THE FISCAL POLICY OF THE COUNTRY.

HL Deb 15 June 1903 vol 123 cc837-921

VISCOUNT GOSCHEN

, in rising to call attention "to recent declarations of Members of His Majesty's Government on the subject of preferential tariffs, and to move for Papers," said: My Lords, I will offer no apology to your Lordships' House for introducing the question of which I have given notice. The House of Lords is not supposed to have much power with reference to financial subjects; but it strikes me that, as an Estate of the Realm, all that concerns, and vitally concerns, the commerce and trade and revenue of the country is of deep interest to your Lordships' House and is entitled to discussion at your hands. But, my Lords, I would offer an apology in this sense; the subject is so vast and goes so deeply into the roots of our prosperity and future financial soundness, that I feel myself oppressed by the vast materials which it may be necessary to traverse. I know it is impossible in a single speech to deal with the great question, the great plan, which has been placed before us. Therefore, your Lordships will be indulgent, I am sure, if upon some parts I only touch the fringe, and endeavour merely to indicate the light in which the features of the plan strike me. I associate myself to the full with all those friends and opponents of the right hon. Gentleman the Colonial Secretary who have seen that on his return from South Africa he had a real conviction of the great issues which he has placed before the country, and that, fresh from his Imperial mission in South Africa, which he performed with such distinguished and memorable success, it was natural for him, if he had conceived a plan by which that Empire for which he had worked so hard might be consolidated and expanded, to feel it was right that he should place it before the country.

I do not propose to entertain your Lordships with any discussion, criticism, or comments upon Ministerial perplexities or Party divisions. All I would say in reference to those matters, at present, is that I would wish the noble Duke who leads us in this House to pronounce himself with as much frankness, with as little reticence, as has characterised some of his colleagues in the Ministry. I think we are entitled to such frankness at his hands. One further request I would make to the noble Duke; and that is that it should be made distinct and clear by him, to whom we look up with such respect, that those who differ upon one side or the other of the Party shall be as free to discuss and to urge their views as the other; that there shall be absolute fair play, and that those should not be considered as mutineers, or as disloyal, who cannot take the view which possibly—though I am not certain of it—the majority of the Ministry may entertain I can assure the noble Duke that there is no disloyalty whatever. I hear the word "mutineer" is being used. But that word does not apply to either section of the Party. They are equally free to discuss and urge upon the country the views which they take.

I would wish, in one word, to explain the spirit in which I am anxious to approach the subject myself and to examine this great project. There is a large floating opinion in the country which has not made up its mind one way or the other. A new generation has sprung up since the days of Cobden and Bright, who, I think I may say, are not acquainted with the old arguments of free trade. There are a large number of men who wish to be enlightened, not with reference to the formulas of the past, but with reference to the application of new economic doctrines to the phenomena of present and existing facts. If I may use the expression, there are a great many agnostics in economics. I wish myself, as a free trader, to look at this matter in such a way as may appeal to those on whom a mere reference to the creeds of the past would not make a sufficient impression. So I will make no reference whatever to what I may call the doctrines and creed of free trade; I will make no reference to Cobden or Bright; I will not speak of the immense prosperity which free trade has given us for the last fifty years, because I find that those are arguments which do not appeal to the very mass of opinion that I should like to see influenced—namely, those who are open to conviction by facts, but are not open to conviction by the repetition of the old formulas. But there must be reciprocity in this matter; and if the free traders—those who are against the plan which has been launched—do not appeal to the old doctrines or to their authorities—their infallible Popes—there must be on the other side no claim of infallibility for the modern doctrines. If the steady light of the well-known beacons by which we have steered, and steered successfully, during the past are to be ignored, at all events let us not be blinded by the dazzling brilliancy of the comet which has flashed across the fiscal sky.

I will make but the briefest possible reference to the unhappy and mysterious subject of the corn duty. I advocated that tax. I held, and I hold now, that it would make an infinitesimal difference, if any, in the price of the food of the people. I think it increased the revenue of the country. It had, in happy and undisturbed obscurity, under Conservative and Liberal statesmen, yielded many millions; and Mr. Gladstone himself raked in millions which that tax gave, with innocent unconsiousness that it was a financial sin. I do not regret the repeal of the corn tax from the point of view which has been put forward by Sir Michael Hicks Beach and others in the House of Commons. It was said that, as it stood, it was a constant temptation to the introduction of preferential tariffs. It was regarded as a stepping-stone to preferential tariffs. And whatever we may think of the new plan, at all events it is better that there should be a clear field, and that we should not have this policy brought before us as a clause in the Budget Bill imposing a shilling duty; but that it should be brought forward in such a distinct manner that the nation may be able to pronounce whether it is prepared to enter upon the fiscal revolution which is embodied in the plan now before the country. I maintain that there is a plan. I see that plan before my own eyes in sharp outline, and I may almost say in colossal proportions; and it is essential that we should distinguish clearly between the various matters which are included in that plan, some of which are interdependent and some of which stand alone. What is embodied in the plan is preferential tariffs to the colonies, with an imposition on the food of this country; preferential tariffs for the colonies, with the grand idea of increasing their prosperity, and, by bringing new corn-growing districts into cultivation and by making the colonies better customers of ours, to do for the colonies so much, in order that they may take more of our goods, resting upon the taxation of food.

I think I have fairly stated the great dream which we would all wish to see realised—closer union with the colonies and the expansion of their prosperity by the extension of their corn-growing districts. That is the first object. Then there comes the second. Revenue is raised by the taxation of imports on food, and that revenue, in the plan as I may call it, is to be applied to old-age pensions. The third object is to secure the power of retaliating on hostile movements on the part of trusts or of trades fed by bounties or by such barriers of high tariffs as would tend to crush the industries of this country. These are the three avowed objects of the plan. But associating themselves with the champions of these three objects there are two other bodies to whom the dazzling prospect appeals. One is the agricultural interest, which hopes that by a tax on corn an impetus may be given to that distressed industry. And another is made up of those who are concerned about the physique of the people, and who believe that by the taxation of corn the labourers may go back to the land, and thus we may receive a fine addition to the strongest and most physically fit portion of our population. These are the objects; and we have to examine them fairly to see what are the means by which these objects, so excellent in themselves, can be accomplished. But, my Lords, I would have you note that the key of the whole plan is that the boon I have mentioned rests upon a taxation of food. What has got to be settled is, in the first instance, how the taxation on food will act upon our population, and whether that condition is not too great a price to pay even for the great boon and benefits offered us by the plan. It is not only a question of taxation of corn and of the grain which is consumed in the fattening of the cattle, but of the taxation of meat—of mutton and of beef. Depend upon it, the humble bacon will follow in this train. All this food will have to be taxed. At what rate will the tariff stand? Will it be 1s. or 2s.? I think, as you look for the objects which are hoped for, you will see that the shilling duty will do extremely little for the plan; 1s. would not be enough to fertilise and to extend the wheat-growing area of Canada; 1s. would not be enough to protect agriculture; 1s. would not be enough to bring the labourer back to the land; and I would point this out to those who believe that in this scheme everything is to tend to the improvement of the physique of the people that it is an odd way of beginning, to tax their food, especially as you must operate, if effect is to be given to this object, by a far larger tax than that. The agricultural interest, I think, hope for 5s.; they do not come out into the open, but that is their hope. And I think the promoters of this scheme ought to face the question boldly and let us know as soon as may be, what rate of taxation on food will be necessary to carry out their plan. My Lords, I now approach the question of the colonial tariff. I may say that I have not a bad record in respect to the question of the colonies. Long before the present enthusiasm, which I rejoice to acknowledge, I was always one of those in the Liberal Party in the old days who clung to the possession of the colonies. I always rejected the idea that we should be better without the colonies, and I have always taken a deep interest in them, and as much as anyone have desired to see consolidation with the colonies, and the ties between us and them drawn as closely as they can safely be drawn. My Lords, the proposal is that the colonies should decrease their tariff in favour of our goods and that we, on the other hand, should tax certain imports, thus establishing a mutual advantage. Now, I hope the colonies will see that what they ask of us is infinitely more than they are prepared to grant to us. What they grant to us will touch certain trades—certain special trades where the British manufacturer competes with the colonial manufacturer. But what they ask of us touches the whole of the population. There is surely there a very great difference.

It is sometimes asked, What do we do for the colonies? At all events, we admit everything which they produce free, while they maintain a tariff against us. In some colonies there is hope of a reduction of their tariff in our favour; but, on the other hand, I also note that there are some who think that the object will be gained by keeping the tariff as against us, but increasing the tariff against the foreigner. I am bound to say that I think that will be a very poor boon to give in exchange to us who are asked to tax the food of the people. Mr. Seddon is rather impetuous. He has already held language to the effect that if we do not grant what is now asked—that is, a preference to their exports—they would see whether it is not necessary to make arrangements with foreign countries. That is not the way to tackle the public opinion of this country. The Canadian Ministers are beginning to consider whether they would not have to go back upon what they have given us. That is not very encouraging. What the colonies must see is this, that they are asking a very large thing. It is not merely a question of a trifling rebate of duty; it is a question that eats into the very vitals of the country. There is also the difficulty, as regards granting a preferential tariff, as to what other countries might do by way of reprisal, and what part the United States might take. I do not propose to examine into this elaborately, but it is a matter which requires most careful examination. We may see our way to a conclusion that there are no dangers which for a great object—and the object is great—we ought not to be prepared to face. But, at any rate, let us note that there are these difficulties, and let them be examined. The whole question of commercial treaties and our relations with foreign countries must be carefully examined, and must form portion of that inquiry which the Government deem it to be desirable to make.

Well, my Lords, I have spoken of the position in the colonies. I would add this further remark, which applies both to the colonies and to ourselves. It is a question how far it is wise to tie our hands, and to tie their hands in a manner which will affect both their treasuries and our treasury in ways that at present one cannot foresee. I will put this test. We make a commercial treaty with our daughters; Mr. Chamberlain asked why should we not make them with our daughters as well as with others. But there is this one risk about the particular arrangement now asked for, and that is it contemplates our putting a tax on food. Suppose we had made a bargain with our colonies, and suppose that before long dear bread should ensue, not from this protective duty only, but from other causes, such as short crops and other defects, may there not be a considerable popular feeling calling for the repeal of that tax? But however much that repeal may be asked for, however great the pressure put upon us, we are tied hand and foot, we have agreed with the colonies; and we should have to go to the colonies and ask them, perhaps after vested interests had grown up in consequence of the privilege we had granted, to tear up the arrangements which we had made, in order that we might free the people and admit all the imports of grain and food for which the country was so clamorously calling.

I think it is admitted by the authors of the plan that the effect of a taxation on food would mean an increase in the cost of food, although there may be great differences of opinion as to the question of degree. But it is said there will be at the same time a great increase in wages. Well, now, let that be proved. That is the first question to which all those who are engaged in this controversy ought to turn their attention. Will dearer food mean higher wages? Let no reference be made to text-books by some economist to show that high wages will follow dearer food. I want to examine the facts; I want to know by what economical process, and not by any spinning of a figment of the brain, by what actual process an increase of wages is to follow an increase in the price of food. It is said that in Germany dear food has been followed by high wages, and that in the United States high wages have followed upon the strong establishment of protection. No argument can be drawn from the example of America to show that what has happened in America would happen here. I want to know the process by which wages are going to be raised. And, another important question, I want to know whose wages are to be raised. Are all the wages in the country to be raised? Is a wave of prosperity to flow from protection? But they say, "We are not asking for protection, but only for retaliation in certain cases." I want to know how the rise in wages is to come about. Assuming, as I will not grant, that through a certain limited amount of fair trade or protection the wages in the manufacturing districts in the trades which are protected should be raised, what certainty or likelihood is there that the rise in wages would extend throughout the country? It may be said that it would extend to general prosperity; but do not let us get to generalities. Let us rather analyse it and look at the different classes affected. Take first the case of the vast body of men who are employed by the Government, by municipalities, and by public bodies. Are we to pay the dockyard hands higher wages? If so, the difference in the charge will have to come out of the taxation of food which has been pledged for old-age pensions. Then there is the Post Office. Are the wages of all Post Office employees, of all the railway men, to be raised? Who will take the responsibility of saying, "Let us put a tax on food and I will guarantee to you all that your wages shall be raised?" I say that is a tremendous responsibility, and one which I for one would be most reluctant to undertake.

What would become of the industries remaining unprotected? They would all have to pay an increase in the price of food without any compensating advantages, so far as I can see, such as the protected industries might gain. Then there is a class which generally inspires deep sympathy. I mean the lower middle class, the class of men who are as poor as or poorer than many of the working classes, and whose wages are kept down by competition. Is it seriously contended that their wages will be raised in consequence of a protective tariff being applied to certain industries in the country? I do not think that can be expected. There was a time when there was some hope for a free breakfast table; but under the present plan not only would there be no free breakfast table, but no free dinner table, no free tea table, and no free supper table. Every meal would have to be taxed, and those vast classes would gain nothing by the imposition of a tax on food followed by higher wages. If the wave of prosperity is to come at all, it would be years before it would reach this submerged class who are hovering on the brink of poverty, the class to whom a few shillings make a considerable difference in their annual expenditure. But another boon is promised which is to be paid out of the tax on food. The money is to go to old-age pensions. To that I would make the obvious objection that, if the hopes of the authors of this plan are to be fulfilled and the colonial wheat-growing area is to be immensely increased, the taxes will diminish every year, and the amount which is being set aside to pay for old-age pensions will be a diminishing quantity On the other hand, the liability for pensions once undertaken can never be stopped, and the country may be landed in a position which I know the Government do not desire, and which Mr. Chamberlain himself has repudiated, that without this taxation on food the country would still be saddled with old-age pensions. The liability is there. How is the money to be found? Every class who derived no benefit from the taxes on food would have to pay for old-age pensions, which at the time of their imposition would be considered as covered by the taxation on food. My lords, I call that a gamble. It is a gamble with the food of the people; and I trust that the noble Duke will tell us that in that gamble he will not take a hand.

I pass now to the third departure in this great controversy—namely, the question of what may really be called protection. I will not call it so, because it is denied by the authors of the scheme that there is any desire to bring about protection. I will call it "retaliatory duties." Well, my Lords, that branch of the subject is of special interest for the Prime Minister. Mr. Chamberlain seems to aim at the consolidation of the Empire, while Mr. Balfour's chief anxiety is the decline of exports and the difficulty of meeting trusts and that class of subjects which comes under the general head of retaliation. The Prime Minister is specially concerned in the condition of the people of this country. His object in having an inquiry is in order to see whether steps ought not to be taken to remedy or to meet the dangers which he foresees. Many people seem to see signs of incipient decay, and in the main they justify that view by the decline in our exports. I am not sure that there are symptoms of decay of so serious a nature as are pointed out. Let us look at several tests. My noble friend Lord Rosebery has pointed to the increased returns of Income Tax. Well, these are very satisfactory, and more especially are they satisfactory in that, although the tax is to-day levied on a narrower area, every penny of the tax to-day produces 10 per cent. more than it did ten years ago. It may be said that the Income Tax returns are no real criterion, that they only represent the incomes of certain classes. Let me point to another symptom, a very satisfactory symptom—namely, the deposits in savings banks. I have the figures extending over fifteen years. The deposits in savings banks, the Post Office Savings Bank and the Trustee Savings Banks, were in 1887 £101,000,000. In 1901 they were £187,000,000. Now these savings come from the pockets of the lower middle classes and the poorer classes, and do not represent in any way the savings of the rich. Then pauperism has declined in the last fifteen years 9 per cent., while the population has increased 18 per cent. I give you these figures as a counterblast against the statement that there are symptoms of decay.

We must make this distinction. In deducting coal from our exports as being capital we must not deduct the whole, but we must only deduct so much as represents the coal itself; for when foreign countries pay us for our coal they pay also for the wages of the men. It is said that our exports are declining. I was amused to find precisely the same arguments carried on to-day as were carried on in 1881. At that time the fair-traders and retaliators and all the various denominations who belonged to the class who predicted ruin to the country, said that we were eating up our capital, and that that had gone on for the last ten years. Well, if that was so, it has been going on now for thirty years. Nevertheless, even if it has, we do not suffer in our income, in the wages of the people, in the population, or in any other respect that I can see, except in a certain, not declining, but slackening of the increase of our exports. It is that slackening of the exports which has mainly attracted the attention of those who fear for our industries and our commerce. It is that, I think, which attracted the attention of the Prime Minister. But before we go to what that decline is to be attributed to, and whether or not it is to be attributed to the hostile barriers abroad, we have got to ask ourselves the question whether our exports have only diminished to the countries where there are high tariffs, or whether they have also diminished to those countries where there is fair trade all round, such, for instance, as China and Japan, and where we compete on equal terms with all the other nations. If it could be proved that the slackening of our exports was due simply to those countries that have raised high tariffs against us, some step in the proof which the fair traders desire would have been given. But if we find that the slackening of increase is in those countries where fair trade prevails, if Germany or France are beating us in China, then I say we must look to other causes besides protection for the further advance which Germany and the United States are making as compared with ourselves.

