HC Deb 31 May 1911 vol 26 cc1111-35

I desire to call attention to a very critical and serious question in connection with the trade relations between the Mother Country and the Dominions—a question which has arisen in connection with the Reciprocity Treaty between Canada and the United States of America. I make no excuse for raising this question this afternoon, because wars have been frequently waged on far smaller issues than those that confront us at the present time. I think I can demonstrate before I sit down that this country is threatened by a great problem—one so grave that it calls for instant national action. If I may be permitted to say so, I raise this question in no party spirit whatever. It is a question which is far divorced from party, and some of the things that I shall have to say will, I am afraid, be quite as uncongenial to my own Friends as to hon. Members who sit opposite. But very frequently there comes a time when it is necessary, in the interests of the country, to say unpleasant things. I want to ask this House to turn its attention to the trade question as it affects the manufacturer, the working man, and the unemployed (with their starving wives and children), and the Empire itself. I should like to say at once that in my opinion in the past the Unionist party has failed to take advantage of many opportunities which were presented to it. It has undoubtedly been negligent with regard to those wider Imperial questions, although I frankly admit that when those opportunities have occurred they have been in times of great stress and great difficulty. But the masterly inactivity of the party to which I belong has been far outdone by the hideous and criminal blunders of this Government, which at the last Conference used language both insulting and uncalled for.

I do not want to dwell on the past, I want to come at once to the crying needs of the present moment, and the situation which has been created by the policy of the last Imperial Conference. Since the Prime Ministers' return to the Dominions, we have found every country prepared to make trade treaties with Canada which the Mother Country alone has refused to countenance. The so-called sordid bonds which have so frequently been mentioned by hon. Members opposite have proved attractive to Germany, France, Italy, Belgium, and the United States, and we find all the countries of the world are entering into trade agreements with Canada. In fact, all the world is rushing in where the Free Trade angels of the Mother Country alone fear to tread. The result of this is that we see the fruits of the policy of Imperial Preference gradually being taken away and gradually being harvested by foreign countries, when if we had only lifted a finger we should have established still greater advantages for the people of this country than they enjoy at present. I want to call the attention of this House for a moment to the extremely valuable information as to the position of the Empire and of the Mother Country which has been given to the House this Session. We have been told that Australasia is buying from us at this time as much as the German Empire, and that New Zealand and Canada are buying practically as much from us as the United States of America; and when we consider these stupendous facts, surely it must make us look at this question from a different point of view, and surely we can no longer consider the arguments that were put forward that we may offend the susceptibilities of Germany and the United States, and last week it was said even of China, by adopting a different policy. Surely we need not consider this question any longer, when it is perfectly evident that the Dominions even at the beginning of their history are a mighty asset to this country, and that the establishment of closer trade relations with them must bring greater prosperity and happiness to the people of our country.

I think the hon. Gentleman opposite who is interested in my last remark, if he had been here at question time to-day would have seen that the comparative position is advancing in an extraordinary manner, because the President of the Board of Trade informed me that the Dominions of Canada, Australia, and New Zealand are buying £2 12s., £6, and £8 per head respectively per annum of the products of this country, while Germany and the United States buy only 11s. 5d. and 6s. worth. A few points of that kind show the extraordinary position that we are in with regard to our Colonies to-day, at the beginning of their growth. They have already established themselves as the great employers of our people, and they are assisting us to-day to a happier solution of our economic troubles in this country than we have ever known, for to-day we find that they actually employ millions of our people by the merchandise they buy, and to-morrow I believe they may solve nearly all the economic troubles under which we are labouring and the poignancy of which, I think, is admitted in this House. These great purchasing communities, these new nations, seem to have sprung up almost in a night, and we have only to look at the romantic history of Canada to see what Canada means to this country to-day, and what she may mean if only we apply the proper policy in ten years' time. The purchases of Canada from this country have risen in. fourteen years from £5,000,000 to £20,000,000 a year, and at the very lowest this means that £7,000,000 a year in wages is being paid to British workers as the result almost entirely of that preference which we have been told by the Prime Minister is the greatest political imposture of modern days.

I can only say that when the working classes of this country begin to see how intimately this question affects them they will be inclined to resent those words. Take four of the Dominions, Canada, Australia, South Africa and New Zealand, which have a population of 20,000,000 of people. They are now buying from us year by year from £60,000,000 to £70,000,000 worth of goods per annum, and before the end of the century, if their population increases at the present rate and the comparative British position is maintained, we shall find that they are buying something like £350,000,000 worth of goods every year from this country. That means that we shall have an increase on our present position of £250,000,000 at least extra trade, or, in other words, £125,000,000 more wages are going to be circulated among the people of this country if we can keep our comparative position to the Dominions over seas. When we consider that, I think it will be admitted by the hon. Member, who smiles, that £125,000,000 increase of wages among the people of this country would do more than all the social reforms and more than all the palliatives of politicians which are going to be applied in this country can do for the working classes. I desire in this connection to point out that even at the present time if the mutual preference which the Colonies ask us for were given it would accrue enormously to the advantage of the British working classes. To-day the Dominions are buying £142,000,000 worth of goods from foreign countries. Much of that trade would come to this country, and our wages bill would be increased if we had the preference of which I speak. Therefore we must admit that the greatest insurance for the future that we have is the trade which lies within the British Empire. That brings me to a new phase of the Imperial question. Canada has tried for years to establish with the Mother Country mutual preferential trade, and in order to prove her good faith we have seen the great preference which she established to our great advantage, and to the great temporary disadvantage of themselves.

