§ The EARL of DENBIGH
My Lords, I rise to call attention to Papers recently circulated relating to communications from the Colonies protesting against any weakening of the Brussels Sugar Convention, and to the reasons put forward by His Majesty's Government in justification of their policy on this question. I had this Notice on the paper for last week, but on receiving a representation from noble Lords opposite that it was desirable to postpone it in view of discussions being carried on elsewhere, I took it off; but when I found that the question was coming on in the House of Commons on the Foreign Office Vote, I replaced it with the assent of the noble Lord opposite.
Before this House is too much occupied with other business I wish to call your Lordships' attention to this important question, because unfortunately there is no doubt that the general public do not thoroughly comprehend the present situation. I know that it is a somewhat complex one, and the difficulty has been that in this country we have invariably regarded the question simply and solely from the consumers' point of view, and therefore the general public, beyond the question of getting cheap sugar, have never paid any attention to the matter. As your Lordships know, the Convention about which so much dispute has arisen was an agreement come to for the purpose of dealing with bounties and foreign cartels. Bounties are pretty well understood, but, unfortunately, cartels are not. I daresay there are a certain number of noble Lords in this House who do not fully appreciate the manner in which the foreign cartels have hitherto worked, and I will go further and say that there may be some members of the Cabinet who would be indisposed to stand a very searching cross-examination as to the ways and methods of the foreign cartels.
Only a few days ago I was speaking to a very influential and well-known Member of your Lordships' House, a noble Lord of great experience, and he expressed the opinion that there did not seem to be any probability whatever of bounties being re-established, because he said he did not believe that foreign countries wished to re-establish them. I quite agreed with him, but I said, "What 1490 about cartels?" "Oh," he replied, "that is a technical question," and he thereupon dismissed the subject. That is just a sample of the way in which it is too often regarded. Though the question of the cartels may be a technical one, it is of just as much importance in dealing with the present situation as the question of bounties; in fact, I think it is more important, because cartels have done more harm than the actual bounties. And when I say that they have done more harm, it is important to remember the exact matter which the Convention was devised to remedy—namely, the constant selling in the markets of the world of sugar under cost price, thereby greatly injuring the cane industry in foreign countries, and more especially in our own Colonies.
I wish, therefore, without any desire to be wearisome, to remind your Lordships ' what this question of cartels is. The cartels were formed in Austria and in Germany; they were great trusts, or combinations, or rings, whatever you like to call them, of the manufacturers of those two countries, who combined together and bound themselves, under very strict penalties, not to sell sugar in their respective countries under a certain price; and by means of this combination they screwed up the price of sugar to a point just below that at which it would have paid other people to have imported sugar to compete with them. By means of having a high protective duty in these countries the cartels made very large profits, but they were only able to work satisfactorily to themselves by means of this high protective duty, or, in other words, by having a high surtax—the surtax being defined in the document of the Brussels Convention as being the difference between the Excise duty and the Import duty.
This Convention was passed for the purpose of dealing with the selling of sugar below cost price. The bounties were dealt with by the countries agreeing to bind themselves not to give bounties in either direct or indirect forms; and the cartels were dealt with by the various countries joining the Convention agreeing to limit the surtax to six francs per 100 kilos, or 2s. 6d. per cwt. With the surtax thus limited the cartels ceased to be profitable combinations and automatically went 1491 into abeyance. It is just as well to remember, too, that the profits made by the cartels in selling to their own consumers were very large indeed. In Austria, I believe, in one favorable year, the cartel made as much as £3,000,000 profit, and in Germany about £5,000,000. The result of that was greatly to increase production and encourage the cultivation and establishment of sugar factories, because, naturally, when these large profits were being made, people were constantly wishing to come in and join the cartels. The consequence was that Austria and Germany produced far more sugar than they could use themselves, and the surplus was dumped on the English market, and owing to the large profits they were making, they were able to sell that surplus sugar at less than cost price. It was this situation which the Convention was brought about to deal with. I hope I have been able to make the situation clear. It is very important that it should be thoroughly understood, and I would point out that these cartels are only in a state of suspended animation. Their organisation is still in existence, and they are ready to get to work again if only they can persuade their respective countries to increase the import duty to a point above 6 francs per 100 kilos. Your Lordships will see, therefore, that these cartels did just as much harm as, if not more harm than, the actual bounties themselves; and yet, unfortunately, in the minds of the British public, the cartels are almost wholly ignored, and people speak of the question as if it affected nothing but the bounties.
There is another point to which I wish to call attention£namely, that these, as I would call them, cut-throat prices were absolutely killing the cane industry in foreign countries and in the Colonies, and I submit that this was entirely contrary to the interests of the consumers in this country. In consequence of the encouragement which has been given to the production of sugar on the Continent of Europe, Austria and Germany alone at the present moment supply about 4,000,000 tons of sugar£that is, very nearly one-third of the total production of the world; and, taking into consideration France and other countries that grow beet, I think you will find that very nearly one half of the whole sugar production of the world is grown on the Continent of Europe. 1492 This is contrary to the interests of consumers, because it places them at the mercy of any drought or bad season in the principal beet-growing countries, and at such times you are certain to have speculative prices and to have the general markets upset. The abnormal prices that obtained in 1905 are an instance.
