COLONIAL PREFERENCE.

HC Deb 21 July 1910 vol 19 cc1453-526

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."

Mr. A. J. BALFOUR

I think the House will probably agree that this is the most convenient opportunity open to us for raising certain questions which are, indeed, within the scope of Supply, but which come outside the natural limits of any single Vote in Supply. I therefore desire to ask the House to take into its most serious consideration the present condition of this country in relation to the whole problem of Colonial Preference. It is not only, I think, desirable to raise this question for the reason I have stated, but it is peculiarly desirable to raise it on this, which is the last opportunity, I imagine, on which we shall be able to have a general Debate on this subject before the Colonial Conference of next year comes into being. It is, after all, a matter upon which Colonial statesmen and Colonial public opinion, whether in Canada, in Australasia, or in South Africa, is most deeply interested. It is a subject on which I hold they have less reason to feel satisfaction with the policy of the Mother Country, and, in view of the anxious Debates which must occur when the Colonial Prime Ministers meet the Government of the day at the next Colonial Conference, it is surely most desirable that some expression of opinion should be made by at any rate those who think as I do on this subject, even if we are not able to carry the majority of the House with us. May I, in a very few words, recall to the House the leading facts of Colonial public opinion on this subject. It is as far back as 1843, I believe, that the first appeal was made by Canada in favour of some fiscal arrangement between that Dominion and the Mother Country, and that expression of policy of 1843 has been consistently repeated by every Colonial statesman of mark to whatever party he may have belonged during the sixty-seven years which divide us from that date. I do not believe there has been a shade of difference of opinion on this question, whether the spokesmen of our Dominions beyond the Seas belonged to one or other of the great Canadian parties—whether they belonged to the original Colonies of Australia, or to the more modern Commonwealth, or whether they belonged to New Zealand or to the Cape. They all spoke on this subject with one voice. They pressed on the Mother Country one policy, and it is the Mother Country, and the Mother Country alone, which now stands in the way of that policy being carried into effect. If the Colonies have been consistent in their appeal to us they have practically shown that it was no mere paper opinion, that it was no mere platform rhetoric they were indulging in, but that they desired, above all things, to be able to give practical expression to the general theoretical views which they had so often advocated. It was with that end they pressed on the Home Government, in the decade between 1890 and 1900, the denunciation of certain treaties which prevented us giving them preference. The moment Lord Salisbury had accepted their views and had denounced treaties which prevented Colonial Preference, the Ministers of the Dominions came forward, and, without any effort being made on our part to give them preference in our markets, they immediately so arranged their tariffs that preference was given to our manufactures in their markets. That was, I think, in 1897. Remember their views—the views of these great Colonial statesmen—were not purely or merely commercial. They had in view an ideal of Empire kept together-well, perhaps I should not say kept together, but an ideal of Empire, which had as one of its bonds these mutual good offices in the matter of tariffs. Actually at this moment they have got a free list—they have established the principle of a free list of goods within the Empire—not unimportant in itself, but important as a precedent which may be, and I believe will be, followed if we give them the chance in the future.

3.0 P.M.

4.0 That was the preface to what occurred in the Conference of 1902. There the Colonial Prime Ministers again pressed—all of them—upon the Government this policy of pre- ference, and it is a matter of common knowledge public to many of us that the majority of the Cabinet in 1903 would have established preference with Canada and other Colonies, but at that time public opinion was not sufficiently matured for a divided Cabinet to take so great and so novel a step, and although the dissentients from that policy were a minority in that Cabinet for the moment the policy could not be carried out.

The UNDER-SECRETARY for the COLONIES (Colonel Seely)

Can the right hon. Gentleman say in what month of 1903 that was? It is vital to the consideration of the matter.

Mr. BALFOUR

I am afraid I cannot remember.

The CHANCELLOR of the DUCHY (Mr. Joseph Pease)

Was it before August?

Mr. BALFOUR

Oh, yes, it certainly was. Of course. I remember the course of events for it was in connection with the Budget, and I believe the whole thing has been made public, or else I should not be speaking of it now It has all been made public, and it is well known that the then Chancellor of the Exchequer, the late Lord Ritchie, entirely opposed, and for reasons which every practical statesman will understand under these circumstances it could not be carried out. That is not material to my main argument. I am not attempting to make party capital out of this either as regards the past or the present. I am not passing any criticism upon the action of those colleagues of mine who differed from me or upon hon. or right hon. Gentlemen opposite; or anyone else. I am only trying to recall to the House what, after all, we are so apt to forget in the day-to-day turmoil of our political utterances, how steady and how consistent has been the movement in the direction of Colonial Preference not only in the Colonies but in this country, and it surely is a sufficient landmark of that progress that the majority of the Cabinet in 1903 would have endeavoured to establish preference but for the circumstances to which I have referred. Then comes the Conference of 1906, and the only result of that was that the Colonial Ministers, with repeated and eloquent persistence, gave renewed expression to the invariable policy which has animated all our Colonies, but the Government refused to take action on its own behalf, while acknowledging in terms, the most specific and unmistakable, that the advantages which the manufacturers of this country had derived even from the preference which then existed were very great and very notable. The then Chancellor of the Exchequer and present Prime Minister gave the clearest expression to those opinions, and if anybody spoke more strongly than the present Prime Minister it was the present Chancellor of the Exchequer, who at that time was at the head of the Board of Trade. Therefore we have it on the authority of the Ministers chiefly responsible in the Government then in office that this grant of preference—this unreciprocated grant of preference by Canada—had been of immense value. I think that was the exact adjective used, as far as I can remember, but that is the substance. They admitted the immense value to the manufacturers of this country of the preference granted by Canada. That is broadly the history up to the present time of the efforts of Canada and of the other great Dominions to have an Imperial fiscal relation between the Mother Country and all the other sister States. Now let me turn to another aspect of this history, and that is the treaty policy into which Canada in particular has been forced by circumstances over which she had no control, and which depend upon the fiscal relations between the great manufacturing States of the world. It is the most instructive branch of Colonial, or perhaps I may say of Imperial, history. Perhaps the right hon. Gentleman opposite will recall, as I have no doubt he does, the terms of the despatch written by Lord Ripon in 1895—that is to say, fifteen years ago—at the very end of the last term of office of a Radical Government. If he refers to that despatch he will find these words:— To give the Colonies the power of negotiating treaties for themselves without reference to Her Majesty's Government, would be to give them an international status as separate and sovereign States, and would be equivalent to breaking up the Empire into a number of independent States, a result which Her Majesty's Government are satisfied would be injurious equally to the Colonies and to the Mother Country, and would be desired by neither. Negotiations, being between Her Majesty's Government and the Sovereign of a foreign State, must be conducted by the representative of Her Majesty at the court of the foreign Power, who will inform the Government and seek instructions from them as necessity arises. That was the Radical policy in 1895. It was not the Radical policy, and in my opinion it was rightly not the Radical policy in 1907, twelve years later. There the Dominion of Canada, technically I suppose it may be said, carried on their negotiations with the knowledge of His Majesty's representative, but it was a purely technical knowledge. I do not believe that His Majesty's Government was ever consulted at a single stage of those negotiations. I do not believe they ever informed themselves or offered an opinion as to what was the best policy for Canada under the circumstances, and I think they were well advised. But then how great is the change and how inevitable, because we all know, it is a matter of common knowledge, and may I add not a matter of regret but a matter of pride or rejoicing, that these great Dominions beyond the seas are becoming great nations in themselves. Integral parts indeed of the British Empire, and always I hope will remain integral parts of the British Empire, but nevertheless claiming, and rightly claiming, to have reached adult stage in the process of social growth and not requiring to lean in the same way on other parts of the Empire as was fitting and proper in the earlier days of their existence. If that be admitted, look at the results that had to happen and look at the results that have happened. The results that had to happen and have happened are these, that Canada, unsupported by any preferential policy on the part of this country, had to deal as an isolated unit from the point of view of international commerce and international treaties with all those great commercial countries with whom she was in direct relation—with France, with Germany, and with the United States in particular, but not, of course, with them alone. She conducted practically in complete and substantial diplomatic independence the negotiations with France and brought herself into special commercial relations with Switzerland with a most-favoured-nation clause, and in consequence of that brought herself again into special commercial relations with Germany, with whom before that period she had had a tariff disagreement owing to the way she had treated us.

The result of all these things and of her subsequent treaties and arrangements with the United States and the result of every one of these negotiations is the only result that could happen, namely, that every one of them has been accompanied by a diminution in the preferential advantages of this country. It is the inevitable result. The Government and those who support the Government in this matter really appear to think that you can remain outside this network of treaties which is more and more arranging the channels into which international trade is to be conducted. We flatter ourselves, or, at all events, flatter ourselves in public, that we can get all the advantages of these international agreements by the operation of the most-favoured-nation clause. We do nothing of the kind, and I cannot imagine how anybody could have expected that we should be able to do anything of the kind. Whoever heard of getting all the advantages of negotiations when you use as your negotiator some one who has no interests in common with yourselves, and who is really looking after their own interests, not our interests, but do not object, of course, if here and there we are able to pick up some crumb of comfort out of labours which they undertake on their own behalf and not ours? These are the results which everybody knows, and I think everybody who looks into the results of these treaties must know, that although nominally we obtain precisely the same treatment as the countries which obtain the treaties, the terms of those treaties are habitually arranged not to give us the same advantage which they get, and the result is that we have not got, and shall not get, the advantage of those negotiations which we otherwise might. The Dominions feel the impossibility of this policy of isolation as much as every country in the world feels it, and as when the pinch gets a little more severe we ourselves shall feel it in time to come.

Therefore, they find themselves compelled and, like all other negotiators, they feel they must have something to give for what they are going to receive, and something to take away if they receive nothing. Negotiation without that is the most helpless and futile proceeding, and it is only a British Foreign Minister who is asked to undertake so thankless and barren a job. Therefore, we are quite certain that the great Dominions which have entered upon this course of independent fiscal negotiation cannot in the circumstances of the case stop where they are. The process which has begun must go on, and the process which has gone on must extend from one Dominion to another. Each will feel the pressure which has driven Canada into these negotiations with France, Germany, and the United States, and other countries, and what Canada has done one day, Australia will have to do the next, and the Cape will have to do on the third. It cannot be avoided. In these circumstances I look forward with absolute certitude to seeing the advantages of preference which we now enjoy whittled away, faster or slower as the case may be, until that arrangement which was so loudly be-lauded both by the present Prime Minister and the present Chancellor of the Exchequer only four years ago becomes the shadow of a shade and finally vanishes altogether away.

I do not see how anybody can contemplate such a contingency with equanimity. Of course I do not deny, I never have denied, that when the time comes, as it is inevitable it will come, when we like other nations have got to deal with other nations by negotiation for our respective exports and imports, an immense amount of labour will be thrown upon British Departments which they now escape. I never regarded these perpetual negotiations on commercial matters as very agreeable for the Governments concerned. They are extremely disagreeable, and I am the first to admit that they have a bad side, but they are quite inevitable. It is impossible that we should go on as we are, and as we could go on with impunity in the days when we had an easy supremacy in commercial matters. It is impossible that we should now go on and see one market after another taken away from us or diminished without our being able to strike a diplomatic blow in our own defence. I do not know how the Government, for instance, are dealing with the Japanese difficulty. I understand that the Japanese have just passed a commercial treaty which is absolutely destructive of the trade of Lancashire and Yorkshire with Japan. They denounced the old treaty favourable to this country, and they passed a new treaty, which will come into operation, unless it is modified, not very many months hence. It is the agreeable task of the Foreign Secretary to negotiate for the modification of that treaty. I believe it to be true that the Japanese Foreign Minister said there could be no negotiations with Great Britain on the subject, because Great Britain had nothing to give. The British Foreign Secretary, dealing with a nation like Japan in a matter of commercial bargaining, has the prospect of a very poor time before him if he has nothing to give. I certainly do not look forward with any satisfaction to the issue of the negotiations which, if this new tariff of Japan is left substantially unmodified, will inflict a very severe blow on some of the greatest of our staple industries.

May I summarise two lines of history, and, if you like, of speculation, and show how they are inter-connected? There are two lines of historical development which have been going on in the last few years. The one line shows more and more that our great Dominions, whether they like it or not, must negotiate for their own trading and commercial interests as independent fiscal Powers with other great manufacturing nations. Considered only in itself, I do not say it will produce separation, but it tends in that direction. Whatever effect it has is in that direction. Lord Ripon says it will be equivalent to breaking-up the Empire into a number of separate and independent States. I think he was quite wrong there, but I think there was just this amount of truth in it, that if you considered these separate negotiations by themselves every Dominion must get into the habit of regarding itself as fiscally one of the industrial units of the world which has to fight for its own hand wholly irrespective of anything which occurs in any other part of the Empire. Therefore, as far as it goes, that tendency is towards driving further apart the units of what I hope is an inseparable Empire. There is another tendency which will not only counteract, but far more than counteract that if you give it free play, and that is the tendency in every Colony, part of the creed of every Dominion statesman, common property among all parties in our Oversea Empire, the doctrine, namely, that it is the business of the separate parts of the Empire to consider not merely their separate interests, but their interest as part of a great whole, knowing full well that if we lend ourselves to the great policy of consolidation it will improve the separate positions of the separate units, and that the gain to the separate members will be not less than the gain to the whole Imperial corporate body. My complaint against the Government, put shortly, is that they have encouraged that part of the policy which tends towards making each separate member of the Empire consider itself as apart from all the rest. I do not think they can stop it, I do not think they ought to try to stop it, but they have omitted to encourage the corresponding tendency which, more than anything else, would help the various parts of the Empire to give that great policy of Preference, which I grieve to think is at present advocated only by one great party in the State, though passionately advocated by them, and which I think ought to become, and might become, the common property of all British statesmen as it is already the common property of every Colonial statesman.

I cannot believe that any man who, apart from doctrinaire prejudices, looks at the tendencies of the times in which we live, can really believe the position of stolid isolation in which we insist on keeping ourselves, is either good for this country or good for the Dominions, or good for this country and the Dominions taken together as integral parts of one greater whole. It is bad for both. I believe we are weakening. I believe we are risking great trading and commercial interests. I believe that more and more we are seeing, and shall see, those exterior markets, on which we more than any other nation in the world of necessity depend, gradually reft from us, or see ourselves compelled to buy those markets at a higher and higher price. I believe you will find, if you persist in this course, that the injury to the great manufacturing industries will be fatal. I believe you will find something even worse than that. You will find, combined with that great injury to our manufacturing interests, that there goes hand in hand a growing feeling among the statesmen of the Dominions over seas that appeals to the Mother Country for this closer commercial union which they have made with a unanimous voice generation after generation, falling as it does on unheeding ears, is one which it is not worth their while any longer persistently to pursue, and if you compel our Colonies to accept that view, if you compel them reluctantly to abandon the doctrine which they have cherished with such faithful persistence in the face of discouragement for all these years, leaving them as you must leave them, and ought to leave them, the completest treaty independence, you will find that their future treaties are made with no reference to the interests of either this country or of the Empire as a whole, but you will compel them to frame their domestic policy as isolated units, and not as parts of the Empire, and in so doing you will have done the worst service, not merely to the commerce and manufactures of the Mother Country, but to those vast Imperial interests of which the Mother Country is the guardian.

The PRIME MINISTER (Mr. Asquith)

I imagine that we are confined by the Rules of Order to discussing, upon the Second Reading of the Appropriation Bill, administrative action, and that we are not entitled on an occasion such as this to debate the larger and wider question whether or not legislative changes which the Government have not undertaken ought, in the interests of the Empire, to have been proposed. That, to a certain extent, limits the sphere of controversy, but I hail with the greatest satisfaction the fact that the right hon. Gentleman has chosen this occasion to raise once more the question which I think has been too long allowed to slumber within the walls of this House, and which, until a very recent date, was a very active issue of political controversy, the question of what is called Colonial Preference. Let me first point out that what seemed to be suggested in some of the right hon. Gentleman's remarks, that the Imperial Government is insensible, unresponsive, to the wishes expressed by the Colonies at the Colonial Conference, is not the case. The Colonial Conference which met in 1907 passed twenty resolutions in all, dealing with the most diverse matters of Imperial and Intercolonial policy, and I think I might fairly say that to all, except to three which concerned preferential tariffs, the Imperial Government has, in the interval which has since elapsed, taken effective action. As regards the three as to which we have taken no action, they were resolutions dissented from by His Majesty's Government at the time they were proposed and carried against the decision of the representatives of the Government.

