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PUBLIC RECORD OFFICE
Reference :-
T།། ‛། ། །།C.O. 885
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PUBLIC RECORD OFFICE, LONDON
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before you. The first is this. That if we chose - that is to say, if those whom we represent chose--the Empire might be self-sustaining. It is so wido; its products are so various; its climates so different, that there is absolutely nothing which is necessary to our existence, hardly anything which is desirable as a luxury, which can not be produced within the borders of the Empire itself. And the second salient fact is that the Empire at the present time; and especially the United Kingdom which is the great market of the world-derives the greater part of its necessaries from foreign countries, and that it exports the largest part of its available produce--surplus produce-also to foreign countries. This trade might be the traile, the inter-imperial trade, of the Empire. It is at the present time, as I say, a trade largely between the Empire and foreign countries. Now, I confess, that to my mind that is not a satisfactory state of things, and I hope that you will agree with me that everything which can possibly tend to increase the interchange of product between the different What wo parts of the Empire is deserving of our cordial encouragement. desire, what is Majesty's Government has publicly stated to be the object for which they would most gladly strive, is a free interchange. If you are unable to accept that as a principle, then I ask you how far can you approach to it? If a free interchange between the different parts of the Empire could be secured it would then be a matter for separate consideration altogether what should be the attitude of the Empire as a whole or of its several parts towards foreign nations? The first thing we have to do, the thing which touches us most nearly, is to consider how far we can extend the trade between the different parts of the Empire-the reciprocal trade.
But
Our first object then, as I say, is free trade within the Empire. We feel confident--we think that it is a matter which domands no evidence or proof, that. if such a result were feasibl it would enormously increase our inter- imperial trade; that it would hasten the development of our Colonies; that it would fill up the spare places in your lands with an active, intelligent, and industrious, and, above all, a British, population; that it would make the mother country entirely independent of foreign food and raw material. when I speak of free trade it must be understood that I do not mean by that the total abolition of Customs duties as between different parts of the Empire. I recognise fully the exigencies of all new countries, and especially of our self-governing Colonies. I see that your revenue must always, probably, and certainly for a long while to come, depend chiofly upon indirect taxation.
Even if public opinion were to justify you in levying direct taxation, the cost of collecting it in countries sparsely populated night be so large as to make it impossible. But in my mind, whenever Customs duties are balanced by Excise duties, or whenever they are levied on articles which are not produced at home, the enforcement of such duties is no derogation whatever from the principles of Free Trade as I understand it. If, then, even with this limitation, which is a very important one, which would leave it open to all Colonies to collect their revenues by Customs duties and indirect taxation, even if the proposal were accepted with that limitation, I think it would be impossible to over-estimate the mutual advantage which would be derived from it, the stimulus to our common trade and the binding force of the link which such a trade would certainly create.
But, gentlemen, 1 am, unfortunately, aware that up to the present time no proposal so far-reaching has come to us from any of the Colonies. Three proposals have been made for the consideration of tho prosent Conference, also ou the initiative of New Zealand. The first and the most important one, is that a preferential tariff should be arranged in favour of British goods which are now taxable in the respective Colonies and in the United Kingdom. And although no proposal comes to us from Canada, I am, of course, aware that similar questions have been recently specially discussed very actively and very intelligently in the Dominion, and that a strong opinion prevails there that the time is ripe for something of this kind. And, therefore, with your permission, I would propose to examine this proposition, not in details, but so far as its general principles are concerned. In 1897 I would romind you that the Premiers then unanimously undertook to consult with their colleagues, and to consider
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whether a preference might not be given on their Customs tariil for goods imported from the United Kingdom. This was a proposal without any reci- procal obligation. It was regarded by the Premiers at the time as a proposal which might be made in consideration of the fact that the United Kingdom was the largest and the best and the mos: open market in the world for all the products of the Colonies. But nothing whatever has come of the r. solution up to the present time. No step has been taken to give any effect to it, That, I think. is due partly to circumstances which we could not have anticipated, partly, indeed, to the Federation of Australia, partly also to the existence of the war, but it is a question which, no doubt, may now be taken
with a greater hope of something coming from it.
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But in Canada, before the Conference of 1897, the Canadian Government had decided to give us a preference which then amounted to 25 per cent., and this subsequently was increased to 33 per cent.
This was
a preference, voluntarily accorded by anada on British taxable goods imported into the Dominion. Canada therefore has anticipated the general proposal of the Premiers, and the time which has elapsed has been sufficient to enable us to form a judgment of the effect of an arrangement of this kind, and I have to say to you that while I cannot but gratefully acknowledge the intention of this proposal and its sentimental value as a proof of good will and affection, yet that its substantial results have been altogether disappointing to us, and I think they must have been equally disappointing to its promoters.
I shall circulate to you another paper which contains very fully the whole of the statistics showing the course of trade in Canada since 1897, and the results of the preferential tariff. But may give you in a word or two the most important conclusions. I am comparing now the import trade of British goods into Canada in the year 1896-97, with the last year for which I have the returns-1900-1901. The total imports of Canada increased in that period 14,500,0007. (sterling), and the rate of 62 per cont. That shows an enormously increased prosperity in the Dominion; it shows how the energy of its inhabitants is developing its trade. Fourteen and a half millions and sixty-two per cont.: if you will kindly bear in mind those figures as showing the total result of all the import trade. Of that the Free Trade, upon which no duty is levied and upon which therefore no preference is given to British goods, increased 6,250,000, or at the rate of 67 per cent. The general trade, that is the trade from foreign countries, which came under the general tariff, also increased 6,250,0001. or at the rate of 62 per cent. But the preferential trade-the trade upon which this advantage had been given to British goods, only increased in the same time 2,000,0001, and only at the rate of 55 per cent. So that the rate of increase under the pre- ferential tariff was actually less than under the general tariff and also under the free tarill. Or taking it in another way, the total increase of the trade of Canada with foreigners during the period named, this is including both the trade subject to the tariff and also the free trade, was 69 per cent., while the total increase of British trade was only 48 per cent.
Well, now, what is the cause of this? Up to 1885 British exports steadily increased to the Dominion of Canada. Then the Government of the day adopted a very severe protective tariff, which by the nature of things, perhaps, specially affected British goods. We are not the exporters, as a rule, of raw materials, or of food. We, therefore, do not export the articles which Canada freely imports. We export manufactured goods, and it was against manufactured goods that the tariff was intentionally, I suppose, directed. The result of that was, that there inmediately set in a continuous and rapid decline in the importation of British goods into Canada. Now, the preference which was given in 1897 has checked the decline, but there is very little increase. Practically the checking of that decline is the whole result which we can recog- nise as having followed the generous intentions of the Canadian Government. Foreign produce at the present time in Canada has still a lower average tariff than British produce, no doubt due to the fact that the foreign produce is, as 1 bave said, as a rule, of a character upon which lower duties are ordinarily levied; but the result is that while foreign imports have largely increased the British imports have largely decreased. But now I want to point out another thing which I think will be of great importance, and which I am
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