HL Deb 18 May 1911 vol 8 cc577-632

*THE EARL OF SELBORNE rose to call attention to the probable effects of the proposed Canadian-American Reciprocity Agreement on the commerce and Imperial relations of the British Empire, and to move for any correspondence or communications with the United States as to the extension to the United Kingdom or any other part of the British Empire of the tariff concessions granted to Canada, or raising the question of the bearing of this Agreement on most-favoured-nation Treaties.

The noble Earl said: My Lords, the subject of my Motion covers a very wide field. I do not propose this afternoon to attempt to cover that field, but to confine my observations to one or two special aspects of it. But before doing so there are two preliminary observations which I should like to make. It is a matter of agreement between all political Parties in this country that we have no concern with the domestic politics of Canada. It is the birthright of the Canadian people within the British Empire to work out their own national salvation, and any criticisms or anxiety that may occur to us do not arise from Canadian matters or from the action of Canadian statesmen in connection with Canadian affairs. But where the action of one part of the Empire has an effect or influence on the United Kingdom or on other parts of the Empire, we have the right, indeed the responsibility, to consider the situation which may have arisen. The second observation I would make is in respect of the United States of America. Here, again, the members of all political Parties in this country are in accord. We have no greater desire than for a permanent friendliness and perfect understanding with the United States of America. But the Americans regard us—it is one of the unfortunate accidents of history—as a foreign country, whereas the Canadians do not, and that exactly explains the difference in our attitude towards Americans and towards Canadians. If I have the privilege of the personal friendship of one of your Lordships who is no relation of mine, it is no derogation to that friendship if I have a still greater concern and interest in all that appertains to my own brother. That exactly is the difference between our feelings towards America and our feelings towards Canada.

I must refer to a remarkable speech made by President Taft only a few days ago. I have the report as published in the Standard, dated New York, April 28, and as I have seen no correction of that report I think I am entitled to regard it as substantially correct. This is what President Taft is reported to have said— This is a critical time in the solution of the question of Reciprocity. It is a critical time because unless it is now decided favourably to Reciprocity it is exceedingly probable that no such opportunity will ever again come to the United States. The forces which are at work in England and in Canada to separate Canada by a Chinese wall from the United States and make her part of an Imperial commercial band reaching from England round the world and back to England again by a system of preferential tariff will derive impetus from the rejection of this Treaty. If we would have Reciprocity we must take it now or give it up for ever. Later on President Taft said— Annexationist talk is bosh. Every one who knows anything about it realises that it is bosh. It should not enter into the consideration of serious men engaged in solving a serious problem. We all, of course, without the slightest hesitation or reservation, accept what the President says about the cry of annexation, which was raised in Congress by a prominent American politician. Therefore we say absolutely nothing more about that.

But I must say a word about the Chinese wall. That allusion shows a complete misapprehension of the ideas of those in this country who are in favour of Tariff Reform and the policy of Preference. It has never entered our minds, it is no part of our policy, to establish a Chinese wall between any part of the Empire and the United States or any other friendly country. On the contrary, we have always recognised that the exact fiscal needs of the different parts of the Empire differ and will differ, and we have no desire to prevent those parts of the Empire from entering into suitable Agreements with foreign countries any more than we have a desire to prohibit ourselves from doing so. But our contention is that the basis of such Treaties must be, first of all, Preference within the Empire between the different parts of the Empire, and then that each part of the Empire, with its own tariff, should be in a position, as I will describe presently, to make its own particular arrangements with foreign countries. Never have we for a moment desired to see a Chinese wall erected between any part of the Empire and the United States. Indeed, there are only two instances of which I have any recollection that might fairly be described as a Chinese wall in tariffs, and they were associated with the names of Mr. McKinley and Mr. Dingley, and as far as my recollection serves me neither of those was a British statesman.

Before I go on to the special aspects of this Reciprocity Agreement to which I wish to draw your Lordships' attention, perhaps you will allow me to remind you that there are, roughly speaking, two classes of trade arrangements which countries make between themselves. In foreign countries trade arrangements are the result either of direct negotiations based upon the tariffs established by those countries, or of such advantages as arise automatically from favoured-nation Treaties. Our country has no such tariffs, and cannot, in consequence, engage in negotiations of that kind. Any advantage, therefore, which we enjoy beyond those arising automatically from Treaties is limited to the benefits which may be incidentally derived from the negotiations of other countries, those negotiations being carried out not in the interests of Great Britain but entirely in their own. That reminder is necessary as an introduction to the remarks that I am going to make. It appears from that that we depend mainly, though perhaps not entirely, on what is called the most-favoured-nation clause in our Treaties. And here it becomes important to remind your Lordships that this great clause—the most-favoured-nation clause—has been interpreted in two ways. One interpretation is that of our own country, followed not only by the whole of the Empire but practically adopted by all the Western nations; and then there is the interpretation which I believe is confined to the United States of America. The interpretation which is placed by Great Britain on most-favoured-nation treatment is as follows— Favoured-nation countries—that is, countries which have favoured-nation Treaties—must grant to the United Kingdom every tariff concession which they extend to other countries. That is a very simple and intelligible interpretation of the clause.

There are many such Treaties, but so far as the Dominions are concerned, or any part of the Empire outside the United Kingdom, these Treaties have been made on a system which has varied at least thrice. Before 1881 neither the Foreign Office nor the Colonial Office consulted any part of the Empire as to whether it wished or did not wish to adhere to a Treaty. They were automatically included in it. But from 1881 until quite recently the system has been different. Clauses were inserted which allowed the self-governing Dominions of the Empire either definitely to adhere to the Treaty or to express their desire not to be included. There was the positive and the negative method, but the result was the same. There was no automatic inclusion of the Dominions in the Treaty; it was left to the self-governing Dominions to decide whether they would or would not be included. But once included they were included in the Treaty for as long as it existed. There was no possibility of, we will say, Australia withdrawing from a Treaty to which she adhered so long as that Treaty was not denounced by His Majesty's Government. Quite recently a third system has been introduced. I had thought till a day or two ago that the Japanese Treaty recently made was the first example of this new system, but I have been told that a Treaty made with Roumania about three years ago was an earlier example. The system which at any rate obtains in the new Japanese Treaty is this. The Dominions are given, not only the opportunity of adhering or refusing to adhere, but also the opportunity of denouncing their position in the Treaty without involving any action on the part of any other portion of the Empire or of the United Kingdom. I may not be absolutely accurately informed, but I believe there are no fewer than 130 such Treaties to which the United Kingdom is a party, and to 44 of these Treaties the Dominions or Colonies are parties—not always the same Dominions or the same Colonies, but, as it were, in different groups according to their recent decisions to adhere or not to adhere. But the central fact remains, that there are no fewer than 130 of these Treaties which affect the United Kingdom, and of those 44 affect other parts of the Empire in different groups.

If you will be good enough to bear with me and keep these facts in mind, I would ask you to follow me still further in considering the history of this Agreement, which is now being discussed in the Canadian Parliament and in the American Congress. The starting-point of our consideration must be the tariff which Canada adopted only a few years ago. That tariff had three sections—the general tariff, the preferential tariff to the British Empire, and the intermediate tariff. The first thing that occurred after this tariff had been made and the preferential treatment of the British Empire secured under it was a desire on the part of the Dominion Government to conduct negotiations with France for a Treaty of Commerce. And here we come, I think, to what was a new stage, a fresh precedent, in what I may call Dominion diplomacy. The Secretary of State for Foreign Affairs appointed two Canadian statesmen, Mr. Fielding and Mr. Patterson, plenipotentiaries to negotiate this Treaty of Commerce with France. I make no comment on that fact; I merely note it as a sign-post in the diplomatic experience of the Empire. The Canadian Government wished for certain concessions from the Government of France, and the return they were prepared to make to them was the Canadian intermediate tariff. But the French Government would not accept the Canadian intermediate tariff. They were not prepared to give Canada the concessions she asked for in return only for the Canadian intermediate tariff, and the result was that the Canadian negotiators had to go below the intermediate tariff and give France better terms than that tariff by itself would have given. The first result of the Treaty negotiated on that basis was this, that the Imperial Preference was diminished.

The second result was that Switzerland, which had a most-favoured-nation Agreement with Canada, claimed the same terms for herself under the most-favoured-nation clause as Canada had given to France, and, of course, she got them. Canada had to extend to Switzerland exactly the same concessions that had been given to France; and, of course, from that followed a further inroad on the Imperial Preference. The third result of this Treaty was that Germany was not content that Switzerland should get these concessions and that German trade should remain in the position in which it then was. Germany had not minded the concessions given to France because French trade did not in this respect conflict with German trade in the Canadian market; but directly the Preference was given to Switzerland German commercial interests were affected, and Germany entered into negotiations with Canada. No Treaty has yet been made between Germany and Canada, but a provisional arrangement has been entered into, and that provisional arrangement again, just like the French Treaty and the Swiss Treaty, has resulted in an inroad being made on the margin of Imperial Preference.

But the fourth result was the most important of all. After Germany had made this provisional Agreement the Government of the United States began to move. So far as one who has no access to inner official Papers can form a judgment, it was the action of Germany that finally brought the United States Government into the field, and the United States Government appear to have taken the field, it is fair to say since the declarations of President Taft, with a special direction against British Preference; and the result of America taking the field in these commercial negotiations with Canada is seen in the Canadian-American Reciprocity Agreement which is now being discussed in Canada and at Washington.

I told your Lordships that there were only two aspects of this question which I was going to discuss, and I now come to the first of them. I have already stated that this country has 130 most-favoured-nation Treaties, and that to 44 of those the Dominions and Colonies of the Empire in varying groups were parties. Canada is a party to no fewer than 12 of those Treaties. She is included in the most-favoured-nation Treaties with Austria, Russia, Switzerland, Japan, Spain, the Argentine, Denmark, Norway, Sweden, and three others, and also with France in accordance with her own recent Treaty. This is the first time, I believe, in the history of the British Empire that one part of the Empire has obtained better terms from a foreign country in respect of a part of its commerce than those enjoyed by the United Kingdom or any other part of the Empire. According to the best calculations I have seen, if the Reciprocity Agreement was now in force nearly £3,000,000 worth of British produce would, by the latest figures, be subject to Import Duty, from which if they came from Canada they would in some cases be entirely free, and in others would pay considerably lower duties than would be levied in the case of the United Kingdom. Whatever our views on the fiscal question may be, I do not think there is one of us who will not feel some anxiety in respect of this precedent.

I make no complaint of the action of the Canadian Government. As I said before, it is the position of every one of us that Canada must work our her own salvation without having her elbow jogged by us, without any interference from us or from anybody else. But I do say that it is a precedent at which I cannot express pleasure—that for the first time one of the great Dominions of the Empire should be on the point of receiving different treatment in respect of some of its exports from a foreign country from what similar exports from the United Kingdom or any other part of the Empire would receive. It is a precedent which may be capable of very large extension. Canada has made this Agreement with America. As I will show your Lordships presently, America is very anxious that Canada should make an even more extensive Agreement of the same kind. Canada has the same right to make a similar Agreement with Germany or with any other foreign country, and all the national rights which Canada has and which we freely admit in this respect are rights which are equally shared by Australia, New Zealand, and South Africa. If this precedent should be largely followed and each one of our great Dominions, or we ourselves here in the United Kingdom, should have a series of Agreements with foreign countries according to which their or our products received more favourable treatment than the products of other parts of the Empire—well it may be possible to imagine an Empire system of that kind, but all I can say is that it would be a different system from any which we have previously known or contemplated, and not one which I think any of us would regard without some anxiety. I would go further and say without grave anxiety, because, my Lords, the step between receiving and giving is a very short one. If our Dominions get accustomed to receiving better terms than we get from foreign countries, will it be wonderful if in time to come they think it a natural consequence to give better terms to foreign countries than they may be able to give to us or to other parts of the Empire? And if you get a general system of commercial Treaties throughout the Empire under which the Dominions are giving to and receiving from foreign countries different terms from what they are giving to or receiving from the rest of the Empire, I think it will be very difficult to see exactly how the Imperial system is going, to work. Because where commerce steps in diplomacy almost always follows; and I do not envy the Secretary of State for Foreign Affairs in the future if this precedent should be largely followed.

