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not be advisable to have some general talk over the ground before we resolve upon any motion. Perhaps we could do that if you would communicate what would be expected from the Colonies, how far you might meet their wishes, and how far we might come to a mutual understanding. If in the line that has been suggested we could take tho matter up, perhaps afterwards wo might resolve on a motion which would be acceptable. I had expected that the Imperial Government, which had called this Conference, night have some proposals to make, or, at all events, some suggestion to make which might perhaps open the way to further discussion.
The SECRETARY OF STATE: I think the suggestion made by Sir Wilfrid Laurier is a valuable one, and one certainly which was adopted at the general conferences en previous occasions, and which always led to our understanding each other better, and led generally to some definite conclusion. And I would say I have very little to add to what I said in my opening remarks. The Imperial Government do not feel at present that they are sufficiently in possession of the minds of the Colonies to offer anything
in the nature of a definito suggestion. I did, however, venture, in discussing the whole matter of preferential rates, to take advantage of the experience which we liave gained in the case of Canada to show that in such a case as that where a preference had been given there still remained a protective duty, and I pointed out that the advantage to the Mother County was not considerable. I do not believe the advantage given, though I appreciate it from senti- mental considerations, is great so long as the duty, even after the pre- ference is deducted, remains intensely protective, as it does in the case of Canada, and, therefore if any preference is to be made, I think we ought to consider whether this rigid protection can in any way be modified in favour of British goods. In that case wo might fairly hope not only that we should send a very much larger quantity of British goods to the Colonies, but that in return we should be able to take a very much larger proportion of Colonial goods for consumption here.
I pointed out how great room there was for such a transaction, inasmuch as at the present time, supplies for this country come, as regards two-thirds of them, from foreign countrios, and there was no reason why a large proportion of them should not come from the Colonies if we were enabled to pay for those goods by goods scut out reciprocally from this country. That, however, is impossible as long as the duties of some of the Colonies are made so high that, practically, British manufacturers have no chance against tho local manufacturers. The local manufacturers have always, of course, a strong natural proference, being on the spot, but if, in addition, the duties remain as high as they are at present, I am afraid experience shows we cannot anticipate any very large increase in the sale of British goods or in the reciprocal consumption of Colonial goods. I mentioned that wo knew frou. the newspapers and other sources that in Canada there had been a good deal of discussion as to whether some corresponding preference might not be given upon goods which were taxable in this country, and the same issue is raised in a resolution to be moved by Mr. Seddon; but I venture to point out that before we could be asked to do anything of the kind, it would be necessary that it should be shown to us that we should get a corresponding advantage. That advantage we do not get in the shape of the preference already offored to us by Canada. As I understand the views of Sir Gordon Sprigg, and Mr. Fuller will correct me if I am wrong, he does not propose to ask for any reciprocal consideration, nor did, as I understand, Mr. Seddon wish to insist upon that portion of his resolution. In both those cases the offer was like the previous offer Canada made to us at the time of the previous Conference. That is to say it was an offer without any reciprocal obligation; a voluntary and spontaneous offer of a certain preference on the part of that Colony.
Sir WILFRID LAURIER: Tálking generally, for my part, I would go in for Free Trade within the British Empire, and would be prepared, if it were possible, to advocate that; but for to-day I must say frankly I do not know how far this would he acceptable to Great Britain. This country is so essentiaily, a Free Trade country that probably they would not like to go
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into a contemplation of that prospect. But it is sufficient to observe that the Colonies are not in a condition to adopt a policy of free trade. We cannot at the present time. We must in the nature of things levy the principal source of our revenue from customs tariff. That at once puts such an ideal condition as I would have had in my own mind to an end. If it would be possible upon some such lines as you suggested, by some con- cession-mutual concession made on both sides, perhaps that would bo going as far towards an object in which I think most of us here believe. have stated, Sir, that the concession which we made to Great Britain, whilst it was made in the hope that it would develop a largor trade between Groat Britain and Canada has not materialised to the degren which would have given more hope to the British people. My colleague, Mr. Paterson, who I hope will be here this morning, is prepared to show that there is another side to this question. Perhaps after you have heard him you may be entirely induced to modify the views that you have expressed, that it would have the desired effect, and that it would not do all that was expected from it. But it served a very vainable purpose in the way of fostering British trade. I think he will show almost cortainly that is the view. Before we dismiss altogether the fact that the preference which we have given is not sufficient, I would have liked to have had the views of my colleagues put before the Conference on this point. On this question-as on most questions-there are two sides, and it would be wise to hear the other side of it, We have had the British side held up to our view, and if we have the Canadian side 1. think it would be found that it will, to some oxtont, controvert the view taken by your exports in this matter.
Sir EDMUND BARTON: I understand Mr. Fielding in the speech ho made the other night indicatod that, since the establishment of the preference, the trade of the Dominion and Great Britain has increased by 50 per cent.
Sir WILFRID LAURIER: Something like that.
The PRESIDENT OF THE BOARD OF TRADE: It is about 40 per cent.
The SECRETARY OF STATE: 42 was the figure given to me.
Sir WILFRID LAURIER: We make it about 49. Wo have had figures as to the special matter the other day; I think Mr. Paterson was prepared to show it was 49 per cent. The condition of things is this, that British_trade with us has steadily declined up to 1897 without the preference, and then it not only stopped the decline, but the trade was increased to that oxtent, so that you say 42, wo claim 49, is not at all a bad showing.
The SECRETARY OF STATE: No; of course you must remember that our view is that the increase is due only to the prosperity of Canada. General imports increased at the rato of, I think, !
62 per cent.
Sir WILFRID LAURIER: Yes.
The SECRETARY OF STATE: But British goods only increased at the rate of 42 per cent., and that increase was not therefore due to the preference, but was due to general prosperity and was not in proportion to the general increase, or specially to the increase of foreign goods.
Sir WILFRID LAURIER: Well, that is probably substantially true, at all events, that is the explanation of this. The general increase in trade is largely in a class of goods which are not made or produced by Great Britain; take the raw material, the coiton wool, waol itself, those two things alone have increased enormously with us though not from Great Britain. Then there is another class of goods imported directly from the United
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