GERMANY AND BRITISH TRADERS. (Hansard, 4 April 1905)

THE EARL OF JERSEY
rose "To ask the Secretary of State for Foreign Affairs what steps have been taken to correct the action of the German Government against British traders in the Marshall and Caroline groups of islands." He said: My Lords, the subject to which my Question refers is of considerable importance to British trade in the Pacific. Most of the islands in that ocean have been acquired by European Powers. The Marshall and Caroline groups are within the German sphere of influence. In 1886 the declaration between Germany and Great Britain contained these two clauses— That the subjects of either State shall be free to resort to all the possessions or protectorates of the other State in the Western Pacific, and to settle there, and to acquire and to hold all kinds of property, and to engage in all descriptions of trade and professions and agricultural and industrial undertakings, subject to the same conditions and laws, and enjoy the same religious freedom and the same protection and privileges as the subjects of the Sovereign or protecting State. and, further— That the ships of both States shall in all respects reciprocally enjoy equal treatment as well as most-favoured-nation treatment, and merchandise of whatever origin imported by the subjects of either State, under whatever flag, shall not be liable to any other or higher duties than that imported by the subjects of the other State or of any third Power. A fine declaration of equality and impartiality of treatment. Under the presumed protection of these clauses Messrs. Burns, Philp & Co., of Sydney, decided to open up a trade with these islands. Before doing so they made inquiries at 289 the German Consulate and were informed that their vessels would be treated the same as German vessels were treated. They despatched a ship, the "Ysabel." On arrival at the Marshall Islands a fee of £225 was demanded for the licence to trade for four weeks. I may state that German ships can trade in our groups of islands for the fee of £100 per annum. Subsequently on the ship's arrival at the Caroline Islands the supercargo was informed that the German company, Jaluit Gesellschaft, had a monopoly except as regards two insignificant islands. So the steamer had to leave without doing any trade.
In August the "Ysabel" went to the Marshall Islands for the second time, and the same heavy fee was asked. Messrs. Burns & Co. then arranged to lease a piece of land from a native chief. The agreement was similar to an agreement made by the same chief with the German company, but the head German official refused to allow Messrs. Burns' agreement to be ratified, though he stated that the German company possessed the right to acquire land. In October a third voyage was made. On the ship's arrival the supercargo was informed that the fee had been doubled from £225 to £450, and the ship returned without trading. Again, in November another voyage was projected, and then the owners were informed that in addition to the doubled licence fee there would be an export tax of thirty marks per ton on all copra. This trip was cancelled. Needless to say, these frustrated attempts to create trade caused loss to a very enterprising British company. I can speak personally of the high position which Messrs. Burns, Philp & Co. have gained as traders, for I know them very well. These are the points, restated. A fee of £225 for four weeks trading as against a fee of £100 for fifty-two weeks charged by Great Britain; then the doubling of the fee and the addition of an export tax; the refusal to allow trade in one group on the score of the monopoly of the German company; the refusal to allow the leasing of land to a British company though it is allowed to a German company; and all these hostile moves in the face of the treaty 290 giving equal rights to the subjects of both countries.
It is not only the loss to one firm which we have to consider. The policy of Germany is significant. It is directed towards the one object of ousting British trade from the Pacific. It is another phase of the same policy which confronts us in China and elsewhere. I have quoted the clauses which give to Great and Greater Britain certain rights. The trade of the Pacific is part of the natural inheritance of our fellow-subjects in the Southern Hemisphere. We are then trustees, and we must take care that no right is sacrificed to or absorbed by other Powers. I feel sure that the noble Marquess will take the matter up, but I should like to impress upon him the absolute necessity of an early decision. The Germans are in favour of delay, because they have shut the door against our traders and at the same time they can trade freely with our islands, so they have nothing to lose. We, on the other hand, run the risk of seeing our rivals secure in their own possessions capturing our trade. My belief is that if matters like this are allowed to drift slowly our fellow-subjects who are keenly interested in the Pacific will have no resource but to consider the necessity of retaliation. I ask the Question standing in my name.

§ *THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of LANSDOWNE)
My Lords, the question to which my noble friend has referred is engaging the close attention of His Majesty's Government. I do not question the accuracy of the statements which he made to the House. In our opinion the treatment received by British trade in these islands is of a very unsatisfactory character. In the Marshall Islands the trade is in the hands of a German company, which, under a contract with the German Government made in 1888, unites the functions of a trading body and those of the Government of the islands. The result of this combination of functions is somewhat singular. The company in its capacity of a trading company is in 291 theory liable to pay the same duties as any other trading company, but when it reappears in its capacity as the Government of the islands it uses the proceeds of these duties to assist its own revenues. When money passes I am given to understand that it is only a transfer, so to speak, from one pocket to the other. This is, in our view, distinctly an evasion of the spirit as well as of the letter of the declaration of 1886, which my noble friend quoted—a declaration under which absolutely equal rights were secured to British and German traders in British and German possessions in the Western Pacific. I think I may say that the whole of the correspondence which took place at the time of that declaration shows that its real intention was to guard against a monopoly of this kind. The Caroline group was bought by Germany from Spain in 1889—that is, after the date of the declaration—and the group lies within the region to which these declarations apply In spite of these facts, I believe it is the case that there has been an absolute prohibition of all but German trade in the group, except in the case of two small islands which are really not worth mentioning at all. Representations have, I need not say, been made to the German Government upon this subject. I am not at this moment able to tell my noble friend anything as to their result, but he may rest assured we shall continue to press upon the attention of the German Government what seems to us a violation of the declaration of 1886.

§ *LORD STANMORE
My Lords, whilst disclaiming any wish to act as the apologist of the German Government, I think it is only just to point out that German ships going to the Marshall Islands are subjected to exactly the same penalties as English ships. While the conduct of the German authorities may be an evasion of the spirit of the engagement entered into with England, I do not think it is a breach of its letter. Nor do I think it is quite fair to say that the Jaluit Company puts into one pocket what it pays out of another. The company is bound to defray all the expenses of administration, but it 292 has no voice in fixing those expenses which are imposed entirely at the discretion of the Colonial Office in Berlin. As regards the purchase of land from native chiefs, I would call attention to the fact that we equally prohibit native chiefs from selling land to strangers without a warrant from the British authorities. In that particular I do not think we have reason to complain of the action of the German Government.

THE EARL OF JERSEY
The agreement for leasing land would have been made with a chief with whom a German company had made an agreement, and on the same terms and, according to the declaration of 1886, the same right of acquiring possessions in the islands was accorded to British and German subjects.

§ LORD STANMORE
It is, of course, impossible to discuss this matter further here; but my information is rather different from the noble Earl's.