Tired at last of endeavouring to make trade arrangements with the Mother Country, Canada has unfortunately been listening to the voice of the foreign charmer, who is only too ready to make business arrangements with her, and that is why we have discovered a great change of policy in regard to reciprocity which has closely followed the appointment of Mr. Bryce to Washington. Canadian statesmen, for good reasons, have repeatedly stated that as far as Canada was concerned there would be no more pilgrimages to Washington. In fact, I think it became generally understood throughout the length and breadth of Canada that it was the policy of Canadian statesmen to stand by those national ideas and the national policy which commended itself to Sir John Macdonald which made Canada what she is, and which alone can keep her what she is. The extraordinary change et policy, reversing all the national traditions of Canada, I think affords almost conclusive proof that the proposals must have come from Mr. Bryce, whose desire for closer political union has always been well known. What we do know is this, that the proposals certainly did not come from Canada, and that Mr. Taft deliberately told the people of the United States that reciprocity was the last chance of preventing Imperial union between the Mother Country and the Dominions, and that this would be the last opportunity they in America would have of preventing that. Then I say the irresistible conclusion we are driven to is that Mr. Taft, Mr. Bryce, and the Home Government, have been conspiring together in order to wreck the policy of Imperial union and to dish the party of Tariff Reform in this country.

I have always been one of those who desired to see Anglo-American friendship, and long before the arbitration proposals were brought forward I always considered that the greatest ideal that we can have is Anglo-American friendship. But when we remember that we have been invited to discuss the arbitration proposals under a canopy of peace, whilst at the same time the United States has endeavoured to buy what they know they cannot possibly conquer, namely, the Dominion of Canada, I say that we in this country are living in a fools' paradise, and that if we want to maintain the freedom and independence of Canada we must act and act immediately. That is why I am asking this House to step in and asking hon. Members to advocate on this occasion a sane Imperialism and to establish even in some modified form preferential proposals which will show the Dominion Ministers that they still can wait with confidence for the people of this country, and which will, once for all, kill reciprocity with the United States, which must bring about the disintegration of one important part of the British Empire. I know that is a point of view which is not shared by some of my colleagues, but I think that, whatever the cost may be, whatever the dangers may be, if you really consider that a policy which has been advanced is not for the ultimate good of the Empire as a whole, it is criminal if you do not intervene and if one party does not express its own opinion.

I consider that the Government has been guilty of a treasonable course, and that it is acting contrary to the interests of the whole of the Dominions throughout the Empire, and that what it has done is absolutely a betrayal of the trade interests of the people of Great Britain and Ireland and all the Dominions. If this agreement goes through, though I sincerely hope that is not probable, the Government have been sharing in an endeavour to allow the United States to give a preference to Canada against their own people, who have sent them to this House and whose confidence they are supposed to hold, and against the people who dwell in the other Dominions of the King in various parts of the world. That being so, it practically comes to this, that the Government, in order to be faithful to their ancient prejudices and ideas, have been assisting President Taft in establishing a Chinese wall, which will separate Canada and the United States, to the exclusion of commodities and goods from other British countries, which at present deal with those countries. I am afraid it may be said that I have spoken somewhat strongly and hotly upon this subject by those who sit opposite, but I can say deliberately that when Mr. Champ Clarke made that speech on annexation it was received with the utmost enthusiasm by those who listened to it, and that whatever diplomatists may say, it is the intelligent opinion of leading Americans at this moment. This is no new question, we have only got to look back in history. In 1888 Senator Sherman, chairman of the Senate Committee of Foreign Affairs, said:— The way to union with Canada is not by hostile legislation, not by acts of retaliation, but by friendly overtures. This union is one of the events that must inevitably come in the future, it will come by the logic of the situation and no politician or combination of politicians can prevent it. The true policy of this Government is to tender freedom in trade and intercourse, and to make this tender in such a fraternal way that it shall be an overture to the Canadian people to become a part of this republic. Senator Sherman was expressing very politely, unlike some of his colleagues, at that time what was the opinion of nearly all the leading brains in America, of whose opinions I can produce as much evidence as any one will desire. From the day when Senator Sherman made that speech the annexation movement in the United States has been going forward. Year by year we have seen it strengthened until in 1891 the Continental Union Association was formed, with its New York League and its League in Ontario. The objects of the union were to extend the power of the United States to the Arctic Ocean in the same way as it had been extended to Mexico and the Pacific. Put briefly, they were to establish commercial union with Canada, and, following that, to annex Canada into the United States. I think we should ask ourselves whether these were small men who were considering this question, and I will read a few of those who were concerned in the organising of the continental union: Mr. Charles A. Dana, Andrew Carnegie, William C. Whitney, Orlando B. Potter, John Hay, Theodore Roosevelt, Elihu Root, Chauncey Depew, General Slocum, General James Wilson, Charles Francis Adams, Seth Low, and Bourke Cochrane. These were some of the organisers of the Continental Union, whose ultimate object was the annexation of Canada. When Mr. Champ Clarke makes a speech in the House saying this will lead to annexation, whatever the promoters of the Bill may say, it is perfectly obvious that that feeling exists in the United States to-day just as strongly as it did then. If Reciprocity is established, Canada, as far as I can see, must gradually lose her nationality and her independence. How can 8,000,000 people withstand the economic pressure of the 90,000,000 who extend along a 3,000 mile frontier? Supposing Scotland belonged to the United States, and suddenly a tariff wall was pulled down and Scotland and the United Kingdom had Free Trade between the two countries. Obviously Scotland must either be ruined, just the same as Ireland was ruined by being brought into our Free Trade system, with no chance of striking out for herself, or else she must become part of the United Kingdom. It is perfectly certain that such would be the community of interests between Scotland and England that it would be impossible to prevent political union, which must come sooner or later, and that is what I maintain with regard to Canada and the United States.