It was only about a year ago that the great question of the necessity of more technical education was agitated, when it was believed and asserted that it was through our less developed technical education that we were suffering in the markets of the world; and it would be a sad thing if, through any hasty judgment, through any hasty generalisations, you were now to go on a wrong tack, and to attribute to protective tariffs that falling off which might be due to a want of energy or a want of technical education, or other causes apart from free trade. This is of the essence of the question. I would point out that the Germans have got several advantages over us which cannot be reduced to paper. They are more economical in their methods, their expenditure on their staff is less, they are content with smaller profits; and it is some of those qualities of the Germans which have been found to make them such formidable competitors in many of the markets of the world. Let me admit a decline—I mean a slackening—in the increase of our exports; and now I come to the point of what is desirable in order to arrest it. There are some rather interesting points. The Prime Minister was thinking of retaliating on special occasions, but there are symptoms that more retaliation and more protection is distinctly contemplated. It is highly probable that the scheme which is before the country will, rightly or wrongly—possibly wrongly—attract a considerable number who believe that it means a beginning of the protection of their interests or manufactures. I am told that in Glasgow the workmen hail the new departure because it would mean protection for the industries of Glasgow.

A very curious correspondence took place between my right hon. friend the Colonial Secretary and Mr. Vince, which has been published in the papers. The right hon. Gentleman was asked with reference to protecting trades, and he said that he would not protect trades against legitimate competition, but against illegitimate competition; whereupon his correspondent asked him whether sweating on the Continent, the conducting of a business in insanitary quarters, would be illegitimate competition. The right hon. Gentleman is reported to have said "Yes." If so, then you get, not the germ, but the plant of protection, already grown to a considerable height. If the conditions under which production takes place abroad are to determine whether we are to put on or take off taxes on certain goods, that is getting nearer to protection, and those who are in favour of protection may congratulate themselves. Those who go into this business only as retaliators, or as fair traders only, will find that in the end they will be landed in protection with all its difficulties, with all its dangers, with all the competition of one industry with another, with all the clamour of this industry against that industry, with all that mischief which we know exists in Colonial Legislature, and with regard to which Colonial Governors will be able to give us some information.

As regards retaliation, what is asked for, and no doubt it is very serious, is such powers as would enable the Government to take measures if some gigantic trust were crushing some industry of the country. I do not well see how that can be put into a mandate; but I believe if some extreme cases were to occur for which an absolutely heroic remedy was required the Government of the day, if they were strong enough, would take such measures as seemed indispensable to such an emergency. But, with a view to such an emergency, to recast our fiscal system seems to me inaugurating a new machinery for an emergency that may seldom, and perhaps never, occur. It is perfectly right of the Prime Minister to face the question; I honour the honesty with which he has spoken his mind on this subject, it shows how anxious he is to master these complicated problems, and to see what would be the best course to take to protect the country. He asked for retaliation. Now I would ask my noble friend in this connection whether he can produce correspondence with the German Government to show what has really taken place with regard to themselves and Canada. Here I am entirely with the Prime Minister, I would wish to have the commercial treaties examined. I wish to know precisely how we stand, and how far commercial treaties would support this or that object which is desired. I do not myself see my way to the review of all the commercial treaties at present. I would further wish to know the history of retaliation between different countries—how the countries have fared who have carried on this war of tariffs, a phrase which has an ugly sound certainly in the minds of those who belong to the past. But let us have the experience of how they have fared who have conducted this retaliatory campaign. I should like further to ask the Government what is their view—because I am sure they have got no plan in this respect—how are you going to retaliate? If you desire to retaliate, are you going to fix upon a particular industry which is supposed to be threatened, and in order to protect that retaliate by acting on the same industry abroad? In many cases you would be quite unable to do that. You would have to tax some foreign export to this country of a different character from your own export which you wish to protect; in fact it would be a competition and a clamouring between all the various interests.

There is no saying how deep a question of that kind goes. You retaliate in one direction and you make something dearer; those using that which is made dearer in this country clamour for similar treatment, or for the repeal of the particular injury which is being done their trade. You cannot protect one trade separately without protecting a number of others, you cannot protect one trade without injuring another. I say, therefore, that in this respect I wish an inquiry, not theoretical—I wish that it should be possible to place the facts before the country. I need not ask, I am sure, that in such an inquiry the utmost impartiality should prevail, and that we may count upon this, that the official organisations and the various Departments shall observe absolute neutrality and independence, and that no Departments are to collect statistics to serve any particular side, if there are sides taken in this matter. I shudder when I think of the electoral leaflets that will be spread over the country with regard to this plan on both sides. I would wish that the matter should be calmly discussed and taken out of the hands of the local agents, and that the local agents should have no instructions from headquarters as to the line it would be desirable to take. Let there be fair play all round in this respect. I have seen allusions to tables which might be prepared on hypothetical calculations and which would prove to the working man that he would have to pay only so much more for food and that he would get so much more wages. Hypothetical calculations are very dangerous things with which to deal when you pledge yourselves to the masses of the country as to any particular policy which you intend to pursue. Let there be perfect fair play in this respect.

I would make another appeal to the Government. The Prime Minister has told us that the plan would not come before the country for two or three years. His mind is unconvinced; and so, if his mind is unconvinced, I take it the Government as a whole is unconvinced. It is possibly conceivable, perhaps not very probable, that some catastrophe might happen which would precipitate a dissolution and would require this matter to be dealt with, one way or another, now instead of after the discussion which the Prime Minister thinks indispensable for the true eliciting of the opinions of the people. Well, then, I ask, and I think we almost have a right to demand, that, if there were such a dissolution, the mandate which is only to be asked for after conviction has been strengthened on a number of subjects, should not be made the mandate at the election before that inquiry has taken place, and before all the facts have been elicited. If it should take place, I for one have no hesitation in saying that I should think it the duty of all those who saw danger in this fiscal revolution to do their utmost to see that such a mandate should be refused. This discussion is to go on, and one thing I will ask his Majesty's Government which I am not in a position to ask except as one of the public. I would ask that the discussion may be so conducted, if possible, that, if the result should not be that we can assent to the views of the colonies, no rankling memories should be left behind from anything that is said on either side, by one political Party or the other here, or in their turn by the colonies.

Impatience is natural. There may be impatience; but let there not be irritation. Let us hope, if we do not see eye to eye, and if the colonies realise that they cannot press us in this matter because it involves the taxation of food, that no ill-feeling will be left behind, and that we can go forward on the road towards consolidating our Empire with equal confidence as in the past. The right hon. Gentleman the Colonial Secretary used some words of terrible eloquence pointing to many lost opportunities—and opportunities have been lost—and pointing on the other hand to the glory of a consolidated Empire. He said— That unless the question of trade and commerce were settled satisfactorily he for one did not believe in the continuance of the union of the Empire. They are strong words, and he continued— We have our chance, and it depends upon what we do now whether this great idea of consolidation is to find fruition, or whether we will for ever and ever dismiss this consideration and accept our fate as one of the dying Empires of the world. We are to accept our fate as one of the dying Empires of the world if we refuse to tax the food of the people! Is the doom of the Empire to be pronounced on every platform if the people refuse to see their food taxed? Is it fair to put the mandate before the people—"No preference, no Empire?" I think it is unjust to the people of this country, I think it is unjust to the people of the colonies. I think it is unjust to the right hon. Gentleman the Colonial Secretary himself, who has done so much and made such steady, and I hope permanent, progress in knitting the Empire together. That is his creed. Surely it is not to depend on commercial bargains with the colonies. Without commercial bargains the colonies have lavished their blood in South Africa, and without commercial bargains we have lavished our millions in the protection of our Empire, which includes the colonies, asking but little in return; and, under these circumstances, I am not to be told that if we cannot accept this plan we are to accept the fate of a dying Empire. The resources of statesmanship, I hope, are not exhausted. Before this idea was mooted many and many were the plans by which it was hoped the colonies might draw closer to us, and we retain our hold over the colonies. On that road the statesmen of both hemispheres must continue to work, undiscouraged if the result should be against the plan, undiscouraged by failure. Forward this Empire must go, not as a dying Empire, but as a living Empire in the world, and our statesmen must endeavour to realise the fair dream of a cemented Empire without the nightmare of tampering with the people's food.

THE EARL OF CREWE

My Lords, the noble Viscount who has just sat down began by saying he did not think he need apologise for introducing this subject to the notice of the House. I am sure everyone of your Lordships will agree with him in that statement, for it would indeed have been strange if a subject of such universal interest to every inhabitant of this Empire should not receive discussion in your Lordships' House at the earliest possible date. Certainly no apology could have been needed from the noble Viscount himself in bringing forward the subject, for nobody could have introduced it with such authority as the noble Viscount, both from his experience of private business and from his experience in managing the fiscal affairs of the country; and I think your Lordships will agree that he subjected the question to a most searching and, at the same time, most judicial analysis, in a manner which probably could not have been approached by any other Member of your Lordships' House. The noble Viscount, sitting as he does immediately behind Ministers, naturally devoted himself rather to the policy which has been brought before the country than to the other question of the singular manner in which that policy has been brought in. Perhaps I may be permitted, from this side of the House, to make one or two remarks on the latter subject. That policy, so far as we know it at present, is the policy of a single Minister. The noble Viscount stated in strong terms his conviction of the absolute honesty of purpose with which that policy had been brought in. I am quite willing to join with the noble Viscount in expressing that belief. I have not the least doubt that on this subject the mind of the Colonial Secretary is in a condition of genuine, even if somewhat excited, conviction, and in bringing it in the right hon. Gentleman has aroused in the minds of some of his colleagues a feeling of exceedingly strong opposition, while he has hypnotised others, including the Prime Minister, into a condition of coma or suspended animation.

We are told that this subject is one on which a difference of opinion may properly be held within the walls of the Cabinet, just as differences of opinion are held on many minor subjects. But what is the obvious difference? It is perfectly true that the Prime Minister holds, and has expressed, opinions on various subjects, such, for instance, as female suffrage, bimetallism, and Catholic education in Ireland, which are not those of the whole of his Party, but although the Prime Minister may have stated his opinion on these questions he has never made them the subject of propaganda. If you will allow me I will illustrate the matter by a hypothesis. Suppose that instead of becoming converted—if it is conversion—to the principles of fair trade and retaliation, the Colonial Secretary had instead become converted—perhaps I ought rather to say reconverted—to the principle of Home Rule for Ireland. It would have been possible for him no doubt to retain his position in the Ministry by stating that he did not consider the subject to be one now before the public, and after once expressing his opinion he could no doubt have gone on sitting as a colleague of noble Lords opposite. But if he had gone about the country instituting a Home Rule propaganda, would it have been possible for him to remain a member of a Unionist Government? And similarly one is inclined to ask: Is it possible for a fair trade Minister to remain a member of a free trade Government? But is this a free trade Government? If it is not a free trade Government but a fair trade Government, then, in turn, we ask the question: How is it that the Chancellor of the Exchequer remains a member of a fair trade Government?

We are told that all these differences are smoothed over by the fact that it is proposed to institute an inquiry into this question of preferential duties. I admit that the idea of an inquiry is exceedingly alluring and attractive. I am certainly one of those, and I know there are many in your Lordships' House, to whom any scheme would be welcome which would further consolidate the Empire, and bring us into closer connection with the colonies, and if it were not that I am convinced that there is very considerable risk attaching to what is called an inquiry itself, as well as to the policy which that inquiry is intended to lead to, I for one would be most unwilling to express disapproval of the proposal to inquire into the subject. What is exactly meant by inquiry? So far as I know, inquiry can only take two forms, namely—a collection of statistics relating to our trade in all parts of the world, and the ascertaining of the opinions of our colonies on the questions involved. Anything else is not in the nature of an inquiry, but in the nature of a discussion, which is a totally different affair. Now, as regards statistics, I imagine that no person or body of persons is in a position to obtain statistics bearing on the question except His Majesty's Government. His Majesty's Government, through the reports of their Consuls and Vice-consuls to the Commercial Department of the Foreign Office, can secure all obtainable information with regard to the trade of other countries. Through the Colonial Office they can obtain any knowledge they wish with regard to the trade of our colonies, and they can obtain similar information through the India Office with regard to India. If that is so, if all the statistics could have been obtained, would it not have been desirable to have obtained them, supposing they are not obtained, before the Colonial Secretary started off on the war-path?

Again, as regards the views of the colonies, it seems to me that it is impossible to obtain any idea of those views unless you are prepared to set positive proposals before each colony in turn. Of course, it would be possible to obtain an expression of general assent from the colonies as a whole if you were prepared to announce a general scheme entirely in favour of the colonies, and entirely from that point of view disadvantageous to this country. I mean that if you go to the colonies and say we are prepared to grant a preference to them on food stuffs—and also, I think, you must necessarily say to some extent on raw materials, because I cannot understand how any scheme of this kind could be carried through without a duty on timber and on wool—if you go to the colonies and say you are prepared to make these concessions, but, on the other hand, although you ask for a preference for your manufactured goods, you will not ask a preference which can in any way endanger the protected manufactures in the colonies themselves, and that, further, although you think as a matter of opinion that it would be a desirable and a pleasant thing if the colonies would contribute some larger proportion to the defence of the Empire, yet you have no idea of making any such question a bargain with them—if you go to them in that way I can well believe that you will receive a considerable measure of assent. But if, on the other hand, you are going as part of your inquiry to discover from each colony on what terms that particular colony will engage in a kind of preferential treaty with you, I think you are embarking on an exceedingly dangerous course. It must be a dangerous course to excite hopes in a colony, hopes which for all you know, because you have not yet taken the opinion of the country, may never be realised. I cannot conceive any course which is more likely to cause friction between us and the various Colonial Governments.

There is one person who sees no need for inquiry, and that person, of course, is the Colonial Secretary himself. The Colonial Secretary's mind on this subject is not open; on the contrary, it is absolutely closed. Speaking in Birmingham on May 16th the right hon. Gentleman said, My policy is to meet everything the Colonies do —that is to say, in the way of preferential duties. He said— Even if the price of food is raised, the rate of wages will certainly be raised in greater proportion. If we were able to bargain on equal terms, I believe that the duties now imposed on our produce would be generally reduced. And, he continued, as regarded old-age pensions—and this seems to me a very strong thing to say—he would not himself look at the matter—that is to say, the matter of increasing the price of the food of the people—unless he felt able to promise that a large scheme for the provision of such pensions for thrifty and well-conducted persons would be assured by a revision of our system of import duties. There are other statements made by the right hon. Gentleman in another place, which are, if anything, stronger. I do not see much of the humble but earnest seeker after truth in those remarks. They are the utterances of a man who has finally made up his mind. The noble Viscount deprecated, as I think properly, recourse to mere authority and the introduction of famous names into this controversy. Well, Mr. Chamberlain invokes the shades of Cobden and Bright in support of his theory. He says— I cannot believe that if Mr. Cobden and Mr. Bright had been present among us now they would have hesitated to make a treaty of preference and reciprocity with our own children. I confess, when I read that, that my only feeling was one of astonishment that during the late war Mr. Chamberlain had not declared his conviction that if Mr. Bright had been here he would probably have raised a troop of yeomanry to be despatched to the front under the title of Bright's Horse. Mr. Cobden died in 1865, but Mr. Bright lived on till 1889, and Mr. Bright, therefore, not merely directed the original free trade controversy, but was in the thick of the fair trade and retaliatory controversy to which the noble Viscount alluded. What did Mr. Bright say then? He wrote, on this very question of protection— Victoria may discover that industry has no greater enemy than protective or restrictive tariffs. And in the same letter he spoke fully of attempting to build up special interests before their time. In 1879 he wrote that— The reciprocity notion is exactly adapted to catch the considerable class of simpletons who have memory and no logic. After that I confess, unless, of course, the Colonial Secretary is able to show that the circumstances of the Empire have entirely changed during the last twenty years, that it seems to me a strong order to invoke the name of Mr. Bright in support of this scheme. I can only arrive at this conclusion. The Secretary for the Colonies is, as I said, absolutely positive that his views are correct. If so, he must have some new data not accessible to the world, showing that a new state of things has arisen, at any rate, one may say, since 1891, when this subject was last debated in your Lordships' House, on the motion of the noble Earl, Lord Dunraven, and when Lord Salisbury considered that the matter was not one of practical politics; and of course one must assume he has communicated those new facts to his colleagues sitting opposite. If so, I repeat my surprise that the Cabinet, before allowing this question to become a matter, as it must become, of somewhat heated controversy, did not publish those facts to the world; but if not, if Mr. Chamberlain has formed his decided opinion only on facts of common knowledge which are accessible to anybody who has the industry to read the Bluebooks, then it appears to me that he in his turn is repeating shibboleths, the only difference being that his are fair trade shibboleths, and those which we are told we cannot repeat are free trade shibboleths. Therefore I cannot see on what ground the statement is made that we should suspend our judgment, and not express our conviction of the danger involved in the proposal.