I would remind the House of what happened in regard to the question of cotton. Owing to a short crop in the United States and to great speculation in Wall Street, cotton a few years ago was forced up to a price which caused the greatest possible alarm in Lancashire and brought disaster to that important industry. What was the result? All our important cotton users began busying themselves to see in what other parts of the world cotton could be grown. The West African Cotton Growing Association was formed, and the question was investigated in Egypt, in Rhodesia, and in East Africa, so as to prevent the cotton markets of Lancashire being too much dependent on the United States supply. Surely the same thing applies to sugar, and it is most shortsighted of the consumers of this country to continue to favour a system which has in the past had the effect of centering the sugar supply of the world on the Continent of Europe, and thus making themselves liable to these fluctuating prices.
I was the other day somewhat severely castigated by the noble Marquess who leads this House and by the noble Lord the Under-Secretary for State for Foreign Affairs for daring to insinuate that the policy of His Majesty's Government on this question had been actuated mainly by political motives; and I was told that their action had been simply and solely due to their adherence to the great principles of Free Trade. I do not wish to say anything to hurt the feelings of the noble Lords opposite, but I am afraid I must confess I am entirely unrepentant, and I venture the assertion again that the action which has lately been taken by His Majesty's Government with regard to this particular question has been mainly owing to Party exigencies and to the statements that were made in the country by many politicians previous to the general election. I say that their action has been mainly in consequence of what have been called the "good-humoured 1493 exaggerations" of politicians—a phrase which fell from the noble Lord the Under -Secretary of State for Foreign Affairs, and which, used in conjunction with what went on at the last general election, is destined to take its place in history second only to that other famous phrase, "terminological inexactitude".
Well, what happened? When that great rise in sugar took place, naturally there was great disturbance to all our markets. The Convention was cursed, no consideration whatever was paid to the real causes which brought it about, and every one in the then Opposition immediately proceeded to direct their attention, and the attention of the public, to the great desirability of destroying the Convention on the very earliest opportunity. The result of that was that when the present Government came in they found themselves very considerably tied up by these "good-humoured exaggerations," and they had considerable pressure put upon them by their followers. Speeches were made on this subject by many prominent members of the Government previous to the general election, and by none more than by the President of the Board of Trade, Mr. Lloyd-George. I have seen several speeches of his in which he declared that if foreign countries were foolish enough to give bounties, and so provide us with cheap sugar, we should be very foolish if we did not avail ourselves of them. Lurid accounts were given of the large amount of sugar which was kept out of the country owing to the prohibition of sugar from the countries which did not join the Convention, and we were told that all this was greatly to the detriment of the sugar-using trades.
The Secretary of State for Foreign Affairs and the Under-Secretary have both acknowledged that they do not want the bounties and cartels to revive, and they admit the evils of both of these systems. Therefore it is evident that the Government now adopt a different attitude from what they did before the general election. It is possible that the President of the Board of Trade may have got somewhat wiser since he took office and came into contact with the permanent officials and with official documents. I believe that is a thing that very often happens to platform politicians. But the curious 1494 thing is they never will admit it. They prefer that the British public should consider them absolutely incapable of learning anything from official documents, or of profiting at all from sources of information from which they were previously debarred. It is quite evident that the situation now is that the Government do not want to destroy the Convention, but they have not got the moral courage to get up and say so. Therefore they are bound to do something for the purpose of performing the Chinese operation which is known as "saving their face"; and so I presume the brilliant idea occurred that the best way out of it would be to denounce the penal provisions of the Convention—the provisions which alone made the Convention effective—while at the same time saying they had no desire to injure the Convention at all; and, of course, as the public has been led to believe that these penal provisions were keeping large quantities of sugar out of the country that denunciation could naturally be done in the name of free trade and great kudos would necessarily accrue to His Majesty's Government.
I submit that His Majesty's Government must have known that no possible good to the trade of the country could come from denouncing these penal provisions, and I shall venture to show why. We had a statement from Lord Denman not very long ago in which he stated, very positively, that in his opinion the keeping out of sugar from the Argentine and from Russia encouraged speculation, and was greatly conducive to the high prices which existed in 1905; but in the House of Commons last week the statement was made on behalf of His Majesty's Government, in reply to a question, that in 1903, previous to the passing of the Convention, the amount of sugar brought in from the Argentine was only 4,000 tons. I respectfully submit that to say that the non-advent of 4,000 tons in a market of 2,000,000 tons could have had any effect on the price is too ridiculous a contention to merit further notice. Then, with regard to Russian sugar, it was stated in the House of Commons, in the same answer, that it was difficult to obtain absolute statistics because a great deal of Russian sugar came through Germany. I believe that is the case, but I am informed by competent people in the City, 1495 who know what they are talking about, that it would be very safe to say that the amount of sugar which came from Russia was well under 20,000 tons. But, whatever the amount may have been, the noble Lord the Under Secretary of State for Foreign Affairs admitted, in the last speech he made in this House on the subject, that the stopping of Russian sugar did not alter the supplies available; and that, I submit, effectively disposes of the rest of Lord Denman's argument.
