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Paragraph 23.-The headquarters of the cable company being a British company, should be in Trinidad, instead of, as at present, in St. Thomas. With the deferred rate there is little cause for complaint as to the charge per word to the United Kingdom. I fail to see (considering the cost of maintenance) how the company can be expected to reduce the local rates, which I consider low, being from Grenada to Antigua 8d. a word, Grenada to Barbados 4d. a word, Grenada to Trinidad 3d. a word, Grenada to British Guiana 10d. a word.

Paragraph 24.-It would be advantageous if there were more co-ordination as regards customs, company, and shipping legislation between the different groups of the West Indian colonies: this is hardly a subject matter to be dealt with by an Imperial Conference, but by instructions from the Secretary of State. The incon- veniences referred to are somewhat exaggerated.

Paragraphs 25, 26.-As regards paragraphs 25 and 26, as an old Crown Colony official, and having had experience in the West African colonies, I am of opinion that the colonies are best served by the recommendations of the man on the spot, which recommendations receive the consideration of the Secretary of State and his decision. In this way no persons who are working for their own particular Crown interests have the power of obtaining special consideration for their shemes. Colony government is the fairest for the colonies and the people of those posses- sions, and I should be sorry to see any change in the system or any interference in the government by a body of people in England who invariably have their own axes to grind.

Paragraph 28--This point must be considered and settled in conjunction with other subjects dealing with the Empire as a whole.

Paragraph 29.--I am in favour of the laws of naturalization being made more stringent, but this subject, as well as those referred to in paragraphs 32, 33, and 34. will be dealt with in connexion with similar recommendations which no dount will be made by other colonies.

G. B. HADDON-SMITH,

Governor.

Government House, St. Lucia, 5th February, 1917.

(No. 33.) SIR,

I HAVE the honour to acknowledge the receipt of the Secretary of State's circular despatch of the 25th September, 1916, in which he states that His Majesty's Government has under consideration the commercial and industrial policy to be adopted after the War and the measures to be taken to avoid any recurrence of the dangers to which the Empire has been exposed by the growth of German trade and influence within it.

2. Mr. Bonar Law also asks for the considered views of this Government on the recommendations of the Conference and on the questions submitted to the Committee so far as the circumstances of the Colony appear to call for special attention in connexion with them.

3. I consequently published his despatch in the Government Gazette, and referred it and its enclosures to the Agricultural and Commercial Society as being the body most representative of commercial and agricultural interests in the Colony and most competent to express the opinion of the community upon the points sub- mitted. The Society has duly considered the various questions and forwarded to me their views embodied in a statement a copy of which is enclosed herewith.

4. My Government has approached with some diffidence the consideration of this important subject, for we are aware that there are issues involved which, from the point of view of St. Lucia, may seem easy of solution, but which, when examined from the comprehensive standpoint of the United Kingdom and the British Dominions and Possessions, may present considerable difficulties.

5. The establishment after the War of a system of preferential treatment on manufactures and produce of the Empire between all parts of the Empire seems to us, though, to stand out clearly as one of the natural and essential results of the War. For St. Lucia we regard the adoption of this policy as necessary to her, welfare and progress, and it would certainly be some reward to her for such small assistance as she has been able to contribute, and has gladly and proudly afforded, in our great national struggle. We confidently look to His Majesty's Government to take a lead in this matter upon the conclusion of the War, and by their indispensable aid to weld the Empire for trade purposes, so far as practicable. into one commercial whole.

6. The tariff policy governing the commercial relationship between the Imperial Government and other foreign nations will also in due course be deter- mined by His Majesty's Government, and the same policy must, so far as possible, inevitably govern the commercial relationship between this Colony and those nations. Nevertheless, this is a question of vital importance to St. Lucia, and for this reason it has been decided to discuss it here.

7. It is reasonable to anticipate that our Allies will expect, and justly so, that some special trade considerations should be extended to them over and above those granted to neutral nations. On the other hand, it is obvious that if those neutral nations who may wish to trade fairly with us after the War are not to be antagon- ized and thrown into the commercial arms of our enemies, we cannot afford to treat It has been necessary, there- them in tariff matters differentially to our Allies.

fore, to consider in what manner we can afford more favourable treatment to our Allies, apart from tariff reductions, and we believe that this can most effectively be done by the adoption of the proposals set out in the resolution C. II. of the Paris Economic Conference, namely, the establishment of direct and rapid land and seaport services at low rates, and by the extension and improvement of postal, telegraphic, and other communications." By these measures an indirect preference over the neutral nations would be conferred upon the Allies, but of such a nature as, whilst not alienating the sympathies of the neutral nations, would enable us and our Allies to secure an undoubted advantage for the sacrifice and sufferings we have together endured.

8. Whatever policy be decided upon in this regard, it is very important in our opinion that the United States of America should not be placed on a less favoured basis in regard to tariff rates than any other foreign nations, even including our Allies. We cannot forget in St. Lucia-and other West Indian islands have no doubt been similarly placed--that during this War we have been much beholden to the United States of America in maintaining our food supplies and other necessities. Both in regard to that, as also to our export trade, without their aid we might have found ourselves in a most serious predicament, for it is unlikely, owing to the scarcity of shipping, that either the United Kingdom or Canada could have made good our deficit either in foodstuffs or other commodities, nor have absorbed all our agricultural produce.

9. In St. Lucia it was not anticipated that the reciprocal preferential trade arrangements which were concluded in 1912 between the British West Indies and Canada would lead to injurious treatment of the West Indies by the United States of America. The United States of America have always recognized the justice of reciprocal tariff arrangements of this kind between different sections of a nation, and they have, moreover, emphasized their understanding of this policy by insti- tuting similar reciprocal measures with their own Dependencies and Protectorates. Nevertheless, they have it in their power, owing to their contiguity and the natural markets for our produce that they present, even if British Imperial preference became a fait accompli, to inflict much harm upon the West Indian islands.

10. It may further be noted in this connexion that the whole of the bunker coal trade in St. Lucia, which is of great revenual importance to the Colony, is conducted with American coal. It is improbable that this source of supply will be changed after the War, especially in view of the shorter distance of carriage from the United States of America to here than from the United Kingdom or Canada, and the consequently cheaper freight rates charged for conveyance. There is already a preference of twenty per cent. on British and Canadian coal imported into the Colony for re-export or other purposes, but although four years have elapsed since the granting of this preference there has been no change effected in favour of the introduction of coal from either of those countries. Much of the shipping calling at the port for bunker coal carries American goods and is in American hands. The tendency, therefore, would naturally be to continue an American source of supply. Indeed, it is owing to the source of supply being American that St. Lucia has during the War been able to maintain a constant and sufficient supply of bunker coal and has also for this reason frequently been assistful in furnishing the bunker needs of the Admiralty colliers and transports, without recourse to United Kingdom supplies, which might not have been available. The imports of coal from the United States of America before the War varied from 100,000 to 120,000 tons per annum.

11. Having regard to the above, and apart from any other considerations that may affect the situation from the point of view of the United Kingdom, my