The noble Viscount made an appeal to His Majesty's Government to preserve an absolute impartiality in the campaign which is about to be held in the country on this subject, and he pointed out that it was likely that literature of all kinds would be published. I wonder what form that literature is going to take when issued from Conservative organisations. Is it proposed either to issue no literature at all, or else to issue alternately leaflets describing the theories of Mr. Cobden and other leaflets containing the doctrines of the Fair Trade League? Is it proposed to send round reversible placards containing on one side the words, "Vote for Ritchie and Cheap Bread" and on the other side "Vote for Chamberlain and Reciprocity," because unless something of that kind is going to be done I do not see how the impartiality for which the noble Viscount asks is to be maintained. I suppose that in East Manchester and other places where people have no settled convictions, copies of both sets of literature and both kinds of placards will be distributed and displayed. The Prime Minister has stated that he has not been able so far to form any conviction on this subject; but we have always been used to look to the noble Duke for a very candid judgment on any broad political issue, and I can hardly think he will consent to leave this House and the country in general in doubt as to his views on this subject. I should like to ask the noble Duke if he really believes from his experience—for, after all, the noble Duke has been in the very forefront of politics for more than thirty years—that it is possible to carry on the government of this country under such principles of Cabinet responsibility or irresponsibility as those to which we are now treated, and I would venture further to ask him if he considers that the position as a whole is in any way fair, either to the country or to our Colonial Empire.

I only desire to say one or two words on the policy itself, on which the noble Viscount dwelt with such unequalled force and fulness. I have not the least idea of discussing the whole question of the merits of free trade, or what the average duties on food supplies would be likely to be, or the possibility of retaliation and the foreign complications which might follow. I merely desire to submit two instances of what might possibly occur if this policy were carried through. As regards old-age pensions, it has always been the belief of the Colonial Secretary that such pensions could only be given to those whom he has described as "thrifty and well conducted persons"—that is to say, those who could not be considered thrifty and well conducted would not obtain pensions. I hope I am not doing the right hon. Gentleman an injustice when I say that I believe that his opinion is that the test of thrift and good conduct would have to be the fact of subscribing to some friendly society. I yield to nobody in my admiration of the work of friendly societies, but I should be sorry to think that among the very poor there are not a great many highly deserving persons who are not subscribers to friendly societies. There are some who have never earned enough, to subscribe to friendly societies, and there are others who have met with misfortunes, whose health has broken down and who may be in the highest degree deserving but are not subscribers to friendly societies. Well, all that class of persons could only lose by this proposal. The only prospect which is held out to the very poor is that of having to pay more for their food, without having, as far as I can see, any extra provision for their old age. But there is a much more serious consideration, and one which affects us and also our colonies. When a tax is placed upon foreign corn and foreign articles of food, one is bound to assume that the price either of corn, of meat, or whatever it may be, will rise at home. If it does not rise it is perfectly obvious that Mr. Chamberlain's great object would be defeated, because if foreign corn can still be sent at its present price at a profit, that is no reason why it should be displaced in favour of colonial produce.

Assume that Mr. Chamberlain is right in believing that a gradual transfer will take place of production of food-stuffs from foreign countries to our colonies, that process must be a gradual one. All those great areas of possible supply of which we hear so much cannot spring into productiveness in a moment, and in the meantime you have an enhanced price of food at home. That, of course, encourages production at home. I do not know whether any of your Lordships have ever walked on the deserted quays of Galway and looked up at the empty warehouses there. Galway was said to have been ruined by free trade. I do not know that any tax on corn would revive Galway, but it would revive wheat growing in such counties as Lincolnshire and Essex. It would no doubt stimulate for a time the production of corn in those and other counties, but as years go on and our colonies begin to grow more and more corn and send it in much cheaper they will gradually begin to ruin the farmers of Essex and Lincolnshire, as those farmers have been now ruined by the United States. I live in a county where the cheese-making industry is an important one. Our principal rival is not a foreign country but a colony. I cannot say that I have ever noticed, in discussing the subject, that the eye of a farmer has particularly kindled with enthusiasm at the idea that his chief trade was being seriously competed with by colonial imports, and it seems to me that it is a great deal to ask of a class of people, who are altogether untravelled and to a very considerable degree unread, that they should so enter into the meaning of Empire as to be prepared to view with absolute cheerfulness and content severe competition with their trade from distant parts of the Empire. It is my firm belief that when this scheme is carried through in its entirety and succeeds, which I am assuming for the purposes of this argument, having accustomed the people of this country to protection you will find them asking to be protected against the colonies. They will be inclined to ask: Why not? They will say: "Here are producers of manufactured articles in the colonies who have for years maintained duties against similar manufactured articles at home." A farmer may well ask: If a maker of manufactured articles in Australia who taxes British goods of the same kind may be regarded as a highsouled Imperialist, why am I, who ask for a small duty on colonial corn, to be regarded as a Little Englander?"

The noble Duke the Leader of the House was present the other day at a meeting of the Iron and Steel Institute. In the course of his speech the noble Duke said, in a humorous vein, that he would be very glad to see the iron and steel industry here receive the same measure of protection which that industry had received in the United States. But he added that he knew it was hopeless, because if he asked for protection all other interests would ask for protection as well. I would ask the noble Duke whether the converse is not true, that when he has protected the British farmer in all his different branches, and those who are competed with by importations of foodstuffs, will not his shareholders then turn round and demand some measure of protection for the iron and steel industry? If that is so, what will you have done? You will have altered the entire fiscal system of this country from a free trade system to a protective system. That evidently would be a matter of regret even to those who follow the Colonial Secretary. The Colonial Secretary affirms that he is no protectionist, and that he does not say for a moment whether a protective system is right or wrong for this country. But one thing you will have done. You will have removed yourselves further from the possibility of a real Zollverein, such as exists in America, than you are at the present moment. After all, the nominal object of all this is, as I understand, to draw us into closer union with the colonies, and if I am right in supposing that, in course of time, assuming this scheme to ran on the smoothest of wheels, the effects will be such as I have described, it surely is an exceedingly strong argument against embarking on the scheme at all. I have tried to show that certain risks attach to the mere act of what is called inquiring into this subject, and I have indicated at least one danger which seems to me by no means an incredible one if the policy is carried through. But, as a matter of fact, what we are in for is really not an inquiry so much as a campaign, thanks to the Colonial Secretary, and to the Colonial Secretary alone. The noble Viscount, in his very eloquent peroration, expressed a hope that this matter might be discussed with as little fervour as possible, and, at any rate, with complete absence of anything like acrimony. Well, I cannot honestly say that I think the part the Colonial Secretary has taken will tend to make that easier for anybody, and if in the course of the controversy severe things are said—and I quite agree with the noble Viscount that it would be very much better if this matter could be coolly discussed—it will be very largely due to the fact that this scheme has been introduced in a manner which I can only describe as involving a more wanton and reckless venture than any that has been plunged into by any statesman within the memory of noble Lords present.

LORD AVEBURY

My Lords, like the noble Viscount who introduced this debate, I have been much surprised to see in the Press, and to hear in conversation, doubts so often expressed as to the wisdom of our free trade policy, and lugubrious apprehensions as to the present position and future prospects of our commerce and manufactures. No doubt competition is very severe, and if we are to hold our own, we must exert ourselves and throw away no opportunity. We must, for instance, do more in the study of modern languages and technical education. While, however, there is every reason for industry and exertion, there seems to me no ground for despondency, nor any economic reason for changing the fiscal policy of the country. Our manufacturers are sometimes criticised for a want of energy and adaptiveness, but at any rate foreign manufacturers do not venture, if they can help it, to compete with ours without claiming protection. Now what is the present position? How does our commerce stand? The total of our exports and imports last year was the largest volume of commerce ever transacted by either our own or any other country in the history of the world. The policy of free trade must, indeed, it seems to me, stand or fall by general considerations. The problem is extremely complex; allowances must be made for increase of population, for new processes, for improvements in the steam engine, economies in manufacture and transport, and the figures are liable to many considerations from other points of view. Still, the statistics are remarkable, and they seem to me conclusive.

Let us, then, see how the facts really stand. There has been an enormous increase in our trade, and the expansion coincided remarkably with the adoption of our free trade policy. For the first fifty years of the last century our trade showed but slow progress. After free trade it went up by leaps and bounds. In 1805 the value of our exports was, in round numbers, £40,000,000; in 1850 it was a little more than £60,000,000—anincrease of about £20,000,000 in fifty years. In 1900 they were £280,000,000, an increase in the next fifty years of no less than £200,000,000. Moreover, if we take the figures every five or ten years, the result comes out even more clearly. At the beginning of the century, as already mentioned, our exports were £40,000,000. The Corn Laws were abolished in 1846, at which time they were about £55,000,000. In 1850 they were about £60,000,000; in 1855, £89,000,000; in 1860, £130,000,000; in 1,865, £144,000,000; in 1870, £188,000,000; in 1880, £223,000,000; in 1,890, £263,000,000; and in 1900, £283,000,000.

The great rise followed, therefore, very closely the free trade policy. But it is often said that other countries are making greater progress. Let us then compare our own figures with those of other countries. I might well omit the United States, because the enormous tracts of virgin soil and the great immigration render any comparison quite misleading. Still, the increase in our total trade in the five years ending in 1900, the last for which we have complete figures, has rather exceeded that of the United States. In the case of the other great protective countries, the balance in our favour has been greater. In the five years the total trade of Russia rose about £12,000,000; that of France, £80,000,000; that of Germany, £150,000,000; that of the United Kingdom, £170,000,000! Moreover, the figures are the more remarkable if we bear in mind the great falling off in prices. For some purposes the weight would be a better criterion of trade than the value. It is not indeed possible to obtain such figures with any accuracy. Mr. Williamson has, however, calculated out for the Chamber of Shipping the total weight represented by the exports and imports, and his results may, I think, be taken as being approximately correct. He estimates the total weight of our exports and imports as having been for 1880, 53,000,000 tons; 1890, 75,000,000 tons; 1900, 102,500,000 tons. So that they have practically doubled in twenty years. Take another test—the total tonnage, steam and sailing, entered and cleared with cargoes or ballast, at ports in the United Kingdom. In 1860 the tonnage was 59,000,000; in 1880, 133,000,000; and in 1900, 209,000,000.

Another test is to take the figures per head. The special exports for the last five years were: United Kingdom, £5 19s. 5d.; France, £3 15s.; Germany, £3 7s. 2d; United States, £2 18s. 4d. But then the question arises: Has the trade been profitable? Here also the figures seem conclusive. Six years ago, the assessment for Income Tax under Schedule D, that which comprises profits of trade, was £254,000,000, but last year it was £347,000,000, showing an increase of over £90,000,000 in six years. Or take the death duties, which Mr. Gladstone used to regard as perhaps the best criterion of prosperity. The value on which estate duty was paid was £219,000,000; in 1902 it was £276,000,000, showing an increase of over £57,000,000. Surely, then, we ought to see our way very clearly before we tamper with a policy which has been so splendidly successful.

It has been said that a rise in the price of food might be met by a rise in wages. That may be, but if so a rise in wages would necessitate a rise in prices, and a rise in prices would, of course, seriously cripple our manufactures in the competition of the world. A difference has, I see, been drawn between raw materials and food. It is understood that the Government would not, under any circumstances, consent to tax raw materials. But, in the long run, a tax on food would hamper our manufactures in the same way as a tax on raw materials. The word Protection is misleading. The fact is that a country can only protect one trade at the expense of the others. Germany, for instance, is held out to us as an example because she subsidises her shipping, gives bounties to sugar-growers, protection to farmers, to metals, to textile, and various other industries. But who pays? The unfortunate German manufacturer finds the food of his family and workpeople raised by the protection of agriculture; his children have to pay more for their sugar in consequence of the sugar bounties; his clothing, and that of those dependent on him, is dearer on account of the exclusion of foreign tissues; he has to pay more than he used for any manufactures or machinery he has to buy; and he is taxed to promote canals and to subsidise steamship companies. Last, but not least, he has to fight in the Reichstag, or there is no knowing what additional burdens might be imposed upon him. And, over and above all the other uncertainties of commerce, he never knows whether his own Government may not ruin him, either by subsidising some rival industry, or by depriving him of some special privilege.

Our colonies have unfortunately adopted the policy of taxing the farmer and the grazier to bolster up manufactories which can only be made to pay at the expense of the agricultural interest. They sacrifice a guinea to make £1. We often hear complaints that we have only one-sided free trade, but free trade is good for a country whether other countries are wise enough to adopt it or not. Protectionist nations, in endeavouring to exclude foreign goods, tend to exclude themselves from other markets. The favoured-nation clause is the real sheet anchor of our commerce. On that we must, and may fairly, insist both for ourselves and for our colonies. So far, however, is there any evidence that we are losing ground in other parts of the Empire? in India and the colonies? Not at all. In four years our imports into India have increased 10,000,000 tens of rupees; those of the whole of the rest of the world 5,600,000. Into New Zealand and Australia our imports have increased £8,000,000, against £6,000,000. If we compare our increase in Australia and New Zealand with that of a single country, even Germany, we find £8,000,000 against a German increase of £1,000,000. In fifteen years, with our colonies as a whole, the increase has been for the United Kingdom, £15,000,000; for Germany, £6,000,000; for France, £1,000,000. In fact, our competition in colonial markets is not so much with foreign manufacturers as with colonial producers. As Sir A. Bateman says in his admirable Memorandum that the figures— Do not show any displacement of the export trade of the United Kingdom in the period in question (fifteen years to 1900) by any one of our three principal competitors. From a political point of view, however, the desire for closer relations between different parts of the Empire is important and satisfactory. Canada has shown her friendly feeling to the mother country by granting our trade a preference, and we greatly appreciate this evidence of goodwill. Moreover, I am very pleased to see that Canada has herself benefited by the reduction. Our trade has increased £3,000,000 with Canada, and the result to Canada has been that her people have got an increased supply of cheap goods, her agriculture has benefited, farmers are flocking in from the United States and settling up the far west. If she would pursue the same policy further she would, I feel sure, inaugurate a period of immense progress and prosperity. Her farmers would save in the price of clothing, implements, machinery, and, in fact, in all the manufactured articles they use, while they would get the same or even a better price for the produce of their land. A similar policy on the part of other colonies would be equally beneficial to them. But, unfortunately, the duties are in many cases still so high that even with the reduction of 25 per cent. they are almost prohibitive. Now, if those on our goods are prohibitive, it does not help our trade to make those on foreign countries still higher. Before we can judge we must know, not only the difference between the duties on our goods and those of foreign producers, but also that between the duties on our goods and those of colonial producers.

I regretted a statement attributed, I hope, and cannot but think, erroneously to Mr. Seddon that if we spurned the offer from New Zealand, she would make overtures to other countries. We have, I need not say, spurned no offer from New Zealand. We are not yet aware that any offer has been made, or, if so, what it is. But what have we done with reference to New Zealand? We have admitted her produce free, while she has taxed ours—not merely for revenue purposes, but in order to keep out our goods. We have, in fact, done all we could to encourage trade; until now her object has been to discourage it. If New Zealand will do as we have done, if she will take off protective duties imposed against our manufacturers, they will not, I feel sure, ask for any preference as against foreign producers. Australia also has a tariff specially designed—not only for revenue, but to discourage trade. We should certainly welcome a disposition on the part of the colonies to lower the barriers they have raised against trade, and to encourage instead of discouraging commerce with the mother country. It has been suggested that a tax should be put on foreign produce in all parts of the Empire whether with or without a corresponding Excise duty has not been stated, and that the proceeds should form an Imperial fund for the defence of the Empire. Some such fund is desirable, and, indeed, necessary, if the Empire is worth maintaining, for it is evident that one part of the Empire cannot permanently bear the whole burden of the Army and Navy. It seems to me, however, impossible that we can be expected to commit ourselves to any vague resolutions. For my own part, I am prepared to examine any proposals which would tend to develop our commerce with the colonies, and to strengthen the bonds which unite the various parts of the Empire But till we know what the proposals are, we shall, I submit, be wise to suspend our judgment. The difficulties are great—they may be insuperable; but while the colonies may feel sure that we shall consider their suggestions in a friendly and sympathetic spirit, still as men of business they cannot expect us to do anything which will cripple or endanger that magnificent commerce, on which the comfort and prosperity of our people so greatly depends.

*THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of LANSDOWNE)

My Lords, whether your Lordships agree or disagree with the speech in which the noble Viscount behind me introduced this subject, I do not think I shall be contradicted when I say that we, one and all, listened to it with feelings of sincere admiration. I doubt whether any speech which has been recently delivered in this House has more moved the audience which listened to it. And, my Lords, as far as what I conceive to be the operative part of that speech is concerned, I certainly do not desire to express disagreement from him; because I understood him to suggest to your Lordships that it was necessary that before we committed ourselves to any extensive departure from those free trade principles which have so long prevailed in this country, we should, with the utmost caution and with great fulness and impartiality, examine the subject with which we were about to deal. The noble Viscount asked that that examination should be thorough, fearless and impartial. He stipulated, above all things, that, so far as the Government Departments were concerned the inquiry should be conducted without anything which could be regarded as a lead from any of His Majesty's Ministers. I am gladly able to give him that assurance, and I am able to say with confidence that if we collect statistics or arguments it will be with the desire which possesses him of arriving at the truth and not with the desire of making good any particular thesis or theory.

