§ THE MARQUESS OF SALISBURY
, in rising to present a Petition from merchants, planters, and others connected with the Island of Barbadoes, said: My Lords, I have taken the unusual course of giving Notice of an intention to present this Petition in order that I might preface that step with a few observations, not only because the Petition is from a distant Colony, and is, therefore, deserving consideration and attention at your Lordships' hands, but also because it expresses the feelings of a portion of Her Majesty's subjects who, like many others at the present moment, are complaining that their interests are adversely affected, and that their industry is being destroyed, by the fiscal action of foreign Powers. The growth of this feeling in the country must be familiar to your Lordships, and it is not necessary that I should dilate upon it. A very remarkable change of feeling has taken place in many centres of industry, and complaints or proposals are being made which, 10 years ago, would have been held impossible. But I will not propose to enter upon that portion of the commercial discontent of the present day which deals with the question of adverse fiscal duties, and which claims retaliatory duties as a protection. It is not necessary that I should discuss that subject; it is one of exceeding difficulty, and I should be sorry to say anything that might be interpreted to be at variance with those principles of commercial policy which this country has deliberately adopted. But the particular case which the planters and merchants of Barbadoes wish to bring before your Lordships, and before the English public, does not deal with the particular class of proposals which are commonly known under the name of Reciprocity. The fiscal measures of foreign Governments give advantages to their own subjects in two ways. They impose duties of protection which exclude our goods from their markets. In that case they give a bounty to their own traders at the expense of their own consumers. The 221 case I have to bring before you does not belong to that class. It is the case of foreign Governments, by direct bounties drawn from the resources of the taxpayer, cheapening products of their own manufacturers and driving the manufactures of other countries, and espepecially of this Empire, out of the market. Now, the particular country whose legislation in this respect has given cause for the complaint of the West Indian planters is Austria, and the way in which the sugar industry is adversely affected is this. In Austria a tax is raised on the native beet-root sugar, which is largely exported, and a drawback is then given to the exporter; but the drawback is so calculated that it gives a large bounty to the exporter, giving him back a great deal more than he had paid to his own Government, and so enriching him that he is able to go to other markets with sugar at a much cheaper price than those producers who have not received similar advantages can afford to sell at. The result is that the Austrian raw sugar has been supported by the taxes of the Austrian subjects, and has been able to compete more and more with the sugar grown by our own planters, who have not such an advantage to support them. So keen, apparently, has the Austrian Government been in this policy that they actually at one time paid back in drawbacks more than the whole of the duty they received from beet-root. The results have been very severe on the West Indian planters. The consumption of sugar in this country has, as your Lordships know, grown enormously during the last 10 years, owing to the increase in wealth and population and the abolition of our duty; but, notwithstanding that fact, the import from the West Indian planters has been almost absolutely stationary, while the advantage of the State subsidy on the part of Austria is shown by the fact that within the last few years the export of beet-root sugar has increased from 600,000 tons to more than 1,500,000 tons. The sugar bounty question has engaged the consideration of successive Governments; and, after much negotiation with foreign Powers, it was thought by the late Government that the best course would be to allow the matter to be referred to a Committee of the House of Commons. It was so referred, and that Committee 222 collected evidence and considered the matter with great care, and made, last Session, a very exhaustive and able Report on the subject. The Prayer of the Petition, and the considerations which I shall urge on the Government, do not go beyond the proposals of the Committee. I only ask that due attention should be given to these proposals, and that they should not be entirely neglected. The Committee said, and said in very distinct language, that very serious damage is being done by the policy of foreign Governments to which I have referred. It appears from the Report that much of the sugar industry of the West Indies has been destroyed, and that 50 sugar-growing estates have been abandoned; while, in 1879, 36 such estates were advertised for sale without purchasers being found for them. All the witnesses on this branch of the subject agree in looking for the general abandonment "of sugar cultivation" if the present state of things continues. If this is the consequence of the action of any foreign Government over whom we have any influence, the matter is one for the grave consideration of Her Majesty's Government, and ought to be dealt with before it is magnified into a very great grievance. It is impossible to mention such a state of things without bearing in mind a similar grievance which exists with reference to sugar refining. It is exactly the same complaint, applied to another branch of the same trade. The French Government gives a drawback to the sugar refiners who export the produce of their industry. That drawback is calculated too high, and the result is that a very considerable bounty is given out of the French taxes to those who export it, and the French refiner is