The noble Lord the Under-Secretary of State for Foreign Affairs was himself extremely illogical and contradictory in his last speech. When I ventured to point out, in support of the agitation for the establishment of the beet sugar industry in this country, the great good it would do in providing employment in rural districts and improving the cultivation of the land, the noble Lord said that the good results to which I alluded would be infinitesimal alongside the advantages given to the trade of the country by the absolute free entry of sugar. The only possible way in which the sugar trade of the country could benefit would be by a permanent and very considerable cheapening of the raw material. I admit, of course, that it is of great advantage to many manufacturing interests to have raw material as cheap as possible, but, at all events in this particular instance, I entirely fail to see why the confectioners and sugar-using trades of this country should necessarily be allowed to make to the great harm of other people larger profits than they do at present.
But what I ask is, would sugar be considerably cheaper? I submit that it could not possibly be cheaper on account of the advent of sugar from the non-Convention countries, because His Majesty's Government admit, in so many words; that no restriction of supplies has been brought about by the imposition of this penal clause; and if there has been no restriction of supplies in this way, how can there be any addition to the supplies by dropping the penal clause? And if the supplies are not very greatly increased, how can the prices be so lowered as to bring about these wonderful benefits to the sugar-using trades? A great lowering of price could not possibly arise simply and solely through sugar coming from the non-Con- 1496 vention countries; the only way in which it could occasionally arise would be by recourse to bounties and cartels—the system which did occasionally produce exceptionally low prices, but which His Majesty's Government are themselves condemning and which they say they do not wish to see re-established. I submit that the position taken up by His Majesty's Government on this particular point is supremely ridiculous.
The Under-Secretary the other day, after he had driven himself into various corners in the course of his speech, knocked out all the arguments that had hitherto been used. He said—If it were asked how, in view of the fact mentioned, the prohibition of Russian sugar in this country could affect the price we had to pay for our sugar or could really limit our supply, the answer would be that any interference with the natural How of commodities along the routes which they follow when left to themselves must involve friction and must tend to make them more expensive.The noble Lord added—A case may easily arise, when sugar prices are unduly inflated by speculation, when it may be desirable for an importer to procure sugar from a special source which may for the moment be the most favourable one.''So that, practically, is the only possible advantage which the noble Lord leaves to be derived from the dropping of these penal provisions. But who would be the people who would import sugar under these conditions? Not the confectioner, not the jam maker, but the big broker in the City, who might possibly be able to snatch a bargain at times of inflated prices. But these gentlemen are not philanthropists; they do not go to Mincing Lane for the benefit of their health; and is it supposed that if an importer obtained a parcel of sugar under these conditions he would not sell it at the best market price he could get and put the profit in his pocket? Therefore I say that when you come to analyse it, the sole possible advantage which is left as a consequence of the dropping of the penal clause is that particular instance to which I have referred.
I do not know why it is that His Majesty's Government use these extraordinarily thin and threadbare arguments in support of this policy—arguments so contradictory that to an exceptionally stupid and dense person like myself they 1497 appear to be almost nonsensical and pedantic. The only conclusion I can come to is that His Majesty's Government are the unfortunate victims of something; they know perfectly well that they have no case and that their arguments are absolutely untenable, but they have to do something and make the best of it. If the dropping of the penal clause was going to do any good, that good might very fairly be set against any evil effects which might result; but I submit I have shown to your Lordships that it cannot possibly do any good and that it may do a great deal of harm. This Convention is extremely unpopular with the sugar interests on the Continent, on account of the fact that it has curtailed very greatly the profits they made under the system which the Convention destroyed; and although, possibly, the countries now negotiating at Brussels may consent to go on with the Convention for another five years, this action of His Majesty's Government is a standing invitation to the cartels of Austria and Germany, and more especially to the Austrian ones, to agitate all they can during the next five years for the, purpose of obtaining an increase in the import duty to their own advantage at the end of that time.
You have no guarantee whatever as to what may happen in five years time. No wonder that we have recently had circulated by the Government this remarkable series of protests [Papers relating to the Brussels Sugar Convention, Cd. 3565] from our different Colonies, showing the alarm and the indignation which they feel. This correspondence begins with a letter received from the Now Colonial Company, dated as far back as May 15th of last year, in which they state that they are going to expend £4,000 on the erection of a hospital for the benefit of their sugar coolies, and they very much wish to know what the policy of His Majesty's Government is going to be. It would be interesting to know what answer was sent by the Colonial Office. Then follow letters from Antigua and Jamaica. From Jamaica comes the request to His Majesty's Government to permit the Government of that Colony to endeavour to negotiate with the United States a reciprocal agreement, whereby the American Government would, after September, 1901, admit sugar from that 1498 island into the United States on preferential terms. Therefore the policy of His Majesty's Government does not seem to be doing much towards promoting commercial intercourse between Jamaica and this country.