My Lords, the noble Lord who followed the noble Viscount objected, as I understood him, altogether to any inquiry as likely to lead to inconvenient results; and he claimed, as an advocate of a similar view, the Colonial Secretary himself, who, he said, had propounded the plan without waiting for that investigation which some of us consider so necessary. He is mistaken in that view, because I find that throughout the speeches which Mr. Chamberlain has delivered he has constantly suggested that this was a question for discussion and examination; in one of the latest of them he used these words— Everybody knows that a plan is absolutely impossible until we know a great deal of matters into which we have still to inquire. That is a position which I for one am entirely willing to accept.

The noble Lord found fault with us because some of us have made no secret of the fact that we approach this investigation with widely divergent opinions as to the results which it is likely to produce. I do not suppose the noble Lord will complain of us for having in our minds different opinions on a subject so intricate. I gather that his complaint is rather that we have made it public to the country that those differences exist. Now, my Lords, I submit to your Lordships that we are not censurable for having allowed these divergencies of opinion to become apparent. We have not proposed any measure to the country. The noble Viscount spoke constantly of the plan and the scheme; but, my Lords, that plan is not one to which any Member of His Majesty's Government is irrevocally committed. It is a plan which has been put forward as a basis for discussion.

THE EARL OF CREWE

The Colonial Secretary spoke continually of "his policy."

*THE MARQUESS OF LANSDOWNE

His policy which he puts forward as a basis for free and open discussion—"the discussion to which we invite the House and the country"—those are the Colonial Secretary's words—"the suggestions which I put forward." Well, my Lords, I shall not waste time in describing the magnitude of the questions which we are invited to discuss. They are questions of a most momentous character. They affect not only the finances of this country, not only our financial relations with the colonies, but our financial relations with the whole civilised world; and if they affect our fiscal relations they affect our political relations also. And, my Lords, surely it is not necessary for me to say that we should never have launched this question upon the area of public discussion if there had not been circumstances which seemed to us to make inevitable that such a discussion should take place. Let me say one word with regard to one or two of those circumstances. In the first place, your Lordships will recollect that in 1897, and at the beginning of last year, there took place in this country those important conferences at which the representatives of the great colonies were present. Now, both in 1897 and last year this question of colonial preference was put in the very forefront of the schemes which were before the conferences for discussion. Let me read to your Lordships the resolutions of the conference of last year:— That this conference recognises that the principle of preferential trade between the United Kingdom and His Majesty's dominions beyond the seas would stimulate and facilitate mutual commercial intercourse, and would, by promoting the development of the resources and industries of the several parts, strengthen the Empire. That with a view, however, of promoting the increase of trade within the Empire it is desirable that those colonies which have not already adopted such a policy should, as far as their circumstances permit, give substantial preferential treatment to the products and manufactures of the United Kingdom. Then there proceeded from each colony a statement of the extent of the preference which might be expected. Do not suppose, my Lords, that these discussions at the Colonial Conference can be treated as discussions at some unimportant debating society. These distinguished colonial statesmen came here for the purpose of doing business; and it is impossible for us, having those Resolutions before us, lightly to brush them on one side, and to refuse to examine the conclusions to which they point.

In the case of one colony in particular—Canada—the question has assumed a particularly urgent character. Your Lordships may remember that in 1897 the Canadian Government offered a preferential tariff to any country which would admit colonial imports on certain terms fulfilling certain conditions of reciprocity. That offer was particularly designed to give advantage to the commerce of this country; but there was an obstacle in the way of our accepting the Canadian offer, for this reason, that the commercial treaty of 1865, which was then in force, bound the colonies to admit imports from other countries upon terms not less advantageous than those offered to the imports of the mother country. The Canadian Government desired to be relieved from that obligation, and accordingly the then Government, of which the noble Viscount was a member, denounced the commercial treaty of 1865, and it expired in July, 1898. That obstacle having been got out of the way, the Canadian Government proceeded to offer to this country alone a preferential tariff, giving to British imports an advantage of 33⅓ per cent., and that offer was, I need not say, accepted. I should I say that to the imports of other countries the Canadian Government continued the former tariff arrangements, all foreign imports being admitted on a single and impartial tariff.

Now observe what happened. The commercial treaty of 1865 having been got rid of, negotiations commenced between this country and Germany for a new commercial treaty, and an arrangement was eventually authorised by the German Federal Council giving to this country and to the British colonies the most-favoured-nation treatment, Canada alone being excepted from such terms. As was to be expected, the Canadian Government protested against this, and we supported that protest by the best arguments we could produce. We pointed out that no privileges were taken away from Germany, and that her imports into Canada remained on the same footing as the imports of all other foreign Powers; but our protests did not prevail; and the result was that after waiting five years—that is to say, in the spring of the present year—the Canadian Government placed a surtax on imports from Germany. That surtax has led to a considerable amount of discussion and to correspondence which is still in progress; the course of which we have been given to understand, first, that Canada is liable to find herself subject to further differential treatment by the German Government, and not only that, but that if, as probably would be the case, other British colonies should follow the example of Canada and give a preference to British imports, then this country, the mother country, in spite of the fact that we open our ports widely to German imports—this country will probably not be allowed to continue in the receipt of the most-favoured-nation terms. This intimation seems to us to create a very serious situation.

VISCOUNT GOSCHEN

Will my noble friend be able to lay despatches on the Table with reference to this matter?

*THE MARQUESS OF LANSDOWNE

Papers were laid at the time when the treaty was denounced, and I shall probably be able to lay further Papers, but I cannot give an undertaking as to Papers relating to matters still under discussion between the two Governments. Well, my Lords, that is the situation with which we are face to face. A British colony has been made to suffer for the preference given to the mother country, and the mother country has had it intimated to her, and not obscurely, that she will be denied the most-favoured-nation treatment if other British colonies do the same thing. I am anxious for the House to understand that we do not for a moment dispute the right of Germany to resort to measures of this kind; but what are we to do? Are we to tell the Canadian Government frankly that we are unable to help them? Are we to tell the Canadian Government that they have got into trouble owing to their desire to deal liberally with our commerce, and therefore we invite them to take back the preference they gave us in 1898? Neither of these courses would be a course which any Colonial Minister would find it very agreeable to take; and surely we are not unreasonable when, in view of the situation I have endeavoured to describe, we propose that the whole of this question of the possibility of making special arrangements for national trade as between the mother country and the colonies—that the whole of that important question should be thoroughly considered de novo. If we had refused to give that amount of consideration to the requirements of the colonies, I think we should have displayed to the world an amount of indifference to Canadian interests and to Canadian sentiment which I do not believe is felt by any Member of this House.

So much as to the colonial case. But there is another matter which greatly affects the issue before us. The form which protection takes has sensibly altered during recent years. Foreign countries no longer restrict their activity to the protection of their own market. They give a kind of protection which assumes an offensive shape, and which leads to the invasion of the markets of other countries by the highly protected produce of the countries to which I have referred. Sheltered by constantly increasing tariffs, there have grown up in several parts of Europe huge trade combinations or trusts, which not only monopolise the home market of their own country, but which the production of vast quantities of goods which the home market is unable to absorb, and which are sold at very low rates, in some cases below the cost price, in the markets of other countries. These transactions are only rendered possible by large bounties, given sometimes by the Government itself, sometimes by trading associations; but whether by associations or by the Government it does not matter, so far as the result is concerned. No industry can stand up against competition carried on in these conditions. Let me read a short extract from a work lately published by a well known Continental writer on trusts, Dr. Raffalovich— Such action in regard to exportation is becoming more and more frequent. In Germany, for example, it is practised in every branch of the export trade. The following details show to what extent has been developed in that country the system of lowering the price of goods for export in order to keep up the price on the home market. The syndicate of rail manufacturers sells rails in Germany at 115 marks the ton and at 85 marks abroad; sheet iron is sold at 125 marks a ton in the home market, and at 100 marks a ton on the foreign market; the union of nail manufacturers sells its products at 250 marks a ton in Germany and at 140 marks a ton abroad. The absurdity of the system in respect of the home market was very well shown last year during the period of the so-called 'coal famine,' when the price of pit coal in Germany rose to 18.50 marks the ton, while it was being at the same moment exported to Austria at 8.80 marks a ton. This system of throwing on the market goods at a price below the market price is evidently extremely troublesome and ruinous to the countries into which the goods are imported, for it seriously disturbs the national industry. From this point of view the activity displayed by the syndicates can be justly considered and branded as unfair competition. The danger of such proceedings, which it is impossible to hinder, has increased since syndicates in various countries have begun to make agreements among themselves; there are now in existence several score of such syndicates.… It seems to us that it would be particularly fitting that the question of this fatal activity should be examined from the international point of view, precisely at this moment when the period for the expiration of commercial treaties is approaching, and when we are face to face with the very serious question of their renewal. I know, my Lords, we are sometimes told that these huge importations of cheap commodities are blessings in disguise, and that we ought to be grateful for them. I do not profess to be an authority on fiscal matters, but I am bound to express, as a layman, my belief that a moderate trade carried on on a sound basis is in the end a much more profitable trade than one at one moment artificially inflated and the next contracted by this artificial interference.

This question has often been discussed. I happened the other day to come upon a very eloquent description of the objections which may be raised to these imports of cheap bounty-fed goods by one who was a high authority upon political economy, and who was one of the most staunch free traders whom I ever came across—I mean the late Sir Louis Mallet. The argument was used that if we made difficulties in accepting these cheap bounty fed goods we might just as well refuse to accept them in the imaginary case where somebody might offer them to us as a present for nothing at all. This is how Sir Louis Mallet dealt with the argument. He said— I will make another equally legitimate hypothesis—namely, that every country with which we trade made a present of the whole of their exports to us for a series of years. Juicy beefsteaks twice a day, doubtless, as your correspondent suggests, wheat, sugar, and other excellent things gratis, and a very pleasant time generally for the consumer while it lasted. But how long would it last? And what then? And what should we find at the end? The industries of all countries dislocated, an immense destruction of fixed capital, our customers ruined, and, by the great stimulus to consumption with no corresponding production, the British consumer demoralised and pauperised—a state of things from which we should only recover by awaking gradually and painfully to a recognition of the truth that the only foundation of a healthy and permanent trade is mutually profitable exchange, and not the giving and receiving of alms. Those seem to me to be wise words. One result of the continued admission of the products of these syndicates and trade combinations, which are becoming more numerous and audacious with every year that passes, may be that the foreigner will begin by getting possession of the market, will crush out our industries, and when he has succeeded in crushing them out will then raise the price to his own profit.

Now, in the case of one commodity, we have already taken a very important step, and, I think, a step in advance—I mean in the case of sugar. Your Lord ships will recollect the West Indian Commission, and the Report which that Commission gave of the effect that bounties have had upon the West Indian sugar trade, and next upon the sugar industry in this country. As the result of the inquiry of that Commission we took part in the Brussels Conference of last year; and although we had taken part in more than one similar conference or convention, we took part in this conference for the first time upon the understanding that our delegates were to be free to consent to the adoption of penal measures against sugar imported into this country under unfair conditions of production. Well, that was a long step in advance. Your Lordships will be asked before the end of the session to deal with a Bill as the result of our participation in the Brussels Conference. But sugar is not a solitary case of this kind of illegitimate competition; these combinations have extended to coal, to the manufacture of all sorts of iron goods, to spirits, chemicals, paper, and to a number of other industries besides. These combinations are the outcome of entirely modern developments, developments which I do not think were dreamt of by those at whose feet we sat many years ago when we first studied these subjects. I do not think with those developments confronting us that we can afford to remain intrenched in the old positions, and to refuse to consider measures which might be necessary, which might be effectual, for the purpose of enabling us to meet the tremendous strain to which the commerce of our country is thus exposed.

Having said that, I desire to admit fully that the burden of proof is with those who desire to alter our fiscal system in order to deal with these evils. I admit, for example, the immense difficulty of framing a fiscal system which might be applicable to the varying requirements of the whole of our colonies; I admit, as the noble Lord on the back bench contended just now, that this country has greatly prospered under free trade; and I admit that, by adhering to free trade, we have been able to avoid, as a Government, dealing with a number of extremely difficult problems concerning the interests of competing industries in this country, and concerning the possibly conflicting interests of the different colonies, problems which any Government is fortunate if it can leave to be dealt with locally instead of dealing with them themselves. All that I frankly admit. But I do think that the time has come when we must consider what kind of free trade it is that this country enjoys at the present moment. It is true that we are enjoying free trade in the sense of Unrestricted imports. But free trade, in my humble judgment, means a good deal more than that; and, although I do not for a moment dispute the account given by noble Lords to-night of the prosperous condition of the country, I do hear, occasionally, murmurs which indicate some misgiving as to the future, a feeling of uneasiness that other countries are making more rapid progress than we are, and that, in some markets at any rate, we are no longer competing with the foreigner as successfully as we were wont formerly. But, be that as it may, I do not think we should discuss these questions upon the asumption that commercial prosperity is the all in all of the matter, I hear it said that the Empire is founded upon trade; so it is, I daresay. But, supposing that we do find ourselves face to face with a position in which, unless we are able to discover some means of drawing the colonies closer to ourselves, we should find them gradually drifting further and further away from us, is not that a contingency which it is worth making some sacrifice to avoid?

I for one should not be deterred from examining these questions with an open mind, because I am told that the result of any changes which may be made may affect by a few thousand pounds the volume of our national trade. What we have to consider, it seems to me, is what is the sacrifice that we are asked to make; is it a sacrifice we can bear, and what are we going to get in return for the sacrifice? All those are matters which we cannot ascertain without full and careful investigation. It seems to me at any rate that these two problems emerge and require our attention. Can we or can we not do something to bring about a closer fiscal unity between ourselves and the colonies, and can we or can we not do something to protect the commerce of this country against the kind of illegitimate competition which I have described? It may be that we shall find it possible to work upon only one of these lines, and not upon both; it may be that we shall not be able to do much; but I do protest altogether against being invited to say without further examination that we are able to do nothing at all. If I spoke my own mind to the House, I should be inclined to say that we might, at all events in so far as the colonies are concerned, look forward to the careful scrutiny of our commercial treaties with the object if possible of finding some means of adapting them to the requirements of those colonies. And with regard to the question of retaliation, I cannot help hoping that just as we have hardened our hearts in the case of sugar, and have committed ourselves to steps for the purpose of preventing the invasion of this country by bounty-fed sugar, so we may find it possible to deal in a similar spirit with similar aggressions in respect of other kinds of industries and manufactures. I am strengthened in that belief because I have certainly during the last year or two detected signs that other countries are by no means unprepared to discuss questions of this kind with us in a reasonable spirit.

To my mind the present position, in which we are absolutely helpless, absolutely unable to defend ourselves, is almost intolerable. To me we seem to be in the position of a man who in some lawless country enters unarmed a room in which every one else carries a revolver in his pocket; the man without a revolver is not likely to be very considerately treated. If we take the opportunity of supplying ourselves with a revolver, and let it be seen by everybody that we have got one, and that it is a rather larger revolver than everybody else's, my own impression is that we shall find ourselves carefully let alone. I say, if I may pursue the analogy, that our revolver will be a much larger one than everybody else's, because our market is a much larger market than anybody else's, and the threat of closing any part of that market to foreign commodities is a threat which no foreign Power can afford to treat lightly. In that case it is perfectly conceivable that it would not be necessary for us to resort to actual measures of retaliation, and we should be able to comfort ourselves with the reflection that we had won a victory for free trade by the use of weapons stolen from the arsenal of our antagonists.

I, at any rate, think it is our duty to regard in a tolerant spirit and with an open mind the proposals for dealing with these important questions. I, at any rate, can see nothing ignominious in the admission that such questions are capable of being dealt with in a great variety of detail; and I fail to see that there is anything unconstitutional or irregular or disrespectful to Parliament or to the public in asking that these questions should be thrown down for free and open discussion. We are, I am happy to say, to this extent, I think, agreed—that investigation is necessary. The noble Viscount, Lord Goschen, asked for it. Lord Rosebery, who is no longer in the House, and who delivered an eloquent speech on the subject last week, asked for investigation. The Colonial Secretary asks for investigation. The Prime Minister has expressed his desire for it. Well, my Lords, is it not our duty to enter into that investigation with an open mind and in the calmest and most even spirit possible? Lord Rosebery told his audience that the inquiry which he desired ought, in his opinion, to be a secret inquiry, and that it should be conducted with calmness. A secret inquiry, in a case of this kind, seems to me to be absolutely out of the question. I do not think that you can consult your own great Departments or chambers of commerce, still less can I bring myself to believe that you can consult your colonies, without the fact being known. And I do think that, if you could conduct your inquiry in secret, and that you were able suddenly to produce the result before the public had had time to consider the matter, your proposals would probably stand a very poor chance of favourable consideration. As to the calmness of the inquiry, I can see no reason whatever why it should not be conducted in the calmest and most judicial spirit, and it is in such a calm and judicial spirit that it will I am sure be considered in your Lordships' House.

