PUBLIC RECORD OFFICE
TILITI
Reference :-
C.O. 885
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT.TO
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Imperial point of view, the proceedings of the Conference in connexion with the subject of defence, cannot have been perfectly satisfactory. What have we arrived at ? Simply this-that the Australian group of Colonies will pay a certain amount annually towards the support of a few ships in their own waters. But what has the rest of the Colonial Empire done towards the maintenance of the Imperial Navy? Nothing at all. The Cape has not agreed to do anything: Canada has not agreed to do anything: and none of the other Colonists have agreed to do anything, for reasons which I think are weighty, and which this Conference will not overrule. At the same time it is admitted by some high naval authorities (although, perhaps, not by the authorities whom we have had before us) that the British Fleet is not quite so strong and powerful as it ought to be, in view of the tremendous interests that it has to protect when compared with the French and German fleets, and having regard to the limited interests that they have to protect. Supposing that the Imperial Government were to find by-and-by that it required very considerably greater assistance from the Colonies towards the maintenance of the fleet and of the army than it has obtained hitherto, I doubt very much whether you would find that a system of subsidies would answer in the long run. You would in that case find very soon that the principle of representation would be asserted by the Colonies. The system of subsidies, if developed to any extent, would practically amount to a tax, and where you have a tax, the people who bear the tax sooner or later ask to be represented. In other words, you might find a system of political federation brought to the fore, a system which, however much we may incline in that direction, would, we must all agree, present tremendous difficulties. The system of subsidies by the Colonies to the mother country has been tried between France and its Colonies. In the French Colonial law there is a clause to the effect that the Colonies shall be bound to contribute certain amounts to the maintenance of the French navy, but according to the latest report that I have seen there is not a single French Colony that pays a subsidy to-day; in fact, the reverse is really the case, and the mother country has to pay for the defence, and in some cases even for the civil government, of the Colonies.
Therefore taking into consideration the necessity that the British Empire should have some other consolidating force in addition to mere sentiment, that it should bave the force of self-interest, that at the same time something more might have to be done for the defence of the Empire than has been done hitherto, that greater contributions might be required from the Colonies than have been paid hitherto, and that then the Colonies would not be prepared to pay it in the form of subsidies, but might not object to some indirect taxation, which practically admitted their right to greater fiscal privileges within the Empire than are accorded to foreign powers, I have, following the hints that I have seen in the public newspapers from time to time, formulated this subject for discussion. I have simply formulated it to draw attention to it, and to solicit an interchange of opinions on it, for I no more believe that my proposal could be carried into effect immediately, than Sir Samuel Griffith believes that immediate effect could be given to his.
The scheme which I wish to lay before the Conference is one which would promote a closer fiscal union between the various parts of the Enpire, which would produce revenue for Imperial purposes, and which at the same time would leave the various fiscal tariffs of the different parts of the Empire, of the Colonies as well as of England, untouched.
I will give some figures to show how this plan might work in practice. I am not, however, going to trouble you with very many figures. I find that the total inports into the United Kingdom from foreign countries in 1885 amounted to 283,000,000. That is the last year that I could get. The total foreign imports into the Colonies (I need not give the process by which I have arrived at the figures) for 1885 would amount to 66,000,000. The two together would give 352,000,000%, representing the imports of foreign produce into the whole of the Empire. Now, supposing that we were to levy an average rate of two per cent. all round (the tariff might be arranged s› that one class of goods should pay more than another), that 352,000,000l., representing the foreign imports of the Empire, would give a revenue of not less than 7,000,000l. That is a revenue which would pay for a very considerable part of the British Fleet. It would relieve the Colonies from the payment of subsidies, and at the same time that it would be paid by the Colonies it would be paid by Great Britain too, of course. I do not know whether Great Britain would feel it, or not, but the Colonies would not feel it, and it would establis!: a feeling on their part that whilst they were paying for the defence of the Empire, they were at the same time enjoying in British markets and in inter-colonial markets certain advantages which foreigners did not enjoy. That would establish a
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connecting link between the Colonies mutually as well as between the Colonies and the Empire also, such as is not at present in existence, and which might further develop by-and-by into a most powerful bond of union.
