TRADE WITH THE COLONIES— DIFFERENTIAL DUTIES. (Hansard, 1 July 1847)

§ LORD ASHBURTON
said, he had given notice of a Motion for the production of all communications between the Government and the Governors of Colonies respecting the Differential Duties by which their productions were protected; but there was no necessity for arguing in support of his Motion, because the noble Earl (Earl Grey) had already conceded it, and the papers had been ordered; but as the period when those papers would be laid upon the Table would probably be near the close of the Session, when their Lordships would be still more occupied than now, he preferred taking this opportunity of making a few observations in reference to the Motion which stood in his name on the Paper. He was not going to enter into any lengthened debate upon a question which had occupied so much of the attention of Parliament last year; he would not occupy their Lordships with any arguments touching the principles of what was called "free trade," nor dwell upon the propriety of giving protection to native industry: at the same time he would not shrink from avowing that the opinions which he last year expressed upon this subject were unchanged and unaltered, and that the lapse of time and the results of experience had only convinced him that in embracing those free-trade principles the Legislature of this country had made a false step—had taken a course which in his view would be prejudicial to the best interests of this country. However, as he had already said, these were questions upon which he did not mean at present to enter at any length, but only as regarded the subject-matter of his Motion—he alluded to our commerce with the several Colonies which owed allegiance to the British Crown. When those free-trade questions were agitated in Parliament, another question very naturally arose, namely, what was to become of our commerce with the Colonies? It was maintained, and he thought with great propriety, that although some of our colonial possessions—such as Malta and Gibraltar—might he chiefly useful as naval 1082 and military stations, yet the main utility of the greater portions of our Colonies was that they formed the best market for the manufactures of the mother country; that they formed the most advantageous object of our commerce; and that we, upon the other hand, by a preference for their produce, encouraged, stimulated, and advanced their interests and resources. It was further alleged, and to his mind with great force, that the moment we came to the decision to forbid not merely an exclusive preference for British goods in the Colonies, hut even some preference, that then the strongest ground for retaining our colonial empire was abandoned. It was, how-over, maintained that, having come to the determination of admitting duty free into this country the produce of all other countries, as there was no protection left for our industry, we could no longer retain a differential duty in favour of our colonial produce, nor in favour of our own in the Colonies. These views were new—they were contrary to what experience justified; it was not under them that our colonial empire had risen, nor by those principles that the mother country had attained her present position. Our history showed that in earlier days the commercial communication between the Colonies and the mother country was almost exclusive, and that, although relaxations had taken place, yet that up to the present time it had always been judged wise and politic to preserve a differential duty in favour of the produce of the mother country and of our Colonies. In the North American Colonies a differential duty of seven per cent had been fixed upon; but that Act had been done away with by that passed last Session, which gave the Colonial Legislatures the absolute power of doing away with all distinctive duties whatever, so that the produce of Germany, France, and the United States would be upon equal terms with that of the mother country. Under these circumstances the query which he had already mentioned would again and again be put, viz., of what use were our colonial possessions at all? Would the advantages accruing from them, under a system of perfect free trade, compensate for the expense, the risk of war, and the various other dangers and inconveniences inseparable from their maintenance? He had been led to make these remarks by reading the address of the Governor General of Canada to the Legislature of Colony, which came among the latest accounts from that part 1083 of the world. There was the following passage in Lord Elgin's speech:— By a statute passed during the last Session of the Imperial Parliament, the Colonial Legislatures are empowered to repeal differential duties heretofore imposed in the Colonies in favour of British produce. It is probable that, by exercising this power, you may be enabled to benefit the consumer without injury to the revenue, I commend the subject to your consideration, and I shall lay before you certain communications relating to it which I have received from Her Majesty's Secretary of State for the Colonies, and from the Lieutenant Governor of Nova Scotia and New Brunswick. He had not the least doubt but Lord Elgin acted in strict accordance with his instructions from the noble Earl at the head of the Colonial Department, and that that noble Lord felt it to be his duty to do away with all kind of preference for British goods. It was not merely loft to the Colonies to abolish the present system, hut they were evidently stimulated to do so. It was the first time, he thought, in our colonial history that the Colonies were not only permitted but encouraged to take the goods of foreign countries upon the same terms as those of the mother country. And he must say that he thought the time for doing so anything but propitious. The manufacturing interests in this country were in a state of the greatest depression; they were already struggling with great difficulties from competition with foreign manufactures; and their goods hung heavy upon their hands. When the reduction in the differential duties was made, in 1845, by Mr. Gladstone, the manufacturing interest was in a state of great alarm, and strong and earnest appeals were made against the reduction of the differential duties then existing in favour of their goods in the colonial markets. But were the manufacturers aware of what was now passing? In a short time they would he treated in the same way in the Colonies as they were in the markets of countries with which we had no connexion. Their Lordships knew how closely the New England States bordered upon the Canadas; and the evidence of Mr. Gregg himself went to show that in the Chinese, as well as in other markets in which British and American goods came into competition, the latter not only stood that competition, but actually boat ours out of the market. If, then, in the foreign market the Americans beat us, with what disadvantage would we not contend with them in a market which was much nearer to them than to us—in a market which was, so to speak, at their 1084 own doors? Railroads and every other species of cheap and rapid communication, were in progress, and the New England States and New Brunswick bordered; yet it was with these disadvantages on our part that we were now throwing our colonial market open. This might be "free trade;" but he scarcely thought it was common sense. It was certainly pushing those abstract principles and fine theories a very long way—to an inconceivable extent. It was what many would term "Free Trade run mad;" and, for his part, he could not see what it was that induced the noble Lord the Secretary for the Colonies to sanction such a step. It was a most serious matter, and one to which he invited the attention of their Lordships and the country. It was all very well to make experiments when those experiments were not attended with danger, and when, if they were not found to answer, the original state of things could be restored. But such a step as this could hardly be retraced. It was not the mere making of an Act of Parliament which might be repealed if found mischievous—it was not like, for instance, the Bank Charter Act, or any other temporary Act; but it was the establishment of a new system. They could not possibly recall the Act with respect to the Colonies. He really hoped that when the matter came to be explained, he would hear the views of the Government not merely upon the effect of this measure, but as to the utility or advantage of our colonial possessions—what particular benefit we derived from them as a recompense for the risk, danger, and expense incurred by their maintenance. As he had already said, he would not go into the whole question of free trade, which was much too large and important to be hastily passed over; hut he could not allow the present opportunity to pass without calling the attention of their Lordships and the Government and the public to what was likely to accrue from our policy towards the Colonies, and to remind them of the unfavourable position in which we now were for so great a change. The noble Lord concluded by moving— For Copies or Extracts of all Communications between the Secretary of State for the Department of the Colonies and the Governors of those Colonies; and also, of all Communications between the Governors and the Legislative Bodies of such Colonies, relating to any Alteration or Diminution of those Differential Duties by which the Produce of the Industry of this Country is benefited or protected.