*THE MARQUESS OF RIPON

My Lords, I had hoped, when my noble friend rose to address the House, that we might have found that he was ranged upon the side of the Chancellor of the Exchequer. I am sorry to find that this is not the case, and that he is deeply imbued with all the heresies, as I think them, of fair trade. The noble Marquess chiefly dwelt, as was no doubt natural on the part of the Foreign Secretary, upon the question of retaliation. He had but little to say in regard to the question of colonial preferences, although that appears to me to be in many respects the most important portion of the question. I will for a few moments deal with the latter part of the noble Marquess's speech in regard to his proposals with reference to retaliation. Those proposals are not new. The noble Marquess spoke as if the state of things which exists at the present time had arisen just now. I believe that that is an entirely erroneous view of the case, and that at all events it is not the view that has been taken by those who for the last twenty or thirty years have advocated the principles of fair trade. My noble friend the noble Duke opposite knows something about the principles of fair trade. If I am not mistaken, he, upon a memorable occasion, annihilated and destroyed the principles of fair trade during one of his elections, and I hope we shall find he still adheres to the principles which then led him to an oratorical triumph. What is the point of the speech of the noble Marquess in regard to this part of the question? It is this, that there has grown up in foreign countries of late years a system of bounties which are found to be injurious to the trade and interests of this country. Well, my Lords, one of the first results of those bounties is that they send the goods of foreign countries, and to a great extent raw material, more cheaply to this country than would otherwise be the case. That we know is so in regard to sugar. When the Sugar Bill reaches this House, if it does reach it, we shall then have an opportunity of discussing that question very fully; but the sugar bounties are bounties mainly given by foreign Governments themselves. The bounties to which the noble Marquess has alluded are bounties given by great trade combinations. The two things rest upon a different basis. I confess that I believe those bounties do not produce mischief to our trade, but render the articles to which they are applied cheaper to us. They produce evil only to their own country.

The noble Marquess says that those bounties may be very well now, but that when they have led to the result that we have been driven out of all the markets of the world, they will be withdrawn and the prices of foreign goods will be raised against us. I should like to know whether the noble Marquess will give us any information as to the present volume of our trade. Has it decreased? Does it show signs of decay? I do not myself believe that it does. One of the first objects of your inquiry, when you have instituted it, must be to find out what is the actual position of our trade at the present time, and how it stands in comparison with our trade in the past. That it is of enormous volume, that it is the greatest trade in the world, no one will dispute. It has been growing for the last fifty years under the fostering influence of free trade, and you now tell us at the end of those fifty years that it is in such a condition that it is threatened with decay. But what we have a right to ask is that you should prove your allegation, and that you should not make it merely upon unsupported evidence. It seems to me, I confess, that this investigation which the noble Marquess says he would like undertaken, I suppose by His Majesty's Government, ought to have been undertaken before the announcement was made by the Colonial Secretary. The noble Marquess has not told us how he is going to conduct his investigation. Is it to be by Royal Commission? I think he did not like the idea of an inquiry by Parliament. Is it, then, to be an inquiry by the Government conducted through the channels of Government Departments? If so, it is an inquiry of a kind that has often been made before, in order that the Government of the day might decide their policy; and such an investigation I venture to submit, in accordance with common sense and with precedent, ought to have been conducted thoroughly and completely by His Majesty's Government before any member of the Government gave expression to opinions of the nature of those with which the Colonial Secretary has recently startled the world.

The noble Marquess, to my infinite astonishment, says that Mr. Chamberlain has no plan. Why, we have had the plan in the fullest details. It is a plan to make food dear; it is a plan to return to protection by a process of retaliation; it is a plan of which everybody understands the meaning, and of which I venture to believe the majority in this country dreads the result. How can the noble Marquess argue that Mr. Chamberlain has no plan? I am sure Mr. Chamberlain would not say so himself. He spoke of "his policy." What is his policy but his plan, and his plan is of a nature so remarkable, so utterly inconsistent with the fiscal principles which have been followed in this country for the last fifty years and which has given us half a century of great industrial and commercial prosperity, that it does naturally startle all those who have heard it, and they have a right to say that it ought not to have been promulgated by a Minister of the Crown without a general concurrence of his colleagues. We know that the Chancellor of the Exchequer absolutely dissents from this plan, that he will have nothing to do with it, and that he adheres to the established fiscal policy of the country. There have, I know, been cases in which Ministers have differed in the same Cabinet upon minor questions, and in some cases they have differed upon questions of great magnitude; but this is, of all questions, the one upon which Ministers of the Crown ought to make up their minds and to speak with united voice, because it goes to the very root of our commercial and industrial prosperity. This question is one which touches every man who is engaged in trade or in commerce, and it is impossible to conceive how a Government can be constitutionally carried on with such deep differences dividing its members. Of course, the Cabinet may differ and keep their differences to themselves for a time, but here you have declared views upon a question which to a commercial country like ours is one of the most vital importance.

The public journals tell us that the Secretary of State for the Colonies is not going to speak any more on this subject in Parliament. They also tell us that he is not to go about the country making speeches until the prorogation. But is he then to go about the country making speeches? Is this investigation, of which we hear so much and upon which so much depends, to be conducted by speeches from a master of the art of speaking on the one hand defending his policy, and by speeches by the Chancellor of the Exchequer the next day condemning and criticising it? That is a state of things which cannot go on, which cannot be allowed to continue. The danger of prolonging this state of uncertainty is very great indeed. This question affects industry and commerce, and affects them in every respect, and the more these disputes are carried on in the face of the country, the more they will unsettle your trade and hamper your industries. Are you going to tie up this question for two or three years after you have discussed it in this way, and then hand it over to a General Election. What will your colonies say? The discussion of this question under the terms in which that discussion will take place will be sure to lead to great dissatisfaction in the colonies. This is a question on which men are divided. There are the strongest opinions on the one side, and there seem to be the strongest opinions on the other side. Is this question to be thrown before the public for discussion for two or three years in the face of your colonies, who ask you to take a particular course? I can conceive no mode of proceeding more calculated to injure British trade itself, and to injure our relations with the colonies than that which it appears His Majesty's Government contemplate pursuing.

What is it that the Colonial Secretary does propose in regard to the colonial part of the question? It is this. He proposes to place a tax, and it must be a considerable tax, or it will not have the effect he desires, upon the food of the people. He does not at present contemplate a tax on raw material. But if you are to deal with your colonies in this matter upon a footing of equality, if you are to benefit the corn of Canada by a tax on foreign corn, you must benefit the wool of Australia by a tax on foreign wool; and that to me, living as I do in a woollen country, is a matter of serious importance indeed. Upon all the bases upon which it is desirable to rest the unity of this Empire, the worst is a tax on the food of the people. There is no basis so dangerous, nothing so likely to produce serious difficulty with the colonies—aye, and possibly to threaten disruption—as the placing of the interests of the great mass of the people in contradiction to the supposed interests of the colonies. If the proposals of the Colonial Secretary were to be accepted—as I earnestly trust they will not be accepted—by the people, and by the Parliament of this country, in a short time they would begin to tell. Dear bread and dear meat would tell their own story, and the great mass of the people of this country, suffering in their food, would undoubtedly turn round and raise a great cry against the policy which had inflicted evils of that kind upon them. The noble Viscount, Lord Goschen, pointed to that, and said— But you will not be able to alter it. You will be bound by agreements or treaties with your colonies, and, however evil the system may turn out to be, you will not be able to change it. If that is absolutely so, then the result is that the people of the United Kingdom will have lost the control of their own taxation—they will not be able to deal with the taxation of their own country in the mode in which they think best. But there is a greater danger even than that, and it is that in a matter so vital to the interests of the very poorest, the time may come when they will not be restrained by those considerations to which the noble Viscount alluded, and when they will desire to tear your treaties to pieces, and, if the colonies will not agree to it, will proceed without listening to their views. That is the most threatening position in which we could possibly be placed so far as the unity of our Empire is concerned. And yet that is a position to which we may easily be brought if we take a wrong step in this matter. The noble Viscount said that if you take a wrong step you cannot withdraw it, but it must further be considered that you may be forced, in these democratic times, to withdraw it, and that if you do withdraw it you run the greatest risk of the disruption of the Empire. I have always felt, in the course of these discussions, that it was very unfortunate that the term "Zollverein" was applied to Mr. Chamberlain's proposals for preferential arrangements with the colonies. Preferential arrangements have nothing whatever to do with the real idea of a Zollverein. A Zollverein such as existed in Germany, whence comes the name, was an agreement of States among themselves by which there were no internal taxes, and by which equal and common taxes were placed upon the frontiers of all the States, the results being divided equitably. That may be the dream of the future. There is nothing inconsistent with sound principles in the adoption, if it be possible, of a Zollverein of that kind within the British Empire. But that is not the proposal we have before us.

What we have before us now has really nothing to do with a Zollverein. It is a proposal to make special preferential arrangements with our colonies, and the arrangements cannot be made except in regard to food and raw materials. There is nothing else that they send us largely, and it is upon those two matters, the very last matters which ought to be made questions of taxation, that your preferential arrangements must necessarily and inevitably be made. There is really nothing new in these proposals. They are the old proposals of the Fair Trade League. They have been before the public now for a great many years, and it was not supposed that they were likely to receive any support from a responsible Minister in this country. However, it seems that they are to be furbished up again, and, with the help of Sir Howard Vincent and others, the Colonial Secretary is to go through the country advocating the adoption of the arrangement. They have been shown to be threatening in the highest degree to our trade and commerce, because they will not only affect the industries connected with food and raw material, but will ultimately affect every single industry in the country, for, if you cut off your imports from abroad you diminish your exports, and hamper and disorganise your trade. Therefore I sincerely hope that this House and the country will not commit themselves in any way to these proposals. We are told that they are to be matter for inquiry, and that that inquiry is to be fair, but we are not told when and how it is to be made. We are left in a position of having one of the most powerful members of the Cabinet committed to proposals of a most definite and clear kind. It is impossible to deny that the proposals laid down in Mr. Chamberlain's speeches have been definite and clear. It is difficult for Mr. Chamberlain to speak without speaking clearly. He has spoken out without any doubt with regard to the proposals that he wishes to submit to the country, and anybody who has watched the course of that astute statesman will know very well that he will not give up that which he has once proposed, and will pursue his object to the end, in the hope, I suppose that he may catch some vote which will enable him to make this desperate experiment. I hope that day may not come; for I am confident, and I repeat it, that no scheme could have been devised more essentially dangerous to the maintenance of our union with the colonies than a scheme which by taxing the food of our people, and, as I believe, the raw material of our manufacturers, will inevitably raise questions between the mother country and the colonies fraught with the greatest danger.

*THE EARL OF MAYO

My Lords, I hope I may be permitted to address a few words to your Lordships on this subject. I suppose no country in the world is so interested as Ireland when the question of protection is mentioned, because it is needless to say that Ireland, which is entirely a food producing country, would benefit greatly from protection. The political effect of this matter interests us very much in Ireland. Irishmen, as you are aware, are very fond of politics, and it seems to me, looking at the question from the political aspect, that the Radical Party have been provided with a new platform and with a policy. That policy is to try and make out as far as possible that there is division in the Party to which I have the honour to belong. The noble Viscount, who was himself a great Chancellor of the Exchequer, and whose speech we listened to to-night with the greatest admiration, stated that he hoped the Government would deal with this matter with frankness and distinctness. I must say that after listening to the noble Marquess, who spoke from the Government Benches, I did not gather that there was quite that distinctness which I should like to have heard on this matter. The noble Marquess stated that he was willing to collect statistics and go into arguments. I would much rather have heard the noble Marquess say what the Secretary of State for the Colonies said—that this was a matter for conference with the colonies. I had the honour of listening to the Colonial Secretary's speech, and I must say that, far from having it impressed on my mind that any new policy was being promulgated with regard to these duties, I left our gallery in the House of Commons with this feeling in my mind, that the whole matter was one for conference, for argument, and for research. As I have said, any question of protection must have great interest for Ireland, which has suffered more than any part of the country from the policy of free trade. That nobody will deny. The Secretary of State for the Colonies, when he was interrupted by one of the Nationalist Members, drew attention to the fact that Irish Members were always complaining that free trade had ruined their country. From that you might infer that I should at once announce myself a violent protectionist, but I must remember this, that protection, if adopted in a very drastic measure, would affect us in Ireland as well as the working men of this country. To show how a little straw indicates in which way the wind blows, you will remember that the Chancellor of the Exchequer last year, when imposing the tax on corn, was urged by the Members from the country to which I belong to exempt Indian meal, which is largely eaten and used by the poor in the poorest districts of Ireland when the potato crop fails. Therefore we have the curious anomaly that protection would no doubt send up the price of beef and of other food that we produce in Ireland, and yet you have the Irish Members, when there is a little tax put on corn, urging that the tax on Indian meal should be taken off. For that reason I agree that the matter is one that should be duly inquired into, and not only inquired into by means of statistics and arguments, but by a conference with the colonies.

I should like to draw attention to one or two remarks that fell from the noble Marquess, Lord Ripon. He said that the Secretary of State for the Colonies had a plan. I heard the right hon. Gentleman's speech and would remind the noble Marquess that Mr. Chamberlain denied having any plan whatever. He said it was a matter for argument, and he added that he proposed to place the whole matter before the country. The noble Marquess also said at the end of his speech that the Government would take a very wrong step if their policy resulted in dear food and dear bread. I do not imagine that anybody is going to take any step at all without those inquiries that are absolutely necessary, and therefore I hope that the Government will go even further than giving us statistics and adducing arguments, because we might go on arguing for ever. What we want is some definite conference on the subject with the colonies, as foreshadowed by the Secretary of State for the Colonies, and then we shall know where we are in the matter. My Lords, I have just come out of a conference which has not been without result, and I should like to see this great subject taken in hand by an Imperial conference. We in Ireland feel very interested in this question of protection, and therefore I hope that the subject will be properly gone into by a conference, not only with the colonies, but with men who are well versed in all these affairs.

*LORD BRASSEY

My Lords, before going to the root of the matter under discussion, I desire to say that it is with sincere regret that I find myself not in accord with the able Minister under whom for five years I had the honour to serve. Mr. Chamberlain, in his recent speeches, has not attempted to formulate a plan. In general terms he has suggested a scheme for closer Imperial consolidation by more active and advantageous interchange of trade. We are to put duties on food and raw materials for the benefit of the colonies, and to look to the colonies for compensation by some material reduction in their duties on British manufactures. We have to consider whether such a scheme is practicable, and whether, in the interests of Imperial unity, it is necessary. Mr. Chamberlain, in his recent speeches, has suggested that the working people of this country may be compensated for increased cost of living by more constant employment and higher wages. This brings me to my personal experience as an Australian Governor. I deemed it my duty, while in Victoria, to discuss the question with leading Australian statesmen whenever opportunity offered, and more particularly with Sir George Turner, then Premier of the Colony and now Treasurer to the Government of the Commonwealth. The views of Sir George Turner were identical with those more recently expressed by his colleague, Mr. Kingston, if the mother country offered advantages Australia would endeavour to reciprocate. They could not take off duties on imports from the United Kingdom. They might increase the tariff on imports from foreign countries. We can appreciate the conditions with which Colonial Ministers have to deal. They depend to a large degree on Customs for the means of carrying on the Government. In Canada, with a revenue of nearly £10,000,000, no less than 57 per cent. is derived from this source. In the Australian colonies the revenue drawn from Customs is the principal item.

Turning from the official view, in the colony of Victoria, as in Canada, the majority of the industrial population was strongly protectionist. I had many opportunities of learning their views in conversation with Mr. Trenwith, then the leader of the Labour Party in the Legislature, and subsequently a member of the Victorian Ministry. The Labour Party has aimed at setting up manufacturing establishments in every branch for which the local conditions were favourable. Australia being a wool-growing country, the tariff on woollen goods was highly protectionist. The Victorian rate was 45 per cent. Under the Commonwealth it has been reduced to 25 per cent. Cotton goods which were imported free into Victoria, are charged 25 per cent. under the Commonwealth. Such articles as tea and coffee, on which a duty was formerly paid, are now admitted duty free. The fiscal policy of the Australian colonies has not changed in the interests of the mother country since the Government was established on a more democratic basis under the constitution of the Commonwealth. The indications thus far are not hopeful for the acceptance of proposals for extensive remission in Australia of the duties very lately imposed. While their tariff is protectionist, our Australian fellow-subjects are good customers to the mother country. It may almost be said that we have a monopoly—certainly a dominant share in the supply of every article in demand, which we are able to produce. In this regard our position could hardly be improved by any change in our fiscal policy. The change most to be wished is one which lies beyond the control of man—a steadier rainfall and a greater ability to carry population.