Then you have strong despatches from Barbados and British Guiana, where the sugar industry is the principal industry of the Colony, and where the greatest possible alarm has been felt at the general state of insecurity which has been brought about by His Majesty's Government. It is also remarkable to notice that there are despatches from nearly all the other Colonies, both sugar-producing and non-sugar-producing, showing that the opinion is pretty unanimous on this point. Protests have come in from chambers of commerce all over the Empire, and it is not too much to say that the greatest alarm has been created by the action of His Majesty's Government, who will have absolutely nothing whatever to show for it. I know that the Conference at Brussels is sitting at the present moment, and, in the interest of the sugar producers and of the possible establishment of the sugar beet industry in this country, I most sincerely hope that the Convention will be renewed. It would be a disastrous thing if it were not. But I repeat, that, even if it is renewed, no possible benefit can come to this country from the action of the Government and the state of uncertainty with regard to the possible re-establishment of the cartels that has been created, and will continue for the next five years until the Convention again comes up.
My Lords, when the Brussels Sugar Convention was first mooted I took a great personal interest in opposing it on behalf of the east coast ports of England. The noble Lord has made a very good theoretical speech, but the practical business question to be considered is whether it is better for this country to have sugar cheap or sugar dear. This is practically what it comes to. In 1903 there was a big meeting held at Hull, presided over by a very strong Unionist, the object being to call upon the local Members of Parliament to do all they could to oppose this Convention. The resolution that was passed was in these terms, that while protesting, on national grounds, against 1499 the ratification of the Convention, the meeting regarded with especial alarm the fact that important local interests would be injured by its operations, and it was felt that the Convention was a move of Mr. Chamberlain to divert the sugar trade from the Continent to the West Indies, as a protectionist measure.
Why should we support the West Indies against our own people? Perhaps the noble Lord and the House generally are not aware that the trade with the Sugar Bounty countries, France, Belgium, Holland, and Germany in sugar alone, in the year 1901, amounted to 1,574,000 tons, whereas the exports from the West Indies were only 34,000 tons; that is 34,000 tons against 1,574,000 tons which came into this country at a low rate for the benefit of all the industries connected with sugar. The West Indies, at the same time that they were exporting 34,000 tons of sugar to England, were exporting 105,000 tons to the Untied States. The exports in coal from the United Kingdom to France, Belgium, Holland, and Germany were £9,629,000, and the exports to the West Indies £48,000. The West Indies do not want our coal, except what is used for bunkering steamers. They do not want our blankets. What do they want? They practically want very little.
The Member for West Birmingham, in his zeal to support the population of the West Indies, thought it desirable to encourage trade there, and the Government now have to pay £40,000 a year for a line of steamers to bring bananas from the West Indies to England. We did very well without bananas in times gone by. As we see in the streets of London, the importation of bananas has produced a taste for them, but I suppose human beings can only eat a certain quantity of fruit, and it would have been more in the interests of this country if they had kept to apples and pears. We must remember the enormous trade we do with the sugar-producing countries, and the millions of pounds worth of coal they buy from us. This year, there has been an enormous increase in the export trade to Continental ports, and the increase has been so great that the local railways have been entirely unable to cope with the traffic. The consequence is that steamers arriving in the Humber ports have to lie out in the 1500 river until room can be found for them in the docks, and until the railways are able to deal to some extent with the traffic. Those are facts; they are not theories.
To make sure of my ground, I telegraphed to the chairman of the meeting to which I have referred, and this gentleman, who is largely concerned in the question, replies that he is as opposed to the Sugar Convention now as as he was four years ago. I do not know that I can say anything stronger. I look upon this from a practical business point of view. It simplifies itself into this: are we to support the West Indies against our own people? Are we to endeavour to induce agriculturists in this country to lay out thousands of pounds in an attempt to grow sugar beet? What would have happened this year, with the season that we have had, to those who had put their money into such a speculation? It would have been a total failure. It is clear that this country is not suitable for the growing of sugar beet.
I am in favour of as little protection as possible and as much dumping as possible. Let us get everything as cheaply as we can. I am sure that in the long run that will be found to be the feeling of the country. I am still at a loss to know what the noble Earl who has raised this question today wishes. Does he wish us to support the West Indies, the entire population of which is very little more than that of one of our biggest cities, or does he wish encouragement given to the cultivation of sugar beet in England? We have plenty of things to grow without undertaking sugar beet, and I think that, on the whole, the people of this country will feel that the Government are acting wisely in putting a stop to all the troubles that the Brussels Sugar Convention has undoubtedly led to.
My statistics are for 1901, when the United Kingdom imported only 34,160 tons of sugar from the West Indies against 1,574,750 tons from France, Belgium, Holland and Germany, the Sugar Bounty countries; at the same time the West Indies exported 105,453 tons of sugar to the United States, show-it is their natural and best market. Again, we exported 15,542,743 tons of coal to the Sugar Bounty countries against 56,725 tons of coal to the West 1501 Indies, and we bought (imported) from the Sugar Bounty countries a total of sugar and merchandise of about £140,000,000 against £1,330,000 from the West Indies. Again, we exported to the Sugar Bounty countries £84,297,248 of coal merchandise against £2,102,122 to the West Indies. The Sugar Bounty countries thus by our purchases of sugar are enabled to reciprocate and help us to maintain our shipping lines and colliery output. The West Indies can do little or nothing. I hope the Board of Trade will give the statistics for 1906.
