EMPIRE FREE TRADE.

HC Deb 29 January 1930 vol 234 cc1029-88

Mr. REMER

I beg to move, That, in the opinion of this House, it is desirable that the Empire should be developed as a single economic unit with internal free trade as the ideal; and that His Majesty's Government in the United Kingdom be urged to open negotiations with the other Governments of the Empire with a view to the formulation of a policy designed to secure that the purchasing power of the Empire shall he directed primarily to the full employment of the inhabitants of the Empire. In moving the Motion which stands in my name, I think most Members of the House know that I am not a new convert to this cause. There appears in my Election Address at the last General Election these words: IMPERIAL PREFERENCE AND EMPIRE DEVELOPMENT.—I also stand for the continuance and extension of Imperial Preference. It has proved to be of immense value to our export trade, and I sincerely hope that by pushing forward the ideal of Joseph Chamberlain we may achieve his ultimate aim of Free Trade within the British Empire. 4.0 p.m.

Most Members of this House are well aware of a book which was written by the great Conservative leader Benjamin Disraeli, called "Endymion." One of the characters of that book is a thinly-disguised replica of Richard Cobden, and that character is made to say that if the Corn Laws were repealed, in five years the hostile tariffs of the world would come tumbling down. In my copy of that book there appears, in my father's handwriting, the statement: "Forty years have passed, and the hostile tariffs are still there." Ninety years have passed, and the hostile tariffs are very much worse than they were in my father's time. I have been told by many people that this scheme is impossible. To the faint-hearted all things are impossible. I have been told that there are difficulties. Difficulties are things made for statesmen to get over. This is a great problem, and I ask the House to approach it, not in a party spirit, but in the spirit which the Prime Minister referred to at the opening of this Parliament, in a council of the nation, forgetting shibboleths which are 90 years old, forgetting quarrels which are 40 years old, even forgetting quarrels of last May, and to approach this sub- ject in a big, statesmanlike way and try to find in what way we can help our industries, our country and our Empire.

The first question I was going to ask the House to consider is: Is it worth while? The British Empire is the largest fiscal unit in the world, and it can be made the largest economic unit, covering as it does 12,500,000 square miles, populated by 440,000,000 people, or one-fourth of the territory and one-fourth of the population of the world. Quite apart from the £300,000,000 of manufactured goods which come to this country from foreign countries, there is the great flow of foreign goods into our Crown Colonies and Dominions. If we examine the raw materials, we find that the Empire produces 24 per cent. of the coal of the world, 71 per cent. of the gold, 80 per cent. of the nickel, 99 per cent. of the jute, 58 per cent. of the rubber, 62 per cent. of the palm products, and 22 per cent. of the wheat. The annual imports into the British Empire amount to no less than £2,200,000,000, and it is important to note that out of that figure foreign countries supply as much as £1,400,000,000, or very nearly two-thirds. I would like hon. Members to compare that figure of £1,400,000,000 with our total exports of £750,000,000.

Let us consider our Crown colonies and Dominions. Take, first of all, the Crown colonies and the non-self-governing colonies. For the purpose of convenience, I am going to divide the colonies into three groups. There is, first of all, the American group composed of the West Indies, and the two territories in the South American mainland—British Guiana and British Honduras. There is the African group, with ports on the East and West coasts of the continent of Africa, and there is the Asiatic group composed of the Malay States, Hong Kong, Ceylon and Borneo. I am dealing with these first, because here we are seeing the greatest development and the greatest increase of trade. These territories are being developed by our brains, our resources, our initiative and our capital, and they have been established by British pioneers. What are we doing it for? Apparently, at the present time we are developing those territories solely in order to find trade for our foreign competitors, for, if we examine the figures, we find that out of the total imports into those territories, this country sends only 26 per cent., and those territories are rapidly increasing in their trade. If the rate of increase that has taken place during the last five years is maintained, the present figure of imports into those territories of £250,000,000 will reach in the year 1932 the figure of £430,000,000, and in 1940 as much as £1,000,000,000. I ask the House to compare those figures with the total exports of this country amounting to £750,000,000.

I would like the House to turn its attention for a few moments to the great Empire of India. When Joseph Chamberlain started his campaign in 1903, there was an Excise in the Bombay cotton mills of 3½ per cent. There was an equivalent import duty of 3½ per cent. also on goods which Lancashire sent to India. To-day the Excise has gone, and the cotton goods from Lancashire and all other countries going into India pay an import duty of 11 per cent. What has been the result? In 1913 the proportion of Lancashire trade which was secured in cotton in India was 43 per cent., and Lancashire sent to India as much as 3,000,000,000 yards of cotton cloth. In 1928 Lancashire was able to send to India only 1,500,000,000 yards of cotton cloth. Where has that trade gone? Hon. Members may think that it has gone to the Bombay mills, but a close scrutiny which has been made by economists shows that this trade has very largely gone to Japan and also to Italy and other Continental countries. Japan sent to India in five pre-War years an average of only 3,000,000 yards, whereas last year the figure was 357,000,000 yards. I have here an extract from the "Financial Times" of Monday last, which I propose to read: At an extraordinary meeting of the Cotton Federation, at which the President, Mr. Fred Holroyd, presided, called to review the state of the trade, a statement was made that in the coarser counts of cotton margins had a tendency to get worse. This they were inclined to attribute to the activities of Japan, particularly in the Indian market. During the eight months ended October last, while our imports of cloth to India declined by over 40,000,000 square yards, the imports of Japan increased by 116,000,000 square yards, or more than a third of the total British imports. I have extracted some figures as to Japanese wages which have been taken from a book published by the International Federation of Master Cotton Spinners and Manufacturers Association by Mr. Arnot Pearse, on his visit to Japanese and Chinese cotton mills, with a preface by Mr. Frederick Holroyd, president of that federation, which it would repay all hon. Members on the opposite side interested in trade unionism to read. The conclusion which Mr. Pearse arrives at as to the comparison between British and Japanese wages is that, taking into account the welfare system in Japanese cotton mills, the wages in the Japanese mills are less than one-half what they are in the British mills; and let it be noted that, in spite of the fact that the Japanese mills have announced to the League of Nations that they have abolished night work, the women and children at the present time work in those mills from 5 a.m. to 11 p.m. in two shifts. [An HON. MEMBER: "Under Protection!"] If we look at the importation of Japanese cotton goods into East Africa, it is sufficiently alarming, and I am quite satisfied, from the investigation I have made, that the main cause of the trouble in Lancashire at the present moment is the serious Japanese competition which is taking place all over the world. In this country at the present moment, Japanese cloth is being sold even in Manchester. I think that if our forefathers had heard of cotton goods being sold in Manchester, let alone talking about taking coals to Newcastle, they would almost have said that such a thing was impossible and unbelievable.

The second question I ask the House to consider is: Can if be done? It can be done, and it must be done. In the French fiscal system all colonies and territories in a similar position to Crown colonies have been placed in the French Fiscal Union. Turning to the United States of America, where years ago tariffs existed between State and State, to-day there is complete Free Trade within the entire unit of the United States of America. In addition to that, included in the United States fiscal system are the islands of Porto Rico and Guam, and also to a very large extent the Philippine Islands. If I may take as an example the island of Porto Rico, which is in close proximity to Jamaica, we find that the value of the trade of that island was four times as great as that of Jamaica, and that 86 per cent. of the imports were taken from the United States of America, while in the case of Jamaica only 28 per cent. of her imports came from us. Take the case of Algeria: 79 per cent. of its imports came from France, while Madagascar took 81 per cent. Compare the figures of that one island with the imports to our own colonies of only 26 per cent.

I would ask the House to turn its consideration for a moment to Canada. By joining in she would have the resources of the colonies at her disposal equally with Great Britain, and their wide and great markets open to her. Moreover, there is only one country in the world capable of absorbing the wheat surplus of Canada, namely, Great Britain. Until the flow of cheap wheat from the Argentine and dumped wheat and flour from the continent of Europe is checked, the Canadian farmer, as well as the British farmer, will be faced with ruin. I ask the House to consider for a moment the question of wheat. In 1928, we purchased from Canada £22,000,000 worth of wheat, and we purchased from the Argentine £14,000,000 worth of wheat. In 1929, we purchased only £14,000,000 worth of wheat from Canada, but our purchases from the Argentine went up to £23,000,000.

Let us consider for a moment the position in Australia. I have been told that Mr. Scullin, the Prime Minister of Australia, is one of the greatest dangers to this scheme; but in my opinion a far greater danger is the right hon. Gentleman the Chancellor of the Exchequer, who seems to worship every morning at the shrine of Cobden with the fervour of a religious maniac. There have been signs in Australia within the last few days that, in that colony, there is a considerable body of opinion in favour of the principle of Empire Free Trade. Although the country party have not as yet finally passed this Resolution, we have reason to believe that they will take up this cause with enthusiasm. Australia could not fail to benefit by Empire Free Trade because 95 per cent. of her exports may be classed as primary products. Like Canada, Australia has been driven out of the British market by the imports from the Argentine. As Canada has been suffering in the case of wheat, so has Australia been suffering in the case of meat, Before the War Australia sent us 170,000,000 lbs. of beef per year, and since the War those imports have dropped to an average of 100,000,000 lbs. per year. It is important to note that under the new Government of Australia great efforts are being made to make Australia a great wheat-producing country. There are also some other minor Australian industries, such as wine and fruit, which are capable of great development.

Let me now turn to South Africa. It can be similarly said that South Africa would benefit to a very material extent by this policy. If we examine her imports, and leave gold, silver and diamonds out of consideration, we find that South African exports amount to £33,000,000, and there is great anxiety in the Union to increase its agricultural wealth. In the Union, there are 10,500,000 head of cattle, and yet South Africa only exported to the value of £170,000 in 1927. An Empire Free Trade market, involving, as it would, a tariff on foreign beef would give South Africa the opportunity to market more beef in this country. South Africa is exporting more and more fruit every year, and her exports in this respect have exceeded £1,000,000. There is an added advantage in assisting this fruit business, because we know it is grown, packed and shipped under wholesome conditions which is not always the case with the goods shipped from the Near East. There is also the sugar industry of Natal, which an Empire Free Trade market) would do a great deal to assist. Her exports of wool do not exceed £17,000,000, and yet Great Britain paid £15,000,000 to foreign countries for wool in 1927. Now I come to the Dominion of New Zealand. It should be noted that this island gives the largest preference and more trade per head of her population than any of our Dominions and Colonies; and yet, in spite of this, there is not one single item in our fiscal system which gives New Zealand assistance of any kind.

My third question is: How can my object be carried out? It can be done immediately. It can be done immediately by the formation of what I am going to describe as the British Empire Fiscal Union, and that Union would embrace, not merely these small islands, but all the non-self-governing Colonies, and that plan could be put into operation at once. It could be put into operation by placing a tariff on all foreign goods, so that these non-self-governing Colonies would be inter-trading between each constituent part and the Motherland. Look at the advantage that would be to this country! Not only would there be £300,000,000 worth of manufactured goods from abroad coming into this country, but also £200,000,000 worth of merchandise which comes into our non-self-governing Colonies. We should have greater scope for our manufacturers and producers of raw material and food in those non-self-governing Colonies. The House may ask: What are you going to do about the self-governing Dominions? We have given them self-government, and we cannot interfere with their discretion, but we can negotiate. They would say that their infant industries need protection against British competition. It is no part of this scheme that we should attempt in any way to crush any industries within the British Empire. There are many precedents which can be turned up where a tariff has been raised within a customs union.

May I now turn back for a moment to India. It might be said that the Bombay Mills would need protection of some kind, brut I have the highest authority for saying that the Bombay millowners are not in the least afraid of British competition. What they are really afraid of is Japanese competition. In the negotiations which our Empire would undertake, it would be the obvious duty of the British representative to suggest that the way in which we could help British trade would be to place a higher tariff on foreign cotton going into India than is charged upon British cotton, and that would enable our own mills to secure more trade. It may be asked: What is India going to gain in exchange I We would offer to India a great free trade market in the British Empire Fiscal Union which I have described. We should secure advantages for the Lancashire cotton spinners and weavers, which would be of untold value to all the workers in that industry. After all, India is losing the British market. In 1924, we bought £24,000,000 worth of Indian tea, and more than £6,000,000 worth of Indian wheat. In 1929, we bought only about £20,000,000 worth of tea, and practically no wheat at all. Given a fair chance in the British market, I think India could steadily increase her agricultural production and forestry products, and in that way she would increase the purchasing-power of her people.