The gravamen of the right hon. Gentleman's complaint is that we have not departed from the position we then took up, and taken steps to advance what be calls the case for Colonial Preference. Let me, before going into one or two more general considerations, ask the House to consider how the matter stands in regard to the only one of our Dominions in respect of which, it is said, to have reached the development stage—I mean Canada. I acknowledge that my right hon. Friend the Chancellor of the Exchequer, who was then President of the Board of Trade, and I myself, speaking as Chancellor of the Exchequer, at the Colonial Conference in 1907, stated that the preference granted by Canada to British goods had been beneficial to British trade, and I make that acknowledgment now in exactly the same sense and the same spirit in which I have always admitted that the Protectionist tariffs imposed by foreign nations are injurious to British trade. But they are not so injurious as we sometimes think. Every artificial restriction of the free inflow and efflux of goods between this country and other countries is a diminution of the freedom of commerce and a diminution of the productive and consumptive powers of those countries.

Let us see exactly how the matter stands at present. The two great competitors in the Canadian market are the United Kingdom and the United States. The United States, of course, enjoys the enormous, the incalculable, advantage of geographical proximity and of daily intercourse, and, therefore, it stands on a different footing from all other nations of the world as regards the Canadian market. What are the facts? For the last nine or ten years the respective shares of the United Kingdom and the United States as importing countries in the Canadian market have been constant, or practically constant, the British being about one-fourth of the whole. It may interest the House to know that during the last year for which the figures are complete, the year 1908–9, of the import trade of Canada, 52 per cent. came from the United States, 30 per cent. from the United Kingdom, 6 per cent. from the British Colonies and Possessions, leaving only 12 per cent. to be divided between France, Germany, and all the other nations of the world. I am coming now to the point the right hon. Gentleman (Mr. A. J. Balfour) made in regard to negotiating power. As the House knows, Canada has three tariffs. She has her general tariff, applicable to the imports of most countries; an intermediate tariff, granted by way of concession to other countries in return for reciprocal advantages; and a preferential tariff, granted to ourselves. The rates of the preferential tariff are approximately 20 per cent. lower than those of the intermediate, and 30 per cent. lower than those of the general tariff. Now I will take what has been done in regard to our two principal industrial competitors in the international and, amongst others, in the Canadian market, namely, Germany and the United States. In regard to Germany, as the House well knows, Canada, in consequence of hostile tariff action on the part of Germany, imposed a surtax some years ago of something like 33 per cent. That was a surtax in addition to the duties leviable under the general tariff. In consequence of an arrangement which has been come to between Germany and Canada, early in the pre- sent year, the whole effect so far as Germany is concerned is this: Germany has now come under the highest or general tariff on all imported goods. The surtax has been got rid of, but Germany is still on the highest of the three scales. Then as regards the United States, under a recent arrangement between the United States and Canada there is a list of articles in respect of which Canada concedes a tariff reduction to the United States, but this reduction is very limited in extent and does not include any articles of first importance in the United Kingdom trade. That is the actual state of affairs as regards the tariff which applies generally and. which is the highest. The intermediate tariff is allowed, with some modifications, to France, Italy, Spain, Switzerland, and Austria, and on certain specified articles to the United States. The preferential tariff is enjoyed by the United Kingdom and the Colonies alone. That is the actual state of the facts as regards Canada. Therefore, as the House will see, the result of the exercise by Canada of fiscal freedom in regard to the making of treaties, which, I agree, she ought to enjoy, has not been in any way prejudicial to the trade of the United Kingdom. On the contrary, Germany, which had the biggest revolver, and which flourished that revolver with the greatest assurance and persistency against Canada, is now under the highest scale imposed by Canada.

Mr. BONAR LAW

Canada had a revolver, too.

The PRIME MINISTER

The hon. Member says that Canada had a revolver, too. She used it, and put on a 33 per cent. duty. What is the result of this fiscal war with Germany? Germany is not in a better position than the worst treated nation under the Canadian tariffs. [An HON. MEMBER: "The surtax is gone."] I agree the surtax has gone, but let the House remember what a loss there has been to both these countries during the seven years when the surtax existed, and during which the differential arrangements existed in Germany—the loss of actual trade, the loss of business through the impediments to trade, and the diminution of profits both to capital and labour. I do not believe that in the whole history of fiscal warfare you can get a better illustration of the essential folly of Protectionist methods. But, after all, our main concern here is not what our Canadian fellow-subjects do in regard to other countries. Our main concern is what it is suggested we ought to do with them. Although, of course, Canada, Australia, and the other Dominions of the Crown would be glad to receive preferential treatment, I am not aware of any demands put forward from any of those Dominions to make any change in our own fiscal arrangements. I listened to the whole of the Debate most carefully at the Colonial Conference of 1907, and I think that, with the exception of Mr. Deakin, I am right in saying that every one of the eminent Colonial statesmen who appeared, representing their own Dominions, was most careful to make it clear that he did not desire to initiate or even to suggest any change in our fiscal arrangements which was not for the interest of our own population.

Mr. LYTTELTON

They asked for reciprocity.

The PRIME MINISTER

What does reciprocity mean? It is a high-sounding phrase, but what does it mean translated into concrete terms? How are you going to give reciprocity? I am repeating a question which I have asked again and again. I want to get an answer to it. Upon what commodities are you going to put your import duties in order to give what you call reciprocity or preference to the Colonies? What are they going to be? Corn? [An HON. MEMBER: "Yes."] Let us come to corn. Here I think there is a little rift in the Protectionist lute. Is Colonial corn to come in free? [An HON. MEMBER: "Wait and see."] In other words, you dare not answer that. Is Colonial corn to come in free, which, I understand, is the proposal of the Leader of the Opposition, and it was certainly the original proposal of the right hon. Gentleman the Member for West Birmingham (Mr. J. Chamberlain)? I see one of the pundits of the Tariff Reform Commission opposite, the High Priest, the Grand Llama of that body, and I ask him: Is there to be a small duty, but still a duty, on Colonial corn as compared with the duty on foreign corn, which is not to come in free? Well, perhaps we shall hear an answer to that. If you are going to impose no duty on Colonial corn at all, where does the British farmer come in? Perhaps you leave him out of your account, but you cannot get it both ways. Either you are going to impose a duty or not on the first necessaries of life—that is to say, on the food of the people. Let us really understand where Colonial Preference comes in. I have a further question to ask, which I have also put many times, and to which I have never yet got a satisfactory answer. There are some of our Colonies—some of the most important of them—which send us manufactures in considerable quantity. Some of the most important of our Colonies do not send us food. South Africa, for instance. I suppose the amount of food imported into this country from South Africa is very small—indeed, practically nil. But South Africa does send us a large number of articles. What are they? There are, among others, hides and wool, which are the raw materials of some of the most important of our industries. Take Canada herself. The exports of Canada to this country are no doubt largely in cereals, but not entirely. Canadian timber is one of the most important exports from that country to this country. I ask again, Are you going first of all to discriminate as between your different Colonies, and say that you are going to tax raw materials—in other words, that you are going to give a preference to Canada—because she is a food-exporting country, and refuse it to South Africa because she exports raw materials? Then in Canada itself, are you going to differentiate between the Canadian farmer in the North-West, and say, "You shall have a preference," and to the lumberman, "You shall have no preference"? How are you going to work this thing out? It is all very well to talk about reciprocity. It is a fine phrase, but when it comes to the actual, practical concrete working out- of the policy of Colonial Preference it remains as nebulous and as full of practical inconsistencies and absurdities to-day as it was seven years ago. Then we are told that the Colonies have given us a certain amount of preference by subjecting our imports to lower tariffs than those imposed on the imports of other countries. But it was made perfectly clear at the Colonial Conference three years ago that there is one limiting condition to all Colonial Preference as given by the Colonies to this country.

What is it? They are not going to allow your manufacturers to become effective competitors with theirs. Anything short of that, anything up to that, they are perfectly prepared to give you. When you reach the stage at which the admission of British products, the products of British capital and British labour, would be in really effective and damaging competition with the Colonial capitalist and the colonial workman who are engaged in the same form of manufacture, then a tariff wall is raised to such a point that you will be excluded, and you are intended to be excluded, from their markets. I make no complaint of that, not in the least; on the contrary, I would like to see as much as any man in this House inter-Imperial Free Trade. It is the great ideal which I think most of us on both sides will be very glad to welcome if it were possible. But it is not possible so long as Colonial opinion and the masses, the democracy, of our Colonies think, whether we agree with them or not, that their own fiscal, economic, political, and social interests require they they should practice the doctrine of protection of native industries. As long as that is so, anything in the nature of inter-Imperial Free Trade is impossible. It appears to us here that cheap food and cheap raw materials are absolutely essential to our industrial prosperity. We cannot consent, either upon food or upon raw material, to impose taxes which would enhance their price and which would thereby handicap our productive power in the great competition of the world, and which, as we believe, would reduce both the profits of the capitalist and the wages of the worker. On the other hand, look at our Colonies. They are young communities. For the most part they consider it essential to the interests of themselves that they should foster and develop, by means of protective tariffs and artificial encouragements, their manufacturing industries. They are perfectly entitled to do so. This Empire would never have been kept together, it would never have been what it is to-day, an Empire bound not so much by material as by moral and social and loyal and affectionate bonds of interest and sympathy, if we had continued to insist upon dictating from Downing Street what should be the fiscal policy of Australia or Canada. Most wisely and most profitably we gave them fiscal authority. The result has been undoubtedly that to some extent we had put a handicap upon our own trade, upon the expansion of our own markets. That is a price we are most glad to pay for Empire, a free Empire, for an Empire which does not rest upon the subordination of one part to another but upon the free consent and the fullest local development of the whole. Let us be content with seeing that while we develop our fiscal system in accordance with our interests we allow our Colonies to develop theirs in accordance with what they believe to be their own interests, and by the interplay of both, by the recognition in every part of the Empire of the fact that complete freedom in these matters is the best security for unity, we shall maintain not only the tradition of our own past but we shall lay the foundation of a still more solid and enduring future.

Mr. MACKINDER

The Prime Minister in his opening remarks referred to the necessary limitations placed upon this Debate by the Rules of Order. The Prime Minister managed under the limitation which he imposed upon himself to enter upon most of the questions included within the fiscal discussion. I wish, while attempting humbly to reply to some of the points that were urged by him, also to deal more effectively with that very urgent side of the question which was brought before us just now by the Leader of the Opposition. That urgent matter as it seemed to me, if I may venture to say so, the Prime Minister hardly referred to. The Leader of the Opposition when he speaks on this subject speaks winged words. I doubt not that they are already on their way to the ends of the world. But to smaller people it is possible and it is advisable to refer to matters which would not be advisable perhaps for him in his discretion to refer to. Therefore, I may, basing myself upon one expression of his, look at this question of Canadian negotiations with the countries of Europe and the possible negotiations with her great neighbour the United States. I want to look at it for a moment if the House will allow me from the point of view of Canada. The right hon. Gentleman the Leader of the Opposition referred to negotiations with the European countries, and said that Canada was left by us unsupported by any preferential arrangement in the Empire to make the best terms that she could by separate action on her own behalf. I noted just now that the Prime Minister spoke of the remission of the surtax in Canada against Germany. I thought, if I may say so, it was a little ungenerous on his part that he should not have referred to the reason for the imposition of that surtax. It was because Canada stood by the Empire that she imposed the surtax, and if a triumph has been won, the triumph has been won by Canada, because she had the courage to act her part alone. I venture to ask that if such is the triumph that a relatively small country, as Canada is in the economic sense, can inflict on great Germany, how much easier would have been the victory if the whole power of the Empire had been behind Canada? But the right hon. Gentleman told us that there had been great losses on both sides, and I think his expression was that there had been a revolver pointed. May I suggest that the effect up to the present has been to divert the German revolver in the direction of this country, because we have not only got to consider the position of British goods competing with German goods in this country, but also their position competing with German goods in Canada? And the effect of the removal of this surtax is, of course, undoubtedly to benefit German trade in Canada, but at the same time inevitably to damage the relative position of British trade in Canada. It is a little difficult to give any precise assessment of the value of the surtax, because in the 1906 tariff of Canada, as the House knows, we have had substituted for the old ad valorem general preferential arrangement a specific arrangement in regard to particular articles, but I believe that substantially the effect of the removal of the surtax is to reduce by about one-half the benefits which we have in Canada on the articles to which it referred. Therefore, however much we may admire the skilful use to which Canada has put the weapons with which we wish to equip this country, honesty must compel us to admit that the net effect of our laissez faire attitude in this country and of the armed condition of the two Powers, one within the Empire and the other without, which are also concerned, is that we are the sufferers.

When I say I want to look at the matter a little from the Canadian point of view it seems to me, and this is very important, that there are some things which can be said here, and said by a Britisher, which Canadian statesmen would be too proud to say. In order that I may put before the House the point that I want to urge, I would ask their indulgence just for a moment or two while I state what I conceive to be the economic position in which Canada finds herself as the result of the refusal of the right hon. Gentleman opposite to take any action. I think the House will agree with me that the geographical position of Canada may be represented by saying that, geo- graphically, Canada is an artificial construction. The frontier thrown across the Continent runs a right angles to all the natural features, and Canada has been created in the face of the greatest natural temptations to fall into a great Continental State together with the United States—in other words, Canada is the greatest and most signal instance at the present moment of a State which has resulted from a settled policy acting under modern conditions, and the abandonment of that laissez faire policy, which was no doubt suitable to the time of Adam Smith. I venture to put it in this way, that what Canadian statesmen, Sir John Macdonald and Sir Wilfrid Laurier, have attempted to do is to create a national texture in Canada running from east to west. All the threads of natural interchange and communication would be from north to south. The whole object of the continuous policy of Canada has been to insert threads at right angles to those running into the States. That is the meaning of Sir John Macdonald's national policy. I want to express this view that in offering preference to us, Canada was studying, and rightly studying, her own vital interests. We have the opportunity at the present moment of helping her policy. She put up a frontier against the United States; she backed it by a great railway. Sir Wilfrid Laurier, with his Free Trade platform, found it impossible to carry out general Free Trade. He gave a preference to this country. Why? In order to strengthen the east and west system of communication and trade in Canada; in order to strengthen by all possible means the vested interests which to-day constitute the stable structure of any nation. In order to strengthen the vested interests making east and west and not north and south the line of communication you have had Sir Wilfrid Laurier adding two more railways, one a State railway and the other a private concern, and you have great banks extending east and west with their branches. But Canada is constantly subject to pressure from the States, and I venture to say that Canada has been driven to negotiate with Germany and France in order to strengthen the east and west communications because you would not supply the place of France or Germany.

5.0 P.M.

Because you would not do that, and because she all the time fears economic absorption by a gigantic neighbour in the south, you have driven her to undertake these negotiations which we know are so largely dangerous to the ultimate unity of the Empire. If there is any blame to be attached for these trade negotiations it lies with those who delayed to take that action which Canada feels to be essential for the preservation of her national existence in the face of the competition of the United States. There is now a fresh offer of the American bribe, and something very different and worse by far than the offer which came from France and Germany, whose negotiations have not tended so far, to remove Canada from the Empire in the economic sense. But every statesman in Canada knows that he has to protect the Southern frontier, as the beginning and the end of all Canadian independence. If Canada is to be independent or a part of the Empire, whatever school of thought you may be following in Canada, you know that the one thing vital to her future separate existence is that communication should not be allowed to run in the main north and south. The figures stated by the Prime Minister just now in regard to the proportion of trade of Canada with the United States and this country is an indication of that very pressure from the south which Canadian statesmen are engaged all the time in fighting. The right hon. Gentleman the Prime Minister referred to the question of wheat. I believe we have had our policy laid down for us on this matter by the Leader of the Opposition. Whatever the differences of opinion I would ask the House to remember that the right hon. Gentleman opposite was destructive in his criticism. The moment you come to a constructive policy there are necessarily Debates as to which particular detail you shall insert in that policy. The right hon. Gentleman knows from practical experience that it is always difficult when you launch a constructive policy which you wish to carry out to prevent just that kind of destructive criticism which the right hon. Gentleman makes, and which we, I think he will agree. wisely postponed. Who can tell what will be the conditions of trade? The conditions of trade today are vitally different from what they were when our policy was proposed in 1903. If we had advanced in 1903 a detailed policy, that policy would no longer be applicable after all the delay. These things are matters of negotiation. The right hon. Gentleman talked to-day as I have heard Free Traders talk on the plat- form. They are always trying to put us on the horns of a simple dilemma.