At a time when proposals are being made for a Customs union of the whole Empire, it is appropriate to recall the recent experiences of the Australian Commonwealth. The conference of representatives of the several States, by whose labours a constitution for the Australian federation was framed, shrank from the yet more arduous task of adjusting a common tariff. They left the thorny problem to the Federal Parliament. That Parliament included many of the best men from all the federated States. It was animated by a strong desire that the first effort under a united Government should be successful. It found the difficulties almost insurmountable. It was hard to reconcile the conflicting interests of Queensland, a sugar-growing and cattle raising province; of New South Wales, chiefly interested in the production of wool; of Victoria, with her manufacturing establishments, extensive vineyards, and important dairy industry; of South Australia, a wheat-growing province; and of Western Australia, now the chief producer of gold. Nearly a year was consumed in lengthy debates. The tariff difficulties in Australia are not encouraging for more comprehensive efforts. A round-table conference between the representatives of countries far more widely separated by distance and other conditions might tend rather to political disruption than to closer unity. In the enjoyment of unrestricted self-government in matters of trade, every part of the Empire has flourished. Nor has there been the possibility of acrimonious disputation. Is it the part of the statesman to abandon the policy of mutual freedom and independence to which we have hitherto adhered?

The fiscal policy of Canada does not differ from that of Australia. It was fully explained in the memorandum submitted by the Canadian delegates to the Colonial Conference last year. Reductions have been made, but in a prohibitory tariff. It remains, and is intended to remain, protectionist. The average rate on manufactures from the United Kingdom is still 24 per cent. The rates are lower on raw materials and machinery. In the supply of such articles we cannot compete with the United States. The changes introduced in favour of Great Britain increased our exports to Canada, The advance was inconsiderable, as compared with the increase in Canada's imports in the same period from the United States. There is room in Canada for a large increase of population. It is vain to hope for a proportionate increase in our exportation of manufactured goods from the United Kingdom. The policy of Canada is to give protection to local industries.

The fiscal policy now proposed is attractive to some who think that we fail to keep pace with protectionist countries. A flying survey, in the light of the latest information, will not justify despondency. Take our nearest neighbour. The growth in the value of British trade in the twenty-five years ending 1894, included in Mulhall's work on the industries and wealth of nations, was relatively three times as great as that of France. While the later statistics are more favourable to France, the condition to-day is unprogressive. Capital is leaving that country and seeking investment abroad, and chiefly in the United Kingdom. The progress of Germany has been greater than our own, but until a recent period Germany had been backward. As the Commission on the Depression of Trade pointed out, the Franco-German war had a great effect on commercial activity. The war indemnity gave large supplies of new capital to Germany, and it stimulated consumption and production. Its force seems spent, and now Germany is suffering from that over-production on which the Commission on Trade Depression specially insisted as the cause of the state of things in the United Kingdom, into which they had been directed to inquire. The latest Consular report gives a gloomy picture of many leading trades in Germany, and large numbers are without employment. We cannot make comparisons with the United States. We admire the energy and the skill which the American people have displayed. Large profits have been realised; a vast expansion has taken place. How far have the benefits been shared by the mass of the people? The report of Mr. Bell, British Commercial Agent in the United States, describes the anxieties of the situation. He says— Within the last five years living expenses have increased more than in the previous twenty years.… When the reaction comes more will be heard of the questions of trusts and tariffs.… Financial authorities are advising caution. And now let us look at home. Lord Rosebery has recently quoted the statistics of our exports and imports for five years. If we look back some ten years an equal rate of progress has been maintained. We have advanced from an aggregate of £682,000,000 for 1893 to nearly £880,000,000 for 1902. Nor has our trade, as it is shown in the Income Tax returns, been conducted unprofitably. In the opinion of the Commission to which I have already referred, profits are more widely distributed. All the indications point to an improving condition of the people. We have the vast increases in the deposits in the savings banks, the greater consumption of commodities, the remarkable statistics of the friendly societies, the spread of education, and some diminution of pauperism. When we take into view the many channels, not always nor everywhere as open as we could wish, through which our trade passes, that Government would be rash indeed which should venture in any part of the world to put obstacles in the way. The new fiscal policy has been recommended on the ground that the ties of material advantage are necessary to hold the British Empire. Is this the teaching of the latest history? Witness the improved relations between the United Kingdom and the United States, and their common action, lately taken in China and elsewhere. The McKinley tariff, intentionally prohibitory, has been no bar. The same bonds which link the two nations together bind us to our colonies in a yet closer union.

When proposals are made by a powerful Minister in the responsible position of Secretary of State for the Colonies, and having for their aim an object which we all approve, they necessarily claim our most attentive consideration. In words used by Lord Salisbury, the matter is not one for vague sentiment. It is one for hard thinking, and the utmost effort that the strongest intellects of our time can give. It is not necessary to rush to conclusions. The condition of the country, as we know, is not unprosperous. It is easy to appreciate that higher prices in our markets should be desired by colonial producers, but it is difficult to see how they can give us compensation. Their policy is protectionist. Their powers of consumption, under any fiscal policy, of the articles we are able to supply are limited. Meanwhile, is there nothing to be done? We may be more liberal in giving Imperial aid to improve steamship services and the laying of cables; we may seize all opportunities of doing honour to the colonies; we may hold Colonial Conferences. No bond can be greater than the services of a strong and a sympathetic Minister at the Colonial Office.

*THE EARL OF JERSEY

My Lords, at this late hour when your Lordships naturally wish to hear the Leaders of the House my remarks will be very few. Like the noble Lord who has just sat down, I am unable to believe that a system of preferential tariffs could be beneficial to this country, or, in the long run, to Australia. The noble Marquess the Secretary of State for Foreign Affairs referred to the threatening action of Germany, and stated that that country would put us upon the least-favoured-nation clause if we gave preference to our colonies. There is no doubt whatever that if the German authorities were to decide to act in that manner it would be so hostile to this country that we should be called upon to consider our position in regard to Germany altogether. The noble Marquess left out of consideration the question of the increase in the price of food in this country, and yet it is upon that that the Colonial Secretary based his policy. I allow that that is not his main object. It is only fair to say that his desire is to use that pivot in order to bring together the different parts of the Empire. Certainly to solidify the Empire is an object worthy of any statesman, but at the same time it is most essential that in endeavouring to draw outlying parts of the Empire together we should do nothing to weaken in any way the heart of the Empire itself. It is upon this question of the increase in the price of food that this matter will be mainly settled. The value of foreign imports into Australia and New Zealand is about £14,000,000 a year, and into Canada about £29,000,000. A part of that £29,000,000 must naturally be for goods which under all circumstances would come from the United States of America, and one cannot believe that it would be either wise or natural for Australasia to entirely cut off connection with other parts of the world. Therefore, we have only offered to us a portion of what I may call this extra trade, and in order to obtain this portion we are to be offered a lower tariff than foreign countries, but nothing like free imports. Surely we ought to pause well before we decide to adopt such a course. We do not blame the colonies. Their policy is entirely one of protection; and what does a protected country desire? It does not desire the import of foreign goods; it will accept those goods for a time, until such time as their own manufactures can supersede them. When their own manufactures have been built up, then the door will be shut against foreign goods. Therefore, we are asked in this country to change our world-wide system of commerce, to impose a great tax upon our people, in order to get, perhaps, for a time a share of those millions to which I have referred. Though I am as anxious as any man to see the trade of the colonies develop, it does not seem to me that Great Britain would be justified in running such a risk. After all, in every country where you have a protective tariff the amount of protection will be a constant source of discussion. Therefore, what is given to-day may be reduced or taken away to-morrow; and where should we be if, after having altered our system with regard to other countries, we found that the doors of our colonies were shut against us, and where, also, should we be supposing parties in the colonies were to be divided on the question of whether or not they would give us a good rebate.

There are other questions which affect free trade besides those of hostile tariffs. You may depend upon it that there is much in the complaints of our Consuls as regards the neglect of our manufacturers to meet the wishes of foreign customers, in the erluctance of workmen at home to make use of the labour-saving appliances which are in vogue in the United States and elsewhere, and in the action of trades unions which will not allow, even within the limit of reasonable hours, either the men or the machines they work, to be used to the full advantage. These are amongst the causes which have hindered the development of our trade, and unless they are altered we may be quite sure that British trade will run the risk of going back. I do not think that we shall get sufficient advantage by so altering the present fiscal arrangements as to add to the burdens of the people, and also to the cost of our manufactures; it would be a strange thing if in this country, whose foreign trade depends upon cheap production, we were to take a step which must inevitably add to the initial cost of manufacture. It would have been far better if we had had the inquiry before the policy was foreshadowed. If this inquiry is to be one which is to be carried out upon public platforms and in heated speeches, we may feel quite sure that the great principle which lies, as I believe, at the root of the Colonial Secretary's policy will be dropped out, and we shall simply fall back into the discussion of whether we support free trade or protection. I am reminded of an anecdote of a curate who was having breakfast with his bishop. The bishop noticed that the curate was only toying with his egg. He said to him, "I think you have not a very good egg there," and the curate answered, "My Lord, parts of it are excellent." So the Imperial flavour is excellent, but the taste of protection disagreeable.

THE SECRETARY FOR SCOTLAND Lord BALFOUR of BURLEIGH)

My Lords, I shall endeavour not to detain the House for many minutes. But it would, perhaps, be inappropriate if some one else from this bench besides the noble Marquess who has spoken, and the noble Duke the Leader of the House were not to express his views upon the important subjects which have been under discussion to-night. We have listened to many interesting speeches, and I, for one, am not disposed to complain of the tone or the spirit in which, at any rate, the great majority of them have been composed. Least of all will I complain of the tone and temper of the very able speech with which Lord Goschen introduced the discussion to-night. If he felt difficulty, how much more must I feel it, that it is not possible, in the course of a single speech, to take up and deal with all the wide range of subjects which might be held not to be inappropriate to the notice which appears on the Paper of your Lordships' House, covering, as it must do, many important points, not only of fiscal policy, but points of foreign policy and of colonial policy as well. I myself have no hesitation in saying that I adhere to the general principles which are understood to be comprised in the free trade policy of this country. But when I have said so much I am inclined to ask, What is free trade? I sometimes think that a definition is necessary in these days. I do not know whether the definition which I shall attempt to give—it is not a new one—will satisfy noble Lords opposite, but it is good enough for me. It is that free trade is a free interchange of commodities at their natural price. When this policy became the adopted policy of the country, its universal adoption was prophesied. I venture to say that the circumstances in which we find ourselves to-day are not the same as the circumstances in which the country was placed half a century ago. At any rate, after half a century of the adoption of the policy of free trade by this country, we find ourselves in almost isolated adherence to its principles. But there can be no doubt of this, that our adherence to its principles has brought us great advantages. Not only through it do we get food as cheaply as possible, but we have the free entry of every sort of raw material for manufacture. If that fact stood alone, I certainly am not surprised that a very grave consideration should be demanded before anyone would be warranted in asking the country to give up those great advantages which I have indicated.

But, my Lords, I am bound also in fairness to say that those who are dissatisfied with the present position of affairs can point to considerations which it seems to me are well worthy of examination and consideration, even by the most ardent advocates of the policy of free trade in the abstract. We have had built round us a wall of hostile tariffs, erected everywhere against our trade. On the other hand, we are able now, as one of the points of consideration, to refer to declarations of important colonial statesmen, and I myself desire to retain absolute freedom for this country to resist any attempt on the part of foreign countries to differentiate between us and our colonies in any matters of the free interchange of commodities between us. Under all these circumstances the Secretary of State for the Colonies has put forward certain suggestions. He has more or less definitely indicated the views which he holds. But, my Lords, I altogether demur to the confident assertions of some noble Lords opposite that he has put forward a definite plan to which he is going to adhere, under all considerations, or under all circumstances. He has avowedly put forward these suggestions for discussion, and he has himself stated that his object is to have them discussed as calmly as possible. He has not committed himself, as I understand it, to a scheme any more than this, that he has made suggestions which he thinks will stand the test of examination and inquiry. It was said on high authority not many years ago that "Nowadays we are all Socialists." I think I may say that in these days we are all Colonial Federationists. Some began soon, some began later, but I do not think there are many in public life now in this country who are not avowedly desirous of doing all they can to unite by every possible bond, and to show every possible consideration to the great self-governing communities with which we are proud to be connected by ties of blood in every part of the world.

I for one, at any rate, cannot forget the record of that colleague who puts forward these suggestions. I certainly do not undervalue the weight of his authority, or the obligations under which he has placed his colleagues and, in my opinion at any rate, the country at large. Nor shall I undervalue the unique experience which he possesses alike of the feeling of our colonies or of their relations to us, and their desire to draw those relationships closer. But I think I am entitled to say that some noble Lords who have spoken, and others who have taken part in discussion elsewhere, are inclined to press, to a most undue extent, the doctrine of what is called the collective responsibility of those who happen to be associated in the Government. I will admit our collective responsibility as frankly as anyone for our executive conduct, for the legislative measures which we propose to Parliament and for any policy which is formally announced upon Government authority, but I altogether demur to the doctrine apparently held by some that this collective responsibility is to include responsibility for every word and every line in every speech which is delivered by any of our colleagues. I venture to say that is extending it to such a degree as would add a new terror to public life, and one which we are not likely calmly to submit to. Nor do I admit, so far as I am myself concerned, that absolute uniformity of opinion is necessary, nor that we are all to think alike on every matter, whether those matters are for the moment matters of practical issue and practical politics.

I stand here and say that, so far as I know, there is no division amongst us as to anything which at this moment we are resolved to do, and I think I may fairly say to those who agree with me upon the general points I have laid down, and even those who disagree with me, that surely there is a case for examination and inquiry. I think those who object to this examination may well be asked, "Have you confidence in your case? If not, if you have no confidence in the principles to which you express adherence, then I for one can understand the reluctance to bring them to the test of careful examination and inquiry. But if you believe in your case, surely a fair and honest examination of the basis on which it stands, of the facts on which it must depend, must be a welcome course and one which in the end must strengthen the case in which you believe." It is upon that ground in the main that I am willing that the examination and inquiry to which we are committed should take place. But I feel bound to say that as matters now stand, and having regard to all the circumstances in which we find ourselves, I am not prepared to oppose inquiry into the principle upon which our fiscal system is founded. On the contrary, as I have said, I welcome the fullest inquiry, but I do lay down these conditions—that it is to be an examination of facts and circumstances by us as a Government, for our own information, and that we retain to the full our responsibility for any policy which we may hereafter propose to Parliament or to the country as the result of such information as we shall obtain. I will only add that, speaking for myself, as I am entitled to do, I feel bound to say that I have little or no expectation that the inquiry I indicate will show it to be either practical or desirable, in the interest of the nation, to reverse the principles upon which our fiscal policy has been based.

*EARL SPENCER

My Lords, this interesting debate is now drawing to a close, and I feel it is my duty to address some remarks to your Lordships upon the great question that has been brought before us, and also upon the speeches which have been made. First of all I would add my tribute to the eloquent and able speech of the noble Viscount who introduced this subject. There was nobody more competent than Lord Goschen to speak with authority on this great question, for there are few people who have held with greater distinction the office of Chancellor of the Exchequer in this country. He has spoken with great force and ability; and I may add that it is remarkable that, of the three Chancellors of the Exchequer who have held office under the present Government, all take the view which the noble Viscount has taken to-night. I notice a remarkable thing in this debate. Your Lordships' House is not usually reckoned to be a very Liberal Assembly in politics. It is not considered to be full of noble Lords who advocate free trade. It is supposed that, as we are a House of landlords there are more Members of it who are in favour of protection than of free trade. And yet to-night we find that, of those who have spoken from both sides of the House, I think I can only name two who have spoken in the sense of protection. I deeply regret to think that my old political friend the Foreign Secretary may be classed among those; and I think another friend of mine who comes from a country which I know full well, Lord Mayo, may also be classed as belonging to the same doctrine. But except those two noble Lords there has not been a single Member of your Lordships' House who has spoken to-night, who has not professed himself a free trader.