able to sell at a price which utterly undersells and destroys the profits of the English manufacturer. The consequences have been, in the same way, most lamentable. Five or six years ago there was a very flourishing sugar-refining industry in this country. The competition of the French refiner, supported by the bounty out of the French taxes, has driven the English refiner out of the English market, and all the establishments which existed five or six years ago have now been closed, and the trade is absolutely destroyed. Now, do not tell me we are bound, by the principles of Free Trade, 223 to look on coldly and calmly and see this destruction of British industries accomplished, because if you lay down that principle broadly and strongly, and say that nothing shall induce you to interfere when a foreign Government is destroying British industry, you may be quite sure that these undertakings which have been hitherto so successful will be imitated in other industries, and industry after industry will be destroyed by the co-operation of the foreign Governments with the foreign manufacturer, against which the British manufacturer is absolutely powerless. The foreign Government, practically speaking, is illimitably rich. It enters into partnership with its own manufacturers. It invests its property in the promotion of their industry, and the British industry, undefended as it is, must necessarily go down. If it really is the case that considerable benefit to the consumer results from this policy, that will, no doubt, be a very material consolation, and grounds for hesitating very much before pronouncing an adverse opinion; but the benefit to the consumer is, in reality, transient. It is always open to the foreign Government to enter into partnership with its own manufacturers to destroy British industry altogether and make British capital unproductive, and then, when that is done, there is no necessity that the bounty should be continued. Capital will not be invested in industries of this kind unless there is some prospect of stability of conditions, and if industry is always liable to be destroyed by a sudden incursion of a foreign Government using the taxes of its own subjects for the purpose of destroying that industry, the British capitalist will not risk his capital by sinking it in the machinery and buildings necessary for carrying on the trade. I cannot pass on without remarking that the French Government have made a further step along this path already. There is already a bounty given upon ships, sailing and steaming, and it is given in proportion to the amount of tonnage they actually carry. I do not know what effect these new measures will have on the British industry of shipbuilding; but it is looked on with considerable alarm, and I mention it as an indication of the policy which is guiding foreign Governments, and as a danger against which our own 224 manufacturers and Government have to contend. It is well known that one of the great difficulties—as was pointed out in a memorable speech delivered by the Earl of Beaconsfield some years ago—is the network of Favoured Nation Clauses which now exist, and which would hinder us from taking any isolated action. The reason why I wish to press this subject on the Government at the present moment is because the Committee, at the close of their Report, make some important proposals. They recommend Her Majesty's Government to institute careful inquiry into the matter, and, in the event of its being found impossible to arrive at an International agreement for the suppression of bounties, they were prepared to recommend the adoption of such a course had it been practicable under our existing Treaties; and they were of opinion that on the renewal of those Treaties the opportunity should be taken of making such alterations as would leave Her Majesty's Government at liberty to deal with the question. With reference to the negotiations which are now going on with France, I think Her Majesty's Government are bound to see that some arrangements are made—if they do make a Treaty—for redressing this great injury under which a once flourishing British industry and a considerable number of workmen are now suffering. But they may go further. If they agree with the French Government in this matter of the sugar refiners I have very little doubt that Austria will be disposed to come to terms. The matter is one for negotiation, and, if advocated by England and France combined, there will be a greater chance of success than if urged by England alone. I earnestly trust Her Majesty's Government will not simply neglect the matter and pass by on the other side. There is a cry arising for remedies which may perplex the ablest statesman to discover and apply. I know that a great authority, the Chancellor of the Duchy of Lancaster—the same authority who, 30 years ago, was so fond of telling us that all nations were likely at once to adopt Free Trade—now tells us that a demand for measures of a reciprocal or retaliatory character is a sign of lunacy. I have no wish that any action should be adopted inconsistent with sound Free Trade; but I 225 should hesitate to apply the name of lunatics to those not of my own opinion, because I fear we should be in the awkward position of finding there are more people lunatics in the world than sane—an observation which always exposes to some doubt the sanity of the person who makes it. I do not think that by calling people lunatics Her Majesty's Government will stop this cry or apply any real remedy to the evils which exist. If they neglect it, if they do not take some pains to remove such grievances as these, I fear they will find themselves confronted, before long, with a political problem with which they will have some difficulty in dealing.
§ Petition for countervailing duties upon foreign sugar imported under bounty into the United Kingdom; of Planters, Merchants, &c. of Barbadoes—Presented (The Marquess of SALISBURY).
§ Petition read.