I have already quoted President Taft's speech, but I have another quotation to make from it, and I ask your Lordships' particular attention to these words— We tendered the Canadian Commissioners absolute Free Trade in all the products of either country, manufactured or natural, but the Canadian Commissioners did not feel justified in going so far. We tendered the Canadian Commissioners absolute Free Trade in all the products of either country, manufactured or natural! Now, what did President Taft mean? Supposing the Canadian statesmen and the Canadian Parliament had accepted those terms, that would mean that all products of America would go free into Canada and all products of Canada, manufactured or unmanufactured, would go free into America; but Canada could not give to the United States what she did not give to the British Empire. Therefore all the goods, manufactured or unmanufactured, from the British Empire would go free into Canada, and if they went free into Canada how could they fail to pass into the United States if there was complete free trade in such articles between Canada and the United States? Not only the British Empire but Canada has no fewer than thirteen Treaties with great countries giving them most-favoured-nation treatment, and therefore the free trade that Canada gave to America she would have to give to these thirteen foreign countries as well as to the British Empire. The result would be that all the products of these thirteen countries as well as the products of the British Empire would be passing freely from Canada into the United States. That would mean Free Trade on the part of the United States, not with Canada alone, but with the world. Does anybody suppose that President Taft meant that?

We all know what the American view of a fiscal policy is. It is perfectly clear that President Taft did not mean that. Did he mean that Canada should free herself from the obligations to which I have referred by leaving the British Empire? We know very well that President Taft did not mean that, because he has told us, in words which we accept without any reservation, that the talk about annexation is all bosh. Therefore we are driven back on the alternative that President Taft did not know the conditions under which the trade of Canada was conducted. He did not know the ties which bind Canada with the rest of the world, and he did not know the elements of the diplomatic situation as it affected Canada and the United Kingdom. Is there no blame on the part of His Majesty's Government that he did not so understand? Is not that the natural consequence of His Majesty's Government taking no part in these negotiations? Was not it the duty of His Majesty's Government, not only to have safeguarded the interests of the United Kingdom and the rest of the Empire—and I will come to that point presently—but to see that both parties to these all-important negotiations really understood all that was involved. It may be that we do not do justice to His Majesty's Government. It may be that all these things were present in their mind, that they have taken an active part in these negotiations from the beginning, and that my conclusion is wrong. That is why I move for Papers and for some information as regards the negotiations which have taken place, because up to now, except in so far as answers have been drawn from them in the House of Commons, His Majesty's Government have given us no information whatever on the course of these most important negotiations. You will see that if the United States Government accepted our interpretation of the most-favoured-nation clause the difficulty would not arise. We have a most-favoured-nation clause with America. If they accepted our interpretation of the meaning of this clause, automatically the American Government would give us the same terms at they have given to Canada.

And in this connection I must draw your Lordships' attention to a letter from Mr. Harold Cox which appeared in The Times a few days ago. Mr. Cox quotes from our Treaty with America; and these are the words of that Treaty which govern the consideration of this question— No higher or other duties shall be imposed on the importation into the United States of any articles the growth, produce, or manufacture of His Britannic Majesty's territories in Europe…than are or shall be payable on the like articles being the growth, produce, or manufacture of any other foreign country. According to our interpretation of language we can see no meaning attaching to those words except that put upon them by our own Foreign Office. But I understand that notwithstanding those words the United States Government do not admit, indeed repudiate, the suggestion that they are bound by that Treaty to give our products the same terms that they are giving Canadian products. I understand that they have a formula which may be summed up in the words "Concession for concession." On that point I should like to know what the Foreign Office have to tell us. I have suggested to your Lordships—I believe not unjustly—that throughout the whole of these negotiations our Foreign Office has been extraordinarily supine. At any rate they must have had in mind the claim on behalf of our products for the same treatment as was given to Canadian products. I invite His Majesty's Government to tell us if they can now, or to promise Papers shortly which will put the thing clearly before the country—I invite them in one form or another to tell us what they have done, what action they have taken, how far they have maintained our rights under what seems to us the only possible interpretation of those words, and on what grounds, if any, those claims have been denied. This Agreement between Canada and the United States is not in the form of a Treaty; it is an Agreement which has to be embodied in legislation. Has that technical point any bearing on the question of whether we are or are not entitled to get the benefit of our most-favoured-nation Treaty with the United States?

Before I pass to another aspect of this question, I should like to ask His Majesty's Government what is the opinion of the Board of Trade with regard to the effect on the importation of wheat and the milling industry in this country of this Agreement if it becomes an accomplished fact. I hold in my hand a copy of the Consular Trade Report, dated December 6 last, issued by the Bureau of Trade and Manufactures at Washington—it is the same kind of thing as a Board of Trade circular in this country—and I invite the attention of His Majesty's Government to this paragraph— What remedial measures are practicable to protect the interests of the United States against the activities of countries that have entered as rivals for the world's grain market? British importers, to whom, the changing conditions are especially important and who have given much thought to them, are quite unanimous in the belief that measures should be adopted in the United States by which the surplus wheat of Canada should be regulated if not controlled. It is suggested that this may be brought about if Canadian wheat can be handled by the north-western mills of the United States; by them it could be converted into flour and the mixing performed in the United States which is now carried on in the United Kingdom. By this means Canadian wheat would be kept out of the British market without injury to the Canadian farmer, fluctuations in price would be removed American mills would be benefited, the export of flour from the United States increased, and all these advantages would be secured without injury to the American farmer. The gist of that statement of the American Bureau of Trade and Manufactures is this. They regard it as very important for the American farmer and the American miller that the United States should obtain complete control of the Canadian wheat market, and that all flour now manufactured in Canada or in England should be manufactured in the United States. It is very natural that there should be solicitude in this report for the interests of the American farmer and miller. I am very glad to see that those who wrote it are also concerned for the interests of the Canadian farmer. But where does the British miller or consumer come in? I suggest to his Majesty's Government that a very large question is involved in this, and I invite them to tell the House, either now or by laying Papers on the Table, what their attitude is in this matter.

The second aspect of this question to which I wish particularly to invite your Lordships' attention and on which I invite an explanation from the Government is how Canada and the policy of Canadian statesmen and our policy and interests are really and vitally affected by the fact that we are both parties to a series of most-favoured-nation Treaties which neither of us can denounce without involving the other. I reminded your Lordships that there are no fewer than twelve of these Treaties to which Canada and the United Kingdom are parties. Before considering how these Treaties affect the Canadian position I would discount at once an objection that may be made. It may be said, "Oh, but the trade which these particular countries at present have with Canada is small and insignificant, and therefore we need not consider it." I admit that the trade is inconsiderable, but I have pointed to what this precedent may grow when the consequences of it could not longer be considered insignificant. Nor would the matter be insignificant even now if, as President Taft has suggested, the interchange of goods on a reduced or free basis were enlarged between America and Canada. Therefore in considering this question I submit that it is no answer to say that the volume of trade between these twelve countries and Canada is too small to be a serious item.

If you consider what are the views of the Canadian statesmen, of the whole Canadian people, almost without exception, on the subject of fiscal policy, you will see how, to put it very moderately, extraordinarily inconvenient these twelve most-favoured-nation Treaties must be. Look at the matter from the view, not of a Free Trader in England, but from the view of a Protectionist in Canada. Canada in return for certain concessions makes a Treaty with France. At once there are twelve countries that can claim the same concession without giving any concession in return. Then Canada makes a Treaty with America in return for very valuable concessions, as the Canadian Government believe them to be, and thirteen foreign countries can at once, if they choose, claim from Canada exactly the same concessions without giving anything at all in return. That is all very well for a Free Trade country, but it certainly puts a Protectionist country in a position of extraordinary difficulty. I invite your Lordships to consider that there are only three possible alternatives for the Canadian Government in the matter—alternatives which involve us, and therefore which we have a right to discuss and consider without for one moment impinging on the right, which not one of us for a moment denies, of the Canadian people to follow their own fiscal policy entirely without regard to our opinion. Supposing this Agreement with the United States becomes an accomplished fact, and that Canada elects to give to these thirteen foreign countries, if they claim it, exactly the same treatment as she has given to America. That puts us in no difficulty at all except this—it is not a difficulty but it is a substantial loss—that it at once makes a great fresh inroad on our preferential treatment. It affects that part of our trade very materially. It is not a matter of contention. All parties are agreed that the Preference freely given to us has been very profitable. But, apart from that inroad on the Preference which we and the rest of the Empire now enjoy, it is quite obvious that this process would make a very considerable inroad on the Canadian fiscal system. Canada would be giving, according to her ideas of tariff policy, a great deal for nothing, and at the same time would be making serious drafts upon her reserve of bargaining power in the future; and it would make it almost impossible for the American Government to extend further the advantages which it is prepared to offer to Canada. I cannot too definitely insist upon that point. The more advantages America offers to Canada, the more bricks she throws down off that Chinese wall which was erected by Mr. McKinley and Mr. Dingley between America and Canada, the more difficult will be the Canadian position in respect of these Treaties.

I ask your Lordships to consider the next alternative. Supposing the Canadian Government said to His Majesty's Government, "You see our difficulties. We ask you to denounce these Treaties of Commerce." I would remind you that as long ago as 1892 there was a correspondence between Canada and the United Kingdom on this very subject. In that year both the Senate and the House of Commons in Canada adopted a Memorial to Her Majesty Queen Victoria. The Memorial pointed out objections to the system of most-favoured-nation Treaties, suggested the adoption of the principle of reciprocal concessions as between various parts of the British Empire and between the Empire and foreign nations thereby adopting the American view of favoured-nation treatment, and declared that the obligations imposed on Canada by the old Imperial Treaties were objectionable and injurious to Canada in a variety of ways. Therefore as long ago as 1892 the Parliament of Canada was already restive under the application of these most-favoured-nation Treaties. Then in 1897 the Canadian Government actually asked Her Majesty's Government to denounce two Treaties, the German Treaty and the Belgian Treaty, the reason why those Treaties were singled out for denunciation being that they alone contained a special clause making it impossible for the United Kingdom to receive preferential treatment from the Colonies, and Her Majesty's Government, I think—that is my recollection and belief—because of that special clause—and really it is difficult to understand how it ever could have slipped into one of our commercial Treaties—did denounce those two Treaties. That was in 1897.

Before asking you to consider further what would be the effect if His Majesty's Government were to denounce this mass of Treaties to which I have alluded, I would remind you that, unfortunately, although the Treaty with Germany was denounced in 1897, no fresh Treaty has been made with Germany, and I think the reason is significant. I quote from an answer given by Mr. McKinnon Wood in the House of Commons on March 27 last— The main difficulty in the way of a satisfactory conclusion of a new Treaty with Germany lay in the divergence of views between the two Governments concerning the right of the Colonies to form special arrangements as between themselves and the Mother Country of which the advantages were not extended to any foreign country. The German Empire, of course, has the right to take that line if it thinks proper, but it is a significant fact and one we should not forget. The main difficulty in the way of the conclusion of a new Treaty with Germany has been the unwillingness of the German Government to admit the right of the United Kingdom to receive preferential treatment from any of the Dominions.

Now what was the answer that Her Majesty's Government gave to the Canadian Parliament in 1892 when they first became restive under these Treaties? I will not trouble your Lordships by quoting more than a very brief extract from the reply— In order to confer on the Dominion complete freedom in its negotiations with foreign Powers it will be necessary to revise very extensively the existing commercial Treaties of the British Empire, and a great break-up of existing commercial relations is involved in the suggestion. I think that this language certainly does not err on the side of exaggeration. I cannot for a moment contemplate any Government in this country, with our present fiscal system, and with no tariff with which to negotiate, being willing to denounce wholesale these most-favoured-nation Treaties. Such action would lead to something very like commercial chaos. The whole British commercial world would stand aghast at such a suggestion, and it would, if accomplished, lay our commerce open, if any foreign nation chose, to the imposition of their penal tariffs. Therefore I cannot for a single moment contemplate, under existing conditions, this or any other Government being willing to denounce all these Treaties.