It has been said by a well-known economist that, if the purchasing power of the Indian people was increased by one shilling per head per annum, India would be able to take £7,500,000 worth more goods annually. I well remember the right hon. Gentleman the Member for Farnham (Mr. A. M. Samuel) saying in this House that if John Chinaman could be induced to wear his shirt an inch longer all the troubles of the cotton industry would be at an end. That may be regarded as humorous, but it is sound economically, because, if we can by any means increase the purchasing power of the people, it will mean increased trade. The difference between those sitting on this side of the House and those sitting on the benches opposite is that on this side we want to make all these things economic while hon. Members opposite take no steps of any kind to make them economic. This scheme has been proved to be founded upon sound economics, and it has proved successful wherever it has been tried.

I want hon. Members to turn once more to Canada. Canada imported last year £5,000,000 worth of anthracite coal. If Canada would put a duty of one dollar per ton on anthracite coal coming from the United States of America and leave free the exportation of coal from this country, there would be an additional trade of £5,000,000 a year for the South. Wales coalfields. If we consider structural steel and steel plates, of which there is very little production of any kind in Canada, we find that last year Canada bought from the United States £10,000,000; worth of these two items. That would mean £10,000,000 more trade for the workers in this country, who want work so badly at the present moment. I am told that £10,000,000 worth of structural steel and plates would amount to about 1,000,000 tons, and that means at least 3,000,000 tons of coal. What has Canada to gain from offering us these advantages? She would gain by the free importation of Canadian wheat here, and she would also gain by the free importation of other products, such as timber, newsprint, and wood pulp into the British Empire fiscal union. Furthermore, our Colonies would buy more agricultural machinery and motor cars from Canada than has previously been the case.

Australia has the greatest advantage of all by coming into the fiscal union, because she would have a free market for wheat, wool, and beef, providing that she was able to give us something substantial in the way of benefit for our manufacturers. South Africa, with sugar, wool, and other products, would get the free importation of those goods into our country, providing, also, that our negotiators were able to secure corresponding advantages in South Africa. Little New Zealand, also, would, I think, gain at last a recognition of the great services which she has rendered for so long to the cause of the Empire. What is our advantage, summed up? It is that we should by this means maintain a material increase in the exports of our manufactured goods, or, in other words, a large share of that £1,400,000,000 which is at present supplied by foreign countries to the Empire, to add to our present exports of £750,000,000.

Doubtless many will be asking the question whether I am in favour of taxing food and raw materials. If I am asked that question in this crude way, my answer would be in the negative, and in any case, we only propose to tax foreign food and raw materials. [Interruption.] There cannot be any rise in price, because the British Empire can supply us with all the food we need, quite apart from the production in this Island itself, which would probably tend to increase. As to raw materials, we have the example of the duty on raw silk, where manufacturers, when exporting their manufactured articles, receive a rebate, an arrangement which to my own knowledge has worked with complete satisfaction; and a similar system of rebates could be arranged in the case of other raw materials which might be subject to taxation. We must, however, look at this matter as a big business scheme. Let me emphasise that I regard this matter, not as a political question, but as a business question. Under this scheme, great volumes of trade would flow to our cotton mills, our woollen mills, our steelworks and our coal mines, and also to our agricultural workers. In circumstances like these, I have no hesi- tation whatever in facing the situation with a stout heart. I am not in the least afraid of the parrot cry of "Your food will cost you more." Even if that statement were true, which I do not believe for one moment, there would be the other side of the ledger to look at. We know and can prove that we should, under this scheme, be giving good and permanent employment to our people, instead of doles and unemployment. We know and can prove that our people would be offered happiness and prosperity, instead of misery and destitution.

I must turn for one moment to the Amendment which has been put down by the Liberal party. In the eleven years during which I have been in this House, I have seen a great advance in opinion. I have seen Members modify their Free Trade, or, rather, their Free Imports views considerably. To-day it is obvious that there are many Members who are thinking deeply on this subject with an open mind. It is true that there are some eminent Members of this House whom I have long given up as hopeless. The right hon. Gentleman the Chancellor of the Exchequer I have given up as hopeless long ago. Until yesterday morning, I had given up the right hon. Gentleman the Member for St. Ives (Mr. Runciman), but I see that his name is attached to the Liberal Amendment. We have heard speeches from the benches on the Socialist side tending towards this scheme of Empire Free Trade. I remember that the hon. Member for St. Helens (Mr. Sexton) and others voted for Imperial Preference in the year 1924, and that the hon. Member for Camlachie (Mr. Stephen) and the hon. Member for Bridgeton (Mr. Maxton) made speeches which tended in the same direction, although they and their friends abstained from voting.

Nothing has been more marked, however, than the great advance shown by the Amendment which has been put down by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and his friends, and, comparing this Amendment with his speeches of 1906 and 1910 in the country, I congratulate him on his courage. Although he has not been able to see the full light of day by supporting the taxation of foreign food and raw materials, this will doubtless come in time. Therefore, so far from regretting the right hon. Gentleman's Amendment, I welcome it, recognising, as I do, that he has abandoned the fetish of Cobdenite Free Trade; but I would point out that any vote given for this Amendment ties this country's hands when discussing the development of inter-Imperial trade at any forthcoming Imperial Conference. Speaking for myself, I shall vote against it, and I beg all my friends, whether they agree or disagree with me, not to tie the hands of any British Government in the future by voting for the Liberal Amendment.

Many times in this House I have heard Members of the Socialist party plead for the downtrodden populations of the British Empire. I have not agreed with all that they have said, but I have this much sympathy with their views, that I think it should be our object and our ideal to raise the standard of living wherever the British flag flies. Have we done all that we could in the past? I do not think we have. Are we doing all that we can at the present? I do not think so. May I ask the House to forget the past; may I ask them to forget even the present; may I ask them to look at the future? If we are to remain a great Empire, we must raise the standard of living of every deserving British citizen, in whatever part of the Empire he may live. The scheme which I have outlined puts forward a practical policy for putting the British Empire upon an economic basis. It alone holds the field; it is our only hope; and for that reason I ask the House to accept the Motion which I have moved.

Mr. MARJORIBANKS

I beg to second the Motion.

I rise to do so with great enthusiasm, but with a nervousness almost equal to that which I felt when I first addressed the House. I stand here as a young man, as a new Member. I have had no experience, such as my hon. Friend has had, of the employment of labour; I have had no experience of the hard conditions of life which have been suffered by so many of my hon. Friends on the other side of the House; and this is the first of the great Imperial Debates which will animate the proceedings of this House until this Parliament is dissolved. This is a very great occasion, and I feel that it is a great honour for me to be speaking here now. There is an added embarrassment for me. This scheme has achieved a great notoriety in this country. It has been advocated by the Noble Lord who initiated it with great energy and sincerity. He has advocated it first in his newspapers, and then he had the courage to go before the electorate wherever they wanted to hear him and to preach it. It was discussed in Parliament in another place, and now at last it comes before the elected representatives of the people.

I stand here as a party man. The programme of the Noble Lord has appealed to all parties. He has, it appears, made converts outside our ranks. He has received criticisms even from these benches, but the criticisms which he has received have been mainly directed to the expediency or the practicability of his scheme, and not to the general principle. I stand here as a Conservative, and as a loyal supporter of the right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin). I earnestly and passionately believe that the only hope of relieving the present distress in this country is a development of the Empire as a single economic unit. But, at the same time, I believe that this country will look to a united Conservative party to attack the false doctrines and principles put forward by hon. and right hon. Gentlemen opposite. If they are not to play "Old Hatry" with our finances and the institutions which we hold dear, we must have a united Conservative party. In legal parlance, a united Conservative party is a condition precedent to a united Empire, and I have both these loyalties. I see nothing to discourage me in the public utterances of the right hon. Gentleman the Member for Bewdley. His last great speech in public led me to believe that the one great hope for industrial England was Empire co-operation.

I speak as a party man, as I have said, but I am going to make an appeal wider than party; I am going to appeal to the nationalistic spirit which every Member of this House must feel knocking at his heart, whatever his political principles may be. I am going to ask hon. Members opposite to consider what, in spite of all our distresses, are the high standard of living and the high standard of morals of the British people. I am going to ask them to consider what the British Empire has meant to the world. I am going to ask them to remember that even those people whose consciousness of unity is demanding independence from us are asking for their liberty usually in the English language, and always according to English forms. I am also going to remind them that their own economist, Mr. G. D. H. Cole, has found it quite impossible to ignore the immense importance of Empire markets in his "Industrial Economic Policy of the Next Ten Years."

I venture to ask my right hon. and hon. Friends of the Liberal party below the Gangway not to be annoyed because we have torn from them their one last shibboleth, their one last splendid garment, the tattered garment of Free Trade. While I make this nationalistic appeal, I may as well at once make the confession that I am only half British myself. I might be reminded of that in the course of the Debate, and I will confess it now; but I do not think that my American blood need prejudice me in this matter; for, after all, if I believe, and I do believe, that the only hope for this country is the binding together of our Empire into one unit, I also think that a good understanding between Great-Britain and the United States is indispensable to world peace. Moreover, the knowledge, which I learned almost at my mother's knee, of how all the proud and independent States of the American Union were welded together into one great economic and social whole, leads me inevitably to the conclusion that, if we can make a United States of the British Empire, as they have made a United States of America, we could overtop even their amazing prosperity.

There are some facts which, if you have the courage to face them, are so eloquent as to be irresistible. What is the condition of the people of England to-day? We have much to lose, and much to gain. On the one hand, we have a higher standard of living among those of our workmen who are employed than any in the world except the United States of America, our Dominions, and possibly Denmark. On the other hand, we have the terribly haunting problem of unemployment always with us. The one we wish to preserve; the other we wish to cure. That was the issue upon which the last Election was fought, and for this purpose it is really necessary, in explaining this new policy, to consider what issues were before the electorate at the last Election. Of course, we all had a cure. The Socialist party said that it was Socialism, whatever that may mean. As I have said before, in the house of Socialism there are many mansions. I gather that what they put before the country was that, if wealth could be redistributed, if capitalism could be abolished, then we should have a new era, and should be on the threshold of a new prosperity for this country. However true that, may be, whether it be right or wrong, it would at any rate leave a terrible interregnum, in which the standard of living of the workmen of this country and of everyone else would be terribly lowered.

That was what the party opposite said. Of course, they misled the electorate by a number of other very material promises, none of which they have been able to fulfil up to the present time. That is how they got their votes. Then the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) sprang upon the country a constructive remedy all his own. He said that in a year he would permanently cure unemployment by a vast system of relief works such as England or any other country had never seen before. He would reduce the number to normal. There were many members of his own party who, when he first announced this extraordinary scheme disagreed with him. They criticised, and even denounced, his policy, but the coffers were closed against them, and they came to heel. When nomination day came, 600 of them faced the electorate with a pledge which one cannot help thinking many of them did not really believe in, but which, for fear of ex-communication, they dare not withhold. If one cannot but deplore their political credulity, one can at any rate admire their courage. It was in the true Balaclava tradition: Their's not to reason why, Their's but to do and die: Into the valley of death Rode the six hundred. Then they were returned, or they were not returned. At any rate, they were not the 600. If one may pursue the analogy even further, one can see the great spirits of Liberalism reviewing the gallant scene and, like the marshals of Napoleon III at Balaclava, saying, "It is magnificent but it is not Liberalism."

What was the Conservative policy at the last election? We fought upon our record, and it was a magnificent record. The right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin) guided this country through a most stormy sea into a safe port. At the most difficult time, perhaps, of our modern history, he showed moderation, and a spirit of peace which added lustre to the name of statesman. It might have been better at this time if we had not called attention to the difficulty of the voyage through which we had just passed, but had flown all our pennants and ensigns to advertise our new adventure. That, I am afraid, was not the course we took, and, faced with these three policies, the country returned a negative verdict, a verdict of safety first. They gave absolute power to no party, but they gave office and a considerable degree of power to right hon. Gentlemen opposite. And what use have they made of it? The country must be bitterly disappointed even with giving them office. I think the whole country-must be longing at this stage for a new policy. They want a permanent remedy. Here we are still with half-a-million unemployed more than last year. What are we going to do about it? We need some constructive remedy. If we go upon the old watchwords and the old policies, we must agree with the Lord Privy Seal that the case is quite hopeless. We can only go in for palliatives. The old cries of Free Trade and Protection are dead and useless. If we go in for the old idea and the present plan of unrestricted and unreciprocal Free trade, of course, we are ruined.