That brings us to the question of favoured nation treaties. I am sorry the Secretary of State is not here because I think perhaps this is the question which in the last fortnight has been exercising all traders in this country to an extent that no question has exercised them for many years past. The question we want to ask is what do the Government intend to do with regard to these favoured nation treaties? Did they consult any business men in this country before they made themselves a party to this arrangement and, through Mr. Bryce, encourage this policy What have they done to discover whether British in terests are going to be injured by this arrangement? They have either to denounce all these treaties which are shared in by Canada, or else it seems to me Canada must cease to be a part of the British Empire. Are they going to denounce these forty-four treaties upon which our Free Trade is built up? It seems to me that you must throw away our only weapon, and whatever happens—and this, I think, is the only ray of sunlight with regard to these reciprocity proposals—Free Trade is once and for all killed by the mere entry of this Reciprocity Treaty into our questions. What then can be done to save a situation which seems to me so grave, to prevent a disaster which must rob our country of so great prosperity in the future and which must deprive our manufacturers of the greatest market of the future? I believe it can be saved by seizing the opportunity of establishing preference now. I do not mind if the hon. Gentleman has not followed the replies which the President of the Board of Trade has given to us and still thinks that food is the objection. Let him establish the principle on any commodity, however small it may be. Let him show that the Government are prepared to consider this question in a sympathetic manner and let the question be introduced at the Conference now, so that we kill reciprocity at once and for all time. I should like to ask what the Government have to fear. The Unionist Party will troop into their Lobby as one man on any question of this description. This may be the most popular policy we have—it is the most popular plank we have in our party policy—but we would willingly forego any popularity if the Government were to adopt the principle and we would do everything we could to help them to bring about a solution of this difficulty. The dear food cry is absolutely killed by the Reciprocity Treaty. Mr. James J. Hill, who is one of those who are behind this movement, has told the farmers of the United States that under British Imperial Preference they would all have to accept less for their corn and the Official Report to the House of Representatives said that Canada was underselling American wheat in the British market, and that reciprocity would mean raising the price of wheat at Liverpool, or, in other words, the President of the Board of Trade and his colleagues are, by joining in this movement, handing over the people of this country to the tender mercies and the unrestricted gambling of the wheat kings in New York, who will bring Canadian wheat into the scope of their operations. It is interesting also to see that Senator Carter, in the Senate, speaking in defence of Reciprocity, said:— The more influential we, the United States, become at fixing the price at which wheat, including American, is sold in competition with that of other sections of the world, the greater is the ultimate benefit to the producer of wheat in the United States. I maintain that through the advent of reciprocity the dear food argument is beaten to fits, and those who still maintain that wheat will be dearer under our policy have no longer a single leg to stand upon. If the agreement is ratified we may lose Canada, but most certainly our bread will be dearer, and I ask under these circumstances, are we such puny creatures that we cannot put aside our petty, party passion in regard to this question and raise our senses of the grander and wider problems which confront us at the present moment. Sir Wilfrid Laurier, before he left Canada, once more said that Canada was true to her original proposition, and was ready to extend her preference to this country. If the Government are again going to bar the door upon the Dominions then all their social reform, all the appeals which they have made to those who support them in the country, will be forgotten and obliterated because of the detestation of posterity in this country owing to the policy they have pursued. But on the other hand if they will frankly and fearlessly and fully establish the policy of Imperial Preference they will prove that they are a Government who are above party, and they will earn, in my opinion, the title of being one of the greatest Governments Which has ever held power in this country.

Attention called to the fact that forty Members were not present; House counted, and forty Members being found present,


I want to raise a tariff matter very akin to the question which the hon. Member has raised and one which I understand comes under the Department of the Board of Trade. I wish to ask one or two questions with regard to the United Dutch tariff. My hon. Friend has pointed out that, thanks to the policy of the present Government, we are in danger of losing altogether the advantages of Imperial preference, and not only are we losing the possibilities of much further extensions in the Colonial market, but we are also, thanks to the fact that we have no weapon whatever whereby to fight hostile tariffs, in danger of losing some of those markets in foreign countries which we possess at present. The latest example of the weakness of our position, which I am afraid is going to affect our traders and our working men very seriously, is the question of Holland. Some weeks ago I asked a question regarding the new Dutch tariff. I pointed out, in connection with a particular trade in the constituency which I represent, namely, the chain trade, we have always enjoyed up to the present time free entry as regards chains and other matters into Holland, but that now a duty of 6 per cent. was being put on, and I asked the right hon. Gentleman what steps he proposed to take to try and use his influence with the Dutch Government to prevent these new burdens being put upon British industry. The right hon. Gentleman's answer was characteristic of the weak position we occupy in all these matters. All he could say was that he would circulate a translation of the new proposed Dutch tariff among the Chambers of Commerce, and ask them for their remarks, and when he had got them he would endeavour to see what influence he could bring to bear upon the Dutch Government. There is absolutely nothing else he could have answered, because we have no means of retaliating whereby to fight these hostile tariffs, and I am very much afraid, whatever remark might be made by the Chambers of Commerce or anyone else, the result would be just the same. The new tariff will go on, and as we are losing our Colonial markets so we shall lose another market on the Continent. The hon. Gentleman will probably remember the old lines written many years ago:— In matters of business, the fault of the Dutch, Is giving too little, and asking too much. 6.0 P.M.

