the mover of the Amendment—not the personal character of the hon. Gentleman, but his political character. He belongs to the most militant section of the tariff reform party, a section of which there are no fewer than two in this House who have succeeded in displacing Unionist tree traders from their seats. And we must also consider the significance of the Amendment in relation to all those mysterious meetings of which we have heard so much, about which we know so little, but concerning which such curious information has been imparted from time to time to the columns of The Times newspaper. But I say—and I was very glad to hear it frankly admitted by the hon. Gentleman—that the Amendment which has been placed on the Paper affirms, in the most distinct and precise manner, the principle of Colonial preference. Now what does that mean? Sir, it does not mean tinkering with existing Customs duties. I challenge the hon. Gentleman who has just spoken to rise in his place and say that all he means by Imperial preference is a mere differentiation of the duties on cocoa, wine, tobacco, and dried fruits. It does not mean merely welcoming the preferences which the Colonies have freely, and without request for a return, accorded to us in the last few years. It does not mean that we should welcome them and do nothing in return. Nor does it mean that we should simply fold our arms and allow the process of reciprocal treaties to proceed between the different protectionist Colonies, which, after all, is a very small matter, which only involves in tariff States mere revisions of the existing schedules, and which constitute steady approximations to free trade and to a reduction of duties. It does not mean that. It means—and I am sure the hon. Gentleman is much too candid and courageous an opponent to deny it—that we should bind ourselves, if we accepted the Motion which is put forward, to erect a tariff wall around this country.


It does not mean anything of the kind. I distinctly stated that it did not mean anything of the kind. I should be perfectly satisfied—and I think I am as extreme as most men—if the Government would undertake to use even the existing taxes as a first beginning. [Ministerial cries of "As a beginning."]