I would ask the Chancellor of the Exchequer for a moment to come down from his financial heights and to desist from his bitter polemics against the right hon. Gentleman the Member for Epping (Mr. Churchill), who by some chance I do not see in his place. I withdraw that unreservedly. I ask the right hon. Gentleman to desist from his polemics against my right hon. Friend and to consider with me a few very simple facts. Before the War our export trade was 16 per cent. of the world's export trade and that of America was 12 per cent. At present, America has 16 per cent. and Great Britain has 12 per cent.—a complete reversal. According to 1913 dollar values British exports have increased 5 per cent. while those of the United States have increased by 48 per cent. The total world trade has increased probably by 20 per cent., whereas the total British export trade is only 83 per cent. of its pre-War standard. On these figures, surely one sees the writing on the wall as clearly as Daniel saw it at Belshazzar's feast, but I do not ask the right hon. Gentle man to put a golden chain round my neck or to make me the third ruler of the Kingdom, because any school boy must draw the natural conclusion, If we go on at this rate it will mean, of course, financial ruin. It will moan that our markets will be flooded with sweated goods from Europe and by mass produced goods from America, and we shall be driven even out of what place we have in foreign markets by the rising tariffs. Further still, we shall be driven out of our own Imperial market, of which we are so sure. We shall be driven out apparently by the rising tariffs in Australia. Of course, this is not an argument against Empire Free Trade, but it is-an argument in favour of it, because if the cause of unity of Empire is not preached, we shall be shut out of our Imperial markets by our own people.

The truth is that a narrow Protection will not save us either. We are the largest importing and the least self-supporting country in the world, and we shall be ruined if we have a narrow system of protection. So will our Dominions be ruined if they see themselves as a single economic unit. I ascribe the unemployment and the lack of prosperity in Australia to their high isolated protective duties. But, once either we or our citizens in the Dominions cease to look upon ourselves as single units and look upon ourselves as part of one great whole, we are on the threshold of a new policy which is neither Protection nor Free Trade but has the advantages of both and the disadvantages of neither. If we look at the simplest map, if we read our children's history books, if we study the marvels of modern transport, if we look at the magnificent example of the prosperity of the United States, we shall have some idea of the great power behind this Imperial move- ment. Of course, the United States must always beat little England in this international game. We cannot compete against them as things go on at present. M. Briand saw that neither this country nor any other single European country could compete against America, because they have a huge domestic market and we have not. They have not only the biggest domestic market but incomparably the richest, and not the richest merely per capita of her population. She has the riches of a common currency, a common taste, a common consumers' demand, and a common language—the English language. Of course, we cannot compete against the United States on those terms. Where then are we to go? Are we to join the United States of Europe and lower the standard of living for our workers immediately and give up everything hon. Members opposite have been fighting for. I am afraid the dream of the United States rejoining the British Empire is merely a Shavian dream.

Where then shall our commercial travellers look? They must look to their best customers—the Empire. What will they find? At first they will be exceedingly encouraged. They will see that the Empire takes half our manufactured goods. They will see that the Dominions buy more from us than the non-British markets and that, although our total world trade has decreased, our Empire trade has increased, and they will be able to form the conclusion that our Empire markets are on the whole stable and are increasing. If they look more closely at the figures they will he discouraged. They will see that Great Britain is not sharing as she should in the increased imports of our Dominions. Our share of the imports of Canada has fallen from 21 per cent. to 16 per cent., while the United States share has risen from 64 per cent. to 65 per cent. In Australia our share fell from 51 per cent. to 43 per cent., while the United States share rose from 13 per cent. to 24 per cent. In New Zealand our share fell from 59 per cent. to 47 per cent. and the United States share rose from 8 per cent. to 15 per cent. That shows how we are losing the international game even in our own Empire, and what a fallacy lies behind these smug figures of increased Imperial trade.

5.0 p.m.

I was in the United States Senate during a tariff debate this summer, and I saw a learned Senator reading a long speech for the benefit of his constituents, and the trend of his argument was that the United States could put up its tariff as high as she liked without doing herself any harm. Another Senator who sat behind me said, "We can only talk like this as long as England remains Free Trade," and he was right. What a competitor she would have if the Empire became a single economic unit! One quarter of the surface of the globe, one quarter of the world's population, of whom the vast majority are governed from London. A single change in policy could be taken to-morrow and make the first step in this great scheme. My hon. Friend the Member for Macclesfield (Mr. Remer) gave the total figures of inter-Imperial trade and the total figures of imports into the Empire. If only we could change this and concentrate and circulate our wealth within our own Empire we can imagine the immense change and the far greater security that would be given to our manufacturers and to the workmen whom they employ. I think Lord Beaverbrook was perfectly right when he stressed the agricultural part of the wealth of the Empire if this scheme were put into operation. He has, at any rate, convinced me that the price of the main articles of food would not rise if a tariff were put on because we have such enormous resources within the Empire. A corollary has been put upon his argument in this way. It has been said, in view of the immense mineral wealth and other forms of wealth within the British Empire that the tariff question of food is a comparatively minor matter. When one considers our great mineral wealth, one is rather surprised that this wonderful position has never been put to the economic account for the benefit of the whole Empire. But we must remember that agricultural wealth is not like mineral wealth, a wasting wealth. It-renews itself year by year and month by month with the industry of man. That is the importance of the vast agricultural wealth of the British Empire. To turn to the mineral wealth, I will give one example—the copper of Northern Rhodesia. Locked away in that vast territory are 20,000,000 tons of copper ore which in five or six years on a moderate estimate would be enough to satisfy the demands for copper in the whole of the British Empire.

It has been said that this scheme should not be put forward to the House of Commons in a serious way until we had some guarantee from the Dominions that they will help us. I am confident that they will respond; and, at all events, since when have we lost the hegemony of Empire, since when has it ceased to be the duty of the House of Commons to initiate these Imperial tasks? It was a comparatively short time before the War that Mr. John Morley, of illustrious memory, wrote in a famous review of Seely's "Expansion of England" that he would be very surprised to see the day when one Australian would be interested in the neutrality of Belgium. Since then five continents have shed their blood for that unselfish cause. The cause of Empire has been immeasurably lifted, deepened, strengthened and enriched in consequence of the union of those tragic and terrible years. That was in an unselfish cause. It is for us to see for our own sakes that the union which we started in those years is not thrown, frittered and wasted away.

I have been dealing with spheres other than the economic spheres. It is now my duty to return to the economic spheres which lie behind all bonds. There is nothing sacred in economics. There is nothing sacred in either Protection or Free Trade. The ideal of Free Trade began as a theory. It became crystallised into a dogma and has ended up as a religion; but, of course, it had a humbler origin. It was good business. Mr. Cob-den was perfectly right; and, if I had lived in the days of Mr. Cobden, I would have been a Free Trader, as my family were. It was to the obvious advantage of Great Britain to have Free Trade at that time. It was a selfish policy and perhaps a cynical policy, but it was the right policy for the prosperity of England. It was to the obvious advantage of manufacturers in this country to buy in a cheap market, to choose what they would manufacture, and to sell to the world as dearly as possible. That is what Free Trade brought to England. [An HON. MEMBER: "Cheap labour!"] I would not agree to that. If it had been carried to a logical conclusion, it would have meant the economic dictatorship by Great Britain of the whole world. Whether that would have been good for the world I do not know, because the whole of the rest of the world would have been in bondage. But in history these things have a way of adjusting themselves. The other nations put up their tariff walls and built up their own home markets, and after the American Civil War, the United States built up a vast home market and were able to send their subsidised goods over to England to compete with ours.

The immense prosperity which Free Trade brought to England had this ironical effect. The surplus profits of our industries were invested in competing industries abroad by free investments, and so our own profits have conspired to bring about our own present unfortunate position. It took a long time for the great prosperity of England to be seriously impaired; but there was a man who saw it before it became an obvious problem. He was a political prophet. I refer to Mr. Joseph Chamberlain, the great father of the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) and of the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain). He saw that the only way to counter competition that would come from tariff barriers abroad was by Imperial co-operation, and he began the first great Imperial campaign. I would like to quote from the great speech he made when he came back to this House badly defeated but confident that he was right. He said: The Prime Minister would be very shortsighted if he thinks he has heard the last of Tariff Reform. We believe that Tariff Reform is closely connected with this great question of the condition of the people. Do what you like, say what you may, it will be continually coming up in one form or another. At any rate we remember what happened when Cobden carried his proposals. He did not carry them all at once. He went through many defeats in the Parliament in which he sat and it was not for a long period—seven or eight years—after he started to agitate that he was able to congratulate himself on his success. We will not be more cowardly than he was; we will not be more discouraged than he was by defeat; and when the Government have failed to satisfy the expectations you have created, when the issues change, when the people once more desire a change of Government, then you will find that we have lost none of our activity, none of the conscientious belief in the necessity and justice of our cause. Then his health failed, and there arose a generation which knew not Joseph. A great constitutional question came up, and then came the War, and all other causes were forgotten. After the War, which made America the most prosperous and richest country in the world, we had our domestic problems to solve. Among them were the problems of housing and unemployment, and everybody was too busy to look at the Imperial vista. The right hon. Gentleman the Member for Bewdley did go to the country really on that issue, but the country did not see the connection between the condition of the people at home and the great Imperial problem abroad, and again we failed. The matter has been dormant for some years, but this cry of Empire Free Trade which is reaching the intelligence and hearts of the people comes to many of us like a ray of hope and indeed like a flood of light. The right hon. Gentleman the Attorney-General said the other day that no man should try to do more than he can. I would respond by expressing the exhortation of the famous British General that to an Englishman nothing is impossible. I could argue with him on economic grounds on these questions, and perhaps, after all, it is better to remind him of the words of one of the greatest patriots and one of the greatest orators whose words ever rang out in this House of Commons, words familiar indeed, but so noble and fine that they can never become hackneyed. I am sure that they are familiar enough to hon. Members on this side of the House: A great Empire and little minds go ill together. If we are conscious of our station and glow with zeal to fill our places as becomes our situation and ourselves, we ought to …. elevate our minds to the greatness of that trust to which Providence has called us. By adverting to the dignity of their high calling our ancestors have turned a savage wilderness into a glorious Empire, and have made the most extensive, and the only honourable conquests, not by destroying but by promoting the wealth, the number, the happiness of the human race. One word more and I have done. [Interruption.] I have appealed, not merely as a party man, to the spirit of legitimate nationalism in this House. I do not think that British nationalism is inconsistent with international peace. Rather, I think, the British Empire is the greatest bulwark for international peace in the world. If it were to be destroyed or to be disrupted, it would be a very-great blow to international peace. If it is going to have this great influence for peace in the world, it must be a prosperous, united and wealthy community. If my poor eloquence has persuaded—I do no suppose it has—even a hard heart of an hon. Member opposite to change his political views and to think at any rate Imperially, as I do, I am sure that we on these benches would welcome him. He would be received with cries of execration by his own people. He would be called a coward and a blackleg, and called by a number of names which undoubtedly would transgress the blasphemy laws which we discussed last Friday, but I think I could give him a reply which he could make to anybody who slandered him. They are the words of a piece of magnificent doggerel by a living English poet: Friend, call me what you will; no jot care I, I that will stand for England till I die.

Mr. SPEAKER

The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has an Amendment on the Paper. It is my intention to call that Amendment, but I should like to point out that, according to our practice in this House, after an Amendment of that kind has been moved, strictly speaking, the Debate ought to be confined to the Amendment and not to the original Motion. The time at our disposal is so very limited on this occasion that I think I shall have the general approval of the House if I allow a wider discussion on the Motion with the Amendment attached to it.