That was written in the days when we had a tariff. There is no doubt that now that we have no power of retaliation the Dutch will give us a great deal less than they did even then. I will point out the effect of the tariff on some of our trades. Hitherto chains have gone into Holland free. Under the new proposed tariff a duty of 6 per cent. is to be charged. That means that for every £ worth of chains sent into Holland the British manufacturer will have to pay 1s. 3d. I daresay Free Traders will state that the consumer will pay. I venture to say that the consumer will not pay, because as a matter of fact there is effective competition in chain-making in Holland, and if our manufacturers add the duty to the selling price, the only result will be that they will be shut out of the Dutch market altogether. Take the case of the galvanised hollow ware trade. The products of that trade have been admitted to Holland free up to the present time, but now a duty of 12 per cent. is to be imposed. Locomotives and rolling stocks have been free so far, but a 6 per cent. duty is to be imposed. On carriages and cycles the duty is 10 per cent., and on motor-cycles and motor-cars it is 12 per cent. I would point out to the President of the Board of Trade that every one of these duties is not merely for revenue, but is a protective duty, because in every one of those cases there are home manufacturers, and the result of the duties will be that our articles will be excluded and protection afforded to the home manufacturers. Therefore, so much less wages will be paid in our own country.

I would ask the right hon. Gentleman what steps the Government propose to take in regard to this proposed new tariff. I am afraid our position is very weak, because we have no weapon with which to fight these proposals. It is becoming more and more obvious year after year that we shall be shut out of every market in turn unless we obtain that fighting power which has been absent from us up to the present time. In regard to Holland, Free Traders have pointed to that country as the one Free Trade country left, or nearly the only one. Holland is now setting up a protective tariff, and it is a very scientific tariff. I have worked it out, and it comes very much to this: On raw materials, such as coal, iron, and yarn, there is to be no tariff at all; partly finished articles are to have a tariff of 3 to 5 per cent.; articles in a much further finished state, 10 per cent.; and on completely finished articles it will be about 12 per cent. In other words, it comes to very much the sort of tariff that was proposed by the right hon. Gentleman the Member for West Birmingham (Mr. J. Chamberlain) for this country a few years ago.

That is a scientific tariff, and the result of it can only be when those fully manufactured articles are charged at the very much higher rate of twelve per cent. to cause a considerably less export of these goods from our country to Holland. I cannot say, for my part, that I can blame the Dutch for the action they are taking. They are, after all, simply looking after the interests of their own people. They are giving themselves a weapon with Which to fight other hostile tariffs on the Continent, and at the same time they are protecting their industries against the competition of British goods. I would ask the right hon. Gentleman whether he has received any suggestions or comments from the various chambers of commerce in this country on the draft tariff which he promised to send round, and if there is any means whereby he can protect our traders against this new tariff. I shall be glad to hear any answer he has to give on that matter. From the correspondence I have received the matter has excited a great deal of attention in the country, and especially in the Midlands, where hard- ware goods are made, and where, if this Dutch tariff comes into operation, a serious blow will be dealt to that trade.

The PRESIDENT of the BOARD of TRADE (Mr. Buxton)

I regret that the Dutch Government are proposing to impose duties on goods going into that country, How far that proposal is likely to become law I cannot say. I do not propose to follow the hon. Gentleman opposite (Colonel Griffith-Boscawen) on the general question of Free Trade and Tariff Reform. That is a large question, which is hardly suitable for discussion on the Motion now before the House. The Bill was introduced to the Dutch Parliament on 1st April, and we had it at once translated and sent to about a hundred chambers of commerce. We have received replies from forty, and we are expecting replies from the others. When we have that information in our possession, we shall be in a better position to see how the new Dutch Tariff affects British trade. I think the hon. Gentleman will feel that before we make representations to the Dutch Government on this matter, we should have full information before us in order that we may see exactly to what extent these new duties are likely to be injurious to British trade. I assure the hon. Member that, having obtained the information, we shall make what representations we find desirable to the Dutch Government with reference to that Tariff. The hon. Member seemed to assume that if we had high protective duties here we should be in a better position to—I do not think he used the word retaliate, but that was what he had in his mind. He believes that we should be better able to parley with Holland on the subject. My experience has been that retaliations by one protected country on another have usually led to great dislocations of trade for considerable periods, and the results have not been satisfactory to either side.


Can the right hon. Gentleman give us one instance?


If I bad known that this discussion was to be raised, I could have given the hon. Member a number of instances.


Give us one.


If the hon. Gentleman will put down a question with reference to this matter, I shall give him the facts. One case was that of Austria and Switzer- land. I have not the particulars here, I have only general information with regard to that point. The latest instance we have had in this respect was that of France France the other day altered her Tariff, not against us, but against all the various countries with which she trades, and obviously if the proposition which I have stated is incorrect, we should have been left out altogether in the cold, while Germany, America, and other protectionist nations would have been able to obtain all they desired in the way of reductions of the French tariff. What happened? Broadly and roughly, this country came out of the French tariff revision negotiations as well as, or even better than, the protective countries which have tariffs of their own. That is the position which this country retains. It is a mistake to think that because we are a Free Trade country we have no means of obtaining favourable consideration. On the contrary, the mere fact of our being a Free Trade country brings us to start with into amicable relations with other countries, and they desire to give in this matter as much advantage and justice to British goods as to others, because we give them in return such advantages under our Free Trade system.