Canada is producing woollen articles in only a few lines, but we may classify woollen goods of a hundred different kinds. The treaties of Germany and of all other great States consist of thousands of items. We have a classification which will be before the House this evening in connection with the Port of London Authority Bill. Do not let us say we are incapable any more than foreign countries of constructing a tariff. I agree with the Leader of the Opposition that it is a most difficult matter, and I readily realise that it is one from which the permanent officials shrink. We enter upon it solely because we are conscious that other nations, trained bureaucracies, less troubled perhaps by democracy, are achieving these things, and, as we believe, are gradually beating us. If we are incapable of such a complicated scientific precaution, so much the worse in the long run for the democracy. It is said that a 2s. duty on wheat will not be acceptable to the small Canadian farmers of the North-West. That is part of the statical argument which leaves out of account altogether the fact of small things growing to be great things. If you have a little rill of water flowing over a rock, when the spate comes the whole rock is flooded; but if that rill flows on for many years, it gradually trenches for itself into the stone a deep channel and when the spate comes it is confined to that channel. If you grant a 2s. duty, what is the effect? Some who have got a large profit may not be affected by it, but a certain number whose margin of profit is small will be affected by it. The moment you have a small channel for trade, the tendency is for that trade to increase, and the larger the trade you do the more cheaply you can do it. Therefore, a small duty cumulatively acting for many years gradually, and all the time pressing in a particular direction, leads to that condition of things in which year by year it is repeated, "To him that hath shall be given." The right hon. Gentleman spoke of the inflow and outflow of capital and trade as being desirable; he spoke in harmony with the great ideal of a universal Free Trade. I am afraid I am one of those who believe that Free Trade within the Empire is not wholly desirable. I cannot help feeling that what would have resulted from the condition of things which John Bright and Cobden anticipated would have been a concentration of manufacturing here and hewing and drawing in the rest of the world. I cannot believe that our Empire is likely to be strong, to be many-headed, if you are to have concentrated here all the manufacturing of the Empire and elsewhere merely the production of raw materials and food. Therefore I believe it is in their own interests, and in the interests of the Empire in the long run, that the Colonies should protect themselves to a certain extent from this country. But that does not prevent in the least an enormous amount of negotiation such as that carried on by other countries.

Under present conditions, while I admit that it is essential we should have cheap food and raw material, it is also essential that we should have markets. What is forgotten always, by those who argue that you cannot import without exporting, is that you may transport the very people and capital and so render both the imports and exports less necessary. This idea of bodies of the population moving is an idea clearly left out from that point of view. That is the argument upon which we differ; that is the argument which Canada sees, and which she has shown in practice by preventing the immigration of her people to the United States, by reversing the course of movement of her population, by adding to her strength from the United States instead of losing strength to the United States. She has shown the possibility of doing that, as Germany is also showing it today. I think the Foreign Secretary made an utterance on the point not very long ago at a meeting of the Free Trade Union. If it is argued that Germany is thinly populated as compared with this country, my reply is, what about Belgium, which has twice the density of population which we have, and yet her population grows. What is of vital importance to take into consideration is that you can move your population under the present conditions by public policy, except that part of the population which is tied to the land by agriculture or by the mines. There is food in Canada for far more than the population which exists there, and you move the food to where the populations are. The object of the tariffs is bodily to move the capital and the people from one place to another, and this is possible to be done, as Germany has shown, as Belgium has shown, and as our own colony of Canada is showing. That is the difference in our arguments. What I am fully conscious of is that you have refused to study this question. You have refused to study these three Resolutions of the conference of Premiers of the Empire. You refused to refer them, for any close study, to any body upon which the Colonies should be represented. You refused to see whether you could deal with them. You simply come down here and say, "It cannot be done." The Colonies say it can be done. Is not that dictation from Downing Street? We are told that dictation from Downing Street would break up the Empire. The Colonies tell you that they can negotiate, and you come here and say, "How can you give equal terms to all the different Colonies?" The different Colonies do not ask for equal terms. All they ask you is to study the question and see whether you and they cannot do business together. If you can do business together, then you would make vested interests in that form of trade, just as you have got vast vested interests in this country in another form of trade, which is not so beneficial to workers in this country as to capitalists. All we want to do is to build up other vested interests—small in the beginning, but which will grow. We want to sow the mustard seed, watch it grow, and in the future make a Great Empire. I know that the right hon. Gentleman the Chancellor of the Exchequer tells the country of a great boom in trade and of a greater boom coming. You attempt to ride off in the fog of your figures and statistics, while the country is attending to its daily affairs. It is said that it is hard for the rich man to enter the Kingdom of Heaven, and it is equally difficult for a democracy, busy with its own daily affairs—when it sees one of those upward waves of trade which are characteristic of the whole world—at the moment to see what is wrong. It is the duty of statesmen to study not the boom of this year, but the general trend of trade. Let us remember that our markets to-day are held by force. Our markets in China, India, Africa, and even our South American markets, where we help to maintain the Monroe doctrine, are ultimately held by force, and you refuse to widen the basis of your power. Your whole system is becoming top heavy. You are dependent on the Colonies and other places for the raw materials and food. And they at any time by their policy can consume their raw material and their food in their own countries, and cut off your supplies. You will thus be left with your population on your hands. You will find yourselves under the necessity ultimately of giving way in all international negotiations, because you dare not trust your strength. We ask, while there is yet time, you will study the general figures, and not the boom of this year, or of last year, that you will consider the relative position of the whole world, not dealing with the condition of this country as compared with what it was in the time of King Alfred. I say that the policy which you are following, as shown by the making of these treaties is driving your own Colonies away from you, and that you are responsible by your delays and by your blindness for the breaking-up of the Empire, which under your very eyes is in progress.

Mr. J. M. ROBERTSON

The hon. Member who has just spoken has covered at least as much ground as he suggested was covered by the Prime Minister and by the Leader of the Opposition. I have no intention of following him except as to two or three principles which detach themselves from his speech. The last words of the hon. Member for instance amount to a kind of threat, I will not say in the name of the Colonies, but in so far as the hon. Member's party is able to speak in the name of the Colonies, that unless this country abandons its policy of Free Trade the Colonies will leave her. If that was not insinuated there was really nothing in the argument. It is an extraordinary assertion to be made by a party professing to be loyal adherents to the British Empire. The Colonies have repeatedly declared through their leading men, and the leading Colonial journalists have declared and repudiated the pretence that they are using any threat in this matter, or that their loyalty in any sense depends——

Mr. MACKINDER

I am afraid that the hon. Member totally misunderstands what I said. In what I wished to convey there was no threat, I was referring simply to the economic tendency.

Mr. J. M. ROBERTSON

But the economic tendency alleged to be at work could only come to anything in the case of the separation of the Colonies. The hon. Member said we are driving our Colonies away from us—that means that they will ultimately separate from us if the policy of Free Trade in this country is carried on. I will leave it to the Colonies themselves to repudiate now, as they have repudiated in the past, all pretences of that kind. Only the other day Sir Wilfrid Laurier, in spite of what is said by the Leader of the Opposition, not only used language of absolute loyalty to the Mother Country, by declared that the preference that has been given to Great Britain is a preference that is to last for ever, in spite of all the eloquence of the party opposite on the subject of Colonial Preference. The hon. Member advanced a still more remarkable theory in regard to the position of Canada and the Empire. He told us that Canada is an artificial construction. Most States in the last analysis are. He told us that Canada would, as it were, naturally gravitate to the United States, and that the only means by which Canada could be prevented from gravitating to the United States is by the setting up of an artificial tariff system which gives preference to the Mother Country or, it may be, to Europe in general as against the United States. I wonder if hon. Members of the party opposite, the Tariff party, realise the astonishing character of their argument. Their suggestion is that there is a strong natural tendency lying in geographical conditions and economic conditions to the coalescence of Canada and the United States, and that if that strong natural tendency is to be successfully averted it can only be averted by the setting up of a policy of Imperial Tariff Preference. If the tendency that the hon. Member alleges does exist, then the remedy he proposes is ludicrous to the last degree.

Mr. MACKINDER

My phrase was that Canadian statesmen had to maintain an East-to-West tendency, and I enumerated railways and other matters in connection with that policy.

Mr. J. M. ROBERTSON

The hon. Gentleman's argument on that point was that Canada was an artificial construction, and that you would naturally tend from economic causes and from mere juxtaposition to coalesce with the United States, and that if that tendency is to be averted it must be by carrying out, and I will include railways if you like, a policy which, so far as we are concerned, is to take the form of Colonial Preference, and that this mere Colonial Preference will successfully avert what he declares is the natural tendency to amalgamate between the United States and Canada. A more hopeless ground for looking for the continuance of the British Empire in North America I do not think was ever declared. It is a doctrine of despair. Finally, we have perhaps the most astonishing proposition of all, that when His Majesty's Government, after carefully and courteously hearing all that was said at the Colonial Conference, gives the old answer that this country cannot afford to abandon the policy of Free Trade, then the hon. Member tells us that that is dictation from Downing Street, because we do not do what the Colonies want.

Mr. MACKINDERrose——

Mr. SPEAKER

I would recommend the hon. Member to prefer to think his arguments distorted than to be constantly interrupting.

Mr. J. M. ROBERTSON

If it be suggested that I have distorted the hon. Member's argument, I am only too glad to allow the hon. Member the opportunity of correction.

Mr. SPEAKER

I did not say the hon. Member was distorting the argument. I said that the hon. Member (Mr. Mackinder) might think his arguments were distorted. It would be impossible that a Debate should be carried on if hon. Members interrupted so constantly.

Mr. J. M. ROBERTSON

I quite agree, but as I am anxious not to misrepresent the hon. Member I should be very willing to give way to him. He did say two or three times that there was dictation from Downing Street. I cannot attach any meaning to the phrase at all, except that it seemed to be clear to me, from the hon. Member's way of putting it, that in refusing to discuss any further than we have done, and the hon. Member does not dispute that the matter was fully discussed, and he will not deny that every point raised by Colonial statesmen has been in detail replied to by His Majesty's representatives, and after all that discussion has taken place, he tells us that it is dictation from Downing Street, because we stand as we stood before. I am bound to say that the tables have been turned with a vengeance if it is to be considered dictation from Downing Street, that this country will not bow to what has begun to look like dictation from the Colonies, or from the Tariff Reform League. I come to, the main issues, from which I am afraid the hon. Member rather extensively departed in bringing forward these propositions. Dealing with those main issues of the proposed Colonial Preference, I have to point out that the Leader of the Opposition, in putting his case, absolutely failed to notice the strongest and most comprehensive of all the answers to the pleas he put, namely, the enormous loss that must be incurred by this country, not merely in respect of putting a tariff on food, and the prospect of putting a tariff on raw material, but the inevitable disadvantage that will accrue to this country from the barriers that will be raised in every other part of the world.

The right hon. Gentleman, by the method of mere innuendo, alleged to the House that at present we got no good whatever from the most-favoured-nation clause in our dealings with any other nation. Not a scrap of evidence was offered for that proposition. The hon. Member practically put the case thus: "How could we hope to get any advantage from tariff negotiations with other countries?" He proceeded to say that it was perfectly well known that although we got nominally most-favoured-nation treatment in our dealings with other States, yet arrangements were made which took away the effect of them. Not a word of evidence is given for this assertion, which, after all, is absolutely vital to the whole Debate. If, as we maintain, we do get and must get an enormous advantage from the most-favoured-nation clause in our dealings with all the nations of the world, it will follow if we get Colonial Preference that we will lose that. We are told we ought to give preference to the Colonies for the purpose of holding the Empire together, and for some of those general and undescribed benefits that are supposed to be connected with holding together, but all the while, under the terms of the case they are asking, we give up our advantages in order to give them an advantage, as a slight return for which we would get some preference from them. Our trade with the Colonies is much less than half our trade with the rest of the world, and we are asked in return for a preference from the Colonies, which even the hon. Member for Camlachie (Mr. Mackinder) admits is a very illusory preference because the Colonies are determined to increase their manufactures, and do not expect to reduce them, in return for a very doubtful advantage of that kind we are asked to end the policy of the most-favoured-nation treatment in every other market in the world, that is, putting ourselves at a disadvantage in two-thirds of our trade in order to get a doubtful advantage for the remaining one-third. If I thought Colonial Statesmen, I should not, I believe, use the word "Colonial," which is objected to, but should use the word "Dominion," if I thought any Dominionist Statesman seriously made such a demand as that I should begin to think seriously upon the advantages of that kind of union that we are told is of such enormous importance. I do not understand that they do make any such demand, they make suggestion, and all of those suggestions have been met.

To-day, when hon. Members opposite, and when the right hon. Gentleman the Leader of the Opposition made this proposition, and when the plain question is asked "What do you propose to do in this matter, what particular arrangements do you propose to make?" First of all the hon. Member for Camlachie replies that it would not be prudent to say what you are going to do, or that it would not be advisable to give any details. So that you are to enter into this new bond and shake off your old fiscal system before you have made up your mind as to what you are going to do. Then he says you are giving dictation from Downing Street, because you do not discuss the question, although the hon. Member has himself refused to answer a question on the subject.

No new aspect has been set upon this Colonial Preference question by anything that has been said to-day. It might be worth while in regard to what was said by the Leader of the Opposition concerning the preference given to the Canadian timber for instance in the old Protection days, to ask how that worked out for the good of the nation. We did at one time give a preference to Colonial timber. The result was that we made dear the building of ships in England at a time when we needed cheap timber in order to compete with the shipbuilders of the world, and in the first half of the nineteenth century we were beaten as shipbuilders in the matter of price in the Baltic. At that very period we gave a preference to Colonial timber which was precisely the timber we did not want for ship building, and we made dear the Baltic timber which was the kind we required for shipbuilding, by doing so we put in the very greatest jeopardy the shipbuilding trade which was then in a very bad position all round. That is the experience we have had in the past of Colonial Preference, and since hon. Members opposite will give us no details which will offer any light towards any practical discussion it is to the past we must turn.

There is one point more in the arguments of the hon. Member for Camlachie as to which I should like to say a word. His argument, if I understood him aright—I use that phrase not without meaning, because it seems very difficult, indeed, on his objections to ascertain what he meant in any one of his arguments—but I understood him to say that Canada had succeeded in attracting population by her tariff policy, that Germany does the same thing, that the value of a tariff policy is proved by the rise of population, and—I suppose this is implied—that, inasmuch as population leaves this country in considerable numbers by emigration, the Free Trade policy is in that way impugned. I will point to one fact which at once counters the whole of that, line of argument. One of the heavily protected countries is Italy. Italy has tried a tariff policy in recent years as determinedly as any European country. Nevertheless the emigration from Italy is, on the average, in proportion to the population, about three times the emigration from this country. In one year we had an emigration of 250,000, but the emigration from Italy, with a tariff policy, was 750,000. What have the Tariff party to say to this? All that they say with regard to the increase of population in Canada is absolutely beside the mark. The tariff has nothing to do with it. What attracts population are the natural resources of Canada. What enables Germany to expand her trade and population is, at bottom, the enormous expansion of her natural resources, especially in respect of the making workable of her hematite iron in the past generation by modern methods. Before that, the iron resources of Germany were inferior to ours, but now that it is workable, on her own calculations Germany has twice the iron ore, as well as twice the amount of coal in her coalfields, that we possess. Under these conditions any country can go forward in population. Canada has gone forward in population not in the least because of her tariff. Is it seriously suggested that the increase of population in Canada is in the protected industries? The hon. Member for the Camlachie Division himself told us that the Canadians manufacture woollens only in one or two grades. It is not in the protected industries that the increase of population has taken place. It occurs in agriculture, where there is no protection. It occurs in agriculture in spite of protection. As regards the emigration from this country, it is a very strange thing that Members of the party opposite should not realise that so much of it goes to Canada. and is in that way building up that Empire beyond the seas to which they profess to look with such hope as regards the future. More and more British population is emigrating to Canada in preference to any other country.