Mr. LLOYD GEORGE

I beg to move, at the end of the Question, to add the words: provided that any such proposals shall not include additional taxation upon foodstuffs or raw materials imported into the United Kingdom. I was hoping that this afternoon we might have a real Debate upon a subject matter which has aroused considerable interest, and, I think, growing interest, in the constituencies. I was looking forward to hearing this afternoon some exposition of this policy. There have been appeals from the two hon. Gentlemen who have spoken—very admirable speeches and eloquent in parts—that we should support the policy. We have even been invited to leave our respective parties and to throng to the standard of the new crusade. But I want to know what we are to fight for? What is the policy? Is it the policy of Lord Beaverbrook or of the other leader of the Conservative party, Lord Rothermere? I will not ask whether it is the policy of the right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin), because that is not to be explained until next week. But which policy? The hon. Gentleman the Member for Eastbourne (Mr. Marjoribanks) taunted hon. Members opposite by saying that in Socialism there were many mansions. I should say that in the Conservative party there are many flats.

I should like to ask, what is this particular policy? I really expected to hear about it from the hon. Gentleman. He is a fervent Free Trader. He has all the characteristics of one. He has written a book, which I read with very great delight, giving a fascinating account of a brilliant legal advocate, whom I knew well, and whom I greatly admired. He points out in that book that his one great characteristic and his strength as an advocate was that he intensely believed in all his cases, however bad. I am not saying that, in writing of that great legal luminary, the hon. Gentleman seems to have imbibed the spirit of his leader, but, having taken up the case, would he mind explaining this crusade, this sacred crusade, as he called it? Is it really so secret that we are not to be told, we ordinary mortals, what it is, what it is all about? Sacred and secret! We are to enter into negotiations, I am told, with the Empire. We are to give instructions to the Chancellor of the Exchequer and the Secretary of State for the Colonies. They are to negotiate. Negotiate about what? They might be told. When they go into a conference of that sort, they will say: "We have received instructions from the House of Commons to negotiate." The Dominions will say: "What about?" They will say: "We do not know." Nobody has condescended to tell us, and that is one reason why we put this Amendment down.

This is not common or garden Protection. It is something sublime. It is something extraordinary. It is Empire Free Trade. Very well! Let us find out what it is! The one test is not manufactures. We do not get any manufactured goods from the Dominions. If we offer to let their manufactured goods in, the offer is so insignificant as to be of no use. The real test is not what advantages we are going to get from getting all the trade of the Empire. You need not roll out statistics to prove that if we had all the trade of Canada, of Australia, of South Africa, of Gambia; if we had all the trade of all our Dominions, and all our Colonies and Dependencies, it would be desirable. The real test is, what are you going to give in return, and we have not heard a word about that in this Debate. I understand that there is to be a speech from the Front Opposition Bench. I have great respect for the right hon. Gentleman the Member for Brighton (Major Tryon), who is going to speak, a genuine respect—I think everybody in the House will agree with me—as a Member of this House and as an admirable Minister. He will not regard me as saying anything which is in the least offensive to him if I say that he is not one of the big five, or is it the big four now? He cannot give a pronouncement on behalf of his party. If there was anything to be said on that vital matter surely it would have been said by one of the three or four men who more or less lead the party.

Therefore, I am assuming that we are not going to hear a word upon that particular topic; but we are entitled to know something. There is an Empire Economic Conference coming, I believe, this year. If the right hon. Gentleman and his friends were in office, what would they propose? The House of Commons is entitled to know, and the country is entitled to know. Are they going to the Dominions to say: "If you drop all your tariffs against us, we will tax the food and raw material that come from every foreign country." Is that the policy? We are entitled to know, because it is a very vital matter. It is no use giving us a schedule of advantages which we should get; what are we offering in return? This Motion is quite harmless, and in many ways quite desirable. I am all for making, if you can, an Empire economic unit. The Empire Marketing Board was an effort of that kind. I forget what it is costing us a year—it may be a million pounds, Whatever it is, nobody in this House has grudged it. Here we are, out of a heavily taxed country, voting a considerable sum of money for pushing the goods of the Empire, oven when they compete with our own.

If, on the other hand, you are to go to the Dominions and say to them: "Will you give us the same advantage, by pushing our goods in your country, even when they compete with yours?"—[Interruption.] That is an economic unit. I am all for an economic unit. I am all for improving the facilities between different parts of the Empire, especially transport facilities. Anybody who knows, as was pointed out by Lord Beaverbrook, what has been accomplished for the Argentine by improving shipping facilities will, know what that means for the Empire. In 1907, at the first Imperial Conference that I had the honour and privilege to attend, I proposed, on behalf of the Liberal Government, that we should consider together whether we could have some sort of improved shipping and transport facilities between one part of the Empire and another. Unfortunately, the great discussion about Imperial preference and tariffs cut right across, and it was impossible to get any decision upon the subject. But it was no fault of ours. I am all for it.

Empire Free Trade! Admirable! Admirable! We are not taxing the commodities of the Dominions. We concede free trade to them. [An HON. MEMBER: "Does everybody else?"] I am coming to that. That is a point that I want to know. We are conceding free trade to them. Their raw material, their food is pouring in here. We are encouraging it. We have not put a tariff upon it. There was a duty put on by the predecessors of the right hon. Gentleman, when I was a Member of this House—I forget whether it was 1s. or 2s. on corn—but we fought it, and it was taken off. We are all for Empire Free Trade, and if they give us exactly the same free access for our commodities as we are giving to theirs, well! there is Empire free Trade. If they say: "There are certain things of ours which you are still taxing, and if you will take that tax away we will give free access to yours," well! there is something to discuss. But is that the proposition, or are you going to say: "We are going to put a duty on all the food and on all the raw material that comes from every other quarter, and let yours come in free"? If so, what are you going to ask in return? That is vital.

With respect to Lord Beaverbrook, I agree with everything that has been said about the extraordinary energy, intelligence and vigour which he hag thrown into this business. I have great admiration for him. What is the proposal? He has done a lot of shepherding of his party towards Protection, but not into his fold. He proposes that there shall be a duty on food and raw materials coming from any other quarter except the Empire. Is that accepted? They are not yet in that fold. Why? Because they have been there before. They have suffered severely from the weather, and have lost many promising lambs. So they do not like the fold, they do not care very much for the shepherd, and they like still less his miscellaneous collection of stray dogs. So they are not going there. I want to find out to-night what is their intention. I think they are more inclined for Lord Rothermere's pen—a tax on manufactures, none on food! They are between the two, but they will have to go to one or the other. Needs must, when two of them drive. Are the Conservative party for Lord Beaverbrook's proposition, that you should go to the Dominions and Colonies and say: "We will tax the commodities when they come from foreign countries, and leave yours free, on condition that you leave our commodities free to go in." No. He is to be allowed to be praised. They say: "This is very good! It is helping the grand cause of Protection!" He is still to be one of the teachers of the party, but the party is not going with him. This House and the country are entitled to know to-night whether the Conservative party is going to declare for or against that policy. The hon. Member who opened the Debate talked about Mr. Joseph Chamberlain's policy. That is not Lord Beaverbrook's policy. Lord Beaverbrook in his speech in the House of Lords, which I read with intense interest and very carefully, because I had to read what the apostle said in order to master the creed before it came here, said: I have great admiration for Mr. Joseph Chamberlain. I followed him at the time, but I want to make it quite clear at the outset that Mr. Joseph Chamberlain's policy is not mine. Lord Beaverbrook is not out for Preference; he is out for Empire Free Trade, which means a tax on food and raw materials coming from other countries which are not inside the Empire, provided there is complete freedom inside. Is that the policy which hon. and right hon. Members are going to support? I have tried to find out whether it is even Lord Beaverbrook's policy. I have been seeking an explanation, but as soon as I have read one explanation another is substituted. I have to begin again. He has outlined at least five different policies, not one of them the policy explained by his Friends in this House to-night. I am going to tell them the policy for which they stand. Lord Beaverbrook started only a few months ago; and there is a new policy every new moon. I notice one peculiarity; when he has a new policy, he sends it immediately to the editor of the "Morning Post"; trying it on the dog, so to speak; and if he survives then the "Daily Express" gets it, and then hon. Members here will have to swallow it. Hon. Members will be forcibly fed.

Let us see what these policies are. The first was perfectly clear and definite, that there should be no Customs barriers against Empire goods anywhere within the Empire; any goods sent from us to the Dominions, admitted free; any goods from the Dominions to this country also admitted free, but a ring of tariffs round the Empire as a whole. That is an intelligible, I will not say intelligent, policy. That was the bribe to the Dominions and the Empire—send our goods in free, and we will put a tariff against all your competitors. That was the inducement. Then came a slight alteration. He began to discover that that would be disastrous to the industry of Canada and Australia, so he said "except key industries." Then it was discovered that "key industries had a meaning," that it referred to those industries which were essential in the event of war, and he said that is not wise. So he said "key and important industries," and he writes a letter, not to anybody here but to Canada, and wants to know why anybody should have been so wicked and absurd as to think that he meant them to take away tariffs on our goods there. Then he goes on to realise that industries have grown up in the Dominions behind a tariff barrier erected as much against Great Britain as against the rest of the world. This is the apostle: If we were asking the Dominions to allow British manufacturers the right of free entry, I can well understand your dismay. And he says: We are not asking this at all. Where is Empire Free Trade? He is not asking for it. Key industries, gone. Important industries, gone Revenue, gone; nothing but a few odds and ends left, tattered remnants. This is the great trade we are going to get from the Empire; no important industry, iron and steel, machinery, textile goods, boots, nothing of that kind, only a few odds and ends, little things, which are not important. If they are not important to Canada they are not important to us. They have been crisscrossing this crusade until the pattern has completely disappeared. There is now a great scheme for the Crown Colonies, and I will come to that in a minute. Why are the Crown Colonies to be brought in? There are no democratic parliaments in the Crown Colonies. But why is it to be whittled down—because this is of the essence of the matter—and in five or six months reduced to this, shrunk until you can hardly see it? I have been trying to find what is left of it through a microscope; it has almost vanished. Why, because no one that matters will look at it. An Economic Conference of the Empire is to be summoned, and if anybody from any Dominion or Crown Colony puts down a motion for Empire Free, Trade, the representative of His Majesty's Government cannot rule it out of order.

A Motion was put down for Imperial Preference when we were in office in 1906–7 as a Free Trade Government, and the biggest Debate in that conference was the Debate on Imperial Preference. If any Dominion or Colony wants it, Lord Passfield cannot rule it out. Who is going to do it? There will not be a rush, and. I do not think the Colonies and the Dominions need ballot for motions in order to get in first. Is there one of them? There are 20 parliaments in the Empire, democratic parliaments, and there are at least 60 parties in the Empire. There are two or three parties here now on the Conservative side of the House; they are growing every day. But is there a single parliament in the Empire that has approved of this? Is there a single party in any parliament of the Empire that bas approved of it"? I am told that the country party in Australia is coming on. They have not yet arrived.

Mr. REMER

About the same size as the Liberal party in this House.

Mr. LLOYD GEORGE

When they vote for it they will be as important as the Liberal party. I read the "Daily Express" every morning, and only this week I saw a huge headline. A very effective way of carrying on a programme when it does not stand much detailed examination is to conduct propaganda by headlines. Here is the headline this week: Australian resolution for Empire Free Trade. Here, I thought, at last is support, important support, for Empire Free Trade. Like some members of the public, I look at the headlines and occasionally do not examine the paper any further, but as I had to make a speech I thought I would read it all on this occasion, and here it is. This is the resolution which was passed by the Kyabram Urban District Council.

Mr. REMER

Is the right hon. Gentleman aware that Senator Elliott is one of the most influential men in Australia, and that the seconder of the Motion is an ex-Prime Minister of one of the States?

Mr. LLOYD GEORGE

Kyabram is very fortunate in having two such important persons on the council, and I shall wait to see whether the influence of Kyabram will spread, first of all to the State in which it is situated and afterwards to the whole of the Dominion. But what is the resolution? It is not a resolution for Empire Free Trade. This was the resolution: It approved the idea of Empire Free Trade, provided there was no interference with the tariffs set up to protect Australian industries. That is not quite sound, and I suggest to the hon. Member for Macclesfield (Mr. Remer) that he should make a journey to Kyabram in order to convert them to Empire Free Trade, and then work his way round the Empire, and by the time of the next General Election he might reach home again. I must add that the Kyabram District Council carried the resolution unanimously.