We cannot stop these advantages under our present system.


I am endeavouring to point out that broadly and roughly we, as a Free Trade country, in these discussions obtain as great advantages as protective countries which have tariff walls. Of course, these countries are anxious to retain our trade goodwill because we give them such advantageous terms. It must not be supposed that because we have not the power of retaliation we are necessarily placed at a disadvantage in these matters. I can assure the hon. Gentleman that we are obtaining the information which will put us in a position to make representation to the Dutch Government if it should prove necessary. I am sure that they will be met in a friendly spirit, and, though I am not able to prophesy, I should be surprised if we do not find that British goods, as compared with those from Germany and other countries, are not suffering more severely under the proposed new tariff.


May I ask if British goods are to get better terms than goods from protected countries?


In some respects they get better terms.


In what respect?


The hon. Member cannot expect me to carry all the particulars of the duties in my mind. The hon. Gentleman (Colonel Griffith-Boscawen) said that if we had protective duties here we should be able to make better terms when negotiating with foreign countries. My answer to that is that if the tariff which is proposed by the Dutch Government comes into force—if it ever does come into force—I shall be surprised if he will not find that British goods, speaking broadly and generally, have as good terms as those of any of the protected countries.


Have any representations been made yet to the Dutch Government?


No. The Bill has only recently been introduced, and we are losing no time in obtaining information on the matter. Surely the hon. Gentleman will admit that it is much better that we should make our representations with full knowledge of the question rather than that we should make them generally before we have got the information.

Captain TRYON

I propose to confine my remarks to the question which was dealt with by the President of the Board of Trade. The question is a very old and familiar one. The argument of the right hon. Gentleman was that we as Free Traders get as good terms as the nations which have tariffs. It is to that question that I propose to address myself. The whole question turns on the interpretation of the most-favoured-nation Clause. The usual interpretation is that if a country, say France, is negotiating and gets better terms for one of her products, claret, then, under the most-favoured-nation Clause, we enjoy similar privileges for our claret; as we do not produce any claret we gain nothing: but I can quite see the advantage that the argument gives to Liberal speakers on the platform as long as they state the case in general terms. That is the best case that can be put for the most-favoured-nation Clause, but. when you go into details the case is very different. When the United States negotiates and receives concessions they grant in return concessions which only apply to those from whom they have received advantages. At the present moment the President of the Board of Trade is making us familiar with the reciprocity agreement. between the United States and Canada. Under that agreement the United States is proposing to give Canada terms she does not give to England. She is deliberately doing so because she has nothing to receive from us. That is of enormous importance in this reciprocity question.

It is not for me or for anybody to discuss in connection with reciprocity the action of Canadian Ministers. We wish in no way to interfere with the action of Canadian parties, but both parties in Canada were in favour of preference, and therefore we are not intervening between parties. Therefore, when we speak now, with the Colonial Conference approaching, with regard to this matter, it is because we hold, not the Canadians, but our own Ministers responsible for what has been going on up to the present moment. It is because the Canadians have a choice offered to them, the choice of open arms by America and the choice of the banged door by this country, that this reciprocity treaty is going through in its present form. I have not the least doubt that if the Government had not taken up this hard-and-fast attitude with regard to Colonial preference this reciprocity treaty would have been a very different problem for the Canadians to decide. On the question of how many shillings a quarter should be offered, we are told that we are offering 2s. a quarter, and that the United States are offering a preference of 8s. That is not the whole point. The point is this: Canada is asked to choose between two different systems. It is a question whether Canada is to remain part of the commercial system which our great self-governing dominions are building up, a system of commercial preference, or whether it is going to be drawn by the action of the United States, and by the refusal of His Majesty's Ministers, into a different orbit, into the position of a commercial satellite of the United States.

I do not think that anything more astonishing has been heard for some time than the views of the Liberal party with regard to this question of the effect of the preference which the United States is going to give Canada. The reciprocity which is given by the United States is not a Free Trade movement. Ministers and others talk on the platform as if reciprocity were a grant of the principles of Free Trade. It is not. It is a grant of the principles which we in this country call Tariff Reform. If the United States is granting a preference to Canada for its wheat, it is doing so by adding a duty of 8s. a quarter against other countries. We have had from the right hon. Gentleman who was Under-Secretary for the Colonies a statement with regard to what would happen. He has told us that on this legislation for reciprocity going through the Canadians are going to get 6d. a bushel more for their wheat. It is very interesting to know that the Under-Secretary for War, who holds that the foreign producer cannot be taxed, admits that as a result of this import duty on wheat, duty at all events, to the extent of 6d., will be paid by the foreign importer. I wish now to refer to a question which is very important from the widest point of view. We have been told that the policy which we advocate must drive Canada away, and we have been told in the words of the Under-Secretary for War, that if the existing system was changed instead of setting up a fiscal bond, it would have shattered the Empire in precisely the same manner as we lost the American Sub-Continent by attempting to tighten the fiscal bond. That statement was made by the Secretary of State for War on the eve of a by-election at Bootle. To that statement I can give a direct contradiction. In the library, within a few yards of where we are now discussing, I turn up the Philadelphia Congress of 1774. I find that the representatives of the Colonies who were there assembled, drew up a long indictment, stating what they have suffered from the Mother Country. More especially they complained of taxes being put on them for revenue purposes. They made out this long indictment, and at this moment, when they were making these charges, when they were swayed by anger and when the bond was very nearly broken, they particularly excepted from their complaints against the Mother Country the preferential system which the Under-Secretary for War said was the cause of the separation.