When we are discussing this question we cannot help referring to the repeal of the corn duty. What is the meaning of that? If we are to have preferential duties it is necessary to impose duties on importations from foreign countries, which do not now exist. Canada has made the first claim in this respect, and in order to deal with Canada you must have import duties on corn. How is it, then, that it has now been repealed? I cannot help, as a free trader, congratulating myself on the fact; for if those who advocate this new fiscal policy, so prominently put forward by the Colonial Secretary, had been in the majority in the Cabinet, they would not have thrown away this stepping-stone to preferential tariffs, this method of giving to Canada the very thing she wanted. Depend upon it, a bird in the hand is better than two in the bush, and if those who advocated this policy had been in a majority in the Cabinet, I cannot help thinking that the tax on corn would have been continued and not repealed. I cannot for a moment believe, what some people say, that the duty has been repealed in order that at a date not yet named it may be put on in greater severity. There is another thing with regard to the corn duty which I think is worth considering in regard to other duties. This duty was put on as a fiscal and not as a protective duty. And yet now we are told on the highest authority, that of the Chancellor of the Exchequer who put it on, that in some respects, especially on flour, it had been a protective duty. There is another matter which is also significant. It was not intended, and it was never expected, that the corn duty would increase the price of the poor man's bread. And yet now we hear from the Chancellor of the Exchequer himself that that has been the case. People are apt to forget another matter, too, that, even if the price of bread has not been raised—there is evidence that it has been raised—if the duty had not been there they would have got their bread at a much cheaper rate. [MINISTERIAL cries of "No."] I say so deliberately; and I cannot for a moment believe that if you put a tax on an article the price of that article is not raised. I will not dwell more upon this point except to say that I think I may congratulate free traders that there are in another place apparently only twenty-eight members who absolutely and openly profess protection.

We are told that we are to have an inquiry. What has taken place in regard to this matter? Within the last few years there have been no fewer than four conferences on this subject. There was the conference over which Lord Knutsford presided in 1887; two conferences presided over by the present Colonial Secretary, to whose ability I wish to give testimony, though I differ entirely from him on this point; and there was the conference at Ottawa, where my noble friend who spoke but very lately, Lord Jersey, presided. And I cannot help congratulating this House that the grandson of one of the statesmen to whom we owe all the blessings of free trade should have spoken in this House to-night, and have advocated the principles which his great ancestor introduced first into Parliament. What did we learn from those conferences? First of all we learned, what we rejoiced in, that there is a great desire on the part of the colonies to come into closer connection and greater amity with the mother country. We all desire that. We next found that any arrangement with the colonies on a basis of free trade would be impossible. And the next point we found was that whatever arrangement we made the complications would be so enormous that it would be almost impossible to have a satisfactory basis for an agreement with the mother country for preferential treatment. These points are, I think, clearly established by the conferences that have taken place. I venture to think the difficulties between the colonies are so great, and the interests of the various colonies and the mother country are so great, that if we try to introduce a common Zollverein between them, instead of drawing the colonies into greater amity and concord we are much more likely to excite dissension and differences. If we consider for a moment how our colonies are placed, how different are the conditions — climatic, commercial and material—between the various colonies, and the enormous distance they are from the mother country and from each other, we shall not be surprised that there should be different desires and different policies with regard to fiscal matters in the various colonies.

This country has very wisely allowed the colonies to have a perfectly free hand with regard to their fiscal relations. We certainly followed a wise policy in regard to that. But these difficulties seem to me to be so great that the effect on the colonies will be almost, I should say, disastrous. Even if at first we could come to some agreement, before this arrangement had been in existence many years I fear it would lead to discord and confusion rather than to an increase of amity with this country. I see my noble friend the Secretary for Foreign Affairs is now in his place. When I referred to him just now I did not observe he was not there. I think the speech of the noble Marquess opens up a very great consideration. The proposals that have been made by the Colonial Secretary point directly to preferential duties in favour of the colonies, coupled with old-age pensions; and he directly says that, in order to do this, he does not wish to impose taxation on anything but food. Now, if you are to have an increase of taxation, I cannot help thinking that the very worst tax that you can possibly introduce is that which taxes the food of the people. But that is the long and the short of the proposals of the Colonial Secretary. The noble Viscount very properly showed that, besides this, there was the point of retaliation on foreign countries on manufactured articles, and there were various other points which were sure to follow if this one step in the direction of the Colonial Secretary's proposal were followed.

But the noble Marquess entered into an entirely new subject. We heard some time ago—I think it was last year—a good deal with regard to the bounties on sugar. Many of us doubted extremely, and many of us still doubt extremely, the wisdom of that policy. We said: "Is the Government going into a war against bounties generally? This is the beginning of it; the thin end of the wedge." We were at once scouted for having said it. But the fiscal policy of the noble Marquess is to deal with the whole of this great subject. It is quite distinct, as far as I can see—I may be wrong, but I think I am right—from the policy which has been propounded by the Secretary of State for the Colonies. The noble Marquess pointed out what has been done by means of trusts on the Continent, one country going beyond its own boundaries in order to establish a great trust by means of which the countries which have joined it may be able to export certain articles of manufacture or commerce at lower rates than those at which the articles are sold in their own country. I think that is what the noble Marquess said. What has been the result of that? The noble Marquess says it has affected immensely several industries in this country. I rather think he mentioned the spirit industry. He certainly named rails and also iron plates. He says the effect of these trusts dealing with these matters has been to introduce into this country an enormous quantity of goods at a rate which would be destructive to those who deal in those goods in our country. He does not prove that. Are those industries at such a very low ebb? Are they running down hill to destruction? And what is the policy which he professes? Why, it is nothing more nor less than pure protection; it is protection of these industries. And the noble Lord must remember that we never should adopt such a policy ourselves. In my opinion, it is very doubtful whether we ought to interfere with other countries in such matters, particularly when they provide for large manufactures in this country an enormous quantity of goods at a very cheap rate. I imagine that the noble Marquess would deal with this question by protective duties on many articles of manufacture. That is retaliation, and retaliation is one of the very worst features of protection. I lament, indeed, to find the noble Marquess advocating that.

In these discussions we often hear allusion made to preferential duties and retaliation as if preferential duties had never been given to our colonies in former days, and as if retaliation had never been exercised in this country. Preferential duties were in vogue for a great number of years. They were not repealed or altered quite as soon, if I remember correctly, as the reform of the tariff, but very soon after Sir Robert Peel had reformed the tariff—I think it was Mr. Gladstone himself who did away with preferential duties. They were a signal failure. Then, in regard to retaliation, we have often and often in the past tried it. Sir R. Peel, speaking in the House of Commons on January 27, 1846, in explanation of his scheme for taking off an enormous quantity of duties from the tariff, said— Now let me conclude with two observations; one connected with our foreign policy and the interests of our commercial intercourse with foreign countries, and the other having reference to our own domestic circumstances. I fairly avow to you that in making this great reduction upon the import of articles, the produce and manufacture of foreign countries, I have no guarantee to give you that other countries will immediately follow our example. I give you that advantage in the argument. Wearied with our long and unavailing efforts to enter into satisfactory commercial treaties with other nations we have resolved at length to consult our own interests, and not to punish those other countries for the wrong they do us in continuing their high duties upon the importation of our products and manufactures, by continuing high duties ourselves, encouraging unlawful trade.… It is a fact that other countries have not followed our example, and have levied higher duties in some cases upon our goods. But what has been the result upon the amount of your exports? You have defied the regulations of these countries, your export trade is greatly increased.… But your exports, whatever be the tariffs of other countries, or however apparent the ingratitude with which they have treated you—your export trade has been constantly increasing. The same thing may be said now. I say those are significant words from the great man who introduced this policy of free trade. The policy of retaliation was known and had been tried in his time, and was found absolutely wanting. In another passage Sir R. Peel says: The best way to compete with hostile tariffs is by free imports. I regret to think that we are now about, not only to fight this question of preferential tariffs in regard to the colonies but also to fight protection, because that seems to be the policy of the noble Marquess, though I do not know whether it is the policy of the Government. I for one, and certainly I believe all those with whom I am connected, will do our utmost to oppose that which we believe will be a most pernicious policy. It may not blow up the rock on which the great commercial edifice of the country is built, but I believe it will undermine that edifice, and in that way will be a terrible blow to the prosperity of our people and the success of our commerce. What is the position of the Government? Here is the second greatest Minister in the Cabinet propounding a policy, and saying this is what he is determined or desirous to lay before the constituencies.

After reading the telegram already published from Sir H. Rawson, Governor of New South Wales, to Mr. Chamberlain, in which the expression occurs, "the declaration of the British Government," ask, Did that telegram, referring to the policy of His Majesty's Government, emanate in the first instance from Sir H. Rawson without any communication from the Government? If the noble Duke says so I shall withdraw any imputation; but it seems to me that the telegram clearly shows that Mr. Chamberlain, in his communications with the Governors, has stated that his Majesty's Government are intending to put forward this policy as that of the Government. How about the other members of the Cabinet? The noble Lord who spoke last said, referring to the collective responsibility of Ministers, that it was impossible that all the members of the Government could be unanimous. I entirely agree. But a great deal depends upon the subject. If the subject is the foundation of our fiscal policy, surely it is impossible for a Minister of the Crown of the importance of the Colonial Secretary to go to the country and say this was his policy, without the country thinking that it was also the policy of the Government. The collective responsibility of the Government is imperative in all matters of importance. The people expect that of every Government. They do not agree that a Government might have four or five voices on a great question—and what question could be greater than this?—but they expect that the Government should speak with firmness and unanimity. I appeal to the noble Duke the Leader of the House to explain his position with respect to this policy. I remember that my noble friend, as a candidate for the House of Commons, fought a severe contest with a fair trader. I have here an extract from a speech he delivered in November, 1885, and I hope he will now repeat the sentiments to which he gave expression on that occasion. He said— A Liberal majority would also mean the accession to power of a Government which is determined to adhere without flinching to the principles of that free trade which has already done so much for the prosperity of the country, and to which Lancashire and the North of England owe all their pre-eminence, industrial and commercial. Does the noble Duke now belong to a Government which adheres without flinching to free trade principles? Certainly it was evident that many distinguished members of the Government have a strong leaning—if nothing more — towards the principles of protection which in the past did so much harm to the country. There is to be an inquiry. What is the inquiry to be into? Have not the principles of free trade and protection been discussed up hill and down dale all over the country for years past? And what is to be the nature of the inquiry? Is it to be a Royal Commission, or a Committee of one House, or a united Committee of both Houses? We, of course, know that a great question of this sort cannot be settled without full inquiry; but we believe the Cabinet, which is responsible for the raising of this question, should inquire into it themselves, and come to a decision on it. We have a right to ask for information on the subject of this inquiry; and we have the further right to ask that there should be no unnecessary delay in submitting this great question to the only tribunal which can give a final judgment upon it—namely, the constituencies. I feel that this matter is of such gigantic importance to the political interests, to the commercial interests — nay, to every interest of the country and the colonies—that any uncertainty about it will paralyse trade and commerce. Therefore, we have a right to demand information about this inquiry, and that the inquiry should not be delayed.

THE LORD PRESIDENT OF THE COUNCIL (The Duke of DEVONSHIRE)

My Lords, I do not think that I need at any length follow the arguments of the noble Earl. I think that in the greater part of his speech he has travelled somewhat beyond the scope of the question which is raised in the Motion of my noble friend behind me. I think the noble Earl during the greater part of his speech entered somewhat into that extremely large and wide field of inquiry and discussion to which we are invited by the Colonial Secretary, and which has been approved and sanctioned by the Cabinet as a whole. I do not understand that it was the intention of my noble friend behind me to ask the House to-night to discuss all the subjects which are involved in the proposed inquiry. I understood him rather to ask what were the conditions and main points which ought to be held in view in any inquiry of that sort; but I did not understand from his speech that he desired us to enter into the merits of the question. There was one point in the speech of the noble Earl to which I ought to give an immediate answer. The noble Earl referred to a telegram which was sent the other day by the Governor of New South Wales, and which has been published. The noble Earl does not seem to be aware that that telegram has already been the subject of a question and answer in the other House of Parliament.†

*EARL SPENCER

I was quite aware of that.

THE DUKE OF DEVONSHIRE

Well, the noble Earl has asked whether that telegram was prompted by the Government. The answer given by the Prime Minister, when a question was put to him on the subject, was— I do not know what declaration the Governor of New South Wales refers to in this statement. The Minister for the Colonies was sitting by his side, and I think that answer could hardly have been a consistent, although it might have been verbally accurate, or an ingenuous answer if the Secretary of State for the Colonies had been any party to the sending of such a telegram.

*EARL SPENCER

Then it was a misapprehension of Sir H. Rawson that this was the policy of the Government?

THE DUKE OF DEVONSHIRE

The Question which the noble Earl, as I understood him, asked, was whether that telegram was prompted by the Government. I should have gathered from the answers given in the other House of Parliament that it was quite obvious that the telegram was not prompted by the Government; but since the noble Earl referred to the subject a few minutes ago, I have received from a representative of the Colonial Office, who happens to be present here to-night, an assurance that the telegram from Sir H. Rawson was entirely spontaneous on the part of the Governor of New South Wales. Coming to the speech of my noble friend Viscount Goschen—we are too old friends to make it in the least necessary for us to bandy any compliments; but I hope he will allow me to say that I heard him with the greatest satisfaction, and that I think he has done a very great service in placing before us so clearly some of the main issues that have to be considered on the † See page 650. great and momentous question that has been so recently raised. This House is grateful to him for having given it an opportunity of listening to the treatment dispassionately, of a question of momentous interest at a period when our discussion may have some effect upon the opinions of the country. Too often questions are discussed at almost unnecessary length in the other House of Parliament, and only come to us when they have been practically decided and when any discussion in this House can no longer have very much bearing on the result. The Motion of my noble friend to-night has given the House an opportunity of even anticipating discussion in the other House of Parliament. Although the subject has been incidentally raised in the other House, the rules of its proceedings have prevented it being so fully and adequately discussed as it has been possible to discuss it in the House of Lords. I need not add to the tribute that has been paid to the speech of my noble friend for the admirable tone and calmness of temper with which he introduced the subject, thus setting an example which will be invaluable when a subject of such vast importance and exciting so much controversy is discussed. I can assure the House that that is the tone in which the Government desire that it should be discussed.

The Colonial Secretary, in the first speech in which he raised the discussion, said that the time had not come when it could be settled, and what he desired was that discussion should be opened. Exactly the same language has been held by those who take a different view of the question from the Colonial Secretary, and who have also expressed their willingness that there should be a fair and full discussion and examination of the question. I cannot see how any man, any convinced and rational free-trader, can take exception to either inquiry or discussion on this subject. In the first place, there is no free-trader who can feel, or profess to feel, satisfied with the present position of the question. What the free trader advocates is free interchange of all commodities between all nations. What we have got—whatever he may think of the advantages to be obtained from what we have got—is something very different from that. What we have got is free imports on one side and exports burdened by every barrier fiscal ingenuity can devise. And I cannot see how any convinced free-trader can object to an inquiry after the lapse of a period of fifty years into the reasons which have prevented the realisation of the hopes which were entertained by the founders of this policy, and an inquiry whether it may not be possible that anything should be done in order to secure the more ample and full realisation of that policy which was undoubtedly in the minds of the founders of free trade policy—Sir Robert Peel, Mr. Cobden, and Mr. Bright.

The name of free-traders cannot with strict accuracy be applied to the supporters of our present fiscal system. We are not free-traders, because we have not got free trade. What we are—it is not a very elegant appellation, but it is more accurate to say that we are free importers. I acknowledge that I have been a free importer during the whole of my political life, and I am now. I was in favour of that policy for the first twenty-five years of my career in the House of Commons, for the simple reason that, so far as I knew, no one was anything else. Then came a period of commercial depression, and the agitation, which has been more than once referred to to-night, in those days went by the name of fair trade. The noble Lord opposite was perfectly accurate when he said I was somewhat closely connected with that controversy. It happened that my opponent in a division of Lancashire was the President of the Fair Trade League. I think it is also perfectly accurate to state that, with the help of my friends—including, I think, the valuable assistance of the present Colonial Secretary—I absolutely annihilated and demolished my opponent and his doctrines. I opposed that movement to the best of my ability, partly because I considered that it was not supported by any strong or sound economical opinion, and partly because, after giving the best consideration that I could to the facts and arguments and figures which were brought forward by the advocates of fair trade in support of their contentions, I came to the conclusion that they had failed to establish their case. I am not ashamed to acknowledge that up to the present time, after a lapse of eighteen years, I have yet seen or heard nothing which has induced me, as at present advised, to suppose that at that time I came to a wrong conclusion. But, my Lords, I admit—I am forced to admit—that a great deal has happened, not only during the fifty years our system of free imports has been in force, but even during the last eighteen years, the period since the subject was seriously discussed—a great deal has happened which, I think, is deserving of our most careful and deliberate consideration. Let me refer to one or two of the important changes and events which have taken place in that period. What has happened is that, except to a very partial extent in our own colonies, no progress whatever has been made in any part of the world in the direction of real free trade. What has happened has been that foreign countries have not lowered or relaxed the barriers they have set up against our imports. They have raised and strengthened them.

*EARL SPENCER

dissented.

THE DUKE OF DEVONSHIRE

Certainly they have raised them.

*EARL SPENCER

They are very much lower than in the days of Sir Robert Peel.