*THE SECRETARY OF STATE FOR THE COLONIES(The Earl of ELGIN)
My Lords, I must confess that I, like the noble Lord behind me, feel somewhat doubtful as to what the noble Earl has desired specially to put before us this evening. I proposed to reply because I found on the Paper a statement that the noble Earl was going to call attention to certain communications from the Colonies. The noble Earl made, as he always does, an eloquent speech, full of knowledge of his subject, and, if I may do so, I would like to express my personal thanks to him for the lucid way in which he described the system of cartels.
§ THE EARL OF DENBIGH
I also put down on the Paper that I would call attention to the reasons put forward by His Majesty's Government in justification of their policy on this question.
§ *THE EARL OF ELGIN
I am quite aware of that, but the noble Earl placed the other matter first in his Notice, and one naturally supposed that that was to be at any rate the jumping-off ground. But he did not refer to those Papers until just at the end of his speech. I admit that then the noble Earl did say one or two words on that subject. I was beginning to feel that I should have little to say, but as the noble Earl has referred to the communications from the Colonies, I shall venture to say a few words on that subject. As to the rest, I have only to remark that we have already had two debates on this subject this session in your Lordships' House, in both of which the noble Earl who initiated them told us that we were going entirely wrong, and in which he probably said, as he has said to day, that our action was entirely actuated by political motives. All I can 1502 say on that point is that we have made our statement. I think we have taken the only action that was open to us as a Government professing free trade principles, and we are not ashamed of having done so.
With regard to the Papers to which the noble Earl has alluded, although there are expressions in favour of the noble Earl's views, the Papers also contain other significant expressions. I will quote one only. In a resolution passed by the Barbados Agricultural Society it is stated that—While the Convention has not led to a rise in the average price of sugar, it has restored the financial stability of the industry, and as it consequence sugar-planters are able to obtain capital for improving machinery whereby the quality of their sugar can be adapted to the changing needs of the market and the cost of production can be gradually reduced.I quote that resolution to show that it is stability which has give man impetus to the sugar industry in the West Indies, and especially to the improvement of machinery. But stability cannot be said to depend on protection alone. I should be inclined to argue that protection was apt to injure stability. I believe that many instances of that kind could be quoted. At any rate, the want of stability is disastrous to any industry. If we want to secure stability we must take into account all those who are interested in the industry with which we are concerned. Therefore we must take into account, not only the producers in the Colonies, but also the consumers in the United Kingdom, and the great confectionery industries to which cheap sugar is of the highest importance. I think we can safely argue that it is detrimental to the Colonies that the democracy of this country should possess the idea that the majority in this country should suffer for the sake of the minority in the Colonies. The friction which arises out of those causes must be avoided, because nothing is more calculated to bring about those unsettled conditions from which the sugar like any-other industry is apt to suffer. It is from that point of view that the action taken by His Majesty's Government proceeds. What happened was this. The permanent Commission established at Brussels under the Sugar Convention met on 25th July to consider the suggestion of His Majesty's Government that, if the United Kingdom could be relieved from the obligation to 1503 enforce the penal provision of the Convention, they would be prepared not to give notice on 1st September next of their intention to withdraw on 1st September, 1908—notice which otherwise they would be bound to give. At the meeting of the Commission a draft protocol was drawn up for submission to the different Governments on the understanding that, if accepted, it would be signed before September 1st next. This draft protocol provides for the modification of the Convention, and, at the same time, for its continuance. It meets, on the one hand, the wish of his Majesty's Government to be relieved from penalising bounty-fed sugar, and, on the other hand, it enables the other Powers to reconsider their position, should they be of opinion that their interests are suffering.
The Commission decided that the text of the protocol should not be published until the Governments had decided whether they would accept it. and it is for that reason, and not because we wish to burke the matter in any way, that we have been anxious that the debate should be postponed. I hope the action which his Majesty's Government have taken will safeguard the stability on which the sugar industry of our sugar producing colonies depends. The noble Earl made some references to an incident in Lancashire and the failure of the cotton crop. He is, no doubt, well aware that one of the results of that incident was that the growing of cotton was taken up in the West Indies as well as in other places. I, for one, think that nothing will give greater stability to the West Indies and to the industries of the West Indies than that their eggs should not all be put in one basket. For that reason I have seen with great satisfaction the growth of the fruit trade, and I entertain still greater hopes in regard to cotton-growing in those colonies. From all accounts which have reached me, it appears that in many of the Islands there is ground well fitted for growing cotton of excellent quality. I hope that, if that enterprise is successful, we shall see those colonies, in spite of any difficulties that may arise in their sugar trade, once more enjoying the prosperity which has perhaps been denied to them for some time.