But let us look at the latest proposal. It is not expounded here, and I think Lord Beaverbrook owes me a debt of gratitude for being the first man to put his policy before the House of Commons. Therefore, with the permission of the House I will explain the latest policy of Empire Free Trade. The Crown Colonies are to be experimented on; the Dominions for the moment are to be dropped, and you are to say to the Crown Colonies that they must buy all their goods from us. Surely that must mean, on the other hand, that we are going to put a tariff against their products if they come from foreign countries. You cannot trade with the Crown Colonies without giving them a fair deal. There is a long and imposing list of these Crown Colonies. The Dominions have been dropped, and now the great crusade is weather-bound in Sierra Leone. How are you going to help the Crown Colonies? This must be a bargain. I am told that they can buy prodigious quantities of goods. I would like to know a little more about those goods, whether they are goods that we produce or whether they are the goods which they buy from contiguous countries—a very considerable quantity of them. But never mind. Take the manufactures. You say to the Crown Colonies, "You will put a tariff against every country except ours. In return we will put a tariff against every commodity that you are purchasing if it comes from outside the Empire." That is the proposal. Take wheat and cotton. What have you got in cotton? You have Uganda, Kenya, Nigeria and the Sudan—they are all mentioned in this great list. What they produce mostly and sell to us is raw cotton.

HON. MEMBERS

Nonsense!

Brigadier-General Sir HENRY CROFT

There is no cotton at all produced in Kenya, but mostly coffee and other produce.

Mr. LLOYD GEORGE

I will give the hon. and gallant Member Kenya, but he will not contradict what I say about Nigeria, Uganda and the Sudan. I have the figures here, but I do not want to detain the House with them. There you have three colonies mentioned, and their greatest export to us is cotton. As a matter of fact the quantity of cotton that we are getting from the Empire, I am glad to say, is growing. When I was Chancellor of the Exchequer it was one of my privileges to pass through this House a Bill to lend money for the development of cotton-growing in the Sudan—I am not at all sure whether it was not the same in the case of Nigeria—and I believe that my right hon. Friend the Member for Epping (Mr. Churchill) was Colonial Secretary at the time. There the production of cotton is growing. It represented something like £6,000,000 to £7,000,000 last year. But seven-eighths of our cotton comes from foreign countries.

Are you going to say to these Colonies, "We will put a duty on the products that we buy from those foreign countries?" It would be a first class thing for the Colonies. You are talking about advantages. There is an advantage for the Colonies. If you are going to find employment for our citizens in the Empire, why not our citizens in Uganda and in the rest, which are mentioned? If you put a stiff duty on American and Brazilian cotton there is no doubt at all that you help Uganda, the Sudan and Nigeria, and you develop Empire cotton. But where would Lancashire come in? How long do you think it would take for you to develop cotton inside the Empire to make up the deficiency of the seven-eighths? There is more than that. Lancashire's trade is an export trade in the main. I should say that two-thirds, if not three-quarters of what is produced in Lancashire—I am told it is four-fifths—is sold abroad on very narrow margins. The greater part of the goods produced in Lancashire mills is exported. The manufacturers have to send it out to neutral markets, where it has to meet the commodities produced in other countries. We have heard of our fighting Japan in the East and fighting the Italian mills in this trade. That is true. Are you going to sweep away that margin, as you certainly would, if you put a duty on the cotton that comes from outside the Empire, and to send the stuff produced by the Lancashire mills to compete with goods which come from countries where there is no duty on cotton? It is an utterly impossible proposition.

Hong Kong is quoted. It shows the levity with which this thing is considered that Hong Kong should be in the list. Hong Kong does not produce. Its trade is a great entrepôt trade; it is a port. Lord Beaverbrook in the House of Lords referred to it as one of the five great ports of the world. That is true. The shipping there is 38,000,000 tons a year. But what does it thrive on? The proportion of goods that come from our country is a small percentage. It is just the place to which the commodities for China come, and they are passed on to China. Vast quantities come from the United States, from Japan, from Germany, from Siam, from almost every country in the world, and the proportion of British goods is a comparatively small percentage. Are you going to put a duty on all the goods that come into Hong Kong from foreign countries? If you do you wipe it out with one stroke of the pen. It is really too crude for words. But then I am told "The Empire can produce all the food that is necessary." When? How soon?

Mr. REMER

Now!

Mr. LLOYD GEORGE

I do not like to quote from the vocabulary of Tariff Reformers by saying "Nonsense!" but I would if I were a Tariff Reformer. Here last year we had 60,000,000 as against 40,000,000 cwts. in wheat; it was as six is to four. Does anyone imagine that you can, for years and years to come, develop the Empire to such a degree that you can make up that gigantic deficiency which would be the result of your closing your ports against foreign goods? [HON. MEMBERS: "Yes!"] Anyone who thinks about it will realise that it is impossible, for the simple reason that the best and most accessible lands have been taken up and we have been driven further and further into the wilderness. Anyone who has passed over the prairies knows that. The growers are going further and further, and it is getting more and more difficult to develop, instead of easier. Last year the Canadian harvest was a failure. It went down to 40 instead of the 50 or 60 of the previous year. On the other hand the Argentine crop was abounding. What was the result? They more or less equalised things.

But then I am told—this was said in the House of Lords—"Your wheat may go up to 55s. instead of 40s., but really there is no difference between 55s. and 40s. It will not make any difference at all in the price of bread." Lord Beaver-brook is a very shrewd business man. I wonder whether he buys his pulp on that principle. It is said that there is no difference between 55s. a ton and 40s. a ton. There is bound to be a difference. If you add 40 per cent. to the cost of your raw material you are bound to pass that on in some shape or other to your retail business. I do not say that if there is in this or in any country any organisation to dump by mean" of subsidies, which enable you to put on the market goods below the cost of production, that that is in the same category. Lord Beaverbrook mentioned two cases in the House of Lords. He said there was the danger of the Federal Board in America. They have raised, I think, $400,000,000. What is the danger there? As I understand it, it is this: They are going to buy the farmers' wheat crop at a fixed price. Once they have disposed of the quantity which is consumed in the home market, there will be a gigantic or a considerable surplus, and that will be dumped on our market, not by the farmer, but by the Government, practically out of the subsidy which they have granted.

The other case is the case of Germany. Frankly, I have been unable to follow what the transaction is there. The real point is whether the German Government is subsidising the export of wheat in such a way that the Germans are dumping on this market, by means of that indirect subsidy, wheat below the coat of production. Let me say at once, that in my judgment that has nothing to do with either Free Trade or Protection. [HON. MEMBERS: "Why not?"] Upon that there is evidently a different point of view. My view is that a case of that kind is a proposition which stands by itself. Free Trade cannot carry that monster on its head, and on the other hand I am not prepared to see it there for Protectionists to climb on its back to a general tariff.

6.0 p.m.

Any competition which comes from countries with low wages and long hours and high tariffs, we have faced for generations and beaten. We have demonstrated to the world that the higher-waged worker, fighting without being embarrassed by tariffs, has for generations been able to beat the low-waged worker who is burdened by tariffs in every part of the world. Take Europe. When you take vast countries like the United States, with its infinite natural resources, comparison is impossible. But take old countries where comparison is possible. Take the League of Nations figures. In France real wages are 60 per cent. of ours; in Germany 80 per cent. So that we need not fear them. But if a subsidy is used by a foreign Government to throw on to our markets, beneath the cost of production, commodities which we are producing here, that is a proposition which, in my judgment, ought to be dealt with drastically. But I do not believe that tariffs will deal with it. It ought to be dealt with in each individual case upon its merits, after all the facts have been examined by a competent tribunal appointed by the House of Commons to examine them, and, if necessary, there should be an embargo against any commodities of the kind. I apologise for taking up so much of the time of the House but this is a vital matter. I only want to say this. France has a great Free Trade Empire—as was pointed out by the hon. Gentleman—in this sense. It has an Empire of 4,000,000 square miles—[Interruption]. Yes, it is the second Empire to ours. It is a Free Trade Empire—[HON. MEMBERS: "Not quite"]—in the sense of Lord Beaverbrook's first proposition with a tariff ring right round it. In the main that is the position. In the main it has Free Trade inside. What is the result? If we had only the foreign trade of France half our population would starve. [An HON. MEMBER: "They are starving now."] Really, that is utterly ridiculous. If we had only the population of France, to begin with there would have been no unemployment here. France has a population of 187 to the square mile; Germany has 348 to the square mile, and Great Britain has to maintain 468 to the square mile. [An HON. MEMBER: "What about Belgium?"] If the hon. Member thinks it worth while to make that comparison he can do so later in the Debate. I am giving the three comparable countries.

Our problem is a very different one. France with half its population on the soil—[An HON. MEMBER: "We ought to have more!"]—I agree, but you have France with half its population on the soil, and, in addition to that fact, if you take even its prosperous industries, would you "swop" with France? If you "swopped" with France, this great Free Trade Empire, giving us the French trade and letting France take ours, the unemployed here would not be 1,500,000, they would he 10,000,000 at least. We have at the present moment the greatest international trade in Europe. We have the greatest international trade in the world per head of the population and the worst of schemes like this—attractive and fascinating, with catching words which appeal to Free Traders and with another aspect which appeals to the right-down Protectionist—the worst of them is, and the real danger is that they are going to take us away from an examination of oar real difficulties. All this will land us in a controversy which will take the mind of the nation away from the things that matter—the real development of the resources of this country and the real improvement of the conditions of this country. We have natural advantages that no other country in the world has and I have no fear of the future, though we may have more than double the population of France to provide for. We have advantages in climate, in the vigour of the population, in the great fact that our coal measures are within reach of our ports. But if we want to get out of our present difficulties we must stir ourselves and concentrate upon the re-organisation of the country, and, above all, stick to realities and drop fantasies.

Mr. PERRY

I think the attention and interest created by this Debate is an indication of the importance of the subject. Whatever may be the opinion of the various parties in the House on this question, I, for one, am indebted to the two Noble Lords who have raised it and who have at any rate revived interest in Empire and Dominion questions. Many of us on these benches welcome some of the expressions which we have beard in this Debate from another point of view. We have been appealed to by the hon. Member for Macclesfield (Mr. Remer) and the hon. Member for Eastbourne (Mr. Marjoribanks) to treat this question apart from party considerations. We have been told that matters affecting the Empire are not the concern of any one party. What we have been told this evening, in this respect, is news to some of us, for we have repeatedly heard the claim made in the past that the interests of the Empire are the property of one party in this House. It is encouraging to find the question raised this afternoon to a loftier plane.

I wish to join issue immediately with the hon. Member for Macclesfield on some of the points which he raised. He referred to the relation of India with the Lancashire cotton industry and pointed out that Lancashire's trade with India had been greatly affected, and was now being largely transferred to Japan. He may have read in the "Times" the other morning about a group of mills—I think in the constituency of the right hon. Gentleman the Member for Darwen (Sir H. Samuel)—having been closed largely on account of the capture by Japan of the trade formerly done with India. The hon. Member would doubtless draw the conclusion that this circumstance was bound up with the question of Empire Free Trade and import duties. If so he must have forgotten, though I am sure that the right hon. Gentleman the Member for Darwen has not forgotten, that that circumstance was largely the result of Lancashire's past policy of building and equipping mills in Japan and all parts of the world and sending out our skilled men to teach the natives there to produce these goods and thus largely to destroy Manchester's own market.

Had the hon. Member for Macclesfield taken his memory back far enough he would have recalled the fact that when Members of this House, some years ago, supported the imposition of the Indian import duties, every Lancashire Member who supported them, irrespective of party, lost his seat at the next Election. There is also the question of Empire cotton. Some 12 years ago a Noble Lord came down from Lancashire and told us that if we invested our money in cotton-growing schemes in the British Empire we should provide cotton for our mills and work for ourselves. Many of us believed that statement, and, in our small way, we helped to lay the foundations of the Empire Cotton Growing Association. We have lived long enough to see cotton grown within the Empire and subsidised by the British taxpayer being sold largely to Japan, the foremost competitor of Lancashire. The hon. Member admitted that the proposal of Empire Free Trade involved the necessity of putting a tax on foreign foodstuffs and raw materials. Then I was reminded by the very interesting speech of the hon. Member for Eastbourne of the close relationship between the units and the Empire, the development of Imperial Preference and the ultimate ideal of the Empire as an economic unit and Free Trade within the Empire. The hon. Member quoted part of a speech of the late Mr. Joseph Chamberlain's, but did not quote another important declaration by the same right hon. Gentleman. It was the late Mr. Joseph Chamberlain who said repeatedly that you could not give a preference to our Dominions unless you placed a tax upon food.