I cannot help thinking that these representatives of the original American Colonies, solemnly sitting in Philadelphia, were better guides to the Colonial opinion of that day than the Gentleman who was, after all, speaking as a party politician on the eve of a by-election. These Colonies claimed, they said, the right to participate in our council, but they said, from the necessities of the case, in regard to the mutual interests of both countries: "We cheerfully consent to the operation of such tax of the British Parliament as bona fide restrain the regulation of our external commerce for the purpose of securing the commercial advantages of the whole Empire to the Mother Country, and the commercial benefits of each respective member." In other words, the moment they were framing their charges they particularly excepted that very system of Colonial preference which, according to the Under-Secretary for War was the cause of the separation. I cannot help thinking that Ministers who have had responsible positions with regard to the Colonies might have made themselves a little better acquainted with this simple fact of our Imperial history before making such statements on a public platform. I believe that this matter is of the most vital importance. It is not a question of free trade or protection. It is a question of whether Canada is going to drift over to the commercial system of the United States or whether it is going to be retained in the commercial system of the United Kingdom and of its dominions.


I must say I was very much astonished at the remark of the right hon. Gentleman, the President of the Board of Trade, that this question was not of sufficient importance to be brought up on the adjournment of the House.


I never said so. I said that you could not expect us to discuss the whole question of Free Trade against Tariff Reform on the Motion for Adjournment. I admit the importance of it.


I am sorry that I so misunderstood the right hon. Gentleman, and I am glad to withdraw what I have said. There was one other remark which the right hon. Gentleman made which also I can hardly follow. He stated that this question of tariffs produced almost invariably dislocation of trade. He was challenged to quote the industries in which this had occurred and he was unable to do so. I would like to ask the right hon. Gentleman what has been the cause of the dislocation of iron industry in this country? Not so many years ago this country exported more iron and steel than any other five countries in the world put together, and to-day, according to the statement of Free Traders themselves, they admit that the iron industry in England has gone to pieces, and that both America and Germany have beaten it out of sight. If the statements of the right hon. Gentleman are true, surely the high tariffs of America and Germany would have dislocated the iron industry in these countries. I think this is one of the most important questions that can be brought up in this House. I admit the trade is better and employment is better to a certain extent in this country to-day than some time ago, but that is because there is a boom in trade throughout the world, and we are bound to get some share in that boom. But I venture to say that we are not getting anything like the share we ought to get in that boom, and if we had a tariff with which to negotiate with the various protected markets of the world we should be getting a very much larger share of it than we are doing. This question of unemployment is the most important that we can possibly deal with. It is all very well for the right hon. Gentleman opposite to introduce another unemployment scheme, but it would be far better for the Government to meet the necessities of the case not by putting their hands into somebody else's pocket and paying the money to the men who are out of work, but by increasing the trade of the country and so finding work and wages for them.

We find that foreign protected markets are being lost to us rapidly throughout the world. In this very iron industry we are being beaten out of sight by protective tariffs, which have enabled Germany and America to obtain the markets which we used to get, and which we ought to be getting now. If it was not for our best customers, our own Colonies, I do not know where our manufacturers would be to-day. They take from us a large quantity of manufactured goods, and they give us in their markets a preference over the other nations of the world. How long is that going to last? What is the position? We have been told already that they buy £140,000,000 worth of manufactured goods. It must not be forgotten that that £140,000,000 is rapidly increasing. Every year their population and their wealth are increasing, and as they increase so the amount of manufactured goods they will require will increase in proportion. But to-day they are taking £140,000,000 worth of manufactured goods, and, unlike us, they possess a tariff by means of which they are able to protect that market—that is to say, they can offer their market for those manufactured goods to any nation they choose and close them to any nation they choose. On the other hand, they naturally want to obtain markets where their own products may obtain the best term that they can possibly get. When they go into the world to make their terms with different countries, they find that in England the market is free, and they have it for nothing, but in every other country worthy of the name, so far, they find a tariff wall against them, and they are obliged then, in order to get access to those protected markets to offer something in exchange; so though we are now getting a preference from them, we see to-day treaties have been asked for and obtained by the different political countries of the world, and what they are able to give in exchange for those protected markets will take away from us the share of the markets which we now get, and the result can only be if we go on under our present system that their trade with us will reduce and our trade with them will be reduced accordingly.

This question of unemployment must naturally follow. The greater the demand for our manufactured goods the greater the employment in making those goods, and consequently the more money is paid for them and the spending power of the people is increased accordingly. The right hon. Gentleman the Chancellor of the Exchequer is driving landlords and all people who are possessed of any wealth at all to extremity by his endeavours to raise the money in order to meet the expenditure of the country. We want old age pension schemes, we want education, we want all these great reforms for our country, and I venture to say that if we continue taxing ourselves up to the hilt as we are doing to-day, it can only result in disaster. The system of the Free Trade party is to take money out of one pocket and put it into another, and as the other gets fat, they say, "Oh, how rich we are getting," entirely ignoring the fact Chat it has been at the expense of the people from whom the money was taken. The day must come when it will be impossible to go on taxing as they are doing without absolutely ruining the country. We have a chance now of accepting the right hand which is held out, and I venture to think it would be well indeed for the Government if they can get away from this shibboleth of Free Trade and address themselves to this great question of unemployment, so as to see if they cannot, by agreement with their Colonies, make an arrangement which will enable us to demand a share of all the foreign markets of the world, while at the same time obtaining a share of our own Colonial markets. We cannot do without the Colonies; we cannot afford to lose them. It is only comparatively recently that we had to call upon them for their men to come and fight for us in South Africa. We called upon them in our hour of peril, we received their aid and assistance, and we ought at least to do what we can to draw still closer not only the bonds of blood and relationship, but also the interests of trade and commerce. We have the opportunity, and I would appeal to the right hon. Gentleman not to commit himself definitely to this worn out idea of Free Trade, but to give us some scheme by which the Colonies will be drawn towards us, and by means of which we shall be in a position to retain markets that will afford employment for our own workpeople while drawing closer the ties of Empire.