In these circumstances what becomes of the argument of Colonial Preference? Are we going to conciliate the lumbermen in Canada by putting a tariff on timber? Some Members on the Front Opposition Bench tell us apparently that we are to do so. That brings us once more to the worse than uncertainty of the proposals and promises made in connection with tariffs. As the hon. Member for the Camlachie Division reminded us, the conditions under which tariffs are made change very rapidly. Precisely so. If we had put 2s. a quarter on wheat seven years ago, we should have had at least 6s. per quarter to-day. The German tariff began at 2s., and is now 12s. The French tariff has undergone the same development. If this nation is ever so lost to a sense of its own vital interests as to begin with a tariff of 2s., it will probably progress to the higher figure as rapidly as other nations have done. Let hon. Members opposite remember this fact in connection with their tariff bargainings. Whatever may have been said by Colonial statesmen about their anxiety to give a preference to British trade, there have been the most bitter murmurs on the part of Canadian manufacturers against the preference that has actually been given to this country. This is surely a state of things which should be regarded with the gravest anxiety by British statesmen. If you have Canada or any of the Dominions giving us a preference nominally out of loyalty to the Mother Country, and the members of the trade affected by the preference in their own country complaining very angrily that they are suffering injuries through the connection with the Mother Country, are you not setting up conditions which will very dangerously indeed tend to a rupture between the Mother Country and the Colony? If you say we are setting up a danger of separation by refusing a general preferential policy, what are you doing when large industries within the Colonies are exasperated by our being given a preference which they declare is opposed to their interests? I read in one of the trade journals last year that Canadian woollen manufacturers who had been doing good business were obliged to shut up their woollen mills because there was no longer the trade to employ them. If you have at any time depression in trade in Canada in one or more industries, and they are able to point to the Mother Country as the cause of their depression, because of a preference having been given, you will have created a cause of rupture such as has never existed before.

The only time that there has ever been a serious danger of separation between the Colonies and the Mother Country was precisely when money interests were involved. We gave that old preference with regard to timber, not I suppose in the least out of any concern for Canadian interests, but simply because British capital was engaged in the Colonial timber trade, a state of things which may be set up again in regard to the relations between the Mother Country and the Colonies. We gave a most injurious preference, which seriously injured our own shipbuilding trade. As soon as we took that preference away a new grievance was set up by taking it away, although the taking of it away was essential to the well-being of the Mother Country. The same thing would happen if you began a tariff on food and you were driven by force of circumstances to take it off, as might well happen. I could not hope to see it taken off until it had done a tremendous amount of harm; but when it was proposed to take it off, what would be the attitude of the people in the Dominion in regard to what they would say was an injury, directed against their vested interests? Hon. Members opposite, in proposing to conserve the well-being of the Empire and to look to its interests, are simply asking us to set up conditions of the utmost strife between the Mother Country and the Colonies where there is peace already—as there may well be, as they have no real grounds of grievance against us and we have none against them. Where there is peace and healthy and natural relations the Tariff party propose to set up artificial, changeable, arbitrary, and capricious relations, which, by their own admission, will have to change every few years, and they hope to retain the same healthy relations, the same healthy reciprocity between the Mother Country and the Dominions that existed before. That will not take place. The whole history of our dealings with the North American Colonies in the eighteenth century should surely be a warning against in any way staking the wellbeing of the Empire upon such financial relations. It was over an unintelligent and ill-judged interference with Colonial trade that we lost that great slice of the British Empire which is now the United States, and it is the same policy that would tamper with the relations between the Mother Country and the Colonies now.

Captain GEORGE TRYON

I am glad to have an opportunity of replying to the last speaker, because if English history is quoted in this House it is essential that it should be quoted with accuracy. The hon. Member has told us that we lost our North American Colonies through some system of Colonial Preference.

Mr. J. M. ROBERTSON

No.

Captain TRYON

Through tariffs.

Mr. J. M. ROBERTSON

I said that we lost the American Colonies through interference with the financial relations of the Mother Country and the Colonies. I did not say through Colonial Preference.

Captain TRYON

If the hon. Member did not think that Tariff Reform or Colonial Preference lost us the American Colonies, I do not see that his observations had any bearing on our present discussion. But as this impression is largely set about the country it is well that I should endeavour to reply to it. When the Colonies were in a state of great tension, when it was a question whether we should not lose them, and when there was great friction existing, the representatives of the Colonies met together and in bringing their charges against Great Britain accepted the principle of Colonial Preference, and said that they wished to bring no charge whatever against that principle, although at the time on other matters great friction existed. I think there has been a most unfortunate misunderstanding both in this House and in the country with regard to Colonial opinion in this matter. I understood the Prime Minister just now to say that there had been no suggestion from the Colonies that we should alter our present system. That is a very serious thing to say, because it is a matter which affects the decision of the country, and carries great weight with the electors. So far from the statement being accurate, I find, on turning to the Blue Book published by the Government, that the Fourth Resolution of what is termed the Colonial Conference was as follows:— That the Prime Ministers of the Colonies respectfully urge on His Majesty's Government the expe- piency of granting in the United Kingdom preferential treatment for the products and manufactures of the Colonies, either by exemption from or reduction of duties now or hereafter to be imposed. When the Leader of the Opposition earlier in the Debate stated that the Dominions were speaking with a single voice, the Under-Secretary for the Colonies shook his head. Might I ask the right hon. Gentleman which of the great Dominions is not in favour of Colonial Preference?

Colonel SEELY

Perhaps it would be more convenient if I replied later on. I have an answer on the point.

Captain TRYON

When you look at the history of these Conferences, taking the first Conference of 1887, and going through all the reports of the Conference since, you will see how unanimous and how persistent that offer has been. It has been something more than an offer. It has been a principle which has actually been carried into effect in every great self-governing Dominion. Therefore, when I find pamphlets and speakers on the platform suggesting to the people of this country that there is no Colonial offer, I say that those who make such a statement are misleading the people on a matter of the most urgent Imperial importance. A matter which has not been alluded to in this Debate is the extension of this principle of Colonial Preference. It is not merely a matter between us and Canada. It is a matter between all the great Colonies and each other. When we hear criticisms passed on this policy, we must remember that all the great Colonies are gradually developing this system among themselves, in order to develop each other's trade. I do not wish to go into all the details of the question, but I should like to reply to what has been said about the most-favoured-nation clause. We hear Members opposite suggesting that we still get the benefits of the most-favoured-nation clause, and I understand it is suggested that we have only to look on while other nations negotiate and we shall get the full benefit. If France negotiates with the United States, and gets lower duties for her claret, what possible good is that to anybody in this country? The idea that we are to stand aside and see other countries negotiate, and then expect to get the full benefit of the negotiations, is based on a neglect of the fact that the negotiations are in reference to tariffs affecting particular articles, and that by picking out special articles in which they are largely con- cerned, the negotiating countries are able to get concessions of the greatest value to themselves, but which are of absolutely no use to us. If the Germans get lower duties on their wine—say, hock—and the French get lower duties on claret, what advantage is that to us, who cannot produce these things? When the Prime Minister and other Members advance this policy, I would remind them that Mr. Cobden did not believe in it. When Mr. Cobden was negotiating with France he negotiated for lower duties on iron and things which we did produce.

But it is as a wide Imperial issue I should like to approach the question. It seems to be certain, whatever hopes may have been held out in the Cobdenite period, in the early Victorian period, from which the present Government draw the inspiration of their policy, that the world is now going forward on a system based on what they would call Protection. Everywhere you see the great Powers drawing into the sphere of their commercial influence the outlying territories near to them, and their overseas possessions. You see the United States bringing into the network of its influence distant places like Porta Rica, the Philippines, and Honolulu. You see in other directions in the centre of Europe commercial treaties between neighbouring countries in the arrangement and framing of which we have absolutely no share. We see also what we believe to be a most admirable and a most hopeful thing, that the policy which this country has for the present rejected—I think not for long—the Dominions of this Empire are developing amongst themselves. We see, for instance, that they make arrangements which will make for closer intercourse and larger trade between them. We base our arguments—personally my chief concern in advocating this policy is on account of its ultimate political result—on this larger policy. Therefore, when we are told by the Prime Minister that all the Resolutions of the Conference have received attention, I cannot help remembering that there was a Resolution, the fourth Resolution, which said:— That it is desirable to encourage British emigrants to proceed to British Colonies rather than to foreign countries.

Colonel SEELY

The Prime Minister especially said that he excepted three.

Captain TRYON

I understood the Prime Minister to mean the three resolutions with regard to Colonial Preference which are not what I read. This is the fourth resolution. But in any case, it is the principle that I would urge rather than make any point in regard to a detail. It is the principle that, if we choose, we can in our tariffs and in our arrangements for our trade with our Colonies develop a far larger Imperial trade than we have now. It is sometimes urged against this policy that it will be a thing that will injure our shipping trade. In the United States they have a great internal trade under their tariffs. That is a trade which naturally takes place on the railways, because the communications of the United States are railway communications. But if, with a system of commercial treaties and preferences with our Colonies, we largely increase the internal commerce of our Empire, that will be a commerce which will be carried in ships. As it grows so will grow the opportunity with it for employing the shipping trade.

It is only a very small point in reply to the hon. Gentleman who addressed the House just before me, but he told us about the former preferential tariff with regard to timber. He told us how much better it would have been if in the old days we had got our timber from the Baltic. But there was a very important thing which he did not tell the House. That was that early in the last century we were engaged in almost constant war, and the reason we endeavoured to develop supplies of timber from our own Colonies westward was because of the great danger of the Baltic supplies of timber being cut off down the narrow waters of the Baltic, leaving us—having had for a short time, perhaps, rather cheaper timber—in a time of crisis without the essential supplies for the maintenance of our Fleet. That is an essential point bearing upon the controversy which might with very great advantage have been mentioned by the hon. Gentleman when he raised the question of timber. To me this question of Colonial Preference and the development of the Empire is one of surpassing, absorbing interest. Sixty years ago we made the attempt to get universal Free Trade with our neighbours, but that experiment failed. Following on that we have seen the gradual reservation of markets, the central, great, protected markets of Europe and the great markets of the world. Going on beyond that we have seen a growing and a very serious danger in the gradual reservation of Colonial markets and of oversea Dependencies by our great rivals. You see, for instance, France reserving the trade of her over- sea possessions for her exclusive use. You see Japan instituting with her possessions, such as Formosa, privileges for her trade and disadvantages for our own. You see Germany carrying out the same policy. You see, as great territories pass under the influence of the United States, that they also are carrying out the same policy. I took the trouble once to go into the matter. I found that three nations—Russia, the United States, and France—had in this way reserved for their privileged trading about one-half of the world outside our Empire. When you remember that this reservation of protected markets is the universal practice for practically every country except ourselves, when you see that practice growing amongst our own Colonies, when you see all these areas being reserved, we can only conclude that it is no longer safe for us to rely upon the neutral markets. We believe that the time has come for us to turn back to what, after all, was our old traditional national policy, and use the whole powers of the State in mutual co-operation with those great, strong, self-governing Dominions across the seas—to hasten the development of our own Empire, for the employment of our people, for the strengthening of our defences, and also for an object to which I may briefly allude, the widening of the basis of our finances. When you see the rate at which other great empires are expanding, when you see the far greater growth of Germany and the United States, you will see that we cannot maintain our place among the nations unless we can build up a wider basis for our finances and for our defence. It appears to me that our policy of the greater exchange of products between ourselves and the Colonies will lead to closer and more frequent intercourse, to better knowledge of each other, to a gradual binding together of the Empire by bonds of closer intercourse and commercial union. We believe we shall by this in the future have the opportunity of widening the basis of our commerce and of our defences, and of maintaining for, I hope, generations to come the great civilising work in which the peoples of this Empire are engaged.

Sir JOSEPH WALTON

Hon. Members speaking from the opposite benches would almost seem to leave out of consideration altogether what are the present trade relations between the Mother Country and her Colonies. Take the case of Canada. We give to Canada the only free market in the world for practically any quantity of produce that she cares to send us. She sends us produce to the extent of £26,000,000 sterling per year. On the other hand, we send to Canada £13,000,000 a year of British goods and produce. On that, notwithstanding the thirty-three and one-third rebate on her duties, she levies practically an average import duty of 20 per cent.—£2,600,000 per year. In addition to that she gives $1,500,000 bounties mainly to her iron and steel manufacturers, to enable them to produce in Canada what we would otherwise send them. In addition, too, to that, up to the present time the taxpayers of this country have borne the whole cost of Imperial and Naval defence. If the inhabitants of Canada contributed equally with the inhabitants of this country to our naval forces, contributed pro rata to the cost of Imperial defence, that would mean some millions additional yearly expenditure for Canada. All this—£2,600,000, the bounties, the absence of any reasonable and adequate payment for Imperial and naval defence—are, in other words, a preferential treatment of Canada in regard to our commercial relations. I ask how can there be any satisfactory and proper basis for the arrangement of a preferential tariff between a highly-protected Colony and the Free Trade Mother Country? If change there is to be, surely it ought not to be a change which would actually give the Canadian agriculturists a bounty on the grain they send into this country. That would be what a preferential tariff—and a duty on corn levied against foreign countries, but in a lesser degree, if at all, against our own Colonies—would mean. At present we get from Canada all the wheat supplies she can send us absolutely free from duty, and forsooth, on the Opposition side of the House, we are asked not only to do that, to ignore the heavy duties that she levies upon all goods we send to her, but to still further make the trade relations more and more one sided by actually giving to her a bounty on the wheat supplies she sends into this country! It seems to me that that cannot possibly be the basis of a satisfactory arrangement. We give all these advantages to our Colonies, for the same applies to South Africa, Australia and New Zealand—even to New Zealand and to Australia in a greater degree than to Canada, because their duties against British goods are higher. The fact is that of all fields of action open to us to increase and develop British trade, I believe the most unpromising to be that of carrying out the idea of attempting to set up a system of further Colonial Preference as between the Free Trade Mother Country and our great Protectionist Colonies. What we do need to develop the trade of this country in our Colonies is to increase the efficiency of our commercial representation by commercial agents and by Consular services. When I was last in Canada I went to a place where they were putting down some big new pumping machinery with lines of pipes stretching out for a mile or two to bring along the necessary water supply. I asked them: "I thought you would have got your machinery, your pipes and your plant necessary for this great undertaking in England, which is going to take the whole of your produce." The reply, somewhat jokingly, of course, given was: "Why, we did not even know that you made these things in the Mother Country." What was the fact? That they had had the representatives of over twenty manufacturing firms of this class of goods from the United States calling to secure the order, whereas English manufacturers did not send a single representative! In regard to Canada, too, while other foreign nations, including the United States, have there a number of efficient commercial representatives, or Consuls, to send home to their various countries particulars of opportunities for doing business, we the Mother Country, more interested in doing business there than any of them, had neither any commercial agent, nor a single Cons[...]l representing the trade interests of this country.

6.0 P.M.

If we are to develop our trade with our Colonies let our commercial men at home send out a greater number of representatives to look after business. Let our Government develop and make more efficient our Consular Service and increase the number of commercial agencies representing the Mother Country in our self-governing Colonies. Those of us who stand by the Free Trade position in this country believe that what we need in order to combat the Protection fallacy and to save this country from the calamity of any return to a system of Protection is to be more decided and vigorous and active in extending British trade and promoting British commercial interests in the great free and neutral markets of the world.