§ EARL GREY
said, he could have no possible objection to the production of those papers; and agreed with his noble Friend that it was highly desirable the attention of the House and of the public should be directed to this subject. With reference to the remarks of his noble Friend, it was not necessary for him to say more than a few words; for, as he justly remarked, the real question at issue was one far too large and important to be discussed upon the present occasion. Upon that question there was a difference of opinion between himself and his noble Friend, which he thought there was very little chance of his ever seeing altered. He would, therefore, confine himself to the measure of last year, by which it was enacted that the great staple productions of some of our principal Colonies, such as cotton, corn, and sugar of the West Indies, should have no protection; and that after a certain period they should compete with foreign produce in the markets of this country. When that measure passed, it was felt by every man that the necessary and the inevitable consequence was, that the Colonies should have the advantage of that principle also; and that if we gave no protection to their produce by a duty on foreign articles, our manufactures, on the same principle, were not to enjoy a differential duty in the colonial market. This, he repeated, was understood and acknowledged by every one as the necessary consequence of that measure. And the only reason for deferring the operation of that Act, was not because of any doubt as to the repeal of the differential duties, but simply because if they proceeded at once, by the authority of Parliament, to repeal those differential duties, making no other provision for supplying the deficiency in the colonial revenue, considerable inconvenience would occur. The power was therefore intrusted to the Colonial Legislatures, and the Colonies had the opportunity afforded them of making such financial arrangements as they thought proper before the repeal of those differential duties would take place. It was quite true that the Governor General of Canada had called the attention of the Legislature there to this subject, and that he recommended the repeal of the differential duties as calculated to relieve the consumer, and at the same time not to injure the manufacturers. The Governor General in so doing had acted strictly in accordance with the directions he had received. His noble Friend said, all this was highly dangerous, 1086 and that they had been acting under an erroneous policy; and he referred to the condition of the manufacturing districts, in order to show that that course was impolitic. He could only say upon that point, that if ever two years' experience was conclusive in favour of any legislative measure, that of the last two years was so as regarded the soundness and propriety of that great commercial change which had been introduced. His firm conviction was, that but for those measures to which his noble Friend had adverted, the distress which would now exist in the manufacturing districts would be awful indeed. It was impossible to foresee, and difficult to provide, against such a calamity as that which it had pleased Divine Providence to visit on the United Kingdom, by the destruction of so-large a quantity of produce; the quantity of capital that had been invested in those gigantic railway undertakings had likewise produced much embarrassment; but he thought that those difficulties would have been greatly aggravated if the old system had continued in operation. But his conviction was, that, were it not for the wise measures of the last Session, the distress which we were now suffering would be much greater. With those few observations, he could only say that he entirely concurred in the propriety of the Motion.

LORD STANLEY
observed, that in his opinion nothing could have a greater tendency to weaken the attachment of our Colonies to the mother country, than the manifestation of an indifference whether we dealt with them or with America, Brazil, or any other country. Nothing, he believed, would tend more to keep up a feeling of attachment and dependence on the part of our Colonies, than for this country to say to them, "We are your natural customers; the connexion between us never can be interrupted; it is the policy of the Legislature and of the Government to maintain that connexion; and by upholding it, they will at once benefit the Colonies, and increase the power of the mother country" He must say, he thought there was great danger lest, by placing the commercial relationship between this country and her Colonies on the same footing as the relationship between this country and Foreign States, they might not only diminish the amount of commerce which had hitherto been carried on between the mother country and her 1087 Colonies, but they might weaken that feeling of attachment which ought to subsist, and which he hoped would subsist, between them. He believed that no long time would elapse before British manufacturers would find that the recent legislative measures with reference to the Colonies had worked most prejudicially and injuriously to their interests, by converting into neutral markets what were formerly protected markets; and he considered it was an unfortunate circumstance that the Government, not satisfied with leaving the Colonies to take their own course, had felt it their duty to incite the Colonial Legislatures to take steps for the removal of the existing differential duties.