Consequently the Canadian people are thrown back necessarily on what I submit is the only final alternative, the only third course open to them—that is, that they should try and make a separate reciprocal Agreement with each one of those countries. Just as their Treaty with France was followed by the Agreement with the United States, so it seems to me that almost the only alternative left to Canada, if any of these most-favoured-nation Treaty countries claim the advantages given to the United States, is that they should endeavour to negotiate with them as they have done with the United States. Every such Treaty only lands the Canadian Government and people in further difficulties, because every advantage they give to any one of these twelve or thirteen countries has to be extended to all the others, and therefore it is scarcely an exaggeration to say that the more Treaties of this kind Canada makes the more hopelessly she will find herself fiscally bogged. And if that is true of Canada to-day, it would also be true of Australia, of New Zealand, or of South Africa to-morrow if the time comes—as come it surely will—that their trade is sufficiently valuable to make foreign countries court them and desire to make commercial arrangements with them. If these Dominions find themselves in this what seems to me real and genuine difficulty as regards the formation of fiscal relations with foreign countries, if that is the position, how can we maintain that they are absolutely free to work out their own salvation fiscally as in all other respects?

The most-favoured-nation clause has been vaunted as the sheet anchor of our fiscal system. It seems to me that that anchor is dragging, and that there is real danger of the ship of Empire getting on political rocks which have not been sighted by His Majesty's Government. To us it appears that the solution of this difficulty was remarkably foreseen by Mr. Deakin when, in the Conference of 1907, he urged, and urged very eloquently, that the right system was the establishment of a preferential arrangement within the Empire, and then that on that basis there should be joint Imperial negotiations with foreign countries. That, my Lords, represents our view. We have no responsibility for the danger into which the ship of Empire is drifting. Our policy is a policy of Tariff Reform involving a tariff as a basis from which to negotiate with foreign countries—a preferential tariff within the Empire, and then joint Imperial negotiation with foreign countries from that basis, so that the different needs of each part of the Empire can be adjusted in its relation to foreign countries. That is not the policy of His Majesty's Government. We know that. But I submit to them that the policy of laissez faire is impossible also. This is just one of those situations out of which they cannot get by simply doing nothing. If nothing is done the difficulty only becomes greater for the Dominions and for ourselves; and I have seen no sign in anything that has transpired in the other House of Parliament or in the publications we have had that His Majesty's Government understood in the least what was involved in those negotiations when they began between America and Canada. As far as I have understood, they have taken a pride in an attitude of aloofness. Not only have they said we do not interfere in Canadian matters—an attitude which, in my humble judgment, is absolutely correct, and which we should imitate—but they have not even taken a hand when far more than Canadian interests, when the trade and manufactures of the United Kingdom and the whole fiscal relations of the Empire, were concerned. They have stood still, and have given no proof up to now that they have in the least realised all that was involved.

I submit I have proved that the situation is a serious one. I think I have proved that the precedent which has been set is one which we cannot regard without anxiety. I submit I have proved that the Government cannot extricate themselves from the difficulty simply by doing nothing. I ask them to tell us what they are going to do. I invite them to tell it us now so far as they can. Of course, I know the difficulties of foreign negotiations, and if they tell us that there are certain things going on now which they cannot disclose, the responsibility must rest on them. But I do press them to promise us at the earliest possible moment to lay Papers before Parliament giving the fullest account of all negotiations that have taken place, and telling us, not only of official negotiations, but of communications which have passed between them and the Dominion or the American Government in relation to this very involved problem.

Moved, That an humble Address be presented to His Majesty for any correspondence or communications with the United States as to the extension to the United Kingdom or any other part of the British Empire of the tariff concessions granted to Canada, or raising the question of the bearing of the Canadian-American Reciprocity Agreement on most-favoured-nation Treaties.—(The Earl of Selborne.)

THE UNDER-SECRETARY OF STATE FOR THE COLONIES (LORD LUCAS)

My Lords, I would like to express, if I may, our gratitude to the noble Earl who has just made this Motion for the manner in which he has dealt with the question. I know that the position would be a difficult one to a less experienced speaker than himself to express his views as fully and as plainly as he has expressed them without offending the susceptibilities of either of the great Dominions or nations concerned, or making it in any way difficult for the Government to play the part it is playing in these matters. I can only say that nothing the noble Earl has said has created any difficulty of that kind, and I should like to express our gratitude to him for that.

In considering this question we have to consider, first, the particular question of fact, and, secondly, the general question of policy. The noble Earl did not devote much of his speech to the particular facts of this question. As to the figures which the case involves, I will give them in as short and condensed a form as I can. I must give them because they are very germane to the discussion. What we are discussing is the way in which this proposed Agreement may or may not affect generally the trade of this country and the trade of the Empire. In order to be able to discuss that we have to consider what the actual effect, so far as we see it at the present moment, is likely to be, and first of all how this Agreement, if it comes into being, may affect the trade of this country with Canada. Our total exports to Canada practically amount to £20,000,000 annually. Of that £20,000,000 the goods dealt with under the Agreement amount to £969,000, of which, however, £176,000 are free to all nations. We should retain a substantial preference on trade amounting to £477,000, leaving only £316,000, or 1½per cent. of the total, on which our preference is annulled; so that so far as that is concerned it is quite obvious that no case can be made as to the disastrous effect on the export trade of this country to Canada that is likely to be produced by this Agreement.

As to our exports to the United States, our total exports in the year 1908–9 were £43,500,000. The goods affected by the Agreement amount only to a little under £3,750,000, but those figures are misleading in this sense, that a great part of that amount represents goods in which Canada does not in the slightest degree compete with us. The two best instances of that are cutlery, of which Canada exports to the United States only £75 worth, and tinplates, of which we have a very large export and Canada an entirely negligible one. Therefore we may say that on the whole the advantages which Canada will reap relate mainly to articles in which the United. Kingdom is not a competitor. I have given those figures in order to show what you may call the material damage to the trade of this country that might ensue, even supposing our existing trade to be destroyed by the effect of the preference, which is a very doubtful and debatable point. But supposing for a moment you admitted it, the damage to our trade is bound to be very slight indeed.

The noble Earl raised the question of other Treaties that may be affected. The best answer with regard to that is the answer which was given by Mr. Fielding in the House of Commons in Canada on February 16 last, in which he said— France is a favoured-nation country to a limited extent, that is to say, as respects the lists of articles specified in Schedules B and C to the French Treaty. Twelve countries: Argentine Republic, Austria-Hungary, Bolivia, Colombia, Denmark, Japan, Norway, Russia, Spain, Sweden, Switzerland, and Venezuela are accorded most-favoured-nation treatment generally. These are consequently enjoying the benefits of the French Treaty. As respects the dutiable schedules in the Agreement with the United States, the concessions to be granted to the United States are largely the same as already have been granted to France and the favoured-nation countries— I would ask your Lordships to notice that— As respects a large part of the list, therefore, no additional advantage will be enjoyed by such countries. There are, however, a few articles in the French schedules which in the Agreement with the United States are made free or dutiable at lower rates. In these cases the advantages granted to the United States will extend also to France and the favoured-nation countries. In the case of a few articles which are not to be found in the French Treaty the favoured-nation countries will be entitled to receive the concessions on the same terms as the United States, but France will not be so entitled. I think it is quite plain from that that the aspect of the question as to how this will affect existing Treaties, to which the noble Earl devoted a considerable part of his speech, has by no means escaped notice by the Government at Ottawa. It is also perfectly obvious that the difficulties which the noble Earl painted when they come in fact to be considered are by no means so considerable as he would have us believe.

There is a point in this on which we on this side and the noble Earl and those who believe with him will never be agreed. The noble Earl spoke of the possible breaking down of Treaties of this kind, and seemed to think that whenever there was a possibility of a tariff wall crumbling, that was to be considered, if not disastrous, at any rate dangerous. We can never take that view. One of the things which we consider most admirable about the present negotiations is that we foresee not only to a certain extent a breaking down of the tariffs of the two countries concerned, but a wider effect outside. There is at any rate a possibility, and we consider a very hopeful probability, of other tariffs being broken down. If that comes about, we would not consider it either a danger or a disaster. We consider it a consummation most devoutly to be hoped for. The noble Earl has spoken of this general question as if he regarded it as constituting a danger. If it is, as he considers it, something against which you must take precautions, what one would like to ask is, "How are you going to prevent it?" The noble Earl, although he dwelt on the possible dangers which he alleged might result from it, gave us no indication as to how the alleged dangers were to be dealt with.

THE EARL OF SELBORNE

I said our policy was joint Imperial negotiation.

LORD LUCAS

I will come to that point in a moment. I thank the noble Earl for reminding me of it. Let us consider how you are going to meet this particular case with any policy of that sort. Is it suggested that you should attempt to forbid Canada to conclude this arrangement, which is entirely within her present statutory rights? That is one possible policy, but it is a policy that I think nobody would consider. Are you going to put obstacles, diplomatic or otherwise, in the way of the negotiations? Are you going to try, by whatever means come best, to impede them? The only and inevitable result of that would be to revive the demand, of which I am glad to say we have heard little for a considerable time, that the greater Dominions should have separate diplomatic representation. The only remaining course is to offer inducements of a financial nature to Canada which she would find more profitable than those now being offered to her by the United States. Is such a thing possible? Can the United Kingdom ever offer to Canada the advantages which the United States can offer? I do not think so. You have only to consider the laws of nature, the laws of geography, and the statistics of production of the two countries to realise that Canada and the United States are, in matters of trade, complementary one to the other in a degree in which Canada and this country never can be. If any proof of that was required you have it in the figures which I have just given to your Lordships. The Agreement, by common consent, covers most of the products either of the soil or of trade. It embraces the standard industries of both countries, and it includes the mutual requirements of both countries. With regard to those very articles on which this Agreement is based this country takes a very small share, as I have shown from the figures, and it is quite obvious, looking at the figures, that this country can never be complementary to Canada in anything like the degree that the United States can. You have only to consider what has been the history of the two countries and the history of the negotiations that are going on, to see, in the words which Mr. Fielding used in his letter to the High Commissioner, that in making this Agreement Canada is realising what have been the desires of her people for half a century. As I say, Canada can supply to the United States what the United States wants, and the United States can supply to Canada what Canada wants, and the fact of geographical proximity and great similarity of condition is bound to make trade with the United States more satisfactory than trade turned artificially in any other direction.

The question which, after all, is at the bottom of the whole of this discussion, and that upon which the points of view of the noble Earl's Party and of the Government differ, is whether Reciprocity with the United States and Preference to the United Kingdom are or are not mutually exclusive. We think it would be exceedingly dangerous if these two things were mutually exclusive; but neither we nor the Canadian Government think that they should be so. I can quote to your Lordships the views which have been expressed by Canadian Ministers on that question. Sir Richard Cartwright, speaking at Toronto on the fiscal situation on December 11, 1903, said— I have advocated the formation of a friendly alliance by any possible means between Great Britain, Canada, and the United States. With that view I advocated Reciprocity with the United States. Largely with that view I have advocated the British Preference. Sir Wilfrid Laurier, speaking of the Agreement on March 7 last, said— Surely in no way at all can it affect our trade with Britain. The United States can enter our market with their natural products, but it is certain that England will never send a bushel of any kind of grain to Canada. However, England can give us a preference in her market for our natural products if she chooses to change her policy, and then we are prepared to give her upon her manufactured products a corresponding advantage. The policy of Canada is just the same as it was three months ago when this arrangement was made; nay, it is the same to-day as it has been for the last twelve years, and it will be the policy of the Canadian Government at the next imperial Conference which will open in May next. Then Mr. Fielding, speaking on January 26, said— This instrument, deals with duties on goods from the United States, but we would have to look over our tariff and see how it affected the British Preference at any given point, and if we see fit to grant Great Britain a larger preference than would remain it is absolutely within the right of this Parliament of Canada to fix that preference at whatever we think is a proper rate. We are grateful for the preference that Canada, has given us in the past, and we are equally grateful for the promise of its continuance in the future. But here we come to the point on which, as I say, we are divided—the question of what the noble Earl called early in his speech a Chinese wall around the Empire.

