PUBLIC
RECORD OFFICE
Reference :-
C.O. 885
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PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH—NOT TO
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freely than into foreign countries, there is at present no appearance of any sustained alteration in the relative proportions of foreign and colonial trade. But even if those proportions were reversed, Her Majesty's Government are convinced that the evil results of a preferential policy would be mitigated only slightly, although they might fall with less severity on this country and with greater severity on the Colonies than would be the case under existing
circumstances.
25. I have dealt with this question at some length, because the strong support which the proposal met with from the majority of the representatives at the Conference entitles it to the fullest consideration,
and renders it desirable to set forth the reasons
which have satisfied Her Majesty's Government that
it would fail to secure the object aimed at-namely, the stability and progress of the Empire.
26. I now pass to the second part of the Resolu- tion, which urges "That until the Mother Country can see her way to enter into Customs arrange- "ments with the Colonies, the Colonies should take steps to place each other's products in whole or "in part on a more favoured Customs basis than is "accorded to the like products of foreign countries." This resolution raises somewhat different issues
from the preceding one. At first sight it would appear that this was a matter in which only the Colonies making such arrangements are themselves concerned, and that as Her Majesty's Government have allowed the Colonies full liberty to frame their fiscal systems with the view, if they think fit, of protecting their local industries, there can be no objection to their making arrangements to extend a somewhat similar protection or preference to those of a sister Colony.
27. It must be remembered, however, that the pri- mary object of a differential duty is a diversion rather than an increase of trade, and that as the proportion of the external trade of most of the Colonies which is carried on with foreign countries is insignificant compared with that carried on with the Mother Country and other parts of Her Majesty's dominions,
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it will be difficult for one Colony to give a preference in its markets to the trade of another solely at the expense of the foreigner, and without at the same time diverting trade from the Mother Country or from sister Colonies which may not be parties to
the arrangement.
28. Serious injury might thus be inflicted on the commerce of a neighbouring Colony, and unfriendly feelings generated, which might provoke retaliation, and would in any case estrange the Colonies con- cerned in a manner which would not conduce to the great aim which the Conference had in view throughout.
29. Any agreement for reciprocal preferential treatment between two Colonies will, therefore, re- quire careful consideration in regard to its probable effect on the commerce of the rest of the Empire,
and although Her Majesty's Government have the fullest confidence that the loyalty and good feeling happily prevailing between the various parts of the Empire would prevent one Colony seeking an advan- tage to itself which could only be gained at the serious prejudice of other parts of Her Majesty's dominions, it is impossible for them to relieve them- selves of their responsibility in regard to the general interests of the Empire in such a matter.
30. The last part of the Resolution, which urges "That for the purposes of this resolution the South
"African Customs Union be considered as part of the
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territory capable of being brought within the scope "of the contemplated trade arrangements," opens,
as Lord Jersey has remarked in his Report, a prospect
of additional complication.
31. The Orange Free State is a party to that arrangement, and if a Colony outside South Africa
were to extend to the produce of that State prefer- ential terms granted to the produce of the Cape Colony, Her Majesty's Government might, unless the same terms were extended to all countries entitled to most-favoured nation treatment in that Colony, be involved in a serious controversy with those countries.
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