As one who is associated with the great consumers' movement in this country, I say that we have been taught by bitter experience that all taxes on imported foodstuffs—yea, upon all articles—inevitably come out of the pockets of the consumers. I do not know how far I can speak for all my colleagues on this matter but I state quite frankly my belief that there are no Members of the House more desirous of developing and assisting the Empire than the Members on these benches. After all our own kith and kin, often driven away from these shores to seek a livelihood in the Dominions, have largely helped to lay the foundations upon which the Empire rests. But I think we are entitled to examine more closely the meaning of this proposal. I would willingly support Free Trade within the Empire but we are not to be content with that. We can only have Free Trade within the Empire under present conditions, in any judgment, by placing a tax upon imported foodstuffs and raw materials. When the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) asks how long it would take the Empire to produce the food necessary for our consumption an optimistic Member on the opposite side said "Now." I am reminded that in 1928 only 20 per cent. of the foodstuffs imported into this country came from within the Empire. [HON. MEMBERS: "Shame!"] I agree, but the shame does not lie here. In the same year, only 13 per cent. of our raw materials came from within the Empire.

I wish to deal with this question in a plain, matter-of-fact way. I have taken some little interest in what is known as the Canadian Wheat Pool, an organisation which now claims to speak for 60 per cent. of the wheat producers in Canada, whose chief representatives are in this country at the moment, and they are trying to link up with the wheat pools of Australia and New Zealand. Wheat buying in this country is now largely concentrated in the hands of two or three, or at the most four, large organisations. When one of those organisations' representatives goes to the Canadian Wheat Pool representative in London, our Canadian friend does not talk about the Empire, he talks about wheat and the price he can get for it. Wheat is food, and so small is the margin in this country, so far as its everyday needs are concerned, that we are often largely in the hands of those who control the wheat supply.

Here is another illustration. Some of us recall the election of 1923, fought largely in some districts on the question of tinned salmon. There were many jokes about that battle cry in Lancashire, but that was very largely the staple food of the textile population of Lancashire and Yorkshire, and the right hon. Member for Bewdley (Mr. S. Baldwin), who brought forward a proposal at that time to impose a tax upon imported salmon from outside the Empire met with a very serious rebuff in those textile districts.

It has been suggested that we might develop more fully the policy of Imperial Preference, but some of my hon. Friends here to-day will recall exactly how that works. During the time when we had a very heavy Sugar Duty imposed on imports into this country, very largely reduced by my right hon. Friend the Chancellor of the Exchequer, we granted a preference to the West Indies. In one and a half year's time the British taxpayer lost over £5,000,000 in taxation on account of the preference to the West Indies sugar growers, and as the largest importers of sugar in this country we knew quite well that the British consumer paid the same price for that sugar as for any other sugar. The right hon. Member for Epping (Mr. Churchill), when he was Chancellor of the Exchequer, went a step further than the preference of one-sixth on Australian sultanas and let them come in free. The preference at that time was about 5s. 6d. per cwt., and within a week of them being allowed to come in this country free, the price of Australian sultanas increased exactly by 5s. 6d. per cwt. With every desire to improve and strengthen the ties which bind the Dominions and the Crown Colonies to the Mother Country, I do not feel that it can be done by adopting such a proposal as is before the House to-night, though we have been indebted to the two Noble Lords for having introduced the subject.

To mention just one other illustration, I had some little part in 1924 in helping to form what is now known as the Labour Commonwealth Group of Members of this House. We felt that it would be helpful that we should know at first hand the importance of some of those problems which affect our Dominions and Crown Colonies. It is hard for us sometimes to understand what the Australian means by a White Australia, but he knows. It was difficult for some of us to understand the importance of the Pacific Islands to Australia until we met our friends from the Dominions and Crown Colonies. We have had the advantage of meeting those friends at our gatherings, and I said to one of them: "Seeing that we allow your wool from Australia to come in to this country free, cannot you consider allowing hats or other materials from this country manufactured from Australian wool, which comes in here free, to go back into your country free?" "Nothing of the kind," he said. "We grant you a preference, but first of all we protect the home market, and the home market is heavily protected against the British manufacturer."

Hon. Members will recall that time and time again within recent weeks questions have been raised in this House, especially by one hon. Member below the Gangway, as to the raising of tariffs in our Dominions and Colonies against articles imported from the Mother Country. All the optimism of the two Noble Lords notwithstanding. I am very doubtful whether our Dominions will accept that policy. May I be permitted to make two quotations only, and then I have done. One is from Australia and is taken from the "Melbourne Age" of the 17th July last: Under Lord Beaverbrook's conception of Empire Free Trade, all British manufactures must be allowed to enter Australia free. It is distressing to find anyone pretending to exercise influence giving expression to a statement so foolish. No species of Empire trade which would remove from Australia the right to regulate her own fiscal affairs can be acknowledged as even a subject for debate. The proposal strikes at the very roots of Dominion self-government. My last quotation is from Canada, a country, I believe, well known to one of the Noble Lords, and it is even stronger. The quotation is from the "Canadian Gazette" of the 15th August, and it reads: Would Great Britain buy her grain, foodstuffs, and raw material from Canada and be free to dump her manufactured articles into the Dominion at the expense of the Canadian manufacturer? Blood may be thicker than water, but Canada means to be mistress in her own house, and not for ever be a hewer of wood and a drawer of water for others, no matter how closely related they may be. With all the desire in the world to strengthen the ties between the Empire and the Mother Country, I do not think a solution can be found in the proposals now before the House. They bring into practical politics the larger issues. The moment you begin to strengthen your tariff walls and to create grave prejudice even with countries outside the Empire, then inevitably you are sowing the seeds of future trouble and probably future wars with other countries, and I hope the House to-night, while agreeing as to the importance attached to this Debate, will not accept the Motion.

Colonel GRETTON

It is somewhat unfortunate that the right: hon. Member for Carnarvon Boroughs (Mr. Lloyd George), on a private Member's day, with so limited an amount of time at the disposal of the House for any one speech, should have made a speech of almost one hour's length, and thus given so little time to other speakers to address the House. I will turn at once, therefore, to the Motion, which is headed by words not altogether in accordance with the Motion itself. The heading is "Empire Free Trade," but the Motion states: That, in the opinion of this House, it is desirable that the Empire should be developed as a single economic unit with internal free trade as the ideal; and that His Majesty's Government in the United Kingdom be urged to open negotiations with the other Governments of the Empire with a view to the formulation of a policy designed to secure that the purchasing power of the Empire shall be directed primarily to the full employment of the inhabitants of the Empire. With those words I entirely concur, and I intend to support them in the Division Lobby if the opportunity is given. I should like to know—and it is unfortunate that the right hon. Gentleman who is now leading the Liberal party is not present—what is meant by the Amendment. The right hon. Gentleman made a very long speech, and he did not by any means clearly tell the House what he means to do by his Amendment. Does he mean to exclude from taxation all raw materials, whatever they may be, and all foodstuffs, such as flour, crushed oats, and other things which have been partially handled, but which may still remain raw materials for making up into various commodities in this country? He did not explain. He did not explain either whether his Amendment is intended to torpedo the Resolution, and until these matters are made clear, I am sure that many hon. Members will be unable to support the Amendment.

After all, his speech reminds one very much of old times. We heard economic and business questions discussed in the old academic, theoretical manner. This is not a matter of politics, but of hard business, and it is a pity that the atmosphere of politics has been brought into this Debate. I do not think there is any hon. or right hon. Member in this House who will object to the ideal of Free Trade within the Empire, but we must work meanwhile in the circumstances in which we live and with the means which are at our disposal, and I would remind the House that we already have a very large measure of Free Trade within the Empire. We have a large free list of manufactured goods and commodities of all kinds with Canada, Australia, New Zealand, and elsewhere. All those matters can be discussed, and no doubt will be discussed, at the forthcoming Imperial Conference, but I suggest that we, as business men, if we want to make a deal, should be able to go into that Conference with our hands untied. These matters have been dealt with for many years past, and there is nothing new in the idea of developing Free Trade with the Crown Colonies. That was suggested as long ago as 1905, but it was not proceeded with because a Liberal Government came into power—these accidents happen and sometimes they are tragedies—and they chose to deal with this question not as business men, but as theoretical politicians. They agreed to this Resolution at the Colonial Conference of 1907: That without prejudice to the resolution already accepted or the reservation of His Majesty's Government, this Conference, recognising the importance of promoting greater freedom and fuller development of commercial intercourse within the Empire, believes that these objects may be best secured by leaving to each part of the Empire liberty of action in selecting the most suitable means for attaining them, having regard to its own special conditions and requirements, and that every effort should be made to bring about co-operation in matters of mutual interest. This is all very proper, and we can agree with that resolution which was passed by the Liberal party in those days. But nothing was done. The right hon. Gentleman wants to know how we are going to proceed. I would ask him to go back to the Imperial Economic Conferences of 1917 and 1918, and to study the resolutions they passed; and, if he likes to go a little further back, he might read the resolutions and recommendations of the Balfour Committee, which was famous and well-known at the time. The Imperial Conference of 1917 agreed: That the time has arrived when all possible encouragement should be given to the development of Imperial resources in anticipation of making the Empire independent of other countries in respect of food supplies and raw materials of essential industries. With these objects in view, the Conference expresses itself in favour of the principle that each part of the Empire, haying due regard to the interests of our allies, should give specially favourable treatment and facilities to the produce and manufactures of other parts of the Empire. Then there is something about emigrants, with which we all agree, and the resolution goes on: The Conference records its opinion that the safety of the Empire and the necessary development of its component parts require prompt and attentive consideration as well as concerted action, with regard to the following matters:

1. (1) The production of an adequate food supply and arrangements for its transportation when and where required …
2. (2) The control of natural resources available within the Empire … and
3. (3) The economical utilisation of such natural resources through processes of manufacture carried on within the Empire."

There is no mystery about these matters. These are mere business propositions. The trouble is that politicians, and Government after Government, have treated them as party questions. The time is not very long for dealing with these matters. The time is slipping by in the Empire; conference after conference takes place, and progress is not made. These resolutions stand; the Empire States will come over prepared to discuss business on these lines, and I suggest that, whatever Government is in power should follow up these questions and deal with them on business lines. If they will go into conference to deal with the affairs of the Empire, freed from academical theories, they will agree to set up duties where duties are required, in order to develop the Empire resources which are required either in the Dominions or in the Mother Country, giving mutual preference for one another, and not closing the door if they can make a bargain which is good for this country and beneficial for the Empire.

Politicians furbish up their old speeches of the past, as we have heard the right hon. Gentleman the Member for Carnarvon Boroughs do, and try them on the new generation. They seem to be living without realisation that we are now in a different era. The necessity is urgent, for we have to deal with the unemployment question at home. The Chancellor of the Exchequer has to deal with the financial problems, and he should know well the difficulties and dangers which beset the sources from which he hopes to draw his revenue. There are scales of duties which are necessary to protect employment in the Empire, duties in the Dominions which are necessary to develop their own infant industries, and duties which the Dominions consider are necessary to raise revenue. All such duties can give substantial Empire preference. There are duties, too, which we can put on, duties which are necessary to give our own people employment and save the Chancellor of the Exchequer the heavy contributions which he is making. I propose to vote for the Motion, and, not understanding the position of the right hon. Member for Carnarvon Boroughs, I cannot support his Amendment.

Mr. WISE

We are glad to have the opportunity of discussing this problem, but, after the handling which the Motion has received, I do not think that I need spend much time on the nebulous and contradictory details of the proposal that has been submitted. We listened to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) with much interest and pleasure. He engaged in the task, in which he excels, of putting questions and supplying the answers to those questions. I should like, if there were time, to put one or two questions about that very interesting little suggestion which he let drop at the end of his speech, and I am sure that several hon. and right hon. Gentlemen who sit opposite would like to do the same thing. For example, I should like to know whether he would propose to stop Canadian wheat coming here if, at the tail end of the season, the Canadian pool finds itself with a large carry over, and desires to realise it at market prices, if it happen that those market prices are less than the prices were earlier in the season. I would like to know whether he would stop Australian butter, if, as is normally the case, the export board set up under the authority of the Commonwealth Government, sells butter in this country at a price appreciably less than it sells butter in its own country. I might pursue these inquiries over a very wide range.