THE EARL OF SELBORNE

It was not my word.

LORD LUCAS

Well, the idea expressed in the words Chinese wall. The system of Reciprocity with the United States and Preference given by Canada to us does not commend itself to the Protectionists of this country. The noble Earl suggests, as an alternative to the present system of things, the policy which Mr. Deakin put forward—that you should have Imperial negotiations before you conclude these kind of tariffs. Is the noble Earl really prepared to come forward at the present time and say to these Dominions, to whom you have deliberately given by statutory right the power to make their own arrangements, that we are going to take that power away from them and substitute in its place the power of having a small minority share only in the negotiation of these Treaties in the future? What is going to be the result of that? I do not believe that in these matters, particularly in Imperial matters, you can at this stage put the hands of the clock back. You have given these powers, for better or for worse—we are convinced that they are given for better—and I do not believe that any Government, by any means you can conceive, could take away the power of individual negotiation which the Dominions now possess and substitute for it simply the power of joint negotiation. What would be the result? As a result of that, the Dominions would lose their exclusive power of following their best and truest interests.

If you try to exclude any form of Reciprocity outside the Empire in order to establish more firmly your system of Preference within, what will be the result? Take this concrete case. There undoubtedly are at the present moment in Canada a large number of people who will be gainers by this Reciprocity Treaty; they may, or may not, be gainers by any system of Imperial Preference. You are bound to have at any rate a number of people—it may be more or it may be less—who would consider that they would have been greater gainers had they been allowed to negotiate the Treaty of Reciprocity with the United States. The result, therefore, of any attempt to exclude Reciprocity would be that whereas you have at the present moment the whole of Canada and the whole of both Parties unanimous in favour of Preference—that is a point which is never even debated in Canada, because everybody is in favour of it—you would have a discontented body of people saying that the price they had to pay for being Imperialists was that they were losing so many cents or whatever it might be a bushel on their wheat. If the United States wants Canadian wheat, can you prevent her having it? Can you prevent the United States taking off the present duty which she puts on wheat if she wants Canadian hard wheat in her mills? You are powerless to prevent that. I would like to know whether Protectionists in this country seriously contemplate trying to compete with the United States in the matter of tariffs to anything like the same degree or height that she herself thinks it fit to impose. Are you, for instance, going to put a 2¼ dollars tax on corn, as she does, in order to compete for Canadian wheat? It seems to me that the lines on which the noble Earl argued this question are lines on which it is impossible to have a successful Empire, and on which it is still more impossible to have an Empire in which you will not have a larger or smaller section feeling that they are being made to bear burdens because they are members of the Empire.

We believe that the true policy is to allow the component parts of the Empire to seek their own prosperity in whatever way they think best. After all, the thing that will foster British trade in Canada far more than the £360,000 worth of that trade that may be now, perhaps, in a rather less good position with regard to American competition than it was before, will be the rapid development of Canada. If Canada in her wisdom considers that more rapid prosperity is going to be achieved by her through negotiating this Reciprocity Agreement, that will automatically do far more for British trade than we could possibly lose under this Agreement; and, in the second place, I say that when a Dominion has deliberately made up its mind to pursue a course of that kind, there is one thing and one thing only which this country ought to do, and that is give Canada a fair field and no interference whatsoever in trying to achieve her object. The noble Earl says that the Government have stood aloof in this matter. What would he have liked the Government to do? Would he have liked the Government to interfere; and, if so, in what way? We know, from the speech which Sir Edward Grey made on this subject in the House of Commons a short time ago, that Mr. Bryce has shown the greatest keenness to assist the Canadian delegates in every way he possibly could. When the noble Earl says that the Government have stood aloof, would he have liked Mr. Bryce to interfere with the Canadian delegates, and, by pressing side by side with what the Canadian delegates were asking for the claims of this country, make the Agreement impossible of attainment? because that is the only alternative. In a matter of this kind you can either help the delegates of the Dominion concerned to get what they want, or you can interfere with them, and by pressing the claims of this country I think you could easily prevent the thing from being brought to fruition.

Now, my Lords, I come to the point to which the noble Earl devoted a considerable part of his speech—the interpretation that is to be placed on the most-favoured-nation clause that exists in our Convention with the United States. The noble Earl quoted that part of Article II of the Convention of Commerce between Great Britain and the United States of America in the year 1815 which deals with what we now call the most-favoured-nation clause, and from that he assumed that we had an absolute right to most-favoured-nation treatment. I suggest for the consideration of the noble Earl the actual words in that sentence. I think your Lordships will agree that the matter is not necessarily quite so simple as is made out, and does not bear, as the noble Earl says, only one possible interpretation. The words are "any other foreign country." I do not know that we could say unhesitatingly that with regard to this country Canada is any other foreign country.

THE EARL OF SELBORNE

I would submit that it is any other foreign country in respect to the United States.

LORD LUCAS

I am only submitting this point. I am not by any means laying it down as a definite fact, but it seems that there are difficulties in the way which the noble Earl has to a certain extent slurred over. I think the noble Earl would find a great many lawyers who would say that the words "any other foreign country" relate to States other than the two contracting States. Therefore I say the matter is not an easy one, but is fraught with considerable difficulties. We do not agree with the grounds on which the noble Earl bases his claim. But we do agree with him in so far that we think we have the right to be treated in the same manner as Canada is treated, but at the present moment, as I have said, it is our emphatic policy that Canada should be given a fair field and no interference whatsoever in her efforts to obtain what she desires.

THE EARL OF CROMER

I beg the noble Lord's pardon for interrupting him, but the point is so important that there ought to be no ambiguity about it. Do I understand that the contention of the United States is that we do not come in under that Treaty because Canada is not a foreign country according to the text of that Article? It is a very important point.

LORD LUCAS

I have not said so, and I should be sorry to say so at the present time. I am merely saying that that is a very possible and a very probable interpretation which may be put upon the words by the United States.

THE EARL OF CROMER

It is one that the Foreign Office do not accept, I understand.

LORD LUCAS

The Foreign Office have never accepted the American reading of most-favoured-nation Treaties. In pursuance of our policy—and I think the noble Earl will find his Question answered in what I am going to say—we are at the present moment watching the situation. We are of opinion that our position will not be prejudiced in the slightest degree by waiting, nor by the Agreement that may be concluded between Canada and the United States. I would only like to say one further word with regard to that. If the United States were to grant to some third State the advantage they are prepared to concede to Canada His Majesty's Government would at once be in a position to claim the same concession under the Convention of 1815, but it is only fair to point out that the State Department at Washington has replied to Press inquiries that they have not any intention of admitting the claim of any Power to the same concessions that they are prepared to give to Canada.

I have answered to the best of my ability the Questions the noble Earl has put. I can only say that his speech has revealed a difference between us which will not, and I do not think ever can, be bridged over in this matter. It is a difference which goes to the very roots of Imperial policy. Cloak it as you may, disguise it as you like, there is no question about it that the noble Earl would like in some form or another to take away from the Dominions the rights they at present enjoy and which they have exercised for a good many years of controlling the commercial arrangements which they may make with other Powers—

THE EARL OF SELBORNE

I never said so.

LORD LUCAS

I know the noble Earl did not say so in so many words, but I do not think any one listening to his speech could put any other interpretation upon it. He did go so far as to say that he was a deliberate advocate of a policy by which the initiation of every Dominion was to be taken away.

THE EARL OF SELBORNE

I am sorry to interrupt the noble Lord. By free consent Mr. Deakin made the proposals, and I accepted them.

LORD LUCAS

It may be by free consent or it may not, but the fact remains that the policy to which the noble Earl adheres—of course, we all know it is a policy which can never be forced down the throats of the Dominions—is that they shall give up the powers which they at present hold for making their own commercial arrangements. We believe, in the first place, that it is not the right thing to do, and, in the second place, that by no such policy as that can the individual, component parts of the Empire achieve their true commercial prosperity. As long as we debate the matter on those lines, I am afraid we shall never come anywhere near agreement. In our belief, the power as it was freely given should be freely used, and it is on those lines that we are watching the present negotiations that are going on between Canada and the United States.

THE EARL OF SELBORNE

Are there any Papers that the noble Lord is able to lay on the Table?

LORD LUCAS

As I explained in my speech, there are no Papers, and therefore they cannot be laid on the Table of the House.

THE EARL OF SELBORNE

Can the noble Lord hold out any hope of there being Papers before long?

LORD LUCAS

The noble Earl moves for "any correspondence or communications with the United States as to the extension to the United Kingdom or any other part of the British Empire of the tariff concessions granted to Canada." I can only say, with regard to that, that there have been no communications with the United States, and therefore we cannot, I am afraid, lay Papers.

EARL STANHOPE

My Lords, I do not know whether in any quarter of the country it may be represented that this debate is an infringement of the rights of self-government in one of our greatest Dominions. In my view to hold such an opinion, that full and frank discussion on a subject of such vital importance not only to Canada but to this country and the Empire is wrong, is not only unsound but extremely dangerous. I go further and say that that policy is extremely unpopular in Canada. It was constantly represented to me when I was there that in many cases Canada was treated, if I may say so, rather like a young man whose relations refuse to believe that he has grown up. They pat him on the head and call him a good lad, and still continue to treat him as a child. Surely Canada is past that, and has now arrived at a stage when we can indulge in a full and frank discussion on matters which vitally affect not only these two countries but the whole of the rest of the Empire. If two friends find that the time has arrived when they can no longer discuss things fully and frankly between themselves surely that is the sign of the end of their absolute friendship? They may keep up acquaintanceship, but that friendship, the proof of which is frank discussion on matters affecting them both, is gone. I venture to think the same holds good between this country and the rest of the Empire. If it be true that the ties which bind the Empire together are as light as air but strong as links of iron, then a discussion on a matter which affects the Empire and its whole foreign policy as strongly as this proposal does, must of necessity be not only a prerogative of friendship but a duty.

The noble Lord who replied on behalf of the Government was asked, "What are the Government doing?" and so far as I could understand him he held up his hands and said, "What could the Government do?" He practically endeavoured to get out of his dilemma by asking that question, and then went on to deal with what he called facts. He stated, for instance, that the cutlery and tinplate trade of Canada was so infinitesimal that it really was not worth considering. I venture to think that was rather an unfortunate instance to take, because I understand that the steel trade and the iron trade of Canada are the two trades which are progressing more rapidly and in every way more widely than any other trade in the Dominion. If it is a fact that at the present moment those two items, cutlery and tinplates, are but small and not worth considering in the Reciprocity proposal, may not the time arrive when they will become great and flourishing industries and be tremendous competitors with ourselves in the markets of the United States? If it is merely a question as to the amount of the trade, then there must arrive a moment when that amount becomes serious. But the point with which we have to deal to-night is not the question of amount but the question of principle.

Then the noble Lord asked, amongst other questions, "Can the United Kingdom offer to Canada as much as the United States?" It is not a question of the United Kingdom offering to Canada; it is a question of the British Empire; and the British Empire, I have always been given to understand, has the greatest markets of any country in the world. It includes not only one-fifth of the area of the globe, but also one-fifth of its population; and if the noble Lord asks whether the British Empire can supply as great a market to Canada as the United States can, I not only reply unhesitatingly in the affirmative but I add that it can supply an infinitely greater one. Then the noble Lord said that a Reciprocity arrangement between the United States and Canada was complementary to Preference to this country. It is perfectly true that that may be so; but the question arises, which is to be complementary to the other. If our Preference is to be complementary to an arrangement with the United States, that is a very different thing from the United States arrangement being complementary to the British Preference. We on this side of the House believe that the United States should come second to this country and the rest of the Empire, and that, to my mind, is the vital difference which divides the two Parties in this House.