THE EARL OF KIMBERLEY
My Lords, the noble Marquess gave a Notice which I will venture to read:—"To present a Petition from merchants, planters, and others connected with the Island of Barbadoes." Well, I wondered what might possibly be the subject which the noble Marquess intended to bring before us, because there are a good many different questions connected with Barbadoes. I then obtained the information that the subject had some connection with the sugar bounties. It seemed to me that upon a matter of such importance as one connected with Free Trade and Reciprocity, Notice should have been given that that was the subject which was about to be brought forward. I do not complain of the course taken by the noble Marquess so far as I am concerned; but, no Notice having been given, your Lordships were not prepared for the speech which the noble Marquess made. The noble Marquess said he would not go into the question of Reciprocity, or say anything which would be inconsistent with the principles of that commercial policy which has been adopted by this country; but the greater part of his speech, I thought, was intended to encourage those who wish to see those principles departed from. He attacked my right hon. Friend the Chancellor of the Duchy of Lancaster, one of the principal English advocates of Free Trade principles, 226 and insinuated that the time would come when it would be wise to embark on a course of Reciprocity and Retaliation. I wish the noble Marquess had stated more fully what policy he was in favour of, because if he were in favour of Reciprocity and Retaliation, he might have indicated how that policy was to be pursued, and whether he would be prepared to introduce the system. I, for my part, think it is a great error to blame persons who happen to differ from me and others on the subject of Free Trade, because it is undoubtedly true that a very large number of educated men are still in favour of the policy of Protection; and we ourselves, not a very long time ago, thought it was a sound system. But if we are to discuss this question, let us discuss it face to face, and not on such a Notice as the noble Marquess has given. I have not lost faith in Free Trade, and I believe it will be extremely difficult, if not impossible, to form a practicable Tariff on this subject which can be submitted with any confidence to any body of men, and by which the Reciprocity system can again be introduced. The difficulties of the West India planters are of old standing. They are connected, as is well known, with the system of industry in that region and with many other causes. I sympathize with them, but I confess, as a consumer in this country, I am not altogether in favour of a movement which seems to be directed to taxing the consumers of sugar in this country, and especially to encourage the production of West India sugar. The noble Marquess has not given your Lordship any figures, but I understand him to say that there is a considerable decrease in the production of sugar in the West Indies.
§ THE MARQUESS OF SALISBURY
My Lords, what I said was that the importation of sugar had, during the last few years, practically stood still; and whereas the importation of beet-root sugar was formerly 600,000 tons, it was now 1,500,000 tons.
THE EARL OF KIMBERLEY
The impression made on my mind during the speech of the noble Marquess was that there had been a great decrease in the production of sugar. However, the Petition presented to the House is from the planters of Barbadoes, and I will venture to ask the noble Marquess whether, in the face of the figures which I will read 227 to the House, he will venture to say that the production has decreased? From a Return of the production of sugar in the West Indies, it appears that the average production of the West Indian Colonies for the five years ending 1869 was 166,000 tons, for the five years ending 1874 it was 181,000 tons, and for the four years between 1874 and 1878, 200,000 tons. There had, no doubt, at the same time, been a large increase in the production of beet-root sugar. For the three years between 1870 and 1873, which was the time when bounties began to affect the production of sugar, the average crop of cane sugar was 246,000 tons; between 1876 and 1879 it had fallen to 242,000 tons; while the corresponding figures for beet-root were 966,000 tons, and 1,607,000 tons. In Barbadoes, during the first term, the production of cane sugar was 91,544 tons; and during the latter three years, when bounties were said to have destroyed the production, it had risen to 132,000 tons. It is, then, rather remarkable that a Petition should be presented from Barbadoes asserting that the industry of the Island is seriously affected. It is quite true that the production of beet-root sugar has increased much beyond that of the sugar cane; but in Barbadoes, British Guiana, and Trinidad, although the sugar cane industry has not advanced so much as beet-root, it has progressed, and there is no symptom that it will decay. But there is another important consideration. When the financial position of these Islands is talked of, their condition as a whole ought to be regarded, and not merely with reference to one production. There has been a large increase in the production of cocoa in many of the West Indian Colonies, and, as I am informed, the production of cocoa, which is more profitable than that of sugar, is increasing to a remarkable extent in some of the Islands. It is the more important for the reason that the increased cocoa production has taken place mainly in those Colonies in which the sugar production has declined. The question of refined sugar, which is a very difficult and complicated one, is being inquired into with very great care, and, as far as the inquiry has gone, it has not been found that the number of persons employed has very largely decreased. The most important part of the speech of 228 the noble Marquess was that in which he threw out general and vague hints that it might be desirable to embark in a system of retaliation. Does this indicate that the Party of which the noble Marquess is the Leader are about to demand a reverse of the Free Trade policy of this country in order to return to Protection? I hope that when the noble Marquess makes up his mind on this subject he will give us fair notice of the fact, in order that we may have a full, fair, and free discussion of the subject.