THE DUKE OF DEVONSHIRE

Has the McKinley tariff lowered the duties against us in the United States? Is the German tariff lower than it was during the fair trade agitation? It is the fact that, so far from lowering or relaxing the barriers they have raised against our trade, they have, generally speaking, I will not say in every case, strengthened and raised them. It is alleged, I do not say whether truly or not, that some of our staple industries have suffered, are suffering, and are still more in the future seriously threatened by the tariffs which have been raised against them. Another thing which has happened in this period to which I am referring has been that, whereas for a very long period we were easily supreme in manufacturing industries of all descriptions, supreme in textile manufactures, in the iron and steel, the machinery, and other branches of industry, our supremacy has been challenged, and in some cases I believe successfully challenged. I am not saying that this challenge to our manufacturing supremacy is a result of our fiscal system; indeed, I believe it is in great part owing to other circumstances. Reference has been made to-night to a subject to which I have frequently endeavoured, not very successfully, to call attention—namely, the comparative neglect with which we have treated the question of industrial education in this country. Undoubtedly it was the opinion and contention of the founders of our present fiscal system that our industrial supremacy would be secured to us by the adoption of those principles in the face of the refusal to adopt them of other nations. Certainly any anticipations of that description which they may have held have fallen very far short of the reality. Again, since this subject was last seriously discussed we have seen the growth of those enormous trusts that certainly never could have been foreseen by the founders of out present fiscal system. We have seen that the formation and growth of those trusts have been capable of disorganising and dislocating the course of trade and industry as effectually as, if not more effectually than, the most retrograde and hostile tariff that ever could be raised against us. Lastly, in this period we have seen the growth of some of our colonies to a position and importance which they were far from enjoying at the time when these controversies were last before the country.

With that growth in importance, prosperity, and strength these colonies have manifested a desire to enter into closer political relations with the mother country. One manifestation of that desire has been in the direction of increased fiscal unity with the United Kingdom. Well, I say, that these changes in the world, these events that have taken place, many of which were wholly unexpected, which could not have been foreseen by those who were responsible for our present fiscal system—these are subjects, at all events, worthy of inquiry. I say these things cannot be put aside as if they were not; there is no sense or reason in ignoring these facts and events and in refusing to enter into some inquiry as to their effect. And all those who profess principles of real free trade, the men who believe that those principles are founded, not only on the dictates of abstract reason, but are proved by the teaching of experience, those are the very last who ought to refuse to enter into the fullest and most searching inquiry and discussion as to the effect not only of those principles, but of the effectual results which have been achieved under our present system. As to the nature of the inquiry or discussion which has been invited, I do not think that until the speech of my noble friend to-night the conditions and character which that inquiry or discussion ought to assume have been indicated with sufficient perspicuity and clearness. In my opinion, the first and fundamental element of such inquiry, that which transcends in importance, and that which ought to precede any other branch of the inquiry, is the investigation of the economical effect likely to be produced by any changes in our system especially involving the taxation of our food imports—the economical effects, not upon any special industry, not upon the political relations between ourselves and the colonies, or between ourselves and other countries, but on the condition of our people, and on the whole and not only a part of our trade and industry, internal as well as external.

Up to the present time, in my opinion, this discussion has proceeded too much upon the effects which the new policy, the new proposed policy, may have upon some special industry of great importance. The prosperity of our staple industries, our textile industries, our iron and steel industries, our chemical and machinery industries, is of vast importance to the country at large; but they are not all. What I want to know, and what I think ought to be the basis of this inquiry, is what will be the effect of the policy which has been proposed on the volume of our minor trades and the industries which support them, and which, taken together, I conceive, greatly exceed in amount, in volume, and in importance any one of the staple industries themselves. In my opinion, attention has hitherto been too much devoted to our external trade, as if the prosperity of the country depended merely on our external trade. I conceive it that our internal trade is at least as important as, if not more important, than our external trade. I do not suppose there are any statistics available, as there are in the case of our external trade, to show what the amount of that trade is; but the internal trade of 40,000,000 of people cannot be an insignificant one. At first sight it appeared to me that any proposal which would raise the food bill of 40,000,000 of people would to a like degree diminish their purchasing power on every other article. Though I am open, on sufficient evidence, to revise my opinion, I should say, at first sight, that any such proposal must exercise an injurious effect on the vast internal trade of the country. I do not think that up to the present time, in the subjects indicated for discussion or inquiry, sufficient attention has been given to the probable economical effects of the proposed policy on the condition of the mass of our people who are not engaged in any of the staple industries, the condition of which we have heard so much. There are a vast mass of our people who can scarcely be said to have any fixed or regular employment, and who are able, and only just able, to earn sufficient to gain a livelihood.

I do not think it has been sufficiently remembered that, whether our fiscal system was a right one or not, we are living in conditions that have been brought about by a system of free imports, and we must take those conditions as we find them. Those conditions are not in every respect as satisfactory as we could desire. No doubt the wealth of the country has increased, no doubt the business of the country has increased. At the same time, the population of the country has increased, perhaps almost to an equal extent; and, in spite of our national wealth, in spite of the prosperity of the people employed in some of our great industries, there are to-day millions of people for whom the margin between themselves and famine is very slender. My Lords, it is free trade, or rather, free imports—it is cheap food which is responsible for having brought those millions into existence. I can conceive that under a different system, though we might not have been so rich or so prosperous, a condition of things might have existed in which the problems with which we are now confronted might have been less great, less momentous than they are now. We have to deal, not, perhaps, with the best possible organisation of society in our country; we have to deal with it under conditions which have been brought about by our present fiscal system, and we must be very careful indeed before we alter those conditions in a manner which may possibly reduce the margin which now exists between those people and absolute want. My Lords, I say under these circumstances I should hesitate very long before I could bring myself to assent to changes the effect of which, as far as I know or have the means of knowing, might be to improve the condition of certain of the higher ranks of labour, which might also have the effect, so far as I know or can have the means at present of knowing, of breaking down that barrier which still exists between those millions and absolute starvation. These are questions, I think, which anyone who professes to be a statesman will admit cannot be solved simply by counting votes at a general election.

And for myself I say that, if I knew that every working man who possesses a Parliamentary franchise was prepared to give his vote in favour of trying this experiment, and if I knew that our colonies were ready to meet us in that experiment as fully as we could desire, I would not be a party to a trial of that experiment unless I were convinced in my heart and conscience that that experiment was justified on sound economical grounds and that there was reason to believe that it would tend to the benefit of the great masses of the people as well as to that of some of the more favoured sections of the working classes. There are other subjects on which no doubt inquiry is needed. There is the question of the information which might be supplied to us by chambers of commerce as to the extent to which a change in the fiscal policy of our colonies might promote the exports and the interests of certain branches of our manufactures. There is the question of how far our colonies would be prepared to meet us. There is the further question whether it is possible for the wit of man to devise a scheme of preferential treatment which shall be fair as between ourselves and our colonies and as between each of our colonies. But all these, in my judgment, are inferior in importance, and ought to be undertaken subsequently to, and are dependent on, the fundamental question to which I have referred—that of the economical effect on our own people and our own trade. In my judgment there is not much need for inquiry into political advantages. It is not mainly or primarily as a political arrangement that these changes are proposed to us. They are proposed to us as being expedient in themselves, independently of any political advantages by which they may be accompanied. If they are expedient in themselves—that is to say, if we have all been, up to the present time, wrong in our political economy, if we have made a mistake—which I admit further inquiry as to the results of our policy may prove to be the case—if these proposed changes are economically sound, then there is no question that they will be politically expedient. On the other hand, if these political advantages—I admit they are great—can only be purchased at the expense of privation, hardship, and discontent on the part of our own people, then I say I can conceive no policy which would more certainly or more swiftly tend to the dissolution and disintegration of our Empire.

My Lords, in what I have said I have not attempted so far, to discriminate between two branches of the policy which has been suggested to us—I mean preferential trade with the colonies and retaliation—I do not like the word—as regards other nations. Now, my Lords, the considerations to which I have referred apply to both of these, though not with equal force. I do not think that either of these policies ought to be adopted unless it can be shown in the first instance that they are, or are likely to be, economically sound. But I do not for a moment compare in importance the results which might follow in each case. The policy of preferential treatment of our colonies founded on the taxation of food would be a policy which would be either irrevocable or, if reversed, the reversal must be attended with the most serious and grave consequences. On the other hand, I can conceive that an experiment in the direction of retaliation might be tried, and, if found not to succeed, that it might be reversed without any serious injury to any great national interests.

Now I come to the question how it is proposed this inquiry should be conducted. As far as the Government is concerned any inquiry they undertake must be undertaken by themselves. It is an inquiry they will have to undertake by themselves with the expert assistance of the various Departments of the Government. I believe that most of the materials—indeed all the materials—for such an inquiry and discussion already exist, and a careful examination and exposition of those materials, aided by experts, would place every one of us in a position to grasp the main features of the question. I entirely agree with what was said the other day by Lord Rosebery, and reiterated to-night, that the burden of proof rests upon those who proposed this change in our fiscal policy; and I have not the smallest doubt that that view is also shared by the statesman who proposed that change—Mr. Chamberlain himself. Indeed, that is the course which the inquiry and discussion has already taken. Mr. Chamberlain has opened his case. It remains for him to support it by the arguments and facts which led him to form his conclusions. Ultimately it will be for Parliament and the people to determine whether the facts and the arguments which he may bring forward do substantiate the case which is already opened. I believe every one is agreed—the supporters as well as the opponents of free imports—that no possible harm can result from an inquiry; and the only charge which has been made against us is as to the manner in which the question has been raised for the consideration of the country.

I wish those who think we are open to blame for the manner in which we have raised this discussion to consider what alternatives were open to us. The question has been raised for the consideration of his colleagues and the country by the Minister who is responsible for our colonial relations. Were his colleagues to refuse to entertain his proposals, either by way of action or by way of discussion or inquiry? We were not prepared to entertain those proposals by way of any immediate action. We were all agreed that there was a case for inquiry. The only question that remains is what the nature of that inquiry should be, whether it should be one conducted in secrecy within the four walls of the Cabinet room, or whether it should be an inquiry or discussion openly carried on before the public. We might have undertaken a secret inquiry. Its result must have been positive or negative. If the result of the inquiry was positive, definite proposals would have been made by the Government, or by a reconstructed Government, or if the result were negative, the question would have been raised for the consideration of the country by a statesman in opposition. In either case this question, the magnitude and importance of which is admitted and cannot be ignored, would have to be submitted to an unprepared Party and the unprepared constituencies. It has been pointed out by the Prime Minister that the course which is supposed to be the preferable one, the secret Cabinet inquiry, has been twice already tried on momentous occasions by two great statesmen—in the first case by Sir Robert Peel in 1845, who carried his policy, but destroyed his Party; and in the second case by Mr. Gladstone in 1886, who destroyed his Party, but did not carry his policy. Judging by the result of the experience which is within the recollection of every one of us, I doubt whether any of Mr. Gladstone's colleagues who are sitting opposite me would disagree with me in saying that Mr. Gladstone might have been better advised if, instead of taking the course he did take, he had before the general election of 1885 taken both his colleagues and the country into his confidence and submitted to them the nature of his proposals with regard to the government of Ireland. I do not say for a moment that his policy would have succeeded; but he would have avoided that complete destruction and disruption of his Party from which it has been suffering ever since.

It is said that open questions of this magnitude within the Cabinet are inconsistent with any idea of true Cabinet responsibility; that it is inconsistent with Ministerial responsibility that Ministers should differ on subjects of great and vital importance. In recent times the number of open questions upon which an immediate or early decision is required is more restricted than at some former periods; but I do not think that ever until the present occasion has it been held that there is anything inconsistent with due Ministerial responsibility on an open question regarding policy upon which there is no question of taking any immediate action. The constitutional doctrine of Ministerial responsibility in the matter of open questions was laid down—some time ago, I admit, but I do not know that anybody has questioned his authority—in a speech by the late Lord Macaulay in the Mouse of Commons. He set down his views in favour of allowing complete freedom of action and opinion of members of the Cabinet, and he supported his position by precedent drawn from the Administration of Mr. Pitt. Lord Macaulay said— Let gentlemen run their minds over the history of Mr. Pitt's Administration.… Excepting on such Motions brought forward as attacks on Government, perfect liberty was allowed to his colleagues, and that not merely on trifles, but on constitutional questions of vital importance. The question of Parliamentary reform was left open; Mr. Pitt and Mr. Dundas were in favour of it, Lord Mulgrave and Lord Grenville against it. On the impeachment of Warren Hastings, likewise, the different members of Government were left to pursue their own course.… The important question respecting the powers of juries in cases of libel was left open; Mr. Pitt took a view favourable to granting them extensive powers, Lord Grenville and Lord Thurlow opposed him. The abolition of the slave trade was also an open question. Mr. Pitt and Lord Grenville were favourable to it; Mr. Dundas and Lord Thurlow were among the most conspicuous defenders of the slave trade. All these instances had occurred in the space of about five years. Were they not sufficient to prove how absurdly and ignorantly those persons spoke who told us that the practice of open questions was a mere innovation of our own time? There were men now living—great men, held in honour and reverence—Lord Grey, Lord Wellesley, Lord Holland, and others, who well remembered that at an early period of their public life the law of libel, the slave trade, Parliamentary reform, were all open questions, supported by one section of the Cabinet and opposed by another. Was this the effect of any extraordinary weakness or timidity on the part of the statesman then Prime Minister? No; Mr. Pitt was a man who even his enemies and detractors always acknowledged possessed a manly, brave, and commanding spirit. And was the effect of his policy to enfeeble his Administration, to daunt its adherents, to render them unable to withstand the attacks of the Opposition? On the contrary, never did a Ministry present a firmer or more serried front to opposition, nor had he the slightest doubt but that their strength was increased in consequence of giving each member more individual liberty. I do not think that the defence of leaving open questions of great constitutional importance, always provided they are not ripe for immediate and instant action, is altogether inapplicable to the question now before us. I fully admit the position is in many respects a difficult one. The noble Earl has challenged me to say whether I think the position of the Government is a possible one. I admit it is difficult; but I say it is not an impossible one. When we are told that the position of the Government at the present time is an impossible one, what does it mean? It means that after a declaration has been made by a Minister somebody ought to have resigned.

My Lords, I want to know who ought to have resigned. Ought the Prime Minister to have resigned because Mr. Chamberlain had invited discussion on a policy he had set forth, as to which the Prime Minister had not formed final conclusions—a policy as to which it was quite possible that on further examination he might find himself either wholly or in part in agreement? The position of the Prime Minister, if he had resigned as soon as that speech was made, and on further reflection found he agreed with it, would have been a most absurd one. Then, should Mr. Chamberlain resign? Why should Mr. Chamberlain resign when he found that his colleagues, though they frankly avowed their present frame of mind, were willing to give an opportunity for opening a discussion on the question he raised? Why should those Members of the Cabinet who entertain grave doubts as to this policy, proposed for their future consideration and possibly for their future action, resign? They were asked to take no immediate action except to vote for a Budget which was entirely consonant with the most pronounced free trade principles. It is very easy to talk about the Government being in an impossible position. Were those members of the Government who entertained doubts as to this policy to take the step of resigning and remove from the Cabinet the advantage of their presence in any discussion which might hereafter arise upon this question? It is very easy to talk of the Cabinet being in an impossible position. I conceive that if it is considered what is actually meant by the suggestion, it would have been a far more illogical and untenable position if any of the Members of the Government had felt themselves called upon to resign, at this period, at all events, of the discussion.

We, the Government, are not the only ones who may find themselves in a somewhat difficult position. Candidates for seats in the House of Commons may no doubt find themselves in a somewhat difficult position, and may find themselves deprived of that clear and decided leading which they generally look for and do not usually look for in vain. I am very sorry for some friends of mine who are placed in this position. The only advice I can offer to them is to say that the more they act on their own convictions and judgment, and the less they allow their conduct to be guided by what they may suppose to be the wishes of their constituents, the better for them. I conceive that it is the duty of any man who aspires to the honour of a seat in the other House of Parliament, on a question of such national magnitude and importance as this, to endeavour to the best of his ability to form his own judgment, and to be influenced as little as need be by what he may suppose to be the wishes and the opinions of those whom he seeks to represent. The only persons, as far as I can see, who are placed in no difficulty are noble Lords opposite; they think that both the principles and results of our present system, which I have said is not free trade, are so clear and have been so conspicuously approved, that no inquiry is required or even is permissible. I believe they will find themselves to be mistaken. I believe they will be compelled, whether they like it or not, to take their share in this great inquest which is to be opened. I believe they will find that the people of this country are not at the present time so deeply impressed with the absolute perfection of our present fiscal and commercial policy that they will view with much favour the action of those who refuse even to inquire whether it has been, as they believe, a success, or whether, as is held in other quarters, it has been but an incomplete success and is tending towards failure. I believe the best friends of free trade will be found to be those who are willing usefully to enter into a full and fair inquiry, not as to its principles, which, perhaps, we may take for granted, but as to its consequences and results. And I believe for myself that the result of any such inquiry will be to establish more firmly the essential principles which underlie our policy, although it may be found, possibly, that some modification and alteration of our arrangements may tend to strengthen and consolidate and make more unassailable and permanent a system founded essentially upon the principle of free trade

The subject was then dropped.