Now I know that there are various difficulties which may be started against this project, and I have noted some of them down.
The first is that it would be said that the proposal amounts to the levying of a differential duty, and that differential duties are bad in themselves, and therefore should not be allowed. But I maintain that this Imperial tariff of Customs would be no more a differential duty as between England and its Colonies than are the duties under the Australian Act authorising the Australian Colonies to grant-special privileges to one another's trade: so that it cannot be condemned on this account, unless we are prepared to demand the repeal of the Australian Act. (Hear, hear.) Then, again, in the Cape Colony we, to some extent, have differential duties also. We have a differential duty in the Cape Colony, not only between our Colony and another British Colony, but between the Cape Colony and foreign States. We have two Republics on our borders, the Transvaal and the Orange Free State; and one of our Customs Acts has a provision to this effect that all South African produce, including produce either from the Transvaal or from the Orange Free State, with the exception of some articles, such as tobacco, spirits, sugar, and coffee, shall be admitted duty free, and they are admitted duty free. While, for instance, all grain imported into the Cape from Australia has to pay duty to a very considerable amount, Free State and Transvaal grain pays nothing whatever. Moreover, I believe that in India a similar practice obtains: that any imports coming overland from the northern border States outside of India are admitted duty free, or at all events not under the same tariff as those which come into India by sea.
As a second difficulty it might be advanced that the proposed Imperial tariff would be an infraction of the most-favoured-nation clause in the treaties with foreign Powers. I do not know whether would involve any greater infraction of existing treaties than the cases which I have already quoted. If the cases of the Cape Colony and Australia cannot be considered as an infraction of these treaties, neither can the present proposal. But if it should, after all, amount to an infraction of existing treaties, then I should say that it may be as well that for the future England should take care that when treaties are entered into, the most-favoured-nation clause is not applied against its Colonies to the same extent and in the same way as if these Colonies were foreign Powers, instead of being integral parts of the Empire itself.
I, moreover, find that the system of favouring Colonial above foreign trade is one which is adopted by almost every other Colonial Power. France adopts it, Spain adopts it, Portugal adopts it. Holland does not adopt the system herself, but she allows her West Indian Colonies to levy a differential duty as against foreign goods, but not as against Dutch goods.
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We may be told, thirdly, that it means protection. Well, it may come to mean protection by-and-by. If the system should be introduced, it will depend very much upon the representatives of the Colonies of the Empire and of the United Kingdom whether it should be extended so far as to become protective in character or not. the present, however, I do not aim at protection. I aim at something that shall supply a cohesive force to the Empire, and shall at the same time provide revenue for defensive purposes. It may even be that in the course of years this system may, instead of proving a protective tariff, lead to absolute free trade as between the mother country and the Colonies. If the various representatives of the Colonies and of the Empire jointly should agree that there should be only one tariff, an Imperial tariff, and no local tariffs, you would have a Zollverein which involves perfect free tra le between the various parts of the Empire.
We may be told, fourthly, that it would revolutionise the fiscal system of England. England now-a-days obtains a revenue of some 20,000,000. from Customs. But that revenue in 1885 was levied upon imports amounting to only 28,900,000/., whilst articles free of duty were imported to the value of no less than 342,000,000. If the plan I have sketched were to work, the bulk of the articles imported into England should be taxed, however low the tax may be, or else some Colonies might complain that they" enjoyed no reciprocal advantage under the scheme. If England were to favour some classes of imports produced by certain Colonies, but not those produced by other Colonies, the plan probably would not work. If, for instance, wheat, which is a Canadian and Australian staple article, did not obtain this advantage, then Canada and Australia would hardly see the use of entering into the proposed arrangement.
As a fifth difficulty it would probably be advanced that the food of the poor man in England would be taxed. Now a tax of two per cent. or thereabouts would not raise
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