The noble Lord went on to ask, Did we propose to dictate terms to Canada? I thought that the question of dictating terms to the great Dominions had been exploded in the eighteenth century. But now we have gone to the other extreme and refuse to make any criticism of any sort or kind. I believe the one policy is as antiquated as the other, and that the time has arrived when we should discuss fully and frankly this Reciprocity proposal. There is a possibility that we may have to dictate to Canada, but that possibility will only arise if we follow the lead which apparently is to be given to us by His Majesty's Government. You have almost done so to-night by stating that you would be glad to have Free Trade with Canada and the rest of the world, and you possibly hope that such an arrangement may follow. When we come to the question of most-favoured-nation clauses, if this country takes up the stand that it is impossible to release Canada from this engagement, then at any rate you arrive at a dilemma from which you can only escape in one of two ways—either by dictating Free Trade to Canada, or by making new arrangements throughout the rest of the world.

Reference was made by the noble Earl to a speech by President Taft, in which he spoke of a Chinese wall. I venture to think the speech of the President of the United States was a curious one, and coming from the quarter which it did it is still more curious. I am distinctly under the impression that there is a very high tax imposed on every passenger who travels from the Hawaiian Islands to an American port in anything but an American ship. The President of the United States omitted to mention that. I believe the tax is 100 dollars. That is a greater Chinese wall than anything that has ever been proposed by the wildest Tariff Reformer in this country. Another thing the President omitted to mention was the proposals to link up the Philippines still closer with the American people and practically to wipe out all foreign firms and destroy their trade. Those proposals were on foot when I was there two years ago, and they may have been carried into effect since. I believe I am correct in saying they have not been withdrawn, and are at any rate still in the air. If they are going to deal in that way with the Hawaiian and Philippine Islands and drive out all other competing peoples, that surely is a Chinese wall if ever there was one. I can only imagine that because the President of the United States happens to live in what is called a White House he spoke on the assumption that he was entitled to throw stones.

Then we are sometimes told of the "bogey of annexation." I am not going to give an opinion on that subject one way or the other, but I will quote one who will be treated as an authority, I venture to think, by both sides of this House, and although we on this side do not perhaps agree with him as fully as noble Lords opposite, we realise, at any rate, that no one can speak with more authority on the subject of the American people than the present British Ambassador at Washington. In his book which has gone through many editions, "The American Commonwealth," we still find this statement in the very last edition— The material growth of Canada would probably be quickened by union" (with the United States) "and the plan of a Commercial League or Customs Union which has lately been discussed, might, if carried out, lead to a political union; indeed, it is hard to see how otherwise Canada could have her fair share in adjusting such tariff changes as might from time to time become necessary. It is perfectly true that the present Reciprocity arrangement does not preclude Free Trade with Canada, and therefore perhaps one may say that it is not a question which affects us at the present moment. But at any rate it does affect the trade of the two countries intimately, and extends to a very large proportion of the whole of the imports of those two countries.

I, too, must follow the noble Lord into figures. I give these figures, not so much as questions of fact, but as showing the principles that are involved. A writer in the Quarterly Review this month gives the following figures with regard to the changes that are effected by this tariff. This proposal will place a further 9.19 per cent. of American imports into Canada on the free list, and reduce the duties on 10.82 per cent. In other words, the Agreement affects more than 20 per cent. of the imports from the United States into Canada, and as already 44.36 per cent. are free, we find that America will get a total of 53 per cent. of her imports into Canada put on the free list altogether. As the United States already holds over 59 per cent. of Canadian imports as compared with our 25.3 per cent., it is obvious that we have to consider that in all seriousness. Sir Wilfred Laurier, speaking of the relations between this country and Canada made this remark— If we do not draw closer together we must inevitably drift apart. That is a question the noble Lord opposite will have to consider—namely, whether this Reciprocity proposal—I hope it will never be an Agreement—is likely to draw Canada and the United Kingdom closer together, or whether the reverse will not more probably be the case. Then as to the imports into the United States from Canada. There we find that 40.67 per cent. are put upon the free list by this proposal, and a further 7.68 per cent. get a reduction in duty. In other words, 48.35 per cent. of Canada's imports into the United States are affected by the proposed Agreement. As 46.78 per cent. of her imports are already free, and it is proposed to make free a further 40.67 per cent., only 12.55 per cent. of Canada's imports into the United States will remain subject to duty once the Agreement is in force.

There arises at once the question whether Canada or the United States can give similar and equal advantages to this country and to the rest of the British Empire and also to those countries bound to Canada by most-favoured-nation Treaties. The noble Earl, Lord Selborne, pointed out that the interpretation in the United States of most-favoured-nation Treaties is entirely different from our own. I could not follow altogether what the noble Lord opposite really intended by his reference to that point. As far as I could understand, he thought that we still had a chance of getting the interpretation altered by the United States. I venture to think that that is a hopeless contingency. It has been for many years the policy of the United States that concessions should only be given to those countries that were prepared to give a quid pro quo. That policy was upheld by the Supreme Court in the year 1887, and quite recently another case came before the Customs Court of Appeal. A British firm found that it was being taxed 9s. 4d. a gallon on British whisky, as against 7s. levied on the French product. The British firm appealed against the higher tax as being contrary to the interpretation of the most-favoured-nation arrangement, and in giving judgment the United States Court of Appeal said this— If this country" [the United States] "should concede to Great Britain without consideration what it has conceded to France for a consideration, it would not be conceding to England the favour it had conceded the other country, but would be conceding to England more than it had conceded to the other country, because England in such a case, gives no consideration for which France gave a consideration. The extension of the 7s. rate (on whisky) to England without a mutual concession would be conceding something more than that which was conceded to France. Therefore, it cannot be within the purview of the most-favoured-nation clause of the Treaty. I venture to think you could not have a more definite statement as to the interpretation of the most-favoured-nation clause in America than has been set forth in that judgment.

What will happen? Unless the United States is prepared to reverse her interpretation of the most-favoured-nation Treaties Canada will receive a preference, as the noble Lord himself acknowledged, which the rest of the Empire will not get in the United States markets. Then comes a question of what will happen in Canada. I am one of those—and I think there are many in this House—who have never been able to understand what principle underlies the policy of His Majesty's Government. It is certainly not the policy, as it used to be in old days, of laissez faire and laissez aller. It is quite true that they follow the policy of laissez faire with regard to the composition of this House, but that is not the policy they adopt with regard, to its powers. It is quite true that it is the policy they adopt with regard to the products of labour, but it is not the policy they adopt, and rightly, with regard to the conditions under which labour itself exists. Which is to be their policy on this occasion? Is it to be a policy of laissez faire? We have no answer from the noble Lord opposite except that of "Wait and see." Let us see what will happen. If Canada signs this Agreement twelve nations, as the noble Earl has pointed out, will claim similar advantages to those which Canada is prepared to give to the United States. It is perfectly true that the trade is not very considerable, but Canada has to consider the question of principle and whether she is going to adopt our interpretation of the most-favoured-nation Treaties or that of the United States. We all know that Germany is prepared to make a similar arrangement with Canada if possible, and it is obvious that Canada in that case might desire to have her hands free from all the engagements we made with her in earlier days.

What is to be the policy of His Majesty's Government? Are they going to wait until this Agreement is signed and then find themselves in the position of saying to Canada, "Yes, we quite see that you should be released from these arrangements, and we shall have to undertake the policy of making new arrangements with the whole of these twelve countries." As the noble Earl has pointed out, it is fourteen years since the Treaty with Germany was brought to a conclusion, and we have failed to make another one yet. Is it to be hoped that we shall be any more successful with these other twelve countries than we have been with Germany? Supposing this country says, "No, we cannot release you from the most-favoured-nation Treaties," then it comes to this, that this is a policy of dictating. You will have to say, "You must have Free Trade with these other countries; we dictate Free Trade terms." Canada can reply, "We cannot accept that position," and Canada must then reconsider her position in the British Empire. That is what the policy of drift is bound to lead us to, and the reason the noble Earl put this Notion on the Paper is to discover what the Policy is, if they have one, of His Majesty's Government, and at any rate to see that something shall be done before matters arrive at a point when any action is too late, and when we shall have arrived at a situation as dangerous as it is unsatisfactory and unpleasant both to Canada and to ourselves.

I am one of those who believe most implicitly in the destinies of Canada. I believe in a fair field and no favour. To say that a fair field and no favour is what is offered by His Majesty's Government is certainly not the description I should give of it. Canada has not got a fair field in this country. She has made offers to us which have not been accepted, and the way in which those offers were met will, I think, go down to history as an example to be avoided. I venture to hope that no such phrase as has been used on the last occasion will be used at the forthcoming Imperial Conference. The noble Lord opposite ended by saying, "It is all very well, but what are you going to do? Are you going to refuse to allow Canada to sign this Agreement with the United States?" It is not, as we have stated again and again, for the Opposition to frame a policy for the Government. We have a policy, and I think noble Lords opposite realise what it is. Our policy is that we should be able to offer better terms to Canada, as we can do, than any other country in the world; and if we did offer those terms there would then be no need for a Reciprocity Agreement with the United States, and the whole of the questions raised by this Agreement would naturally fall to the ground. Sir Wilfred Laurier has himself publicly stated in Canada that he is prepared to renew those proposals. It is for His Majestys' Government to decide whether they will again bang and, bolt and bar the door against them and allow the policy of drift to go on until they find themselves face to face with a situation in which drift and laissez faire are no longer possible.

LORD GREVILLE

My Lords, I feel that an apology is due from one who has been so short a time a member of this House for rising to take part in this debate. But though I have been in your Lordships' House only a short time, I have spent seven years of my life in two of our largest Dominions. I had the honour of serving in Australia for four years under a distinguished member of this House, who I am sorry to see is not here to-night. I welcomed this Motion of the noble Earl very warmly when I saw it on the Paper. I was in Australia at the time, and the one thing you heard on all sides after the Conference was the regret and disappointment felt at the I do not like to say want of sympathy, but want of action on the part of His Majesty's Government. I therefore welcomed very warmly the noble Earl's effort to get some information from the Government as to what their policy is.

The noble Lord who spoke from the other side made use of the word "interfere" several times. That is a word that I do not think ought to be used at all. It is an absolutely unnecessary one. No one, I think welcomes more than our—I would like to use the word—brothers in the Colonies full light and full information with regard to all the actions of the Government. We are rather in the position of a large commercial house with branches all over the world, and I do not think that the word interference can be used when the head of the house makes arrangements or business terms with the branches outside. That, my Lords, seems to me what the policy of the Government should be—to so arrange affairs with the Colonies that there could be no question of these Treaties coming up. The noble Lord the Under-Secretary asked what would we have them do? I would like to see a continuous policy laid down dealing with all these matters. The noble Lord said that at present he thought there was no danger of any interference with our trade by any Agreement that might be made. But I like to look into the future. The trade is not going to stand still. Any one who knows our Colonies and has visited them will say without hesitation that it is impossible to quite forecast the enormous expansion of trade and prosperity in the Colonies, and little though these Agreements may affect us now I venture to say it will be a very different story in the future. We have heard the expression "Chinese wall." The wall of tariffs may be broken down between America and Canada, but what I am most anxious to see is that there should not be a large wall built all round England preventing everything that we must desire coming in; and I fail to see, if the Colonies are making Agreements all over the world, where we shall come in when we have no terms and no Agreements to offer on our part. The noble Earl strove to extract from the noble Lord opposite some definition of the Government's policy, and it was with feelings of great regret that I listened to the reply of the noble Lord, because I cannot say he threw the smallest light on the subject. I feel most deeply that full and free discussion of the policy of the Government of this country is welcomed very warmly by the Colonies, and that is why I regret that so far the Government are unable to give us any indication of their policy, or any information in the shape of Papers.

LORD WELBY

My Lords, the only conclusion I can come to from the speeches of noble Lords opposite is that much regret is felt that His Majesty's Government have not taken such steps as would practically have put an end to this Reciprocity Agreement being carried forward. I would like to ask the noble Earl whether he has seriously looked back upon the history of this question. Reciprocity has been, I might almost call it, the dream of Canada for sixty years. It is over sixty years since a wise statesman, then Governor-General of Canada, warned the Government of the day that if Canada was to be kept as part of the Empire it would be absolutely necessary to grant her Reciprocity with the United States. Over and over again in Despatches he dwelt on that important point. If that is the case; if Canada, now having the opportunity, is really anxious for Reciprocity; and if, as we learn, Sir Wilfrid Laurier, her Prime Minister, is prepared to carry this Agreement through at all hazards or fall with it—I ask the noble Earl whether he thinks he is going to add to the loyalty of Canada or to the stability of the Empire by throwing himself athwart the wishes of that great Dominion.