THE EARL OF CARNARVON
said, he did not see that the speech of the noble Marquess was open to the suggestion just made, or he would have formulated his Notice in different terms. It was scarcely possible to consider such a question as that raised by the Petition presented to the House without referring to the general topic of Free Trade, which just now so largely engrossed public attention. The case of the West Indian Colonies was an extremely hard one, and all the harder because the resources of those Colonies were naturally very great, and they could supply a very large portion of the demands which this country could make upon them if it were not for the somewhat unfair action of the Government of a foreign country. The French bounty system was one which inflicted undeserved hardship upon the trade of this country, a considerable branch of which it threatened to destroy. A very curious picture was presented by the present state of things. On the one hand we had large Kingdoms forming themselves into great commercial unions, self-supporting and independent of others, as was being done by France, Germany, and the United States. On the other hand we had the English Empire, scattered over the whole of the world, the different parts containing different products which each other part desired, but the parts kept separated from each other by different and sometimes by adverse Tariffs. More than this, we had almost the whole of Europe at this moment entering into a combination to get as much as they could for themsleves, and as much as they could of what we had. France, in particular, had entered into a partnership with her own manufacturers to impose such a duty as must obviously have the effect of ruining the industries of this country in her market. There were, no doubt, 229 several conclusions which might be drawn from that state of things which were quite apart from the question before the House. The first result was that the country was now touching a new phase and form of this question, and we had arrived at a new point of departure in the negotiations for the French Treaty to which his noble Friend had alluded. It was perfectly clear, as his noble Friend had said, that the consumer in England was not likely to gain anything from these bounties, and for this obvious reason, that until the necessity for the continuance of these bounties ceased, the foreigner would get a hold of the English market, and make his own terms. The English trade thus destroyed by him was one which demanded a vast amount of capital, and, though it might be destroyed in a few years, could not be re-established in a short time. He ventured, therefore, to hope that the Government would consider very carefully the conclusion which had been arrived at not long ago in the other House of Parliament, which was to the effect that unless we were to obtain a Treaty, not merely equivalent, but superior to that of 1860, it would be better to have no Treaty at all. He, for one, heartily agreed in that opinion. He had always had grave doubts as to the whole policy of Commercial Treaties, and in those doubts he expected many noble Lords opposite would concur. Certainly, unless a better Treaty were obtained than that of 1860, he thought it would be better that we should be perfectly unfettered.
§ EARL GRANVILLE
My Lords, I do not rise to continue this discussion, which, as my noble Friend the Secretary of State for the Colonies has said, has been brought upon the House very much in the nature of a surprise. I entirely join in the protest of my noble Friend, and I think that if the noble Marquess intended to raise this most important question, he ought to have given us some indication of what he meant to do. I looked at the Notice Paper, as it is my duty, and when I read the Notice of the noble Marquess, I thought he was going to bring before your Lordships some local grievance with which my noble Friend near me would be able to deal. But I had not the most distant idea, nor do I think that anyone could have conceived that 230 the noble Marquess was to a great degree about to raise the standard of Protection, under colour of the more plausible names of Retaliation and Reciprocity. That policy would have a great effect, a most mischievous effect, upon this country. My Lords, there is nothing that I could desire more than that this subject should be brought before your Lordships and worked out completely. But I do protest against two noble Lords settling between themselves to have this discussion without the Notice which it was proper to give. Could anyone imagine that if your Lordships had known generally that this subject would be brought before you, there would have been so few noble Lords present? Why, we should have assembled in large numbers on such a question as this. The only thing I have some satisfaction in hearing is the statement of the noble Lord opposite (the Earl of Carnarvon) that he would prefer no Commercial Treaty at all to one which would put our commercial relations in a worse position than that in which they are now placed. No doubt, Treaties of Commerce are an exception—it would be better to have no Treaties of Commerce. But the existing Treaty was made in peculiar circumstances, and was intended to give the two countries an opportunity of seeing what could be done with a greater relaxation of trade. If this subject is to be treated in such a manner that our commercial relations will be put in a worse position than they are now in, I think it would be infinitely better to have no Treaty at all.
§ THE MARQUESS OF SALISBURY
My Lords, I only wish to say that I deny in the most categorical manner that I raised the standard of Protection, Retaliation, or Reciprocity. What I did was to urge the noble Earl at this juncture of the negotiations with France, to exercise his diplomatic ability for the purpose of protecting British industry and Colonial property, which are just now suffering from a deep grievance at the hands of Foreign Powers.
§ Petition ordered to lie on the Table.
§ House adjourned at a quarter past Seven o'clock, till To-morrow, a quarter before Five o'clock.