§ THE MARQUESS OF SALISBURY
My Lords, the noble Earl who has just sat 1504 down and the noble Lord who preceded him have thought it wise, in their own interests, to attempt to import into this discussion all the prejudice which hangs round the fiscal controversy. But I would like to remind your Lordships that this question of the abolition of the sugar bounties was long anterior to the fiscal controversy. The abolition of sugar bounties has been advocated, not by those who are called protectionists, but by ardent free traders. I believe Mr. Gladstone himself was in favour of the abolition of sugar bounties. I am quite sure of this, that the Government which negotiated the proposals of the Sugar Convention contained such men as the Duke of Devonshire, Lord George Hamilton, and my noble friend Lord Balfour of Burleigh, all of whom, as your Lordships are well aware, proved at a very important and significant moment their attachment to the principles of free trade. Therefore I am not prepared to admit that those who favour the maintenance of the Brussels Convention are to be labelled with the name of protectionists.
§ THE MARQUESS OF SALISBURY
But the noble Lord behind the Government Bench said so, or used words to that effect. Even the Government themselves do lip service to the interests of the producers as well as to those of the consumers. That fact stands on the face of their despatch, in the opening words of which they say they are—bound to consider the interests of the consumers and producers in the United Kingdom and her ColoniesHaving said that much, that is all they do for the producers so far as the Colonies are concerned. The rest of their policy is confined to looking after the interests of the consumers and the consumers alone. What can be the motive for adopting this policy? Why could not the Government have left things alone? They were not called upon to make themselves responsible for the Brussels Convention. That was done before they assumed office, and all they had to do was to leave it alone. All that the noble Earl the Secretary of State for the Colonies could find to say on that subject was that it was inconsistent with the faith of a free 1505 trade Government that they should continue the Convention. I notice that his colleague, the Secretary of State for Foreign Affairs, speaking in another place, said: —We never denied that under the Sugar Convention benefits might accrue to those parts of the Empire which produce sugar. But what we did contend was that no benefit to a particular part of the Empire should be purchased at the cost of the community as a whole.That appears to be the policy of His Majesty's Government. I am surprised, if they take that view, that they are content with the consequences of the Sugar Convention, even though its sanctions are by their action to be abolished. If they really think the interests of the consumers are alone to be sought, why do they not take steps to persuade foreign countries to re-establish the bounties, to get rid of which we were at such pains?
I would refer your Lordships to another quotation, one of an earlier date, but not many years old: —The benefit which the British Empire as a whole derives from any lowering of the price of sugar due to the operation of the bounty system is too dearly purchased by the injury that system imposes on a limited class— namely, your Majesty's West Indian and other subjects dependent on the sugar industryObserve the phraseology of that quotation and compare it with the observation I have just quoted from the speech of the Secretary of State for Foreign Affairs in another place. According to Sir Edward Grey, no benefit to a particular part of the Empire should be purchased at the cost of the community as a whole; but, according to the quotation I have just read, the benefit which the British Empire as a whole derives from any lowering of the price of sugar due to the operation of the bounty system is too dearly purchased by the injury that that system imposes on the sugar-producing Colonies. I have read those two quotations, because the latter quotation is signed by no less a person than the Secretary of State for Foreign Affairs himself. The extract I have quoted is from the Report of the West Indian Commission, of which Sir Edward Grey was a member, and though there was a slight difference of opinion between the Commissioners on the question of retalia- 1506 tory duties, yet in respect of the quotation I have given to the House there was no difference of opinion. It is contained in the unanimous part of the Report, and all the Commissioners committed themselves to it.
I wonder what it is that has caused the Secretary of State for Foreign Affairs to change his opinion. He has not confided that to either House of Parliament. Has he really changed his opinion, or is it one of those wonderful compromises at which Governments arrive? I cannot help thinking that that is so, because there was a significant phrase in the Secretary of State's speech in another place about the harmony of the Government. I always distrust Ministers when they begin to advertise their own harmony. There are two ways of achieving harmony. One is for all to agree; the other is for those who disagree to sink their opinions; and perhaps that is what has happened in regard to His Majesty's Government.
One other observation founded on the Report of the West Indian Commission. The majority of the Commissioners were against countervailing duties. As your Lordships are aware, there is no question of countervailing duties so far as the Brussels Convention is concerned. The penal method adopted was that of prohibition and not countervailing duties. But it is interesting to note the objections which the Commissioners in 1898 had to countervailing duties. One was the uncertainty felt by the Commissioners as to whether or not that policy would save the West Indies. No doubt they had a right to be uncertain; but we have no such right. We have before us Papers showing that Colony after Colony bears witness to the success of the Convention. Colony after Colony declares that the Brussels Convention has been a conspicuous success, that it has saved the West Indies, and that its abolition would seriously prejudice their prosperity. In some of the despatches the representatives of these Colonies speak of the ruin which will follow upon the destruction of the Brussels Convention, so that the doubt which Sir Edward Grey and his colleagues had in 1898 no longer exists and that particular reason against countervailing duties may be eliminated.