My purpose in getting up is to draw attention to what is indeed a very grave and serious problem, the problem of our export trade. I do not think that the policy of mere negation will help us very much in the situation in which we find ourselves. We used to say that, after all, the export trade would recover when we got away from the War. In fact, that is not happening. The world export trade is now about 20 per cent. above pre- War, but our export trade is about 17 per cent. below the world figure. The export trade of many other countries—not merely of America and Japan, but even of Germany—has recovered, but our export trade remains stationary. Hon. Gentlemen on the other side talk about the value of Imperial Preference, but, though during five years of their office the Preference Duties were existing in the Dominions, our trade with the Dominions is practically stationary. With Australia, for example, the figures of our trade are practically as they were pre-War, while the figures of the United States and Japan are about three times higher than pre-War. In Canada, British exports are again stationary, while American exports to Canada are four times the British exports, and have increased by nearly three-quarters of the amount of British exports in the last three or four years. The same phenomenon is to be observed in South America. Whereas before the War, we sold to South America about twice as much as the United States, now the United States sells to South American countries about half as much again as we sell to those countries.

These are very grave and serious facts, and it behoves us to face the situation. What is the explanation and what is the remedy? It is no good generalising about British export trade, and giving vague and unconnected figures, as the hon. Member who opened the discussion did with very great skill. You have to analyse British trade market by market, and you may reasonably and properly split it up into three great groups. There is trade with the Dominions, trade with Europe, and trade with the Far East. Take the Dominion trade, and with the Dominion trade I include trade—because it is of the same nature—with great agricultural countries like South America, Russia, and many of our colonies. On what basis before the War did we build up that great trade which was of such great value to us during the whole of the last century? I think that the biggest factor was that we in this country had more capital to invest than any other European country. Trade with the Dominions and with South America was based very largely on British investment of capital in those countries, not merely because that involved the movement of capital to those countries, but because it gave us an opportunity of getting a grip on the commercial and banking machinery of those countries which might have gone to other countries.

What has happened since the War in regard to that? We have found ourselves unable to carry on the investment of capital to anything like the same extent as before the War. We realise, and many people in many parties strongly argue, that now we cannot afford to invest, at any rate indiscriminately, capital which is badly needed at home for all kinds of purposes. In the meantime, another country, America, has come in and taken our place, and it is perfectly clear that we cannot out-distance her in this particular race. I have just quoted the figures of trade between ourselves and Canada, and ourselves and South America. It is interesting to compare those figures, which show a big comparative drop of British trade and a big increase of American trade, with the figures of capital invested before the War. We invested six times as much capital per annum as the United States in the Dominion of Canada. Since the War, the proportions have been exactly transformed, and America is investing six times as much as we invest. You get the same startling figures in regard to South America. It is clear that that particular weapon, which was so valuable in the Nineteenth Century, has gone.

The question is: Have we any sort of bargaining instrument by which we can replace it? I think that we have. This country is still, and is likely to be for some time, by far the best market in the world for the agricultural produce and the raw material of the Dominions and the great producing agricultural countries. A third of their wheat, three quarters of their meat, most of their butter and a great deal of their other produce must be sold in this market. Can we use that in any way in order to stimulate our export trade with those countries, as compared with the export trade of our competitors? We have heard a great deal from the Lord Privy Seal and others about developing our export trade.

A few months ago the Lord Privy Seal went, as he said, like a commercial traveller with a packet, or a bag, or, as I understand, a shipful, of samples to Canada, in order to see what he could sell. Apparently, he was not very successful. He suffered the fate of many commercial travellers, who go into a shop, but find that they are not very welcome. Suppose that instead of going with a bag full of samples, he had gone with a pocket full of orders. Suppose that he had been able to say to the Canadian wheat pool, the Canadian Government, "I want to buy wheat. I want to buy—shall we say—2,000,000 tons of wheat for each of the next five years. I am prepared to place a definite order. You will know precisely where you are during that period. You can have a steady price, or we can work out the basis of price to suit your convenience and ours. In any case, whatever may happen, you will be under no danger of your great markets being spoiled by German or by American or any other dumping, or by our custom being transferred elsewhere." Suppose that he had said: "I want to do the same for your cheese; and we would like to do the same with regard to other produce." He might also have said: "As a matter of fact, we already buy from you three or four times as much as you buy from us. Would it not be a reasonable business arrangement that some of those vast orders that you now place in the United States should be switched across the Atlantic to us?" Orders for their State railways, for their municipalities, for their State electric power stations, and orders, so far as the farmers are concerned for the supply of the consumable goods that are needed in their cooperative stores throughout the West—the co-operative movement is growing in the West—orders for the variety of goods which Canada must buy from abroad and which now she is buying from the United States and elsewhere.

He might have gone to Australia with the same sort of offer. Australia wants to sell butter, dried fruits, wool and a variety of other things. All the time that her market is here, her best market is here, and all the time she is buying from America, from Japan, and from other countries, an increasing, a rapidly increasing, quantity of manufactured goods that we used to supply and that we would like to supply. I think that is a business proposition, the sort of proposition which the Canadians would listen to: and it has the advantage that there is no question of taxing the food of the people in this country, or of increasing the price of raw materials. The offer we make to them, and it is a perfectly good business offer, is that we should give them a stable market, a secure market, and a guaranteed market, and I think if the offer were made the Dominions would very quickly respond. And even if they did not respond, I am quite sure there are other countries that would. In a small way this method has been already tried by Lord D'Abernon in South America. As a matter of fact I am informed, and I think the information is right, that in the last few months Australia herself has been making this sort of proposal in regard to the export of wool, I think, to Japan; and Japan herself has made a deal on those lines in respect of cotton and cotton goods with some of our East African Protectorates. It has never been tried on a large scale, but I submit that with the increasing centralisation of the sale of agricultural goods this is a businesslike way of dealing with the problem. On another occasion I dealt with wheat, and the same kind of principles apply to dairy produce, to meat and to a dozen other commodities. It is a method which would achieve the object which I believe actuates hon. Members opposite, and it would not involve any question of the taxation and the artificial increase of prices of food or raw materials here.

It would also help us in the other markets which we have to hold. There is no time for me to deal in detail with this, and I will not attempt to do so, but I would point out that the proposals of the other side neglect Europe altogether and would put up a ring fence between us and Europe. Never was there greater folly. Europe is still the largest importer, importing more than all the rest of the world put together, of manufactured goods; and in the last two or three years her trade has been increasing at a faster rate than that of the rest of the world. The proposal I have made would not interfere with, but by giving steady orders to our manufacturing trades, would help our hold on what is absolutely vital to us, especially for the highly skilled industries, the great European market, with its 375,000,000 consumers, and would also enable us to hold our own and develop the trade, so vital to us, with the Dominions and with the other agricultural countries.

I have no time to deal with the Far Eastern market, but there, again, the method proposed on the other side offers no hope. There is no question of persuading India to come into any such scheme. In the present state of Indian opinion the idea is quite preposterous. Nor, indeed, does Free Trade of the old type offer any hope whatever. Free Trade has no relevance to the conditions of the modern world, and Protection of the old kind is even more pernicious and injurious. The proposal I have made meets the world situation as it is, and it would, I think, develop the trade of this country and of the Dominions on lines which would secure the advantage of agriculturists and of producers and of consumers both in the Empire and here.

Major TRYON

I think I ought to mention that by the courtesy of the Chancellor of the Exchequer I have been informed that he wishes to speak for only a short time. For that reason, I have got up very late to address the House. I am glad that this is so, because it has given me, as I think the whole House, the pleasure of listening to the speech of the hon. Member for East Leicester (Mr. Wise). That is a speech which is really encouraging to us on this side. It was not a party speech, and it looked at this great question from an Imperial point of view. If he had been present, I would have liked to contrast it at some length with the speech of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). This is a private Member's day, and I speak as the Member for my constituency, the largest constituency in the country, and I want to say to my hon. Friends behind me that in the hostile districts, politically, of one's constituency there is no part of the Conservative programme which is listened to with more attention than that part which deals with Safeguarding and with Imperial Preference. I would further say that I am very happy to find myself next to the Noble Lord the Member for Horsham (Earl Winterton), because he was the first Member to be returned as a supporter of the policy of the late Mr. Joseph Chamberlain. I have fought for that policy, and I have won a seat, which was twice Liberal, on the whole policy of Tariff Reform, including food taxes. I claim to speak as one who has fought eight elections and has entire faith in the policy of Imperial Preference. However, I will say no more on that, but will turn at once to the great problems which are immediately under discussion.

First, let me say that I welcome the way in which the Press of the country is directing public attention to this great question. I do not agree, of course, with all the newspapers, and it would only be pointing out what is obvious if I were to say that they do not agree with each other, but at any rate they direct attention to these fiscal and Imperial questions, and the speech to which we have just listened from the Labour party is a further and most interesting contribution to that discussion. After all, there is, at all events, one thing which we all of us support, and that is that the essential foundation of the campaign in favour of Empire Free Trade is right, because the essential foundation of it is to look for our commercial future to the Empire rather than to foreign countries I think it is there that our commercial future and opportunity lies. Many of us may differ as to the method, but we agree in this, that it should be to the Empire in the main that we look for our commercial reconstruction after the War.

There are, as I have said, many differences between those who support this Imperial cause, and I would only say this, that if those of us who hold the faith of Imperial Preference, and those who have very similar views will only cooperate, we can carry our policy through; but, if those of us who differ on some details from some of the more ardent advocates in the Press of this policy are to be attacked and driven out of public life, then there is no hope for those who are conducting this campaign, though I have no doubt the Conservative party will survive. In the Motion occurs the word "necessity." I think the word "necessity" is a very proper one to put in the Motion, because what is the position of this country?

Unlike the right hon. Member for Carnarvon Boroughs, before deciding how I was to vote, I did not look out of my window to see if there was a hoar frost this morning. That is what he did on the morning of the Coal Bill Debate. I looked to another source of inspiration. I looked to the unemployment returns. The Labour party may laugh at those who propose this in the House of Commons, but the unemployed are not laughing. There are nearly 1,500,000 of our people unemployed.

Mr. MILLS

There are 3,000,000 in America.

Major TRYON

That gives me no satisfaction, though it may make the hon. Member smile.

Mr. MILLS

That is under Protection.

Major TRYON

I am concerned with the people of this country, and I find that hundreds of thousands more people are out of work since this Government came into office. It cannot be said that this is due entirely to seasonal changes, because nearly 50,000 more people are out of work at the present moment than at this time last year; and I therefore say, in view of the complacency which has been displayed, not from the Back Benches, but from one or two speakers on the Front Bench opposite, that though under this Government it may be a little easier to get the dole, it is very much more difficult to get work.

7.0 p.m.

Nor do I find much hope in the Liberal party's proposals for the unemployed. It is true they had some wonderful road schemes, but at the last Election they were committed to the repeal of the McKenna Duties, a proceeding which would throw out of work many thousands of skilled mechanics. It would be a very poor consolation to a skilled mechanic thrown out of work by the repeal of the McKenna Duties to get a chance of making roads for foreign motor cars to travel over. Among the speeches from the Liberal benches I remember one from the right hon. Gentleman the Member for St. Ives (Mr. Runciman). He speaks from the point of view of the shippers and of the distributors. Shipping, banking and distribution are all necessary and valuable parts of our public life, but a nation with a population as large as ours, on an island so small, cannot live by banking, by distribution, and by shipping alone; they must, in the main, get their employment from increased production. I say, without going into details, that our production cannot be satisfactory in this country when we have nearly 1,500,000 people out of work. Examined that way, we find that there is this difference. While the unsheltered parts of our trade are doing badly, there is a bright spot. Look at the trades which are enjoying the benefit of the Safeguarding and McKenna Duties. They are doing well. Let us then extend the area of benefit, and let us extend Safeguarding. When I say that, I am met by the usual Liberal objection that if you put a duty of say 33⅓ per cent. on anything, the cost of the article goes up by 33⅓ per cent. It would be interesting to know from the Liberal party what would be the rise in the price if the policy of prohibition of dumped goods which we have heard advocated to-night were put into force. If Safeguarding puts up the price by 33⅓ per cent., how much would prohibition of dumped goods put up prices? If the right hon. Gentleman who advocated that had heard the comments of the Liberal Members behind him, he would have found he was embarking the Liberal party on an unfamiliar course It is not for me to attack the right hon. Gentleman. I thank him for his references to myself. As one who has fought hard for many years for Safeguarding and for Imperial Preference, I do not forget the part that he played in those policies. I do not forget the extensions of Imperial Preference which he brought forward successfully when Prime Minister, although when in opposition he may laugh at these proposals which are put so seriously before the House of Commons.