Personally I am not content with our share of the trade and great commerce of China which has been secured by this country. I even complain of my right hon. Friend the Secretary of State for Foreign Affairs, inasmuch as that in my humble judgment we have allowed foreign nations to make their distinct arrangements and to make inroads upon British trade there. We made arrangements with Germany in which the Yangtsze Valley was to be considered an exclusive sphere of influence for this country in regard to railway construction. We made similar arrangements with Russia and with France, but unfortunately we see at the present moment that whereas we have undertaken no railway enterprise in the German sphere in China in the great province of Shantung, we find to-day that in the great Yangtsze Valley Railway Germany is to have one-fourth interest and is to supply one-fourth of the railway material, one-fourth of the line is with France, and the United States of America also comes in, and we, in that vast sphere of British influence, have only to have one-fourth of the construction of that railway which is to open up that great valley, the richest garden almost in the world.

I consider also that in the railway of Aigun our representations have hardly been strong enough in supporting British commercial undertakings, and that in that way we are losing ground in China. Our proportion of the trade and commerce of China is going down, but let Protectionists remember that in China we have an open market with all the nations of the world, that we have no duties against us that are not against every other nation entering this great and rich empire, Nith its 300,000,000 of people crying out for development, with any amount of resources, and we ought to be more fearless in obtaining a greater share of the trade. I went to Turkey last autumn, and I landed at Salonica, and saw there on the wharves great piles of steel joists and girders, and I saw the same at Constantinople. When I went and examined the marks on these joists and girders I found that they came from Belgium or Germany. I went to the Consuls at these ports, and I saw the English Consuls. I learned how it was that England, the friend of the Young Turks—the nation which is not only a fair field and no favour, which is all we ever claim, but has a fair field and every favour, because the Turks would rather do business with us than with any other nation in the world—was not doing better business in Turkey. Our Consuls told me that no one was sent out from England to look after this business which was open to them of supplying these joists and girders. The English Consuls are ready and wishful to assist and promote and to open up British trade in these commodities throughout Turkey. But what happened? I took the trouble to write to the manufacturers of steel joists and girders on the north-east coast and on the sea-board, and what did I find? We are supposed to have the finest mercantile marine in the world, and we ought, therefore, to be able to transport joists and girders from our seaboard to Salonica and Constantinople as well as any other nation. I found a British firm of steamship owners was in a shipping combine carrying out these steel joists and girders from Antwerp and Rotterdam for 7s. 6d. a ton, these goods, but they demanded 12s. 6d. for carrying British steel joists and girders to the same places. In fact the shipping trust ought to be smashed for they are smashing British trade and commerce, and I think it is a disgrace to British shipowners that they should hamper British trade. In this open market of Turkey, without any hostile tariff against us whatsoever, we do literally nothing in regard to finding new openings for British trade and commerce.

In regard to India we certainly hold our own, and if we hold our own in India today, where we give other nations an equal opportunity of competing upon equal terms, what can there be so wrong in the conditions of British trade and commerce? The fact is that what we need is not only that our manufacturers shall wake up and be as active in China and India in pushing their trade interests as the Germans and other great competitors are, but the necessity of increasing enormously our British Consular Service, and especially that we should cease to employ at so many places abroad foreign Consuls. To my mind it is the greatest absurdity in the world that in foreign ports the Consuls of this country should be foreigners, who are naturally much more interested in the trade and commerce of their own country than in promoting the trade and commerce of our country. Our expenditure on the Consular service is a mere bagatelle, and if we increased that expenditure tenfold I believe it would be the best spent money that we could put into the annual Budget of this country. I hope the House of Commons will realise that a Protection system, instead of advancing our trade and commerce, would enormously hinder it. If I believed that a return to Protection would really advance the interests of this country I would be the first to advocate it, but it is because I am profoundly convinced that, whether it be the iron and steel trade or the coal trade, we have much more to lose than we should gain by any system of import duties upon goods coming into this country. It could only have the effect of raising the prices and reducing the consumption, and if the consumption is reduced the quantity manufactured would be reduced and unemployment would be increased. The Debate so far has been entirely on Colonial Preference, but the aspects of Colonial Preference with which I have attempted to deal are such as must be realised by commercial men as worthy of the closest attention. Some action ought to be taken both to increase our commercial representatives abroad and to waken up British manufactures and to induce our Government to take some stronger line without being unduly aggressive in the maintenance of British commercial interests in every part of the world. To listen to some of the hon. Gentlemen opposite one would imagine that the trade and commerce of this country was going to the dogs. I believe, taking the imports and exports, the trade of this country within the first half of this year has shown that we enjoy an absolute record, and that we had a bigger oversea trade than in any six months in the history of our country before. Therefore I say it is idle for hon. Gentlemen opposite to say that this industry is ruined and going away, and that other industries are going. I had a most extraordinary experience at the last General Election——

Mr. SPEAKER

That does not now arise. The only aspect of the question we are now discussing is Colonial Preference.

Sir JOSEPH WALTON

I apologise, Mr. Speaker. It was my ignorance. I was under the impression that upon the Appropriation Bill practically everything affecting British trade and commerce could be discussed. I submit to your ruling at once, and I only say that on the question of Colonial Preference I hope His Majesty's Government will stand in stout opposition to it, as they always have done, believing, as I do, that any attempt to make arrangements in that connection will be injurious to British trade and to the trade of our Colonies, and will be against the best interests of the Empire.

Mr. CHAPLIN

As I have been one of the pioneers for a great number of years of the movement in favour of Tariff Reform and Colonial Preference, and as I have also been challenged upon one point this afternoon by the Prime Minister, perhaps I may be allowed to interpose for a few moments. I think the non possumus speech of the Prime Minister this afternoon with regard to the possibility of establishing a policy of Colonial Preference between ourselves and our Colonies will be heard with the same universal regret by every one of those Colonies as I am certain it was by hon. Gentlemen who sit upon this side of the House. My right hon. Friend the Leader of the Opposition stated the case on behalf of Colonial Preference in a manner that could not be excelled, and he also called attention to what almost everyone must recognise, namely, the critical position in which that policy stands at the present moment in the eyes of those who desire to see it carried into effect. I will not dwell upon that part of the question for a single moment, but what I should like to impress upon the House is that one of our reasons for pressing this question—which has not been alluded to at all so far as I know up to the present—is what I should describe as the chronic curse of unemployment, which unhappily prevails at the present time in the United Kingdom, and has prevailed more or less for years in a greater degree than in any other great country in the world like our own. What is the meaning of the statement, so often alluded to which was made by the late Prime Minister that in this, which is still, I suppose, one of the greatest and richest countries in the world, it should be possible for a gentleman in his position to tell us that one-third of our population is constantly underfed and on the verge of hunger? One of the reasons for this state of things is to be found in the fact that in the great foreign markets, which we formerly enjoyed to any extent that we pleased, and which provided any amount of employment for the workers in this country, those markets year after year have become more and more closed to us in a variety of respects by hostile and sometimes by absolutely prohibitive tariffs. At the same time it must be obvious to everyone that if we are to remain a great and prosperous commercial country in the future, as we have been in the past, and if we really desire to see our workers in this country provided with the opportunity of constant and regular employment, as they [...]sed to be at one time. [An HON. MEMBER: "When?"] Does anybody deny that it would have been absolutely impossible at any other period to say, as the late Prime Minister said, that one-third of the whole of our population was suffering from want of employment, was underfed, and was always on the verge of hunger? [An HON. MEMBER: "He never said that."] When could that have been said? [An HON. MEMBER: "Before the repeal of the Corn Laws."] Yes, I know all about that. If hon. Members will read the Reports of Committee after Committee and Commission after Commission, all of which they can find in this House, they will see that the root of all those troubles and difficulties was the result of cash payments and currency troubles. You have only to walk into the Library and take the trouble to study those Reports in order to learn for yourselves what caused a greater degree of distress than has ever been known before until we arrived at the period when the Prime Minister told us a few years ago the real position of affairs as regards one-third of our whole population, and if we are to see any real and genuine improvement in that position it is certain that other markets must be found in order to replace those markets, a large portion of which we have undoubtedly lost. Where should we look for those markets except it be to our Colonies and to our own relations and kinsmen across the sea? They are willing, ready, and anxious, and have been for years to make arrangements with us by which our position could be enormously improved, and by which they could also derive great advantage from us. In his reply to my right hon. Friend I do not think the Prime Minister attempted to answer the greater part of his speech at all. The Prime Minister seems to think that he has satisfied all requirements by saying that the Colonies at the last Conference never expressed any desire that we should change our fiscal system in this country against our own will. Our Colonies have always been careful to avoid pressing upon us anything which they have reason to believe would be entirely opposed to our own views. At the same time they have made their views perfectly clear not only at the last Conference but at the one before that, and I am going to ask the Prime Minister to give rue his attention to a paragraph which is to be found in the Blue Book of that Conference, which I daresay a great many hon. Members of this House and perhaps many people outside have either forgotten or were never aware of.

The PRIME MINISTER

I was there.

Mr. CHAPLIN

In the pages of that Blue Book will be found what is called the Memorandum of the Canadian Ministers, and this is what they say:— If they could be assured that the Imperial Government would accept the principle of preferential trade generally, and particularly grant to the food products of Canada in the United Kingdom exemption from duties now levied or hereafter imposed, the Canadian Ministers would be prepared to go further into the subject and endeavour to give to the British manufacturer some increased advantage over his foreign competitors in the markets of Canada. There was as distinct and clear an offer as ever was made, and, remember, it was made at a time when the 1s. duty on corn was in force, they were already giving to us a preference of 25 per cent. over all other countries. "Yes," said the right hon. Gentleman, "but how are you going to get it? You are going to get it by British legislation which will be most injurious to the people of this country, inasmuch as it will make their food dearer." And then the right hon. Gentleman asked, "Are you going to put a duty on corn?" I thought it was known that that was to be part of the policy of Tariff Reform ever since its first introduction, as it is known to be the policy of Tariff Reform at the present time. But then the right hon. Gentleman said, "Is there to be a duty on Colonial corn?" The Prime Minister, I think, knows the answer to that question.

Mr. ASQUITH

I do not.

Mr. CHAPLIN

I read the announcement when I was in Egypt. There were two policies submitted originally to this country on this question.

Mr. ASQUITH

Only one originally.

Mr. CHAPLIN

That is so; I ought to have said until quite a recent period. There was the policy of the right hon. Gentleman the Member for West Birmingham, which was to impose a 2s. duty on foreign corn, while Colonial corn was to come in free. The Tariff Commission Report proposed to go a little bit further and have a 1s. duty on all corn to begin with, and an additional 1s. duty on foreign corn; and personally I am still inclined to believe that it was an improvement upon the original scheme. [HON. MEMBERS: "No."] But that policy was not approved of, and afterwards the policy of the party was announced by my right hon. Friend that the duty should be limited to foreign corn. The Prime Minister says, "If that is the case, where does the farmer come in?" I will tell the right hon. Gentleman. There were a great many other duties proposed by the Tariff Commission, and I understand they were accepted as the policy of the party. What is the objection to 2s. on foreign corn? The right hon. Gentleman says that it will raise the price of bread. Please remember that a duty on bread and a duty on corn is a very different thing. The right hon. Gentleman says such a duty will be injurious because it will increase the price of the food of the people. But would it? We have had a great deal of experience on that point, and if the Prime Minister will refer to the figures of the consumption of foreign and British grown corn in this country, he will find that the imports of foreign corn were at one time, and no doubt will become increasingly so in the future, less than one-half of the whole of our consumption. But a 2s. duty on the half is only the equivalent of a 1s. duty on the whole. The 1s. duty on corn never raised the price of bread by the fraction of a farthing. [HON. MEMBERS: "Yes, it did."] If I am contradicted on that point I shall have to give a calculation which will prove my statement to demonstration. Here is a calculation made by two eminent gentlemen, one connected with the Master Bakers' Society and the other a leading miller in this country. I had the calculation made on the flour, because hon. Members will recollect that when Sir Michael Hicks-Beach introduced his duty upon corn he introduced a corresponding duty on flour, and the duty on flour was rather higher in proportion, and to be absolutely on the safe side I had the calculation made on the flour. Here are the figures: The duty on the flour was 5d. a cwt. A sack of flour contains 2½ cwts., and therefore the duty upon a sack would be 12½d. Every sack of flour will produce between ninety-five and 100 loaves according to the quality of the flour, and if you divide 12½d. into 100 loaves it comes out at half a farthing per loaf. But that is not all. You must allow something for the cost of manufacture, which does not depend upon the price of wheat at all. As a matter of fact, it comes out at something less than half a farthing on the quartern loaf. It is well known that if a baker tries to raise the price of bread more than he ought to do in order to get more than a fair profit, competition in the baking trade is so keen that he would be undersold by his competitors at once. I am sure my calculation will bear examination, and it is only necessary to consult the statistics of the price of wheat and the price of bread during that time to see that it is so. I defy anyone to show that I am wrong when I state that as a matter of fact it was common knowledge, except during one by-election, that the price of bread never varied and was not increased in the slightest degree by the duty.

Mr. ASQUITH

That is like what happened in regard to beer.

Mr. CHAPLIN

I know nothing about what happened in regard to beer, but I do know this about corn: That during the by-election, which occurred very shortly after the 1s. duty was imposed upon corn, the price of the loaf was raised till the election was over—when it immediately fell to its former amount. Then the right hon. Gentleman says, "Where is the farmer coming in?" The farmer would come in in a variety of different ways. If I had my way I should like to see the produce of some of the duties devoted to the help and the assistance of the agricultural interests of the country. The Chancellor of the Exchequer himself has admitted the absolute necessity and the duty of the English Government to do something of this kind by his Development Bill, and I think something in that direction might be done by any Government which succeeded the Government of the right hon. Gentleman and was not afraid to deal with the question of Tariff Reform.

Let us look at the other side of the question for a moment. Supposing Parliament has the courage to impose this duty upon corn, what are you going to get in return for it? Why, that which Canada has told you, and what Canada said in effect, two Conferences ago, was this: "We have got now to buy £50,000,000 worth of goods every year which we cannot produce ourselves. If you will only give us this preference and this small advantage we do not say we will admit your manufactures free against our own—we do not propose to do anything of the kind—but with regard to all the goods we are obliged to buy from other countries we are ready and prepared to put such duties on all other foreign countries as will give you the control of our market." I wonder if hon. Members have ever really considered not only what would be the value of the Canadian market today, but what that market may be worth to the workers of this country at no distant date. There is no question that Canada is rapidly becoming one of the great future countries of the world. There is no doubt as to its resources and as to the almost illimitable extent of the finest wheat land the world has ever known or ever seen. On this point I am really talking about something I know from my own experience. Many years ago I made an expedition, leaving Oxford for the purpose, and travelled across the Far West, nearly to the Rocky Mountains, and taking, curiously enough, the very line of what is now the Canadian and Pacific Railway. That was the day when the prairies were peopled with millions and millions of buffaloes, and everybody acquainted with agriculture knows perfectly well that the test of rich land and of the value of land is the condition of the beasts which feed upon it, and we never killed a buffalo for food which had not three or four inches of fat. You ask any farmer or anyone who feeds beast in this country what is the value of land which will enable him to get them fit for the butcher without artificial food, and he will tell you that a field, or a close, as many of them call them, which will feed a beast is worth £5 an acre even in these days. That will give some idea of the richness and fertility of the soil in that vast region in the West, and will show you one of the great resources of Canada. The right hon. Gentleman himself has mentioned the illimitable forests, and so they are. There is any amount of timber. I suppose it is impossible to estimate the value of it. It is also the case with iron and with coal, much of which is far nearer to the surface than it is in this country, and quite recently we have been told of enormous discoveries of the precious metals.