I have listened with interest, to the speech of the hon. Gentleman who has just sat down, though he took us a considerable distance from the subject of the remarks of the hon. Member for Christchurch, who raised a point which more directly concerns the observations I am about to make. The speech of the hon. Member for the Abercrombie Division of Liverpool (Colonel Chaloner) seemed to me to show the nebulous character of the doctrine of preference. He suggested to us that we should put on a tariff, but that it need not necessarily be imposed. How a tariff that is put on need not necessarily be imposed I do not quite understand.


I was referring to a tariff on foreign manufactures, and not on the Colonies.


If we invented a tariff which was not imposed on foreign countries, what benefit would that be to Canada? That is a practical point to which the hon. Member does not seem to have directed his inquiry. The speech of the hon. Member for Christchurch was one of interest for this reason: that he stated for the first time explicitly what has been implicit in all the arguments against Canadian reciprocity. In all the censure of the Government for not interfering with Canada and killing reciprocity, as the hon. Member advised us to do, there was a very careful weighing of words, a nebulousness of phrase, and nobody, until the hon. Member spoke, ventured to say what really underlay the whole argument. It was that we should come forward and say to Canada, "We will not allow you to carry out this treaty." The hon. Member had more courage than his colleagues. He described his own speech, and said we shall probably say of it that he had spoken both strongly and wildly. I did not propose to use those phrases myself, but I accept them, for I think he spoke very strongly and very wildly. What did he say? He told us that if Reciprocity was carried Canada must lose her independence, and he used as an argument the extraordinary historical statement that it was because Ireland was connected with Free Trade England that her commerce was injured. I always understood that it was because the policy of England was Protectionist against Ireland that her commerce was injured. If we are to start with the doctrine that we are not to consider the vital interests of the Dominions, but, first of all, our own interests, then I think our great Empire will be in very considerable danger of dissolution. The hon. Member made another very wild statement. He told us, without a vestige of argument, and without attempting in any way to justify his wild assertion, that this Reciprocity agreement was made in a spirit of conspiracy—he used the word "conspiracy" —on the part of the British Government and of Mr. Bryce, our Ambassador, to put a stop to Tariff Reform. We do not need to enter into any conspiracy to stop Tariff Reform. Tariff Reform is at the lowest ebb at which it has been for many a year in the country. We have had three elections which settled that matter without the necessity of entering into any conspiracy.

I think the hon. Member rightly described his speech as wild. What was his remedy? His remedy was that we were to step in immediately and set up a system of Preference, to put a duty on all foreign goods, and a little less on Canadian. I do not know how Canada would be blessed by that. The hon. Member also used the words, "Once for all let us kill Reciprocity." Now when the imperial Conference is sitting, hon. Members opposite the other day were pleading with us to open our minds to the delegates, and take them into counsel on foreign affairs, in all brotherliness and love. We have opened our minds to the Imperial Conference. We have taken them into our confidence about foreign affairs, and now the hon. Member for Christchurch asks us to drop this bomb into the Conference. We are to say to Canada: "Oh yes, we mean to work on. Imperial defence with you, but what was given so long ago as 1867 we take away. Your right to make treaties in your own interests is to be yours no longer." What sort of a spirit would you produce in the Imperial Conference if such a policy were adopted. The hon. Member said he did not suppose he would get the support of his colleagues, and among those who have spoken not one ventured to support him. The other day in the House of Lords they had a discussion on this question, and Lord Selborne said:— He made no complaint of the action of the Canadian Government. Canada must workout her own salvation without having her elbow jogged by us, without any interference from us, or from anyone else. Yes, but Lord Selborne had some experience of the Colonies. He knows the value of the policy of not interfering with the National aims and development of Canada. What would be the view of the Dominions of a system like that of which the hon. Member speaks. This is a proposal which the Canadians have desired for a great many years, which a large party in Canada desire. It is a proposal that the Government of Canada is in favour of. One hon. Member, I think the hon. Member for Brighton, said that the United States was giving this to Canada because it was a protectionist country. I do not think that there is a word of truth in that statement. The United States is giving this to Canada because it suits the United States to give it to Canada—because it suits the United States and Canada in regard to those great natural products which are the principal articles concerned in the Reciprocity agreement, to have free trade. That is why they are doing it, because the whole population is feeling the burden of the cost of Protection. It is the most natural development in the world. I do not believe it has any political significance. I believe that the causes why Canada will remain loyal to the Imperial connection have no relation whatever with these trade questions. They are deeper and wider. I am not going to discuss them. We are satisfied with the loyalty of Canada. We do not believe for a moment that this Reciprocity agreement means any political rapprochement to the United States of America. We believe that in freedom is the security of this Empire; and it is because we as a Government believe in Free Trade, because we believe that Free Trade between the United States and Canada will be as good a thing for Canada as we believe Free Trade to be for ourselves—it is because we believe that it is by giving these great Dominions their freedom and not trying to check and cavil at them as the hon. Member would do, and by that means alone, that we shall retain their loyalty and maintain the interests of this great Empire.