1507 At this hour and in this small House I shall not go into the question of the most-favoured-nation clause. Our Government dealt with the difficulty of most-favoured-nation treatment in connection with the Convention, and it was very easily disposed of. It was agreed that the most-favoured-nation question was not touched by the Brussels Convention. There was another point—the loss to the consumer in England which countervailing duties would involve. That was all that the noble Lord who spoke just now from the back bench opposite cared about. His whole idea of Imperial policy was what would happen to the consumer in England. But this is what Sir Edward Grey and his colleagues signed in 1898—On the whole we think, as we have already indicated, that the loss to the British consumer, if it were the only matter to be considered, might reasonably be accepted in view of the importance of removing the disadvantages under which the West indian producers at present labourSo that Sir Edward Grey held that the interests of the consumer ought not to be allowed, if they stood alone, to weigh against the interests of the West Indies.
I raised the question of the export of coals. That is a very large portion of this question. None of these Colonies buy our coals.
§ THE MARQUESS OF SALISBURY
I am afraid I do not quite see the relevance of the noble Lord's observation. If the West Indian Colonies sell sugar to us we have corresponding exports on which we make our profit, and we need not go further into the matter. So long as we have a trade with the West Indies it is certainly profitable both to the seller and to the buyer. Then there was the inconvenience to trade. That had to do with a large number of subjects, but in one respect at any rate that also may be eliminated from the consideration. One of the difficulties which the Commissioners anticipated was the sort of complication that hangs round what are called certificates of origin, but, as a matter of fact, there have been no such difficulties found in working the Brussels Convention. Therefore speaking as we do, not looking into the future as the Commissioners did, but having the actual working of the Convention to guide us, we say that we may eliminate nearly 1508 all the arguments which Sir Edward Grey and his colleagues put forward for objecting to countervailing duties.
Here we have a Convention which has worked very well, which has, in fact, saved the West Indies, and which has not presented the difficulties foreshadowed by the Commissioners, of whom Sir Edward Grey was one; yet the Government, colleagues of Sir Edward Grey, now wantonly and without reason wish to upset it simply that they may fulfil the rash and unwise pledges given during the general election. I have always tried on these questions to be moderate, and I believe that great harm is done to the cause of free trade, which I have at heart as much as noble Lords opposite, by this bigoted and unreasoning desire to work a theory to an undue extent. I do not believe that that is a sound or a practical policy, and I regret very much that the Government should have adopted it, I believe that the great fiscal controversy which has arisen, and which I profoundly regret, has been due as much to the stick in-the-mud policy of the free traders in the past as to anything else, and if they had-taken a reasonable view and had been willing to admit that it was consistent with free trade to stop these perfectly artificial advantages given to one particular trade, the fiscal controversy would probably never have arisen.
But the Government are not at the end of their difficulties. We do not know the full policy of the Government. It is possible that there are foreign negotiations still pending which make it necessary for them to exercise a certain reticence, and it is possible they may, by means of some diplomatic instrument secure that the consequences of their having abandoned the penal clause may not be felt. That is possible, and, if so, except that it is rather a shabby proceeding to take advantage of all the benefits of the Sugar Convention without making yourselves responsible for it, I do not know that anything more need be said. But, if they have not secured the future safety of the West Indies, there will be very much to be said. The West Indies may be ruined, and, if they are, the Imperial Government will have to take over their debts. That represents a very large sum of money. 1509 Then there is the welfare of the negro population. I think I caught an observation from the noble Lord who sits on the back bench opposite which I profoundly regret. He spoke with some kind of contempt of a policy which had at heart the welfare of the negro population. That is not the view which has been taken by responsible statesmen on this subject. That was not the view taken by Sir Edward Grey and his colleagues, who spoke in the most emphatic way of our profound obligation in respect of the negro population in the West Indies. They did not go there of their own accord. Under British law they were compelled to go to the West Indies, and if we abandon them we shall incur a grave responsibility. If the fiscal policy of His Majesty's Government and the abandonment of the Brussels Convention should lead to the ruin of the West Indies, the Government will not only have to take over the debts of the West Indies, but also to undertake whatever course may be necessary with regard to the negro population. I think they are incurring a grave responsibility, unless, as I say, they intend to secure, by some diplomatic arrangement, the benefits of the Convention without making themselves responsible for it.
Although something may be done by such diplomatic instrument, what is most especially required is that confidence should be restored in the West Indies. Therefore it will have to be, not only a diplomatic instrument, but one which everybody can understand, so that the confidence of those engaged in the West Indian sugar industry and the credit of that industry shall be safeguarded. If one thing appears more prominently in these despatches than another it is that they value the credit and the confidence which the Sugar Convention gave them. The fact that once more, owing to the action of the Government, the whole thing is uncertain makes them anticipate a great disaster and the possibility that there will be no longer any investment of money there, and that the prosperity which has begun once more to shine on the West Indies may be destroyed. Therefore it is most important that credit should be restored and confidence re-established. Whether to-night or at a future period, I hope something may be said which will reassure our West Indian 1510 fellow subjects, and show them that, after all, England has not abandoned them, that their interests will be safeguarded, and that, whether it be by means of the Brussels Convention or in some other way, they will not be allowed to suffer owing to the policy which, for different reasons, His Majesty's Government have thought good to follow.