Look how extraordinarily this country has changed even within my time, though I am not an absolute Methuselah, yet I can remember what is now the City of Winnipeg when I formed my camp there for my expedition. I arrived there in a canoe, which was the only means of progress open to me, and I found eight great wooden buildings and one stone house surrounded by a great wooden palisade. What is Winnipeg to-day? There are any number of railways to it, and any number of railways from it. It is a city of 130,000 or 140,000 inhabitants, I believe, and it is growing with the greatest rapidity. The whole of the country over which I travelled a thousand miles to the west is now growing corn. If all this change is possible in my time, what is not possible in the next fifteen or twenty years? I have often said, and I maintain, it is no exaggeration whatever to say that if Canada affords a market to the extent of £50,000,000 a year at present, there is no reason whatever that I know of why within the next fifteen or twenty years it might not be a market worth to our workers in this country £250,000,000 at least. All this we might have had at our disposal years ago if we had not been so inconceivably foolish as to reject their offers as we have done, and even yet the great part of it is still open to us. Nearly everyone admits that want of employment is the great curse of the country at the present time, and here we have a Prime Minister coming forward today and saying non possumus once more to all our Colonies with regard to Colonial Preference, and repeating, only in less offensive language, "The door is still banged, and barred and bolted against you."

Mr. GIBSON BOWLES

It is a very great pleasure to hear my right hon. Friend expounding the earnest convictions of a convinced Protectionist. He has truly said he has not arrived at the age of Methuselah. He seems to me to bear more the appearance of a young Lycidas. I believe he will not only approach the age of Methuselah, but will have to go beyond it before he sees this crazy plan of Tariff Reform carried into effect. The omens are not very favourable. Scotland is against you, Ireland is against you. [HON. MEMBERS: "No."] They have never voted for you. Wales is against you, and, as long as you are for taxing food, Lancashire and Yorkshire will always be against you. The right hon. Gentleman's personality is all the more interesting because he is an illustration of the old method of keeping parties together. The old method of keeping parties together which was adopted by Lord Salisbury and his predecessors was to have a definite policy and to welcome all those who could more or less adopt that policy, but yet to have toleration for individual convictions or even heresies. It was upon that ground that the right hon. Gentleman, with the late Mr. James Lowther, was tolerated. The Party was not then Protectionist, but these two eminent Protectionists were not only tolerated, but they received posts in the Government. That is altogether altered. Instead if a definite doctrine with toleration, the doctrine at present is indefinite, and no toleration is extended to those who will not swallow the whole of it. That has made a very great difference in the composition of this House, and will, I think, make a great difference in future Parliaments.

The right hon. Gentleman says there have been two policies of Tariff Reform. There have been many more than that. There was the Bacon and Maize Policy. That is abandoned. There was the what-you-will-lose-on-the-tea-you-will-gain-on-the-sugar Policy. That was abandoned. In fact, almost everything has either been abandoned or materially modified, the last modification having come from the right hon. Gentleman the Member for the City of London (Mr. Balfour). The fact is the policy becomes more uncertain the longer you go, and the party that professes Tariff Reform has had as many policies as the woman of Samaria had husbands. My right hon. Friend opposite advocates a shilling duty on corn, and he says that will hurt nobody but will benefit the farmer. He did not tell us exactly how it will benefit the farmer.

Mr. CHAPLIN

I did not say it would.

Mr. GIBSON BOWLES

He asked himself, "What will the farmer get out of it?" and what he replied was not what the farmer would get out of the duty on corn, but he suggested that when the duty on corn was imposed something in another way might be done for the farmer out of the revenue derived from it. He did not suggest any direct benefit would arise to the farmer from the duty, or from a preference to the Colonies, his suggestion, I presume, is that a further extension could be made to that system, under which the agricultural landlord now gets half of his rates paid for him by the taxpayers of this country at large——

Mr. CHAPLIN

I never referred to the question of rates, nor had I it in my mind. I thought I had made myself clear. Nobody ever supposed that the trifling duties proposed in themselves could restore the agricultural industry to its former prosperity if you were to utilise a certain amount of the aggregate sum of those duties for the credit, help, and assistance of the agricultural interest. That would be an agricultural policy which, I believe, would be of real advantage and help.

Mr. GIBSON BOWLES

The right hon. Gentleman has given a paraphrase of what I previously said, that it would be a dole of the character of the half-rates that are paid to agricultural landlords. What I wish to lay down is this: the right hon. Gentleman did not suggest there would be any direct advantage to the farmer from this duty on corn. He was content to look for the benefit to the farmer to indirect contributions from the general funds of the country, or from the proceeds, it may be, of the 1s. duty. But has he forgotten we have already tried the 1s. duty and that it was condemned as an injurious duty to the farmer by the right hon. Gentleman the Member for the City of London?

Mr. BALFOUR

No. I suppose the hon. Gentleman is referring to a speech I made during the Debate initiated by my right hon. Friend the Member for Wimbledon. I do not quite accept his version.

Mr. GIBSON BOWLES

Yes, I foresaw there might be some little doubt on the part of the right hon. Gentleman and so I have brought the extract of the speech. On 15th May, 1903, the right hon. Gentleman said:— I am the last person to minimise the fact that one of the hopes we entertained was that he had given some increased permanent breadth to the basis of our taxation and thereby lightened the task of future Chancellors of the Exchequer. But I think it is quite plain that those hopes were fallacious. I do not believe, in fact I cannot think that anyone present believes that this tax can be a permanent part of our fiscal system. And again in the same speech the right hon. Gentleman said:— The argument I felt most acutely was that this was not merely a trifling tax on corn, but a tax on the raw material which farmers use in their industry. That point was very anxiously considered in the Cabinet and it gave us very serious pause. The facts have turned out I am afraid precisely as might have been anticipated, but it has turned out that in fact the tax has operated as a great burden on the raw material used by the farmer. I suggest, therefore, that the 1s. duty has been already tried, and found not to be to the advantage of the farmer. It operated as a tax on the raw material of his business. It turned out, in fact, a great burden on the raw material used by the farmer. I will leave for a moment the question of the advantage to be derived directly by the fanner, and come to the question of Colonial Preference in general. An hon. Member who spoke earlier in this Debate said Colonial Preference was a mustard seed which we should plant, and that it would grow into a, great tree in time. Yes, but the mustard in it is a tax on food, and that is why I for one cannot entertain any project of Colonial Preference. We know without a tax on food you can have no Colonial Preference. That is common ground, and it is the reason I am against it. Indeed, I look back with some pride to the fact that I was, I believe, the first person in this House to use the term "free food." It was immediately after the right hon. Gentleman the Member for West Birmingham began his campaign. Free food is a citadel from which, unless you can expel us—even though you take all the outworks—you will never get a Protective system. You will never get it as long as we can keep free food, and that is why we apply ourselves to that rather than to Free Trade. Free Trade, I admit, is, perhaps, a term open to objection, or, rather, to cavil, because Free Trade—absolutely Free Trade—is a pious opinion; it is the doctrine of perfection; it is not free so long as you have high expenses and Chancellors of the Exchequer, but it is as near free as may be. It is freer here than in any other country in the world. It is our own system which we have adopted since 1846, which I designate as Free Trade, free enough for me, and quite free enough as long as you keep your food free. The doctrine of Tariff Reform is a new one—the old original feudal doctrine of Protection professed by the right hon. Gentlemen the Member for Wimbledon was frank and open. It avowed its object, but this Birmingham doctrine grafted on to it, the doctrine of Colonial Preference plus Protection is an entirely new doctrine. It is not the feudal doctrine of landlord and tenant standing together, the protection given to one—not only personal protection but fiscal protection—being extended to the other, it is an entirely new doctrine. It is the doctrine of the application of the principles of retail trade to the policy of a great Empire. The doctrine is: "If you will give something you will get something back." It is a kind of cross-commission You are to allow the Colonists something, and they are to allow you something. The right hon. Gentleman has drawn a glowing picture of the growing riches of Canada. I entirely agree with him. I agree that those riches are destined to increase; but the present position of Canada has been attained without any preference from this country. It has been gained under the principles of Free Trade. [CRIES of "No."] It has been mainly achieved since we withdrew from Canada the slight remnant of preference we once extended to her—a preference on wood, to which the Canadians themselves strongly objected, because, they said, it was calculated to keep Canada a lumber country, whereas she desired to become a manufacturing country. All this increased progress in Canada has been achieved, not through preference, but inspite of its absence. The last rag of preference was abandoned in 1860, and, therefore, as far as the prosperity of Canada goes, this argument tends, not in favour of the right hon. Gentleman's contention, but against it. The right hon. Gentleman must have forgotten what one of his former leaders said, and I propose to quote the words, because they should, in my opinion, be graven on the lintels of every Tory door. That great statesman, Lord Salisbury, in 1887, at Derby, said:— My belief is that Protection means nothing else but civil war. Those who are interested in the land desire it, and those who are not interested in the land would repel it; and those who are not interested in the land are much more numerous than those who are interested in it. Some of the most remarkable utterances ever made are those which have been made by the right hon. Gentleman the Member for the City of London. I have already quoted one in which he recognised that even a shilling duty would constitute a serious burden on the raw material of the farmer. He has made some progress since. He has become converted to the idea that there should be some duty on corn, and he believes it would be paid by the foreigners. He believes something still more marvellous, for, speaking at York, on 12th January, 1910, he said:— It is nonsense to say that when the other country comes to its senses and sees that its open markets are being abused and in consequence of that conviction puts on duties, the whole or part of these duties will not in many cases be paid by the foreigner. They will be paid by the foreigner, and I do not believe that any competent economist will deny the truth of what I say. Well, I, as an incompetent economist, do flatly deny it. Then, said the right hon. Gentleman:— I believe that a small duty on corn, with a preference to the Colonies, would tend to diminish rather than increase the cost of bread. If that is so it would be a pity to stop at bread. Are you going to diminish the cost of everything by putting a small duty upon it? That, I take it, is the right hon. Gentleman's doctrine.

Mr. BALFOUR

It is not my doctrine.

Mr. GIBSON BOWLES

The words of the right hon. Gentleman are these: "I believe that a small duty on corn, with a preference for the Colonies, would tend to diminish rather than increase the cost of bread." Would it not equally tend to diminish the cost of wool or of any other raw material if you put this small duty on it, or is it the smallness of the duty the right hon. Gentleman has in his mind as tending to decrease rather than to increase the cost? If it is that, then if you make the duties still smaller prices will be still further reduced, and if you make the duty nothing at all you will get your raw material for nothing at all. I think, however, I know what was in the right hon. Gentleman's mind. I think he meant if you were to stimulate the growth of corn in the Colonies you might in the end by this preference system cause them to grow such an enormous amount of corn that they could afford to sell it to you much cheaper, and thus bring down the price of bread. If that be his view, surely every encouragement you give to the growth of corn in the Colonies is pro tanto a discouragement of the growth of corn in other countries, and, therefore, while you may get more corn from your Colonies, you may get less from other countries. That is a rather serious matter. Our great advantage now with regard to corn is that when one great corn-growing country fails another country comes to the rescue. If Russia ceases her supply in one winter you can get the corn from Argentina, and if Argentina fails India comes to the front, while if India fails then Canada sends supplies. There is too great a likelihood, I fear, of a very bad crop this year both in the United States and Canada, but there are excellent prospects of a good crop in India, and if it be true that you would encourage the growth of corn in your Colonies by a system of preference, and if, as I think it necessarily follows to that extent, you discourage its growth elsewhere, the effect will be to limit the number of your markets and to diminish the prospects of the deficiency in one market being made up by an abundance in another. Therefore I do not think that that is a very sound argument.

7.0 P.M.

At any rate, I am myself convinced that a duty, even a small duty, so far as it has any effect, must have the effect of raising the price of the article on which it is put. What is to be your real system of Colonial Preference? It was originally to involve the reduction of the duties on tea, sugar, and tobacco. This particular system of Tariff Reform is all one, and the cornerstone is that Colonial Preference which we are only to arrive at by a tax on corn. Do you still propose to diminish the duties on tea, sugar, and tobacco? Do you still propose that there shall be no tax on raw materials? I believe there is to be a tax on bacon and maize, because my right hon. Friend the Member for Wimbledon (Mr. Chaplin) has rejected the proposed exception of them. There is one other thing I should like to allude to. The right hon. Gentleman the Member for the City of London (Mr. Balfour), speaking at Hanley, I think it was, said two things. He said that if you consult any statesman you like among the representatives of the smaller Powers, they will all tell you with one accord that there is certainly going to be a conflict between this country and Germany; that they are of opinion that in that conflict we shall be worsted; and in that very same speech he told us that Germany would not allow us to have Tariff Reform.

Mr. BALFOUR

I said that Germany would not allow us to have Tariff Reform?

Mr. GIBSON BOWLES

Yes, certainly, that is what the right hon. Gentleman said.

Mr. BALFOUR

Did I ever suggest that Germany was going to war with us on the question of Tariff Reform?

Mr. GIBSON BOWLES

No, the right hon. Gentleman did not say that, he only suggested it by the concatenation of the two statements, and in that way he certainly did suggest it. He certainly did suggest that there was a struggle imminent between this country and Germany, and that Germany would not allow us to have Tariff Reform because it would injure her, and the suggestion of those statements was that the system of Tariff Reform would bring about war with Germany in which we should be worsted. That is my version of the right hon. Gentleman's speech.

Mr. BALFOUR

I do not admit it.

Mr. GIBSON BOWLES

I will send for the speech to-morrow, and I have quoted it in this House before. I do look upon this as the last dying groan of this financial heresy. Do hon. Members, especially those of them who were in the last Parliament, remember that this was the cause of their losing two-thirds of the Conservative party? Do they remember that those Benches were positively empty at the first election after Tariff Reform was put forward? They may have improved their position now, and for my part I am glad to see it, because I do think that an Opposition should be strong. I think no Government is good enough to do without the criticism of a strong Opposition opposing them, and my own regret is that the Opposition from the public point of view is not stronger, more capable, and more united. But the adoption of this heresy has been the ruin of the party which has adopted it. Their continuance of this adoption will reduce its numbers even below the point at which they now are, and I venture to say that so long as you have as a principal point of policy the imposition of taxes on the food of your fellow citizens so long will you be kept out of the seats of power which lie on this side of the House.

Mr. MACMASTER

The last speaker, who is always listened to with attention by the House, closed his remarks with reference to the evils of taxes on food, and made some strictures on my Friends on this side of the House by reason of their proposals with regard to flour and wheat. It is only a few evenings ago since I heard an hon. Gentleman on the opposite side of the House state that there was a sum of £10,000,000 sterling imposed now which was in the nature of taxation on food, and he said with great frankness to his friends that if they wished to carry the war into this side of the House they should first clear themselves of the reproach which existed against them in regard to taxation on food before they denounced the Opposition for their intentions in this matter. I have heard good deal in this Debate about Canada and its relationship to the subjects which are under consideration. Having lived there myself the greater part of my life, and having been a member of two legislative bodies in that country, I may, perhaps, humbly pretend to know something of what has happened there. I do not pretend to know everything about it, but I do pretend to have some knowledge and experience of what has gone on in that country in the last twenty-five years. Certain observations have been made here with reference to the general principles of Free Trade and Protection, and the Debate has taken a very wide range. I would like to call attention of the House to a fact which is within my own experience. It has been stated here that Canada is prosperous owing to her great natural resources, and to a certain extent that is true. It has also been said here that Canada has prospered under Free Trade in the past. That certainly is not true, nor is it by any means true to any considerable extent that it is by reason of the natural resources of Canada that her great prosperity of to-day prevails. These same resources existed twenty-five or thirty years ago, and they lay dormant in the country—unutilised. I can remember twenty-five or thirty years ago that Canada was in the most wretched conditicn—the people were fleeing from the country, there was little employment, the American competition had destroyed the industries, and the only refuge was for the people to leave the country and go to the United States, where they became hewers of wood and drawers of water, unless they could acquire some little property in land. The country was in a desperate condition. At that time there was a very low tariff in Canada.