The noble Earl, if I may say so, raised some questions which I think are not at all real questions. He portrayed Canada receiving the manufactured goods of the United States free of all duty, while the tariff remained in force against us. When he paints that picture he overlooks the fact that Canada is at present Protectionist to the backbone; she refused Mr. Taft's offer suggesting greater freedom for manufactures, and as far as we can judge there is no symptom whatever of her intention to depart from the policy of Protection on her manufactured goods. Let me give one fact to show how devoted Canada is to the principle of Protection. Some years ago she gave us a preference of 33½ per cent. on the duties on our woollen manufactures. Before very long the woollen manufacturers of Canada rose against this tremendous concession to us, and the Canadian Minister, Mr. Fielding—this is only three or four years ago—yielded to the pressure put upon him, and the preference was reduced to, I think, 14 per cent. That will show your Lordships that Canada has no intention at present to carry out such an Agreement with the United States as that which the noble Earl raised up in order to frighten us.

I should like to ask whether the effect of Preference in Canada generally has been of any very great moment to us—except in this regard, that I look upon it as a very valuable proof of the goodwill of Canada to us and to the Empire. But as far as any actual benefit to us is concerned, I think it would be very difficult to show it from figures. If you look at the figures ranging over the whole period from 1897, the beginning of Preference, up to 1909, you will see that on the import of dutiable goods it very slightly increased from a proportion of 30½ to 31½, which is not a very large advance. On the other hand, to be quite fair, the import of free goods from this country fell. I think it is fair to say that Preference probably rested on what was then a falling import from us, whilst in the case of the United States, who had no Preference at all, their imports, both dutiable and free, show a considerable increase. Looking at that fact I come to the conclusion that the contiguity of the two great countries, the absolute necessity in their own interests to exchange their products, makes it impossible for Canada not to avail herself largely of American produce. You might carry it further. I will give you the instance of metals, one of the most important things that have been mentioned. The duty-paying metals imported into Canada by us increased in those thirteen years by about fourfold, and we enjoyed a certain preference. From the United States they increased sixfold. That appears to me to show beyond all question of doubt that it is so much in the interests of Canada to deal with her neighbour close hand that we cannot really rival the United States in the matter.

I feel very great difficulty in knowing what the noble Earl opposite would have done. It appears to me that if he had had his way he would have interfered earlier in the course of these negotiations with a view of bringing up a variety of very dangerous subjects, the most-favoured-nation clause, and so forth, and he would have taken that action entirely with a view of stopping this Treaty of Reciprocity. The noble Earl has one general remedy. Whatever be the case, his general remedy in all difficulties is Tariff Reform. If I might venture without offence to say so, he rather reminds me in that connection of Canning's celebrated saying with regard to reform—that a man arguing in favour of reform as a universal remedy was like a painter who could only paint one thing, and that was a red lion, and the red lion was introduced on every occasion when he had to use his brush. It seemed to me that from that point of view the noble Earl fails in his argument; and I must say I very greatly regret that anything should be done in this country which would put any difficulty in the way of this Treaty of Reciprocity, and convey the idea that we grudge the Canadian people making the best use of their commercial opportunities, that we, are anxious to promote what I might call our own selfish interests rather than the interests of Canada and of the Empire. I can only hope that that policy will not be pursued, but that the Reciprocity Treaty if it passes will be received by us with wishes of god-speed, for there is no doubt that as the trade and prosperity of Canada and the United States increase we shall have our share.

LORD AMPTHILL

My Lords, I think we have reason to feel indignant at the manner in which we have been treated by His Majesty's Government. My noble friend, Lord Selborne, in pursuance of his duty as a member of this House, brings forward a question of the first Imperial importance, and the Government, in answer to him content themselves with putting up a young Under-Secretary to make a speech such as we have listened to, and of which I will not say more than that it had very little indeed to do with the question we put to the Government, which was, "What are you going to do in the circumstances which have arisen?" Instead of answering that question, the Under-Secretary turns on us and plies us with questions. "What are you going to do?" "What would you have done?" he asks, and finally ends up with a scandalous misrepresentation of the attitude of the Unionist Party. The Government remain silent and dumb as to what their policy is. It appears that in this as in other matters they have no policy. But I would like to observe that the government of the country and the management of the affairs of the Empire are matters in which the people of this country are concerned and with regard to which they have a right to be informed, and it is in Parliament and by means of Parliament that they obtain such information. His Majesty's Government are neglecting their duty if they maintain this arrogant attitude of "Wait and see," and of refusing information. We shall persist in our endeavours to obtain information, and if these suave methods of the noble Earl—and they were admitted by the noble Lord opposite to be suave and unexceptionable in every way—do not succeed, I am afraid that we shall have to become a little more pertinacious.

Then the noble Lord on the Back Bench opposite is put up because His Majesty's Government have no answer to give apparently and cannot give an answer, and he misrepresents my noble friend by saying that my noble friend made a general attack on Reciprocity. He did nothing of the kind. Nothing could be further from the fact. He was most careful to guard himself against any suggestion or suspicion that that was his intention or his object. What he did was to ask, "What are you, the Government, going to do in the circumstances which have arisen?" That is to say, if Canada does conclude this Reciprocity Agreement, what are you going to do? That was the question. There was no attack whatever on Reciprocity. I will not follow the noble Lord further into his argument except to remark that his history is at fault when he says that Reciprocity has been the dream of Canada for the last sixty years. He ought to know that the policy of Reciprocity was superseded some years ago by the policy of Imperial Preference, and it is our refusal to entertain the policy of Imperial Preference which has revived the policy of Reciprocity.

LORD WELBY

May I interrupt the noble Lord? I think I am perfectly right in saying that it was the dream of Canada sixty years ago. Over and over again it has been pressed forward by the Canadian Government upon the United States Government, and not very long ago Sir Wilfrid Laurier said they had only ceased their efforts on account of the absolutely repellent attitude of the United States Government.

LORD AMPTHILL

I have nothing to say to that. But there is all the difference in the world between saying that a thing was a dream sixty years ago and that a thing has been a dream for sixty years. The dream ceased, and has been succeeded by Imperial Preference. The object of this Motion was most clearly explained by my noble friend, and it is intolerable to have to repeat an explanation so clear and so full. It is simply to obtain information. We do not want to raise a debate on Tariff Reform or to discuss food taxes, or, indeed, to go into any of those usual dialectics which were evidently anticipated by the noble Lord the Under-Secretary. We want to know what the Government are doing, or are going to do, in a matter of such deep and far-reaching concern to the Empire. It is not at the present moment a question either of maintaining Free Trade or of advancing Imperial Preference. It is a question of dealing with the far-reaching situation which is confronting us at the present moment.

May I state what we want to know in simple and different words from those of my noble friend? The question we ask is this, How are you going to maintain the continuity of commercial obligations and the continuity of commercial diplomacy if Canada decides to conclude a Reciprocity Agreement? We say "if Canada decides." We have not disputed her right to do so; we have not even questioned the expediency of her doing so; all we know is that Canada is considering these arrangements, and we ask if she does decide upon them what are you going to do to maintain continuity in our commercial obligations and continuity in our traditional commercial diplomacy. Do you wish to maintain those obligations and the commercial policy which Great Britain has pursued for fifty years, or have you some other policy in view? If you do wish to maintain them, how are you going to do it? That is what we want to know. It is simply that question to which we want an answer. And if you do not wish to maintain those obligations, then what is your policy? Those are the questions we ask, and it is to those questions we respectfully ask for an answer from His Majesty's Government for the information of the people of this country who are deeply and vitally concerned.

My Lords, let me explain once more as briefly and as simply as I can, but from rather a different point of view from that of my noble friend, how this question has arisen. Hitherto the British Empire has been one in the matter of commercial relations with the rest of the world. I say it has been one, but I know, of course, there have been certain exceptions during the past thirty years or so, but that is the general principle. The British Empire has been one in the matter of commercial relations with the rest of the world, and on that principle all the States forming the Empire have shared the advantages and the disadvantages, and the obligations, if you prefer to put it so, of that policy. But now there is to be a change. There is now to be for the first time in the history of the British Empire a differentiation in favour of one of the States forming the Empire as against the United Kingdom and as against the other States of the Empire. Canada has entered into an arrangement with the one nation in the world which puts a different interpretation on the most-favoured-nation clause from ours, and that is why this is a new question and why totally different difficulties have now arisen. The Reciprocity arrangement goes a great deal further than anything that has taken place hitherto in the Agreements which Canada has made, in pursuance of her autonomy and with the full consent of the British Government, with France, Italy, Belgium, Germany, and Holland. It is an entirely new question, because it is one of differentiation against the rest of the Empire.

What it means is this, that Canada is to enjoy advantages which we are not to share, or—and this is equally important—she is to suffer disadvantages on account of her Imperial connection. As my noble friend Lord Stanhope said, it is not a matter of amount but one of principle. It may be a very short time before the amount which you may now call insignificant becomes overwhelming in importance. On account of Canada's action we are to lose some of the advantages we have been enjoying, and this discrimination on the part of Canada as against the rest of the Empire is incompatible with Imperial unity. There is no doubt about that. Nobody will deny that the tendency of such differentiation in commercial relations must lead to political disintegration. The difficulty here is that we are concerned with a great principle; it is not a question of Canada alone, it is the position as affecting the Empire as a whole. This question must arise in the other Dominions of the Empire. It must arise in India. We had an exceedingly important statement elsewhere last night from the ex-Viceroy of India, my noble friend Lord Minto, who pointed out that although in many respects there is a vast difference between Canada and India yet the same question was arising there, and that unless India were allowed to make such commercial arrangements as would assist her own development we should not be treating her fairly. The question, therefore, will arise in every part of the Empire. The whole question depends upon most-favoured-nation arrangements and upon the fact that we in the time of our supremacy and our pride and our conversion to Free Trade forced our interpretation of that arrangement on the rest of the world, whereas the United States of America have adhered to the interpretation we used to hold before the days of Cobdenism. This most-favoured-nation clause is the very citadel of Free Trade, and the one thing on which Free Traders pin their faith. They tell us, in reply to every argument for Imperial Preference, "We have our most-favoured-nation clause what more do you want?" But that citadel is being attacked; the enemy is actually within the gate. But what are His Majesty's Government going to do? There is no time to parley; there is no time to obtain a mandate; it is a matter which requires immediate action, and unless something is done the citadel on which you pin your faith, together with your pride, is going to tumble to the ground.

The thing I want especially to call your Lordships' attention to is that this question is not even touched upon by Free Trade speakers; it is not touched upon by Free Trade journals all over the country. They are afraid to touch it; they funk the question. A very important Memorandum was published by the Tariff Commission yesterday, and yet this morning it is not even mentioned in a single Free Trade or Radical paper throughout the country. This conspiracy of silence and inability to reply increases our anxiety for information. We want to know what his Majesty's Government are going to do. There is one more reason which makes it all the more extraordinary that His Majesty's Government appear to be so unconcerned and unable to give any explanation of their policy, and it is this: One of the certain consequences, so far as we can see, of this Reciprocity Agreement if it is ever carried out is that the price of bread will go up in this country. That is a matter as to which you have always professed to have the greatest concern. If you are not concerned with what Canada contemplates, if you are not concerned with how this matter affects the rest of the Empire, what are you going to do to prevent the rise in the price of bread for the people of this country?

We have made many vain attempts to get information from the Government on a matter which discussion has surely proved to be of supreme importance to British trade interests. At first the Government were inclined to pooh-pooh the whole matter and treat it as if it were no concern of ours. The very meagre White Paper which was issued would really seem to show, unless a great deal of correspondence has been suppressed and withheld, that the Government were not alive to the importance of the question, or did not understand that it was bearing on the whole system of International Treaties. In the White Paper there is no allusion to the most-favoured-nation clause until the arrangement has been made between the representatives of the two countries. Surely there was time for the thought to have occurred to His Majesty's Government that possibly the matter might in some way be affected by this most-favoured-nation clause, of which they talk so much at other times and to which they attribute so much importance. Surely there was time between May 13, 1910, and January 21, 1911; but there is not a word in this White Paper, not a word of any correspondence, not a sign to show that any of those officially concerned with the business had ever lighted on the idea that possibly most-favoured-nation arrangements might have something to do with the question.