*THE UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (Lord FITZMAURICE)
My Lords, I hope the noble Marquess who has just addressed the House will not think it discourteous on my part if I do not attempt to follow him over the very wide held he has traversed. I would not really be justified in inflicting upon your Lordships, at a very short interval of time, a second edition of a speech which exactly a month ago I made in reply to the noble Earl who has brought forward this subject tonight. I regret, but I am not going to profess to be astonished, that my words did not carry conviction into the mind and heart of the noble Earl. As I said at the time, I feel that we on this side of the House and noble Lords opposite are separated by questions of principle, matters of long conviction, which probably will not be materially changed or altered in their texture by a very great number of debates either here or elsewhere.
I certainly was under the impression, when I saw the noble Earl's notice on the Paper, that, just as on a previous occasion he had desired to bring the grievances, as he thought them, of English producers, or, rather, intended producers, of beet, before the House, and on another occasion the general arguments connected with the whole of this question, on both of which occasions I had the honour of replying to the noble Lord, to-night he was going especially to bring forward the question of the Colonies, and for that reason my noble friend the Secretary of State for the Colonies decided, in keeping with the practice of your Lordships' House, to reply to the noble Earl. But what has really happened is this. The noble Earl and the noble Marquess appear to have come down to the House and made speeches they had prepared at, as I think, some comparatively remote time —
Upon the assumption that by the month of July or August this year the wreckage of the Sugar Convention, which some of them had had a hand in negotiating, would, as it were, be lying about the Continent of Europe. But that is not the case. As I pointed out just a month ago, we are concerned in negotiations, and it is, of course, an exceedingly difficult and objectionable thing to make partial statements; and if I have anything to regret at all in this matter — and I am sure I am expressing the feelings of the Secretary of State also — it is that we have been obliged, owing to the necessities and courtesy of debate, to go even further than we would wish at this moment. Naturally we would desire, when the time came, to make a full and complete statement, and to inform the House of the exact terms contained in the protocol. That, however, is not the position in which exactly we have been placed; and we have gone, in consequence of the pressure that has been used, as far as we can go consistently with the interests of the situation.
A very large part of the speech to which we have just listened was taken up with matters of what may be called mere debate. Attempts were made to show that something which the Secretary of State for Foreign Affairs said on the subject the other evening in the House of Commons did not agree with something that was written in the carefully selected extract which the noble Marquess produced from the Report, one of the signatories of which was Sir Edward Grey, of the Commission that went to the West Indies. I really think I am expressing the feelings of noble Lords generally when I say that a question of this kind is really not benefited by such treatment. Many things have happened since Sir Edward Grey and his colleagues went to the West Indies and wrote that interesting Report, and the most important, the thing that has entirely modified the situation, is that the Sugar Convention has come into existence, and, whether we think that Convention was wise or unwise, it is impossible to discuss the question as if the Convention did not exist, or as if the matter at issue could be dealt with simply according as we may be free traders or protectionists. I am convinced that the passage on the 1512 subject in the speech of the Secretary of State for Foreign Affairs in the House of Commons the other evening carried conviction to the minds of all who heard it. The passage is so important that, with your Lordships' permission, I will quote it. Sir Edward Grey said —The late Government entered into that Convention on certain terms, having made certain arrangements with other Powers. We had to consider, when the time came for denouncing the Convention, whether so long as we could do it consistently with our own economic interests it was not our duty to cause the minimum of inconvenience to other Powers by, if possible, not disturbing the arrangements they have made. Our unconditional withdrawal must have meant considerable inconvenience to other Powers, and we thought it right, in the interests of good relations with them, that as we had, under the late Government, entered into a Convention with them, we should not denounce it unconditionally without making to them proposals which we felt sure would safeguard our own interests by freeing us from the penal clause, and yet securing our own interests with the minimum of disturbance to the other Powers.Now what applies to foreign countries applies to the Colonies equally, perhaps even more. We cannot get away in either case entirely from the effects of our own action. To speak frankly, I am inclined to think there has been a tendency too much of late to use politically the argument about the danger to the trade of the West Indies and the indifference of Liberal Government on that point. I quite appreciate the anxiety which is entertained as to the trade of the West Indies, and no blame can possibly attach to the people of the West Indies for having organised themselves to do the best in their own interest; but there is no justification whatever for the charge that any Government, Liberal or otherwise, is indifferent to the fortunes of the West Indian Colonies. I cannot add anything to what has been said by the Secretary of State with regard to the present position of the negotiations. We are fully cognisant of the difficulties and dangers of the question; we have fully considered the subject of cartels; and I sincerely hope that when the time comes we shall be able to satisfy your Lordships that we have not treated the matter lightly or in any unworthy spirit.
§ House adjourned at twenty minutes before Eight o'clock, till To-morrow, a quarter past Four o'clock.