The hon. Gentleman says he would be content if we would use the existing taxes as a first beginning of this tariff wall which is to be erected round the country and differentiate in favour of the Colonies. Yes, but we are not dealing only with first beginnings. We are dealing with the principle of a great change in our fiscal policy, and I say that it is not possible to give a preference to the Colonies unless you erect duties round this country which do not at present exist. And what sort of duties? Why, it is not so long since I heard in this House the right hon. Member for West Birmingham on a memorable afternoon use that oft quoted sentence— If you would give a reference of the Colonies you must put a tax on food. Yes, Sir, the principle which is affirmed by this Amendment, if it is to mean anything but mere opportunities for political partisanship, if it is to mean anything but a mere academic assertion in support of which no real effort is to be made, is that those who vote for it are prepared, if they are given the power, to impose duties differentiating in favour of the Colonies upon bread and meat and dairy produce. [Opposition cries of "No."] It is no use saying "No." The right hon. Gentleman the Member for West Birmingham is not here, and we are all very sorry for it. If he were here he would not allow his followers to say "No." I congratulate the Opposition upon the determination at which they have arrived. They have taken a long time making up their minds, but this is the first formal, definite, public assertion which they have made of their adhesion to the principle of preference involving the taxation of food. [Opposition cries of' "No."] I am bound to say I do not think they will suffer in the country so much as some of them suppose they will. They may not win many votes by their declaration, but they will win what no doubt they value more than votes, the respect which is always accorded to honourable, but misguided, opponents. We also will make a clear declaration. We will not be behind them in expressing our opinion upon the issues which they have raised. We have not forced this discussion upon the House. We were anxious not to dwell unduly upon this question on the eve of this important Colonial Conference. But since we are challenged we are bound to state our view, at whatever cost, or whatever disappointment may result there from. We do not enter the Conference with an open mind upon this subject. Nor do the Colonial Premiers. They have their instructions, as my hon. friend who his just returned from Australia showed in his masterly speech this afternoon, and as the right hon. Baronet the Member for the Forest of Dean has also shown. They have their functions defined within precise and definite limits. We, too, have our instructions regarding the principles we are expected to formulate and put forward, and, be sure of it, we shall not fail to do so. Let me say I do not imagine that that is going to cause any ill-feeling, or any set-back or re-action in what is, I think, the rising tide of goodwill between Great Britain and her Colonies. I have read with care the speeches and statements which have been made by Colonial Ministers. I will only quote to the House what Mr. Fielding has said. Mr. Fielding said— It is a question for you, for the people of Great Britain. We adopted preference because we believed it was a good thing for Canada. When your people see fit to adopt it as a good thing for Great Britain we shall be pleased. If it does not suit you to adopt it from the standpoint of your own interests we have no objection to make. In the few minutes that yet remain I cannot allow this opportunity to pass of once again paying tribute, on behalf of His Majesty's Government, and on behalf of the Liberal Party, to the scrupulously correct attitude maintained throughout this long-drawn controversy by Colonial Statesmen. I have no time to enter upon an elaborate economic discussion; and I am sure the House would not wish me to do so. I will therefore leave altogether the economic argument, and say that we on this side of the House are opposed to Colonial preference on political grounds as well as on economic grounds. It is arguable that even though preference might cost us money, yet it would be worth while for us to adopt it for the purpose of welding the British Empire more closely together. We do not impeach the motives of hon. Gentlemen opposite. We recognise that the objects they seek are worthy and lofty objects; but we believe the methods they adopt, even if they resulted as they think they would result, would not weld the British Empire together, but would only introduce perpetual sources of injury and friction. It is impossible to frame an equitable system of Colonial preference. The complexities which arise from dividing raw materials from other articles, the absence of any logical reason for giving a preference to articles not specified as raw materials, and refusing a preference to articles so specified, and the special geographical circumstances of each particular Colony, make the formation of a symmetrical and uniform system of preference absolutely impossible. And in the bargaining which must attend such a process, the haggling which the Leader of the Opposition rightly deprecated on Friday last—in the bargaining which must arise, ill will, and not good will, will be engendered. I am one of those who think that it is the function of both Parties in the State to steer Colonial affairs out of the arena of English Party politics. They can do no good to the Parties who handle them. They can only injure the relations which prevail between this country and the great Colonies when they are so handled. But the process which you now ask us to set up of differential duties will bring Colonial affairs into every election, and into the centre of the most unpleasant parts of our financial discussions whenever the Budget is before a Committee of this House. Every year Motions will be made to remove these taxes on food and other commodities on which a preference has been given, and the advocates of those Motions will be forced to dwell—in just that spirit of haggling which the right ion. Gentleman condemned—upon the value of the Colonial return; and upon the existing proportions of their contributions to naval and military defence. And what sort of taxes will these be? I stick to what the right hon. Member for West Birmingham has said, that if you would give a preference to the Colonies you must put a tax upon food. It has been said by an hon. Gentleman behind me that food taxation falls with increasing weight in proportion as the ladder of poverty, is descended, and questions of bread and meat, which are of very little consequence to the majority of persons in this country, constitute for a minority the most serious and grinding questions which they have from day to day to meet, and absorb day by day and week by week nearly a half, if not three-quarters, of their whole worldly income. Now, what, a basis on which to build the fabric of your Empire! What a strange basis on which to erect this stately monument which you fondly hope will last, for ever! If you wished to choose the path which would bring against the great Colonies of the Empire a dangerous and a terrible antagonism on the part of the working classes in this country, you could not more surely indicate it than you do by this Amendment. There are many factors in the price of commodities—freights, harvests, the condition of the currency, political affairs in the different countries, the credit of the world—all these things influence the price of staple commodities. A tax is the one factor in price entirely in your own control. When you have the Empire joined together on the basis of this preference by duties on food, you may be confronted with a demand which no Government could resist to remove the tax which has been imposed. But the tax will be irremovable. At present we can do what we choose with the revenue and expenditure of the year; the House of Commons is supreme. But if in times of scarcity a demand were made for the removal or reduction of a food tax which is the subject of a preference, a Minister will have no power to accept the decision of the House. He will be bound to enforce that tax by treaty obligation entered into with the self-governing Colonies, on the basis of which advantages have been given to this country in manufactures and other respects, on the basis of which tier upon tier industries in this country and in those Colonies have steadily grown up. Then is the time when you will bring upon the British Empire the danger of a collision which every man who loves the British Empire should labour to prevent. Regarding the great controversy raised so recklessly, so unfortunately, and at so inconvenient a moment, from a Party point of view I am glad that hon. Gentlemen opposite have at last committed themselves definitely to the principle of preference. At any time or in any place, here on the floor of the House of Commons or in the tumult of a popular election, we are ready to meet you on the issue which has been raised, and we will en- deavour to do what we are convinced we can succeed in doing, prove to the country that you are wrong all along the line—wrong in your logic, wrong in your statecraft, wrong in your arithmetic, wrong even in your demagogy—right only in having at last found the candour and courage to avow your true opinions and, by so doing, warn the public throughout the Empire of the catastrophe from which they have been preserved.

Motion made and Question, "That the Debate be now adjourned."—(Mr. A. J. Balfour.)—put, and agreed to.

Debate to be resumed to-morrow.

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