When these things were pointed out in another place, Sir Edward Grey was obliged to admit that they did contain difficulties, that they were of importance, but he still attempted to minimise them. He said that difficulties under the dual interpretation of the favoured-nation clause had existed before, and he doubted whether the Reciprocity Agreement would be a serious contribution to those difficulties. He went on to say—and this is a most peculiar statement—that the difficulty was not specially germane to, or peculiarly influenced by, the Reciprocity negotiations. That, my Lords, is surely an extraordinary statement to proceed from the Secretary of State for Foreign Affairs in a matter of this kind. After all that has been said on both sides of the water and by statesmen and responsible men of all three countries concerned, surely it is recognised that the question which has arisen in Canada will arise in other Dominions of the Empire. And in the absence of some policy, of some Imperial principle for the negotiation of trade Treaties for the mutual and individual advantage of the States of the Empire, one of two things must happen. The Dominions may withdraw from our Treaties, in which case the Imperial Government will have to denounce them all.

That is a proposition which noble Lords opposite will not deny. That is one alternative. The other alternative is for the Dominions to sacrifice their own interests for our advantage, in which case we shall have to reproach ourselves with hampering them in their development. Both those contingencies must lead to the disintegration of the Empire. You offend the Colonies and create difficulties and all the elements of quarrel. Therefore I say it is essential on that account to have some Imperial agreement.

The Imperial Conference is upon us; it opens next week. That is why my noble friend has brought forward this question this evening, in order that we and the people of this country may know what attitude His Majesty's Government have taken up. Surely they must have some policy on the very eve of the Conference. We have left it till the last moment to ask what that policy is, and I think that is fair. They ought by now to have made up their minds what they are going to do in the matter of this difficulty. We, the Unionist Party, have a plan. I am not going to describe it; it ought to be familiar to all. It is a plan, and I challenge denial, which has ever been recommended and urged by the Dominions themselves—the plan of Imperial Preference. What is the Government plan? Perhaps they have some better plan than ours. They cannot let things slide. The policy of laissez faire will not do in this matter. You must do something, or you are faced with one or other of those two contingencies which I have just mentioned. The idea of denouncing all our commercial Treaties is too monstrous to be entertained for a moment. I would not suspect even His Majesty's Government of harbouring such an intention. It would mean chaos not only for us but for foreign nations who have built up their tariff systems on our interpretation of the most-favoured-nation clause—an interpretation which we have forced upon them. They did not want these complex tariffs which they were obliged to impose and which we forced upon them when we had predominance and power.

My noble friend quoted the reply to Canada in 1892 when we refused to denounce these Treaties for the benefit of Canada on the ground that it would mean a great breaking-up of the existing commercial relations of the whole British Empire with foreign nations. Let me explain once more why these contingencies are inevitable unless we come to some agreement with the Colonies in this matter of commercial diplomacy. Let us take the present case of Canada, although really in this matter Canada is merely the occasion for the discussion. The point of view of my noble friend was one of Preference; he did not attack the Reciprocity Agreement. He wants to know what you are going to do in regard to the question of principle which has been raised by these circumstances in Canada. And I repeat again, because I do not want the misrepresentation to go forth to the country, that my noble friend neither attacked nor approved the Reciprocity Agreement. We take Canada, therefore, merely as an instance. When we last asked a question on this subject the noble Viscount the Leader of the House told us that Canada proposed to extend the concessions which she will grant to the United States under the Reciprocity Agreement to those foreign nations, twelve in number, which are entitled to them under the most-favoured-nation clause. She cannot do that for long, however much she wishes to do it, if indeed she can do it at all. Under her present system, which is a Protectionist system, she cannot give concessions to any number of nations for which she receives no equivalent concessions in return. Obviously the result of so doing must, if it is carried to any extent, force a policy of Free Trade upon her. Her tariff would cease to be revenue producing to the extent to which she was obliged to give those concessions to other nations. If this reciprocal arrangement leads, as everybody thinks it will lead, to complete commercial union with the United States of America, Canada would obviously be unable to maintain a tariff at all. That would mean Free Trade with America, and therefore she would be obliged to give Free Trade to every other country, which she cannot do because she depends upon her tariff for her revenue. If that is clear, surely you will admit my conclusion that Canada is bound sooner or later, probably sooner, to seek release from her present obligations under most-favoured-nation arrangements. Will anybody deny that that is not only probable, but inevitable? That is my point. Very well, that is agreed; and I need not enforce the argument by pointing to actual experience.

When Canada first adopted the policy of Preference she found herself up against the difficulty of the Belgian and the German Treaties. Sir Charles Tupper, the Canadian statesman, pointed out the difficulty, but Sir Wilfrid Laurier, who was in office, said, "We shall be able to arrange that, and maintain those Treaties." But he tried it and found it unworkable, and what Sir Wilfrid Laurier had to do was to refund the duties to the foreigners. The result was that Canada was obliged to ask for the denunciation of those Treaties, and they were denounced by Lord Salisbury in 1896. That is what happened then, and that is bound to happen again. If Canada is once drawn into the net of United States commercial diplomacy she will be forced to adopt the American interpretation of the most-favoured-nation clause. That is the point. That means separation. You cannot have two different interpretations of Treaty obligations under the same sovereignty. I challenge anybody to tell me that you can. You cannot have such a position that the Sovereign of this country is obliged to say to other Sovereigns that the words of one and the same authority mean one thing as applied to the United Kingdom and another thing as applied to Canada or to any other Dominion you like to name. The English words in a legal obligation must always mean the same thing.

In this matter there is a question of principle involved, a question totally different from questions of Party politics such as we have often discussed here. You have to deal with foreign nations, and foreign nations have a means of enforcing their wishes if they are too seriously thwarted. If Canada, adopting the United States interpretation, were to administer her Customs contrary to Imperial obligations, that would be tantamount to separation. It would be a declaration of independence. Canada, as we all know, would not dream of doing that. But if she wished to administer her Treaties in accordance with American interpretation we should have to denounce those Treaties. It is a serious matter, in spite of the light-hearted attitude of the Under-Secretary. Those Treaties are not easily negotiated again. My noble friend reminded your Lordships of the German Treaty of 1865 which was denounced by Lord Salisbury in 1896. When that Treaty was denounced we became technically liable to the German penal tariff, and the only reason why that tariff has not been imposed is that Germany, no doubt for excellent reasons, has been magnanimous towards us. If we denounced those Treaties we should be liable to the penal tariffs of other nations unless they, too, chose to treat us with magnanimity. We cannot count on the magnanimity of foreign nations. Why should they be magnanimous? It is not business or common sense to entrust your commercial interests to the magnanimity of commercial rivals. If you do not agree with me I beg you to ask that question of any business man you like in the country. Why should they be magnanimous? We forced on them our interpretation of the most-favoured-nation clause at a time when we had the start of them in manufactures, commerce, and everything else, and we have put them to the trouble of building up these complex tariffs, which they have had to revise from time to time. But they have no longer to depend on our favour, and would not this be their opportunity of taking it out of us if we were obliged to give up these Treaties? We are faced, therefore, with the alternative of injuring ourselves or of injuring the Colonies by hampering their developments, and in either case, put it how you will, of injuring the Empire as a whole.

And what for? I will not go into that point because, as I have said, we only want information. We do not want to raise the question which is at issue between the two Parties of Tariff Reform or Free Trade, but I ask your Lordships to consider why are we to be forced to choose between these two alternatives of injuring ourselves or injuring the Colonies, and in either case of injuring the Empire, instead of adopting another course. There is, as I have already said, another course. But possibly His Majesty's Government have still a further alternative. Perhaps they are contemplating an Imperial policy on quite different lines from anything that we ourselves have imagined or suggested or discussed. If that is so, surely they will tell us. It is a matter which concerns the people of this country vitally. It is a matter which is urgent, imminent, important, because next week His Majesty's Government are going to meet the representatives of the Dominions and discuss this question. I ask them therefore once more—and I do beg that they will not reply by merely retorting with a tu quoque storm of questions such as the Under-Secretary put to us—What are you going to do to give commercial men of this country a sense of security in the international relations of trade? And, as my last word, I would say that in this matter if we do not take the right line now we may start irretrievably on the downward path.

THE SECRETARY OF STATE FOR WAR (VISCOUNT HALDANE)

My Lords, the noble Lord who has just sat down has for the second time this session poured out the vials of his wrath upon the heads of His Majesty's Ministers. Last time Mr. Bryce came in for a share of his criticism. On this occasion he has said nothing of Mr. Bryce, but has directed his speech to putting and enforcing the pointed question, "What is the policy of His Majesty's Government at this crisis?" I will tell your Lordships. The policy of the Government is to give every facility to Sir Wilfrid Laurier and the people of Canada to do the best they can for themselves, to enter into this Agreement, and, as they think and as we believe, to take thereby the best step they can for the development of Canada. We hold that it is not a disadvantage to us that Canada should develop by the growth of trade relations with the United States. We hold that an enlarged Canada, a Canada with a great trade of this kind, cannot fail to be a more prosperous Canada, a Canada which will be a better market for our goods and will do more trade with ourselves. Therefore, from every point of view, we look upon the step which Canada is taking as being probably a very good step in our own interests as well as in the interests of Canada. But, my Lords, it is not for us to intermeddle with the policy of Canada. We have a perfectly definite attitude towards these matters. We do not think it is a good thing to attempt to guide or influence the policy of the great Dominions in matters of trade. We are—and perhaps this is a simple answer to the noble Lord—we are Free Traders, and we intend to remain Free Traders.

As for Preference, we regard it as an utterly unscientific policy. We expressed our view when it was launched on all sorts of incorrect premises in 1903. We retain that view, and every new phase and every memorandum which comes from that obscure region, the committee rooms of the Tariff Reform League, fills us more and more with the impression that those who promote that policy have not thought it out, and have not the facts and materials on which to put a definite proposition before their countrymen. The noble Lord has asked for a definition of our policy. That is our general policy. And now I come to the more specific case which has been dealt with by the noble—

LORD AMPTHILL

The noble Viscount has not given me a complete answer. My question is, What are you going to do for us?

VISCOUNT HALDANE

I will tell the noble Lord.

LORD AMPTHILL

You have told us what you are going to do for Canada, but the question is what you are going to do for us and the Empire?

VISCOUNT HALDANE

We are going to leave the British merchant to flourish in the future as he has done in the past under Free Trade, and to leave the British Empire to hold together by bonds of sympathy and see that it is not killed by any kind of fiscal fetters being put upon it. I noticed that the noble Earl opposite, Lord Selborne, coupled with his disclaimer of any attempt to interfere with Canada a hankering and longing for another policy which was to be adopted by common consent, but which, he was careful to say, would impose such restrictions upon entering on negotiations such as we have been witnessing lately between the United States and Canada as would make that kind of development impossible. That is a policy which to my mind represents a tendency in Imperialism which may lead in very different directions from that supposed to be contemplated.

The noble Earl seemed to think that the British Government in the course of these negotiations had been sitting with hands folded doing nothing. We have done nothing in one sense. That is to say we have not interfered, but we have been cognisant at every turn of what is taking place. I doubt whether any negotiations have been more closely watched or more sympathetically observed. We are fortunate in having an Ambassador who possesses the confidence of the people both of the United States and of Canada. He has been in constant relation with both sets of Ministers, but not for the purpose of interfering. He has kept us informed of what has gone on and has carried out our policy, which is that we should not enter into communications with the Government of the United States with a view to interfering with negotiations of which we approve, and in the way of which we have not the slightest intention of putting obstacles. Mr. Bryce, as I say, has kept us informed, and we have been cognisant of these negotiations. If we do not lay correspondence with the United States, it is because we have none to lay, having deliberately abstained from trying to interfere with these negotiations. For what purpose should we interfere? Perhaps some noble Lords think that this is a new departure on the part of Canada. Canada has carried out similar Agreements with Germany and France, and, I think, also with Belgium, and has been in negotiation with other Powers, not only with our complete consent, but because it is part of the liberty of her Constitution.