We are in this position, that in our domestic trade part is doing badly and part is doing well. The part doing well is that which is safeguarded, or which is protected by the McKenna Duties, and the Liberal contentions against these duties are absolutely unfounded. When we suggest extending Safeguarding, their suggestion is: "You must not do that. You will send up the price of the article. What will happen if steel will cost more?" The Liberal contention then, is, that these duties will send up the cost. I would remind them that when the duties were put on motor cars the cost did not go up. It went down. It was said that it would mean less employment, but they gave more employment. It was said that these protective duties would bring about obsolete methods in the firms and busi- nesses concerned. Would anybody really argue that the motor trade of this country is lacking in enterprise, in good machinery, or in good methods? It is just the encouragement and help which these duties have given which has enabled the trade to instal better plant. So far from the export trade dwindling, as was suggested by the Liberal party, it has actually increased.

Let us, therefore, extend these duties. That was done by the late Government, and, so successful were the McKenna Duties on motor cars, that they were extended to motor tyres, and I myself have seen in many places additional factories put up in this country directly as a result of those duties and giving more employment to our people. The supporters of the present Government, at all events, cannot claim that their policy of nationalisation could do anything like what has been done by Safeguarding in the case of motor tyres. If all these products were made by the State, nobody but the State would be allowed to manufacture them, but, under our system of private enterprise, foreign firms come over here with their capital, with their better methods, and you get an addition to our methods of manufacture which is very useful, very helpful, and very encouraging to the trade which you obviously could not get under nationalisation. My first point—and I am speaking for myself and my constituency—is that I Would extend those Safeguarding Duties and make it much easier for them to be got through.

If from that we turn and look overseas, it all depends on the outlook of those concerned. One of the curious results of that odd form of gambling which we conduct in this House, the drawing of names out of a box, is that by taking out these Specimens from different parties you get some idea of what the various people who support the Front Benches are keen about. It is quite an interesting accident of the ballot box that when the name of the hon. Lady, the Member for East Middlesbrough (Miss Wilkinson) came out of the box, she proposed a Resolution directing our attention to the importance of increasing trade with Russia. We take a different view. When on that Same day a Conservative Member's name was taken out of the box, he proposed a very similar Resolution about the importance of increased trade with the British Empire, and rightly so, when you look at our overseas trade. Take the whole trade of the world and the exports of all the countries, and you will see that there has been some increase since the last normal pre-War year, 1913, but our share in the changing years which have come since has dwindled from 13 per cent. to 11 per cent. of the whole. Therefore, we who depend on overseas trade more than any other country are losing our place among the trading countries of the world. If Free Trade is the foundation of our prosperous past, surely Free Trade, which we are still practising, must undoubtedly have to answer for what has happened subsequently when we are undoubtedly not holding our own.

Just as in the home trade there was one bright spot, the safeguarded industries, so in our exports overseas there is also one bright spot, the trade that comes to this country from the Dominions. We are doing badly at home and badly overseas, but in both cases, where the policies of Safeguarding and Imperial Preference have been applied, trade is doing better. Why is there this difference overseas? Partly because throughout the world these new nations created by the Treaty of Versailles, and the old nations, too, are practising Protection. They may be wrong, but they are practising Protection. When we talk of what various people are in favour of, let me point out that in our Dominions there is hardly any serious Free Trade party in any of them. Moreover, while the right hon. Gentleman the Member for Carnarvon Boroughs goes rather further towards us on this matter than some of his supporters, we have bad very excellent speeches from some of his important speakers who used to speak for the Midlands and the North. I noticed lately that there is a little group of them who have been driven down like the ancient Britons into Cornwall where, again like the ancient Britons, they must be very sorry to be separated from their leader in North Wales. I believe that St. Ives is a considerable distance from Carnarvon, speaking both politically and geographically.

I spoke of our trade doing well overseas. So it is. Who are the people-who make it do well? There is the New Zealander who buys from us over £13 per head. I hardly like to mention the Russians, but they are worth 4d. each to us. I do not know what 4d. would be worth in the hands of my right hon. Friend, but at all events 4d. seems to me a very poor contribution for each Russian towards our unemployed. That is not so much due to the excellence of New Zealand—although I think it is indeed excellent—as to the complete failure of Socialism in Russia. But that, of course, is a point outside this question. If you look at the North American Continent, you see that the average Canadian buys from us nearly £4 per head, whereas the average citizen of the United States buys only about 7s. from us. That gives some measure of the value to us of the commerce of Canada. It is obvious that, if Canada was absorbed in the United States—and I pray that will not, and indeed I do not think that it will ever happen—but if, for the sake of argument, we assume that that should come to pass, then obviously those purchases would be measured in shillings rather than in pounds.

To come back to the question of Imperial trade—[Interruption]—I would remind hon. Members opposite that New Zealand and Canada are parts of the Empire, and Russia is not. There is a great measure of Empire Free Trade now in existence. We have lately had in office in Australia a Labour Government. Unlike the Labour Government here, they are highly Protectionist. That is a complete answer to the contention that Protection is simply the policy of a few rich manufacturers. I do not agree with the whole of their policy, but at any rate the Autralian Labour party is a Protectionist party and also a party which is in favour of Imperial Preference. Under their tariff, there is a list of articles which come in perfectly free, if made within the Empire, but pay duty if they come in from foreign countries. That is an example of Empire Free Trade actually working. Similar arrangements have been made in Canada, and there are quite a number of articles on which our Dominions put special duties in order to give a favour and advantage to the working people of the Mother Country.

Therefore, when I am asked for my policy, I say that I am in favour of an extension of Safeguarding and an ex- tension of Imperial Preference, so that, wherever we have duties for our own purposes, those duties should favour the Dominions. When you think that we have about a quarter of the whole of the world's population and about a quarter of the world's surface all under one flag living together in a peaceful commonwealth—because we have achieved peace between the various units of the British Empire such as no countries outside the British Empire have ever known among themselves—when you think that we have an overwhelming proportion within the Empire of nearly all the great essential products which go to make up the commerce of this country, then it is obvious that it is from the British Empire we should endeavour to rebuild the prosperity of our country after the Great War. If we extend Safeguarding and Imperial Preference and if, in consultation with the Dominions, we do everything that we can to encourage and develop trade between this country and the great overseas Dominions, we shall do something to remove a state of things which brings about the intolerable position that in the centre of this great Empire of ours there are 1,500,000 people out of work. I believe, if we did that, we should do something to tackle the present state of unemployment.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

When I see the large number of Members who are anxious to take part in this Debate, I feel somewhat conscience-stricken at interposing even for a few minutes in the discussion. In response to the appeals which have been made to me, I intervene to express the views of the Government on the proposal which is now before the House. I have always held that private Members' days should be given wholly to private Members' discussions, and, even if I were disposed to do so, I could not deal in the short time available with all the statements which have been made in the course of the Debate. I will therefore confine myself simply to that part of the Resolution which calls upon the Government to take action in this matter. May I congratulate the right hon. and gallant Gentleman the Member for Brighton (Major Tryon) upon the dexterity of his speech. The right hon. and gallant Gentleman began by dissociating all the other Members of the late Government from anything that he might say in the course of his speech. The most remarkable feature of the Debate this afternoon has been the silence of the late Government upon this question. The right hon. and gallant Gentleman the Member for Brighton spoke for half an hour, and he never even honoured the Resolution by making any reference to it. Although it is a Resolution on the ideal of Empire Free Trade, the right hon. and gallant Gentleman never went beyond Safeguarding and Imperial Preference.

I have a difficulty in speaking on behalf of the Government at this moment, because, like the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), I do not know what it means. The Resolution itself is nebulous and ambiguous, but the speeches of the hon. Member who introduced the Motion and the hon. Member who seconded were by no means ambiguous; they made it perfectly clear to the House what they mean and what they have in their minds. The hon. Member for Macclesfield (Mr. Remer) and the hon. Member who seconded the Resolution said that it means the taxation of food and raw materials.

Mr. REMER

Foreign food.

Mr. SNOWDEN

If we were debating that point I should have no difficulty in showing that the taxation of foreign food means the taxation of all the food in this country, because, if you put a tax upon imports from foreign countries, that necessarily raises the price. [HON. MEMBERS: "No!"] An hon. Member who spoke earlier in this Debate showed from his own practical business experience that the price of food imported from one of the Dominions upon which a preference was given was equal to the price of similar food imported from a foreign country. Therefore, you would give no advantage to the Dominions by taxing foreign imports into this country unless the effect was to raise the price in this country. No doubt this Resolution means, in the minds of those responsible for bringing it before the House, a tax upon food and upon raw materials, and, although not much on this point has been heard in the course of this Debate, it means, especially with regard to the Crown Colonies, a tax upon manufactured articles. Under these circumstances, perhaps hon. Members will not be surprised when I say that the Government can give no support to a proposal of that kind. In the Resolution we are asked: To open negotiations with the other Governments of the umpire with a view to the formulation of a policy designed to secure that the purchasing power of the Empire shall be directed primarily to the full employment of the inhabitants of the Empire. If there were nothing more than that in the Resolution, the Government would have no objection to it. As a matter of fact, we have taken steps to hold an economic conference on that question. When we were last in office five years ago, we did everything we could by financial support to encourage migration to Australia, and we have supported every Measure which has been brought forward which, in our opinion, was likely to knit closer together the bonds which unite the Mother country and our overseas Dominions, but we can give no support whatever to a policy such as that which is hinted at in the terms of the Resolution now before the House.

What does voting for this Resolution mean? The right hon. and gallant Gentleman the Member for Brighton said that he was not speaking for his colleagues on the Front Opposition Bench, but I suppose that the members of the party opposite will go into the Division Lobby in support of the Resolution. What will their votes mean? Is the right hon. Gentleman the Member for Epping (Mr. Churchill) going into the Lobby in support of this Resolution? I remember that about a month ago the right hon. Gentleman the Member for Epping called attention to the fact that about 30 years ago he was a member of a Unionist Free Trade party—

Mr. CHURCHILL

Free Food. And I see no reason why I should alter my views in that connection.

Mr. SNOWDEN

There should be no mistake about this issue, because it has been made perfectly clear in the speeches from the other side of the House to-day, that voting for this Resolution means voting for a tax on food. [HON. MEMBERS: "Foreign food!"]

Mr. MARJORIBANKS rose—

Mr. SPEAKER

The hon. Member for Eastbourne (Mr. Marjoribanks) cannot interrupt the speech of the Chancellor of the Exchequer unless the right hon. Gentleman gives way.

Mr. SNOWDEN

What does voting for this Resolution mean? It means that every Member who goes into the Division Lobby in support of it is voting for a tax on the people's food—[HON. MEMBERS: "No! "]—and it means, also, that they are voting for a tax upon raw materials. They will be voting for proposals which, if carried into effect, would increase the cost of production of every manufacturing industry in this country. We have been told that this Resolution will bind together the workers of the Empire, but if this proposal is carried into effect, it will reduce the standard of living of the workers of this country to the standard of living of the workers in Protectionist countries.

Mr. GEORGE BALFOUR

I should like to take this opportunity of pointing out that the Chancellor of the Exchequer, in his last sentence, has been far more concerned with political propaganda than with our trade. The right hon. Gentleman has endeavoured to pass out to the country something which he must know in his heart is not the whole tale. I shall be quite prepared to debate this matter with the Chancellor of the Exchequer at the proper time, but now I only want to nail this lie to the mast. [Interruption.]

Major-General Sir ROBERT HUTCHISON rose in his place, and claimed to move, "That the Question be now put," but Mr. SPEAKER withheld his assent, and declined then to put that Question.

Mr. BALFOUR

I want to make this point quite clear. We say that the Empire can produce the food that our people require—

Sir R. HUTCHISON rose in his place, and claimed to move, "That the Question be now put," but Mr. SPEAKER withheld his assent, and declined then to put that Question.

Mr. BALFOUR

I only wish to say—

Sir R. HUTCHISON rose in his place, and claimed to move, "That the Question be now put," but Mr. SPEAKER withheld his assent, and declined then to put that Question.

It being half-past Seven of the Clock, the Debate stood adjourned.