I was rising all last night and I have been rising to-night in order to catch Mr. Speaker's eye, and I am only the third Liberal Member outside my very admirable Friends on the Treasury Bench who has been called upon, while on the other side of the House there have been speeches from eight Members to whom it has been my privilege to listen. I congratulate them on their success in catching the Speaker's eye. I also congratulate them on the fact that they have occupied 110 minutes of the time of the House, while the speeches on this side have only occupied fifteen minutes. I shall not endeavour in my remarks to make good the balance of time, though I feel I have sufficient indignation in my bosom to enable me to discharge that task. One question to which I wish to call attention has reference to the general disposition which we find in various Departments of the State to rely excessively upon the views of subordinate officials rather than on the point of view of the House or the public at large. We have had the question of Colonel Morgan raised to-clay, and I should have liked to add my quota to that interesting discussion. While I do not wish to bring it up again, there is one question that has not been asked nor answered on a very material point in connection with the Colonel Morgan incident. It is this: How was it that Colonel Morgan was ever thought of in this connection? Did he come and present himself at the door with an application for a job, or was his case set out by some friend in the office. I cannot for a moment imagine that he was sent for by the Secretary for War, or the Under-Secretary for War, or the Financial Secretary. I am certain myself that if we got at the bottom of this we would find that the whole of this unfortunate affair has arisen out of some friend's action, or I might say of some jack-in-office, who has put forward Colonel Morgan's claim. That is only one instance of this tendency to rely on subordinate officials. I might point out that exactly the same state of things existed in connection with the diffi- culties experienced about the magistracy. The Lord Chancellor was led, I believe, into his difficulties with the magistracy because he was too ready to take the word of the lord lieutenant. Undoubtedly that has been the case in many instances, but I shall only name one.

Take the case of the Isle of Ely, the case which the hon. Member for Wisbech has shown up, and where it is admitted, I believe, that the Lord Chancellor took the word of Lord de Ramsay that he did not know the politics of the gentleman appointed. All this time Lord de Ramsay was president of the Conservative Association, and these gentlemen were vice-presidents, and yet in the simplicity of his heart, and trusting to the people who ought to be loyal to him, and who work with him, the Lord Chancellor was led into this totally untenable position. I call the attention of Ministers to the great danger they are in if they follow too readily the advice of subordinate officials rather than seek for guidance in the sense of the House of Commons, I venture to say that after all there is a great deal of wisdom left in the House. No doubt some Members are foolish enough even at the eleventh hour to dictate to the Colonial Conference; they seem to desire that the administration and offices under our able and advanced Radical Ministers should be kept up to the mark of administration in a proper spirit. I will now give one other instance. There is the Board of Agriculture. In my opinion if a forward policy had not been put into force in connection with the allot-men question we should be, electorally speaking, in a worse position than we are at present. Why was it that our request that more Commissioners should be appointed was first refused? It was, as far as I can understand it, due to the traditions of the office and the objections raised by the secretary and other officials. They are very respectable and very capable men, but they live on the old traditions of their positions. But, Sir, we are out to make this country the most democratic and successful Liberal country in the world, and that can only be done by carrying on the work of these Government offices in the proper democratic sense and having loyalty in the administration of the Ministers in office and a sense of loyalty to the party that support them, and not by excessive loyalty to the officials with whom they have to work.

I wish to refer to one other instance, and that is the Holmes circular, which I am perfectly sure is exercising the thoughts and the attention of hundreds of people in the country at the present time. Let me point out that every family which has one of its members in the teaching profession is stirred to the very depths of its feeling by this circular. Every family which has a child that it wants to put into the Civil Service is up in arms against the spirit which it thinks, and perhaps rightly thinks, is there revealed. Every family that has a friend or relative in any department of the Civil Service is wondering what the Government is going to do, and I make no doubt, unless something is done, and done under thoroughgoing and business-like conditions, by-elections will reveal a certain amount of difference and difficulty to Ministers. Let me point out -what the Holmes circular really amounts to. It amounts to this: that superior officials in the office of the Board of Education—the Chief Inspector of elementary schools and the Chief Permanent Secretary of the Board of Education—put out of themselves a circular which they approve, but which they did not submit to their chief. Their chief, the President of the Board of Education, as soon as this was brought to his notice at once recalled it and at once signified his total disapprobation. Yet when the matter was brought up on the floor of the House of Commons by the hon. Member for Chelsea, who, I think, has done more service to the country than any other Member of the Tory party this Session, he is treated by the President of the Board of Education as if he had done something underhand in bringing it successfully to light.

I want to make it perfectly clear to Ministers for whom I have a great deal of admiration, and they need not pretend they are not listening to me for I know they are, that I want to give them good and sound advice. I do not want them to make any reply to my remarks, but want them to read, mark, and inwardly digest that it is their duty to be loyal to this House and to be loyal to their party followers and to the public sentiment of the country before they are loyal to their permanent officials. If they will only go home and think over these remarks, I am sure they will have a very pleasant holiday, and if they think over them to some purpose when they come back, then we shall have a very successful time for the remainder of the Session.