THE EARL OF SELBORNE

I said the same myself.

VISCOUNT HALDANE

The business of British Ambassadors is to assist and be sympathetic, and it is not our business to try to interfere in these matters with a view to exercising some sort of controlling hand. The noble Earl put his case on a different ground. I could not get clearly before my mind what his point was, but he seemed to think that we were giving up some plain and obvious right which we had by Treaty with the United States to the same advantages as Canada is getting in this case. The noble Earl assents. I am not going to express an opinion one way or the other on this point, except to say that I think the noble Earl is under a very great delusion if he imagines that this is a clear plain business about which there cannot be two views. I presume that what he is alluding to—it is the only thing he can be alluding to—is the Convention of Commerce which was signed at London in 1815 between the United States and this country. The second Article of that Convention says that— No higher or other duties shall be imposed on the importation into the United States of any articles the growth, produce, or manufacture of His Britannic Majesty's Territories in Europe, and no higher or other duties shall be imposed on the importation into the territories of His Britannic Majesty in Europe of any articles the growth, produce, or manufacture of the United States, than are or shall be payable on the like articles being the growth, produce, or manufacture of any other foreign country. And therefore, argues Lord Selborne, because Canada gets certain advantages, we ought to get the same advantages. It may possibly be so. I make no admission. I pronounce no opinion one way or the other. But in order to sustain that you have to make out that Canada is "another foreign country." I can only say that, so far from being the obvious proposition which Lord Selborne seemed to think, it is a proposition that requires very careful consideration indeed, and I should be very much surprised if it did not turn out that there were very great differences between legal authorities on the point. My present desire is not to express any opinion on that one way or the other, further than to say that it is anything but the plain proposition which the noble Earl assumed.

If that is so, what is our position? Supposing that the country had not at two or three General Elections pronounced against Protection, we might take up Protection and enter next week into some such general tariff agreement as embodies the policy of Mr. Deakin, to which the noble Earl referred, but then we should be turned out of office; we should be hurled with execration from the position we now hold for going against the express and in this case most distinct decision of the country. That is not a policy which responsible Ministers can for a moment lend themselves to. If that policy is shut out, what remains? I will tell your Lordships what remains. What remains is to watch with the utmost care all these transactions as they occur; to approach them not with minds parti pris, but recognising the liberty and freedom of those great Dominions and that in their prosperity you find your own prosperity; believing also that the best course for them is to get rid of those tariff walls which are hampering their trade with other countries and to take such a course as suits the necessities of their own people. We have heard recently from Sir Wilfrid Laurier his own views of policy in that connection. It is not suggested that we should go against those views of policy, and if that be so I am at a loss to understand, I am puzzled to understand, what is in the mind of the noble Earl or the noble Lord who has just spoken.

I have never been able to bring these tariff propositions into a concrete and crystalline form. They are put forward in general terms, and when you come to try to put them into a definite form they evade and elude you. They are put forward on platforms at meetings full of Tariff Reformers, and because they receive applause and assent they are supposed to be clear. But when we come to examine them in debate they go to pieces. There was an expression used in the House of Commons the other day which is not sufficiently polite for your Lordships' House, and therefore I will not use it but merely quote it. "Sloppiness" is the expression I refer to, and it conveys that the matter is not in a clear or crystalline form and is not intelligible when you come to look closely into it. If any illustration were wanted of the danger of lapsing from that clear crystalline form in which these things should be presented it is found in the suggestion which arose in the speech of the noble Earl to-night. Neither on the terms of the Convention has he a clear case nor has he a clear case on his policy. When he is challenged, he cannot say that anything else ought to have been done than was done. He cannot say that Mr. Bryce was negligent. He does not say that. He cannot say that we ought to have interfered in the negotiations between the United States and Canada. He agrees that Canada is not to be deprived of liberties which she has enjoyed on other occasions, and which she is enjoying now. There is nothing left except that we should accept or adopt the policy of Mr. Deakin. His Majesty's Government have no intention of adopting the policy of Mr. Deakin, and, as I have explained, if they did they would be turned out of office, as they would deserve to be, by the majority of the people of this country as unworthy of their trust. As that also has gone, we remain with nothing as an alternative to the course which Ministers and their representatives abroad have pursued in connection with this matter.

VISCOUNT MIDLETON

My Lords, after the apologetic speech of the Under-Secretary of State for the Colonies it has been a relief to your Lordships to hear the full-blooded defence of the position of His Majesty's Government which has been delivered by the noble Viscount. At the same time I must say I was very much surprised at the charge the noble Viscount made, that on this side of the House a proposition had been advanced in general terms and that my noble friends evaded anything like a definite proposition, because all that the noble Viscount did was to deal with this matter in the most general terms. He did not attempt to make good that this was in any respect a policy which was likely to be advantageous to this country. He spoke in general terms of prosperity, and dealt separately with the position of Canada and Great Britain in this particular. So long as the Canadians are, on their own behalf, trying to make an Agreement which will develop their trade with the United States, their policy is admirable. If Great Britain enters on an attempt to secure Preference for her Colonies, we are told that she is entering upon a sordid bond; but the moment that Canada or any other Colony enters into some Agreement it is said to be a triumph of civilisation and a matter on which everybody must be congratulated, especially if it happens to exclude this country.

The noble Viscount's argument was certainly a most peculiar one, and was very much in contrast with that of the noble Lord the Under-Secretary, whose apology was—"What does it matter? The whole subject is so small." The noble Viscount spoke quite differently. He said this was a very good step in our own interests. How? Where? It may be a good step in Canada's interests; I am not saying a word about that at this moment. But how in our interests? Where do we come in? My noble friend Lord Selborne has pointed out that one of the operations which we may expect to see carried out under this Agreement, and in support of which he gave quotations from a periodical equivalent to the Returns of our Board of Trade, is the manipulation of the market for Canadian wheat so as to take care that the Canadian farmer gets something more and loses nothing, but with the avowed object of raising the price of wheat in the British market.

VISCOUNT HALDANE

I thought that was just what the Party of the noble Lord wanted to do—to raise the price of wheat all round. At one time we hear complaints of dearness, and at other times of cheapness. But I do not believe it will happen.

VISCOUNT MIDLETON

That is a strange delusion under which the noble Viscount is labouring. I know, of course, the old innuendo, but I really thought that as the noble Viscount has so thoroughly adopted the tone of this House he would have discarded anything he might remember of the tone of the platform. Surely he knows that our proposal with regard to wheat, to which it was proposed to give a preference, would have itself enabled this market to be supplied with wheat on which no duty of any sort or kind would be paid. The whole question of our having a policy to raise the price of wheat all round is disposed of by that one fact; whereas the noble Viscount, who poses as the patron of cheap food, is at this moment justifying, on behalf of Canada, an action which may lead to the advantage of Canada but which will be taken advantage of on the part of the United States to raise the price of wheat in this market. Of course, the noble Viscount is not responsible for that; but still I again ask, where does our interest come in? I shall wait for an answer, a reasoned reply which we have a right to expect from the Government to justify their inaction in this very serious matter.

The charge of the Under-Secretary that my noble friend had brought forward this motion with the object of endeavouring to interfere with the freedom of action of Canada in this matter was most unfounded. The noble Lord said that what Lord Selborne wished was to take away from Canada the right to negotiate separately. There was not in my noble friend's speech a shred or shadow of foundation for that statement. It was reiterated by Lord Welby, and was cheered on those very rare occasions when cheers were heard from that side of the House. The whole point of my noble friend's argument was that there was an opportunity, which was being missed, of bringing the whole forces of the Empire to bear to get better terms than could be obtained by a part of the Empire. On that, which is our policy, we have the right to stand without being accused of grudging such a shred of advantage to one Dominion as might be obtained without that co-operation.

I think it is right to ask, especially on this occasion, that we may have a reassuring word from the Government as to one statement made by the noble Lord, the Under-Secretary. I do not propose to labour the question of the most-favoured-nation clause, except to ask this. Were we right on this side of the House in understanding the statement of the noble Lord the Under Secretary to be to this effect, that the United States had some basis for the interpretation which they have put on the most-favoured-nation clause, an interpretation which has been repudiated by this country for over 100 years? We on this side of the House so understood him.

LORD LUCAS

I certainly never said so. I merely stated, in reply to a question from somebody, that we had never accepted the view which the United States had taken of the most-favoured-nation clause.

VISCOUNT MIDLETON

I am very glad to have drawn that disclaimer from him, because he will see at once that though this question may be one of small amount, it is a question of principle. My noble friend asked the noble Lord whether he could lay any Papers. To that he replied that there were no Papers to lay, from which we conclude that no correspondence has taken place on this subject at all.

VISCOUNT MORLEY OF BLACKBURN

Not with the United States. No correspondence with the Government of the United States.

VISCOUNT MIDLETON

We cannot sufficiently call in question the masterly inactivity of His Majesty's Government. The noble Lord said several times over that they were watching the case. The noble Viscount said they had "sympathetically observed the case." We think we have a right to ask for more than that. I agree with the tribute which was paid by the noble Viscount, Lord Haldane, to our Ambassador in the United States, but that our Ambassador should have had no instructions to pursue British interests in this matter at any stage of the negotiations does certainly seem an extraordinary omission on the part of His Majesty's Government.

LORD LUCAS

May I interrupt the noble Viscount for one moment? If that last statement of his is based on anything I said, I am afraid that he misunderstood me. What I said was that in accordance with the terms of the Motion we have no Papers to lay, because there has been no communication with the Government of the United States.

VISCOUNT MIDLETON

The terms of the Motion are, "as to the extension to the United Kingdom or any other part of the British Empire." That is a very serious question. We desire to be reassured as to the extent to which His Majesty's Government have attempted to receive from the United States assurances as to the extension of the tariff concessions granted to Canada to other parts of the British Empire and to this country. It seems to us to have been a most short-sighted policy to have allowed this opportunity to escape. The Government have placed themselves in a very difficult position for negotiating with any other foreign Power or with the United States by themselves locking and shutting the door to any possibility of tariff negotiations on our own side. They have, of course, tied their hands, and the more they choose to assume that the people of this country have decided against our policy—at one moment they tell us that the verdict was on Free Trade, at another that the verdict was on Home Rule, and at another that the verdict was on the House of Lords—the more we feel that they do not rest on the opinions of the people in this particular respect. I believe that the result of this debate will be to create a widespread feeling that what the noble Viscount calls "sympathetic watching" the negotiations has really meant the neglect by a Government which is completely absorbed in home questions of Constitutional change of British trade interests. As Lord Ampthill pointed out, we have only had one small White Paper on this subject. The announcement that there are no more Papers to follow will, I think, be a great disappointment, not only to your Lordships, but to the country. It represents a confession on the part of the Government of having no power to act, and the speeches to which we have listened really make us feel that they have no desire to act in the matter. Apart from the general question, I congratulate my noble friends on having, on the eve of the Colonial Conference, drawn from the Government the kindliest possible references to our great Dominions. But coupled with that has been the evidence that there has been complete inactivity on the part of the Government in pressing the interests of this country in these negotiations, and an attempt, which I do not think will deceive any man who comes over here from the Colonies, to impress this House with the belief that any union between Great Britain and the Dominions overseas for these purposes would weaken the Dominions rather than establish that co-ordinate and sustained effort which we on this side of the House believe will have the best possible results for the trade of the Empire, and also for the union of the different parts of His Majesty's Dominions.

THE EARL OF SELBORNE

As I understand His Majesty's Government to say that there is no correspondence or communication to lay upon the Table, which is not surprising considering that they have told us that their policy is a policy in this respect of doing nothing, I do not intend to trouble your Lordships by pressing this Motion.

Motion, by leave, withdrawn.

House adjourned at Eight o'clock, to Monday next, half-past Three o'clock.