A great statesman arose whose name has been mentioned this evening—Sir John Macdonald, a Free Trader out and out, and Scotch by birth. He took into consideration the condition of the country, and he came to the conclusion that it required a tariff in order to stimulate employment. He therefore adopted what is called the National policy, which is primarily the imposition of a much greater tariff than existed at that day—namely an increase of the tariff from 15 to 25 or 30 per cent. At the very outset the same criticisms were made in regard to that proposal that have been made in this House. It was said that it would ruin the country, and would not create prosperity, and some went so far as to say that to raise payments from the country by means of a tariff would be nothing less than legalised robbery. Those were the observations and criticisms made upon it. The plan was, however, submitted to the people of the country, and the hopelessness of the existing condition was taken into account and considered relatively to the prosperity which prevailed in the United States under Protection, in comparison with the poverty in Canada. The people decided to give the policy proposed a trial, and they returned Sir John Macdonald to power with a large majority. People said he would never propose a tariff, but he did, and the results were not immediate. Everybody knows that in a case of this kind time must be allowed to get the results. The great corn does not come from the seed immediately, and that has been shown in this case. But in a very short time the good results of the tariff became obvious. People began to invest their money in industrial pursuits, because a country cannot live by agriculture alone, and that great exodus of the people from the country which had prevailed for many years before was arrested. People remained at home to a large extent, and after a while, when conditions of prosperity prevailed, the people who had left the country commenced to return and seek homes in their own country.

That was the commencement of the restoration of prosperity in Canada. I can remember very well myself when I was at school the discussions which took place among the young men and the boys there as to the practical problem before them, and I say it with all seriousness in this House that the young man of my day, when I was comparatively a boy and approaching to manhood, had to face the very question of subsistence. Every man must do something in a new country, and the real problem was the problem of life before us. What were we to do for the maintenance of ordinary life? That was the problem before us. We should either have to leave the country or face great difficulties, and the prevention of the exodus of the great mass of the people from that country was brought about by the fiscal policy which is known as the national policy. I do not pretend to say that exactly the same results would take place here. I wish to state that in fairness and honesty, but what I want to do is to point out what was the condition there, and what was the condition that supervened. Surely, at all events if you can only look at it from an impartial point of view it cannot be said that the adoption of a protective policy in that country was followed by the disastrous results which are so often prophesied in this country. What happened in the lapse of time? Fourteen or fifteen years after this the Government of the day which introduced this policy went out of power. Their opponents who had condemned their policy in opposition all along, and said that when they came into power they would abolish the last shreds of it, what did they do? When they came into power, far from abolishing the policy which restored prosperity to the country and gave employment to the people, the party that had condemned it absolutely adopted it, and continued it in force, and they have continued it since they came into power during the last twelve or thirteen years; and now the Finance Minister of the country in his Budget speech of the year before last said that the people of the country were all, as far as the tariff was concerned, Proctectionists, and it was the settled policy of the country. So much for the experience of that one country.

In regard to the question of the preference that was given by Canada to this country in 1896, and subsequently until it got to amount to a preference of about 33 1–3 per cent., it is within the knowledge of all that when that preference was given the German Government in order to punish Canada for having favoured the Mother Country denied her the most-favoured-nation treatment, and applied their highest tariff to Canada, whilst they extended a much lower tariff to the Mother country and the other Colonies. Canada in return imposed a surtax equal to about 33⅓ per cent., and that condition of things operated until about six or eight months ago, perhaps less. That preference gave a great advantage to those in this country who sent exports of any kind in the Canadian market, and the imposition of the surtax had an additional effect in that direction, because the Germans were becoming, after the Americans, the most formidable competitors in the Canadian markets with British exporters. Immediately after the imposition of the surtax by Canada the German importation commenced to decline, and a very considerable arrest took place in the importations from the United States on account of the Preference. The result of both the Preference and the surtax on the part of Canada was that British trade, which had been going down in Canada before 1896, while American and German trade was going up, immediately took an upward turn and continued to rise, outpacing the German trade completely, and holding its own fairly well with the American trade. Of course, it could not absolutely hold the field against the American trade, because, owing to the proximity of the two countries and the means of communication from one to the other, the American trade still held up fairly well. The 6 per cent. to which the Prime Minister referred must have been calculated with reference to the time when the German surtax was in operation. But I would ask the Prime Minister to wait and see and to make a calculation a year or two years from now, and I will prophesy that he will see a rapid increase in the German trade with Canada which will materially change the percentage he gave us to-day.

There is one other point to which I wish to call attention. Canada made a treaty with France. Our Plenipotentiary, able and excellent Ambassador as he is, was only a bystander, and his instructions were practically to give effect to whatever the Canadian Minister arranged. The Canadian Minister made the treaty, and after a great deal of difficulty it was ultimately, with some modifications, confirmed in the Canadian Parliament and the French Legislature. It had hardly taken its place on the Statute Book when the Americans bestirred themselves in order to get the same advantages for themselves that the Canadians had granted to tile French, and which incidentally had been granted to some other nations. The Americans have two tariffs—one which they apply to nations which they consider discriminate unfairly against them and the other to nations which do not. The very moment that Canada gave this preference to France the Americans came down upon them with their big revolver—their maximum tariff—and they said to Canada, "Unless you will make a reduction in your tariff equal to what you have given to France we will apply our maximum tariff to you." If they applied their maximum tariff to Canada it would have a very serious effect on Canadian trade and Canadian employment. Consequently it became necessary for the Canadian Government to deal very warily with the proposition. Conferences took place, and the net result of what happened was that the Americans, without making a single concession whatever to Canada, secured a reduction of duties on thirteen groups of articles of Canadian importation, so that the net result of what happened was that all the advantage went to the Americans and all the disadvantage to the Canadians and also to the Britishers in respect of those products which are exported from this country, and which go into the Canadian market, and which come into contact there with articles exported from the United States. I mention that to show that there are times when it is an advantage to have a tariff, and the United States, by reason of the compelling force of a tariff, has given a practical demonstration of how to abstract an advantage from a neighbouring nation. With that example before us, is it possible to deny that as regards those countries which impose such heavy taxation against this country in the nature of tariffs which interfere with the exportation of our products to their market, while we admit their products free, if we had the power to impose tariffs, if not as a permanent creation on the Statute Book, at all events as a delegated power to the Government of the day, we might be in a position to say to certain foreign nations, "If you do not deal more reasonably with us we will put on a tariff, and you will suffer a very great disadvantage"?

Mr. GIBSON BOWLES

Does the hon. Member suggest that a Minister should do that without the authority of Parliament?

Mr. MACMASTER

Such a thing would not be a legislative anomaly. It exists in certain Legislatures to-day. There is an express provision in that country which has been so much admired to-day—Canada, in the Customs Act—that the Executive of the day shall have the power to impose increased duties in respect of dumping into that country.

Mr. GIBSON BOWLES

Do I understand the hon. Member really suggests that it would be for a Minister——

Mr. SPEAKER

I stopped the hon. Member (Mr. Macmaster) when he interrupted the hon. Member.

Mr. MACMASTER

The line of my argument was that where a foreign nation by reason of a statutory enactment of its own imposes a heavy duty upon exports from this country, which is immensely to the disadvantage of the trade of this country, as has been admitted all round, if we had an enactment from our Legislature which would enable the Government of the day to say to that country, "If you do not take down a portion of your duty we will impose the duties that we have the power to impose," it would be a very great advantage, and the absence of that power is a corresponding disadvantage. I wish to make a few remarks about the country generally. Though born in Canada, I am of British stock, and knowing the country well I have not quite got the fears of its being absorbed by the United States which have been expressed to-day. I think there is in Canada a firm determination, with your good co-operation I trust, to set up a great, strong, powerful nation in the North American Continent, and I believe that feeling is deep-seated in the hearts of the people, and not only those of British but those of French origin, who have been so fairly treated in Canada and in this country when they have conic here for the judicial decisions of the Privy Council.

I believe the roads running east and west throughout Canada and connecting the manufacturing districts of the east with the great producing districts, the lumber country and the mining country of the west, are so well constructed now, and prospectively will be so much better constructed, that there will be no danger of this lateral pressure. But the surest guarantee against lateral pressure, if there is any prospect of it, and I do not deny entirely that there is some, is to lend all the encouragement we can, by a reasonable preference, if possible, to the settlement of these great outlying plains to which the right hon. Gentleman (Mr. Chaplin) referred. It is only a few days ago that I heard Lord Strathcona say that in fifty years there might he fifty millions of people settled on Canadian land. I think it is a reasonable prospect. I have seen its growth and its increased prosperity. Then should we not in time, while it is not too late, direct our intellects and our energies to see if possibly we cannot bring about better trade conditions with our Colonies which will confer mutual benefits on the Mother Country with these young and growing communities, which are ultimately bound to be great nations, with large markets? Should not we in time, and before too many treaties are made with foreign countries—the United States, France, Belgium, and Italy—take time by the forelock and endeavour to see that a proper foundation of political and states-manlike cement is made which will for ever guarantee to us that there shall be no separation between the Colonies and the Mother Country, no matter what inducement may be held out by foreign nations?

Colonel SEELY

The Government has been attacked to-day by the Leader of the Opposition on three grounds, and he especially attacked the Department which I represent. We shall all agree with much that the hon. Member (Mr. Macmaster) said. We can all agree that we hope the day when there shall he any separation between this country and the Colonies will be a distant day. I shall endeavour to- show that, in the judgment of all on this side, the best way to avoid separation is to avoid taking the advice of the right hon. Gentleman opposite. The right hon. Gentleman has told us that we are running a grave danger by not adopting a policy of preference with the Colonies, of several disasters following. First of all he told us that we are flouting the opinions of the statesmen in the Colonies, and, secondly, he told us that, as a consequence of our refusing to adopt this system of preference, the Colonies are driven into making treaties with foreign countries, and, as he put it, that is very near to independence. He quoted Lord Ripon's despatch, and he went on generally to point out that it will be to the interests of this country and the Colonies that we shall adopt a system of preference. To take the first two points, is there a vestige of foundation for the statement that by refusing to adopt a policy of preference we are flouting the wishes of the statesmen of the self-governing Dominions? He told us that all the statesmen of the Colonies speak with one voice, and the Mother Country alone stands in the way. Do they speak with one voice?

Mr. BALFOUR

I did not say they did.

Colonel SEELY

The right hon. Gentleman is very particular about words. I maintain that the words he used bear that interpretation, for he endeavoured to show, to the delight of his followers, that this was a system which would be very good for the Dominions and very good for us. They cheered that. He said that all Colonial statesmen were in favour of prefernce, and that we alone flouted it and stood in the way.

Mr. BALFOUR

"Flouting" carries with it some idea of being contemptuous. I never suggested that. All I said was that they took one view, and that we stopped the way.

Colonel SEELY

We are glad at least to have it admitted that there was no contemptuous rejection of preference, but it was stated on the other side that there was contemptuous rejection. You cannot have it both ways. The statement that we have contemptuously rejected these proposals either is or is not true. If it is not true, then at least we may claim that we rejected them with civility; but if it is true, what I have ventured to put forward as to what the right hon. Gentleman said is true.

Mr. BALFOUR indicated dissent.

Colonel SEELY

Then we will put it at once that we have stood in the way of a great and a desirable reform, which is endorsed by all the statesmen of the Colonies, who speak with one voice. But they do not speak with one voice. Quite the contrary. One of them speaks emphatically with one voice, but the others speak with very different voices. I will quote what two of them have said, and these not the least distinguished of Colonial statesmen. Sir Wilfrid Laurier said:— This is a matter which is altogether in the hands [...] the British people, and they have to choose between one thing and the other; and if they think on the whole that their interests are better served by adhering to their present system than by yielding ever so little, it is a matter for the British electorate.

Mr. MACMASTER

Did he not also say that his Government would be ready to make concession for concession?

Colonel SEELY

Of course he did, and that is why this discussion arose. The electorate has spoken, and it has rejected the policy of preference. It has rejected it twice, and when we as the Government have rejected it, we are following out the advice given by Sir Wilfrid Laurier; but there is a stronger statement still by Sir Joseph Ward. The Leader of the Opposition said the Colonial statesmen spoke with one voice.

Mr. BALFOUR indicated dissent.

Colonel SEELY

The right hon. Gentleman went perilously near saying so. It is not sufficiently well known that the Colonial statesmen did protest against the view that they were trying to force the policy of preference upon us. No Colonial statesman would affect that by refusing to adopt the policy of preference, we are running the risk of offending the Colonies, and that if we do not draw closer together by this method, we must go farther apart. Any such suggestion is really destitute of foundation. Sir Joseph Ward said:— I should like to say that if I were a public man resident in England, and with the general knowledge of economic conditions that I possess at the moment, I should be found on the side of those who are fighting for cheap food for the masses of the people. I believe that anything in the way of preference that the Colonies might suggest, if it were calculated to raise the price of food to the masses of the people, ought to be opposed, and rightly so, by the British people. I think we may conclude from these quotations that any suggestion that we are running the danger of offending the self-governing Dominions by refusing to adopt the policy of preference is without foundation.

Mr. BALFOUR

I never said so, and I never suggested it.

Colonel SEELY

If the right hon. Gentleman did not say so his followers have said it again and again, and it is for that reason we have been told that unless we adopt this policy the Dominions will drift apart. [Cheers.] It will be observed that that statement is cheered. But why should it be so if in point of fact the Prime Ministers of these great Dominions urge us to folow the advice of the electorate, and we are only following the advice which they themselves have given? What is wrong in that? What the right hon. Gentleman has got to do is to criticise the electors of this country for having by an overwhelming majority stuck to the principle which for so many years he held dear and which he so very recently abandoned. I very well remember a speech which the right hon. Gentleman made just before the fiscal controversy assumed its height under the advocacy of the right hon. Gentleman the Member for West Birmingham (Mr. J. Chamberlain). It was to a speech he made to a meeting in Lancashire, and which was described by one of the greatest economists of the day as the pure milk of Free Trade. There was no speech which he apparently delivered with greater conviction. He will remember it was the speech in which he said that if by some stroke of a fairy wand you could increase the riches of one country and the riches of another, and so on. The right hon. Gentleman spoke with a zeal and energy which I am sure he could not have shown unless he believed in it most earnestly. I think he has forgotten that fine speech.

Mr. BALFOUR

There are some amazing opinions being attributed to me. The right hon. Gentleman has not given a very accurate account of the speech I delivered this afternoon, and I do not admit his interpretation of the speech I made ten years ago. Can he quote one word I ever said indicating that I disliked Colonial Preference?

Colonel SEELY

I never said that the right hon. Gentleman disliked Colonial Preference. I said he had great admiration for the principle of Free Trade, and I say so again. He had. At any rate, the right hon. Gentleman has committed himself, and I presume his followers, to a tax upon corn. That at least he will not deny. I do not think it has ever been stated in so set terms before. However, there it is. Here a technical point arises, which I shall leave my right hon. Friend the Foreign Secretary to deal with himself. The point raised by the right hon. Gentleman is that if we stick to our Free Trade system while the Dominions stick to a Protectionist system, as a consequence they will be forced to make their own commercial negotiations with other countries culminating in commercial treaties. But it is said that treaty-making power is a right of the Sovereign Power, and that in so far as you allow the Dominions to make commercial treaties, they are asserting a measure of independence which, in the view of the right hon. Gentleman, is undesirable.

Mr. BALFOUR

I say that it is desirable and necessary.

Colonel SEELY

What, that treaty should be made by the Colonies? The right hon. Gentleman quoted from a Blue Book——

Mr. BALFOUR

I do not think the right hon. Gentleman has listened to a word I said. I repeated over and over again with the utmost emphasis I could use that I thought the doctrine stated by Lord Ripon fourteen years ago was inapplicable, and that no statesman on either side of the House would ever think of acting on it.

Colonel SEELY

I am in the recollection of the House, and I make bold to say that the version of his speech which the [...]ight hon. Gentleman has given is a novel one. I know perfectly well that the right hon. Gentleman does not wish to deceive anyone. No one who knows him would for a moment suggest that he would deceive. That is inconceivable. I listened carefully to every word he said, and I understood him to make the criticism that by allowing treaties to be made by the Dominions we were running the certain risk of disseverance. What is the objection?

Mr. BALFOUR

The objection is exactly this. The Colonies in their present adult stage must have treaty-making power. If that treaty-making power is exercised by them while we hold aloof from all commercial relations, then the two things taken in combination do tend towards separation rather than to uniting the Empire.

Colonel SEELY

I confess that I am more puzzled than ever. If it be a fact that there is no harm at all, and no disseverance involved in the treaty-making power being exercised by the Dominions irrespective of this country, what is the harm of our remaining a Free Trade country and the Dominions continuing Protectionist countries? How far is disseverance likely to take place? If the problem be examined I think it will be seen that there is no element of danger unless that element is the danger that we are not brought into the treaty. Where is the danger? If you wish the Colonies to make such fiscal arrangements as they please with other nations without interference, and if you do not wish us to interfere, what difference does it make that we do not adopt the same fiscal arrangements as they adopt? I am puzzled to know the right hon. Gentleman's position, because, looking around, I do not see the signs of those dangers which he fears. There is a certain tone of dolefulness and melancholy as to the future which the right hon. Gentleman now begins to adopt, following the example of some distinguished persons. I suppose, in the future, unless we do something quite different from what we are now doing, there is every sign that the Empire will fall to pieces. Now is the appointed day. Yes, we definitely decided many years ago—it may be as long ago as 1860—to abandon the system of Colonial Preference, though for one brief moment during the fair trade propaganda, it was again before the country as a proposition. It was decisively rejected by the people of this country, and I for one have seen no signs of our dying. Up to the present moment is there any sign of the dying either of our own industries or the industries of the Dominions, or, still more, is there any sign of that disseverance of which some profess to see a danger in the making of these treaties? As a matter of fact, the treaties have been made for a long time past, and during all these years the Colonies have stuck to one fiscal system and we to another. Surely the signs of disseverance would by this time have begun to appear, but exactly the opposite is true.

For the first time we have signs of a keen, almost a passionate desire to do something of a practical character in the matter of naval defence. I do not wish to say that the great Dominions all along were not keen to assist. They were, but they are more keen now, and they have now taken practical steps to help us. It is a strange sign of the dangers of having Free Trade at the heart of the Empire and other systems of finance at its extremities, that those very extremities should for the first time join with us not only in naval defence but in military defence, coming here and discussing and pressing the matter forward on their own initiative. There is not a word of truth in the suggestion that if we do not do something different in our fiscal arrangements the Empire is in danger. I trust that that aspect of the case will not often be put forward seriously in this House again. Viewed from whatever point you look at it, I venture to say, and I defy contradiction, that the close bonds which unite us with the Dominions across the seas have drawn closer during every year that has passed for at least the past ten or fifteen years. The desire to help us has been shown to be greater, and the determination not to allow disseverance to occur is more largely in evidence to-day than in past times. Then why not let the system alone as it works so well? We have heard a great deal on the other side of the advantage of a system of Colonial Preference. It is said that if you adopt this system of preference you will have a market for the manufactures of this country. It is said that you will encourage the growth of food in the Empire, and that it will be better for us—whether in peace or war I do not know, and hon. Gentlemen opposite do not make it clear which they mean—but whether here or in the Dominions, I should have thought as far as that went, that there was a great element of risk in having all your eggs in one basket either in peace or in war. But that has been said to be an advantage.

What are the dangers? There is an element of danger in the Dominions them-selves to which reference has been made earlier in the Debate, in the case where certain bodies of manufacturers are exceedingly angry because a protected system proposed would leave them out. You would have undoubtedly a great deal of bickering in the Dominions at any tariff arrangement made, which could not possibly benefit everybody, at least everybody except the devoted Tariff Reformer. I think everyone will admit that proposition. There is another great danger which I do not think is sufficiently dwelt on. It is said that by this system you will greatly stimulate the growing of corn. We are asked to observe the vision of the great North-West filled up with prosperous British and Canadian farmers. What will be the result at any time, if it should happen in the future as it has done in the past, when these particular countries with which we are joined would have a very short crop? I think it will be admitted it would be a great grievance to raise the price here, because we should be debarred, as far as the preference applied, from obtaining our corn from other places. That has ben used as an argument with regard to the dangers here. But I think there would be a great danger there also. It is quite true that if in consequence of any preferential system you raised the price of corn in a time of scarcity every poor man would hate the name of Empire. That is a great danger not only here but for the Colonies also, for just at the moment that the shortage of corn tended to increase the price in would come the Chancellor of the Exchequer here in answer to popular clamour, which he could not resist, and remove the preferential duty, and let the foreign corn in free. That would be just at the moment when the Canadian farmer wanted it most of all himself. He would have a very short crop. He would have very little to sell, but for what he did sell he would at least hope to get an enhanced price due to the preference[...] but that is just the moment when he would lose. So we should have people on both sides, both in the Dominion and in this country, whenever you have a shortage of corn within the Empire, as has happened three times within the last fifteen years, you would have the people here cursing the system, and the people in Canada, a very short time afterwards when the preference was removed, cursing the system too.

None of those things can happen under the present system. Again, I ask why not let it alone? Surely these are great dangers—dangers which no one denies. Just because we on this side do care about things, I hope as much as hon. Gentleman opposite, and just because we see these dangers, we are determined by every means in our power to go on opposing this system of preference, which we are convinced, far from cementing the Empire, might very likely break it to pieces. It has been said that this is necessary for the well-being of the country and for the wellbeing of the Dominion, and a picture has been drawn by the right hon. Gentleman the Member for Wimbledon of the marvellous growth of Canada. I am sure we are all glad to hear the right hon. Gentleman expounding views in which he, at any rate, has always believed, with so much zeal and energy. But the very great progress that has been made makes one wonder whether it is wise to run any risks for the sake of increasing the rate of growth within the Dominions. Since Parliament established the system of self-government throughout the Dominions there has been expansion in all cases. In many cases there has been great expansion, and in the case of Canada there has been marvellous expansion under the present system. I do not think it right to ask us to make so great a change for the sake of the prosperity of the Dominions. They do not ask it. We do not think that we should press it. With regard to fiscal arrangements, can it really be supposed that a system of preference is going, as was suggested by the right hon. Gentleman, to solve all our difficulties? Has it solved them in any other country? We all know it has not. Then why should it do so here? The thing is devised in order to make it go down with the electorate here, who do not like high taxes on corn or anything else. The duties are so minute that, although they will involve all the evils of the system, the effect, at any rate for the moment, would be very small upon the revenue.

No one pointed this out with greater force than the right hon. Gentleman the Member for West Birmingham some years ago, in a speech which is very familiar to hon. Gentlemen opposite. It was at the time of a previous conference—I think in 1902—and he explained that the foreign trade of this country was so vast and the trade of the Dominions with us so small that he did not believe that the people of this country would ever take the step now proposed. And he added that the effect on the revenue he believed would be infinitesimal. Again, just on this point of pounds, shillings, and pence, and not upon the effect of the well-being of the Empire as a whole, I reiterate the statement of the right hon. Gentleman the Member for West Birmingham that the result of such a policy would be, as he put it, of infinitesimal importance. Again, in conclusion, I can only say we do adhere absolutely rigidly to the Free Trade doctrine. We do not do it with any desire to refuse to pay attention to the statesmen who will come here at the next Conference. Far from that; we know that they themselves would think little of us if we disregarded the wishes of the electorate in this country. For they have told us so themselves. We do not believe that a system of this kind would tend to cement the Empire, or would cure any of the difficulties, including the treaty making difficulty on which the right hon. Gentleman dwelt, and which have subsisted in the past. We at present are witnessing a very remarkable phenomenon, which so far as I know has never been seen on this globe before, of so widely scattered an Empire, of such a diverse character, on such extraordinarily good and cordial terms, and in which we find that the great heart and centre, where the greatest part of the population dwell, has lived under a Free Trade system for fifty or sixty years, while complete fiscal autonomy, has been given as soon as it possibly could be given to the outlying parts of the Dominion, they have adopted various systems, some largely in the nature of complete Protection, and some tending towards Free Trade, but all of them less Free Trade than our own, and after all these years we see this strange phenomenon of a united Empire, and some of us are beginning to wonder whether it may not be as a consequence that you see this strange and gratifying phenomenon. I for one believe that that is so. The grant of complete fiscal autonomy has removed every sense of grievance, and that most dangerous of grievances, the feeling that taxation is imposed not for the good of the people within the area, but for the good of some one outside. It appears to us that a system of preference would lead to these dangers again. For again it would be possible for objectors in the Dominions to say that "this tax is imposed not for the good of the people, but to fulfil your own engagements." We believe that the existing system is the best system, and we mean to stick to it, and nothing that the right hon. Gentleman said, and none of the things that have happened in the past, have made us alter our opinion one bit. We mean to stick to Free Trade, and by so doing we believe we shall help to cement the Empire.

Dr. HILLIER

I venture to think that of all the many arguments that have been adduced on this subject to the House this afternoon the one which will leave the most permanent impression on the minds of Members of this House and of the people of this country is the fact, the very grave fact, that Canada, after waiting patiently for thirteen years for some reciprocal treatment in regard to those advantages which are acquired by British manufacturers and British workmen has finally in a sort of despair of ever obtaining reciprocity entered into a, series of treaties with France, Germany, and the United States, and indirectly with other countries, which, as the right hon. Gentleman the Leader of the Opposition pointed out, must have the effect of very seriously diminishing those advantages which have been acquired for this country by the action of Canada for years past in the matter of trade, the very advantages to which the Prime Minister bore testimony and the Chancellor of the Exchequer bore testimony at the last Colonial Conference. Now it is perfectly clear—it is not disputed—that these advantages will be whittled away and are rapidly disappearing under the existing system. It has been clearly demonstrated by speakers this afternoon that previous to 1897 our trade with Canada was declining, that after the adoption of the preferential policy for our people our trade improved, and that it has continued eminently satisfactory since then. It is not denied that the whittling away of this preference is the effect of the treaties recently made, and is undoubtedly a serious menace to our commercial position in that country.

8.0 P.m.

I will not enter into the question as to whether this does not constitute a danger to the Empire. Our opponents delight in overstating our case in this extravagant way. The position disclosed by the Leader of the Opposition in referring to these treaties, if it is not a danger to the Empire, is clearly and avowedly a very serious menace to our trade with that Colony in the future. I notice that the right hon. Gentleman the Prime Minister spoke with some satisfaction of the preponderance of our trade with Canada in 1908–9 over that of every other Continental country. I should like the right hon. Gentleman to tell us what he anticipates will be the relative position when these new treaties have had time in the course of two or three years to operate. The Prime Minister did not in his remarks even attempt to deny that disadvantage had accrued to our trade relations by virtue of these new treaties. I have listened with great attention throughout this Debate to ascertain what remedy right hon. Gentlemen on that bench have to suggest for this state of things. What is it they propose to do to meet this growing menace to our trade? They have absolutely nothing to propose; they simply fold their hands, and they say, "Nothing is to be done." It is a more or less deplorable condition of things, but we are unable to do anything. Rather than discuss the adoption of some remedy for the prevention of this loss which must accrue in regard to our trade, they simply talk about what is the policy of Colonial Preference, as they describe it, and not as advocated by the leaders of the party to which I have the honour to belong. It seems to me that the Prime Minister almost treated with scorn any idea of Colonial Preference. He said that in order to give preference we must tax food and raw material. [HON. MEMBERS: "Hear, hear."] I can only tell hon. Members opposite who cheer that statement that we already under our existing Free Trade system tax both food and raw materials. [An HON. MEMBER: "Too much."] Too much, as the hon. Member opposite says; I quite agree. This policy of Colonial Preference, however, will not necessarily involve any absolutely new departure in our system of taxation. Hon. Members opposite admit that we already tax both food and raw material—tea, coffee, sugar, tobacco, and I may mention cocoa. Tobacco is very heavily taxed, and to all intents and purposes that article is practically a raw material. By a readjustment of taxes on food and articles of raw material a very considerable degree of preference might be given, but I entirely dissent from the view that the Colonies would be jealous one of the other, or that they would enter into these negotiations in a spirit of haggling controversy.

They have shown in this matter the most gallant and disinterested motives in regard to this country. Without any direct commercial reciprocal advantage from this country, they have for years past accorded to the Mother Country very substantial advantages under their preferential system of tariffs. The view that it is impossible to readjust the various duties now existing so as to grant some preference to the Colonies, because the Colonies would be jealous one of the other, and that what would satisfy one would not satisfy another, is entirely falsified by the actual facts, of which we have already had experience. I think the opposition to our policy is not to be found in any real consideration of statesmanship, but is to be found in the last statement made by the Under-Secretary for the Colonies when he said that they would adhere absolutely and rigidly to the doctrine of Free Trade. I was wondering whether he was not reciting the Coronation Oath or something of that sort, because there seemed to me in his utterance to be something in the way of an antiquated religious formula. If this plan of adherence to the doctrine of Free Trade is to be the one guide for statecraft and administration in this country, I really think that, so far from our policy being on its last legs, as the hon. Gentleman the Member for King's Lynn was good enough to suggest, it is the policy of His Majesty's Government which is really in a parlous condition. They adhere to this doctrine of Free Trade as if it were the quintessence of all that science could demonstrate with regard to economics or political economy. [An HON. MEMBBR: "Hear, hear."] The hon. Member opposite says "Hear, hear," but I would remind him that every other civilised country on the face of the globe, including our own Colonies, have come to a different conclusion, and adopted the alternative fiscal policy. The hon. Member for King's Lynn, if I understood him rightly, said this controversy is not precisely a controversy between Protection and Free Trade. He recognised that Tariff Reform was an economic policy which had features of its own, and which could not fairly be described merely as a policy of protection. I quite agree with him. I think that this adoption by our opponents of mere catchwords and phrases accompanied with the assurance that the policy of His Majesty's Government is to be guided alone by rigid adherence to the doctrine of Free Trade, is not only puerile, but absolutely misstates the real position. Consider what the effect of this policy of Colonial Preference would be in regard to Free Trade. It is perfectly certain that it would not give all within the Empire absolutely free trade, but it is equally certain that it would give us freer trade as between the Mother Country and the Colonies than we possess at the present moment. I do not think the right hon. Gentleman can deny that.

Colonel SEELY

I am not so sure.

Dr. HILLIER

I will endeavour to convince the right hon. Gentleman. The policy of preference means that the Colonies will reduce in our favour existing tariffs. It is perfectly obvious that so far as they reduce those tariffs to that extent do they render our trade with them freer than it is now. Therefore, this using of catchwords in reference to Free Trade, and bandying them about among the electors on every occasion, does not in the least meet the case. As a matter of fact, the policy of Colonial Preference is the policy which has been carried out with extreme advantage in the German Empire—the policy of the Zollverein, or Customs Union, under which the duties existing between the various States within that Empire were broken down so that there was Free Trade within that Empire. [HON. MEMBERS: "Hear, hear."] Yes; there is no doubt that was the policy of the Zollverein some years ago. Tariff Reformers propose a similar, but not an identical, policy with regard to the States and Colonies within the British Empire, which, as I have already pointed out, would at least give us freer trade within the Empire than we possess at the present time. I think the country will realise with some amazement that when there is brought to the notice of His Majesty's Government the fact that we are losing with one of our most important and most rapidly developing Colonies certain trade advantages which we have enjoyed in the past, His Majesty's Ministers have not one single suggestion or remedy to offer. The country will realise the fact, not only with astonishment but with profound regret, and with considerable distrust of the sagacity of His Majesty's present Ministers.

Mr. DILLON

I must enter my protest against the action of the Government in withdrawing, for the first time in twenty years, the Foreign Office Vote from the consideration of the Committee of this House. I cannot recall any instance, as well as I can remember, within the past twenty years during which an opportunity has not been given to the House of Commons to discuss the Foreign Office Vote during the Session. As a matter of fact the general practice has been for the Vote to be set down more than once, and it has frequently been the practice, when there were matters of exceptional interest, to bring the Vote before the House. At the present time there are several matters of quite exceptional interest which we would have been glad to discuss had the Government afforded an opportunity. I do not know whether this new and novel procedure is part of the policy which we frequently hear spoken of—namely, that of withdrawing foreign policy altogether from party politics, but I desire at the earliest possible moment to protest against that policy if such be the intention of the Government. If ever there was a time at which the Vote of the Foreign Office should have been brought forward, and ample opportunity given for discussion, it is in the present year. There are important subjects which the House of Commons, if it had a true sense of its duty, would have discussed this year on the Vote. I think the House of Commons is exceedingly ill advised if they consent without a protest to this policy.

And it being a Quarter-past Eight of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed without Question put.