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PUBLIC RECORD OFFICE

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C.O. 885

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PUBLIC RECORD OFFICE, LONDON

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States, and which I do not see any prospect of being similarly introduced from Great Britain-mining machinery. Canada is fast becoming a great mining country. The United States are more accustomed to the manufacture of mining machinery, which is more suited to our purpose than anything we can import from Great Britain in that way. But if you talk in that way the increases are balanced. The figures have gone up very remarkably-62 per cent. against 12 per cent.-from Great Britain. But if you take the class of goods, as I hope to show, in which Great Britain can compete with foreige nations--there are two nations only that can be competitors with Great Britain in our market, except and besides our own manufactures—that is, Germany and the United States of America-compare the imports of Canada from Great Britain with the imports of Canada from these two great competitors of Great Britain, you will see there has been a marked advantage in favour of Great Britain.

Sir ALBERT HIME: Perhaps I might clear the ground a little bit if I mention that I had a conversation with Sir Gordon Sprigg on the subject of this preferential treatment of British goods in Natal and Cape Colony, and that we were at one in the matter of the desire to grant preferential duties to the Mother Country. So far as I am concerned, I have authority to offer the pre- ference the same as Canada has given--333 per cent. Of course, Sir Gordon Sprigg has not yet been able to give a pledge to that effect, but he will recommend it. We cannot do that, Sir, by means of a reduction in our duties, because our duties are low, and, of course, the Cape and Natal are in the same boat. because we are in a Customs Union there, and we hope all the Colonies of South Africa will very shortly be in the same Customs Union; there may be some slight difference in the tariffs-that is for the Customs Conference to decide. We hope to have such a Conference soon after I go back. But, in any case, the preference would be by means of an addition to the duties which would be imposed upon foreign goods and foreign manufactures. Our ordinary duty-the ad valorem duty—as imposed just now, Sir, is 7 per cent., but, of course, that does not represent our average duty; our average duty is about 17 por cent. That, of course, includes very high duties on such articles as spirits and tobacco and other specially-rated articles; but the main duty on ordinary goods that we are importing from England is 7 per cent., and that is more a revenue duty than a protective duty. We must have revenue, and therefore the only way we can give the preference is by raising rates against foreign productions, and that we are prepared to do so far as Natal is concerned-and, as far as the Cape is concerned, Sir Gordon Sprigg is prepared to recommend it, I think I speak subject to correction-by means of an additional duty on foreign gools of 33 per cent, I think, Sir, that that will clear the ground so far as the Cape and Natal ́are concerned, and probably so far as the South African Colonies are

concerned.

The SECRETARY OF STATE: May I, for arithmetical accuracy, ask whether you mean to add 33 per cent.? If you do, that would only give us a preference of 25 per cent.; you would have to add 50 per cent. in order to give us the preference of 33 per cent.

Sir ALBERT HIME: Assuming that 7 per cent. is our ad valorem duty, we would be prepared to make it 10 per cent, on foreign products.

The SECRETARY OF STATE: Then, of course, that would be a preference to us of 25 per cent ?

Sir ALBERT HIME: Yes.

Mr. FULLER: I may confirm what Sir Albert Hime has said about Sir Gordon Sprigg's views. My conversation with him was just on those lines. Our að valorem duty, that is, un leading articles that are not rated, is

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7 per cent., and Sir Gordon Sprigg would be prepared to recommend the raising of these to 10 per cent. But there are other ad valorem duties male, I think, specially for the natives, because it is a little difficult to get taxation from the natives-to the amount of 20 per cent. And there is a large number of rated articles, and a largo free list rather on the principle of bringing in the raw material such as sheet iron and so on, free; that has always been kept in view, and agricultural implements are free. But Sir Gordon Sprigg is prepare to lay down a general principle that what Mr. Chamberlain described as 25 per cent. rebate or one-third on, to the existing duties. would be prepared to submit that to Capo Colony. The duties, however, must be raised generally before the reduction to English importers can be made.

Ho

Sir ALBERT HIME: If I may be allowed, I do not know how that would affect any treaties that there may be at the prosent time, between the British Government and foreign countries; whether we could do it without interfering with the most-favoured nation clause; if it can be done by means of general ad valorem increase of duties excepting the British dominions or excepting the United Kingdom, or whether it can bo done by means of a hostile tariff against foreign importations. Of course, it comes to the same thing in the long run, whichever way wo look at it.

The SECRETARY OF STATE: On the occasion of the last Conference, on the recommendation, or at the request, of the Premiers then, we denounced the two treaties which stood in the way of arrangements of this kind betwoon the different parts of the Empire.

Sir ALBERT HIME: Germany principally.

The PRESIDENT OF THE BOARD OF TRADE: Germany and Belgium.

The SECRETARY OF STATE: Germany and Belgium.

Sir WILFRID LAURIER: There are no treaties in existence which would militate against anything on this subject?

The PRESIDENT OF THE BOARD OF TRADE: am not aware of any treaty obligations which would interfere at all-with such an arrangement.

Sir WILFRID LAURIER: No, I think not.

Sir ALBERT HIME: One more word, Sir, although we do not ask for any reciprocity in any shape, in the shape of condition of reciprocity, any- thing that can be given us in the way of a concession to the Colonies, will, of course, be welcomed. We do not make it a condition of any such arrangement.

Sir EDMUND BARTON: I should have liked, before expressing myself. with any great fulness on this subject, to have heard the views of the Minister of Customs of Canada in the statement which was promised us by him of actual experience he has had in connection with the working of the arrangement; but, I suppose, as Sir Wilfrid Laurier says, we shall hear something from him before the proceedings terminate. I feel, Sir, very much in the same position as Sir Albert Hime and Sir Gordon Sprigg in the statements that have just been made. I think we shall all admit that it is impossible to make any absolute rigid rule applying to all the autonomous Colonies constituting the Governments over which we preside, and it seems to me that a cautious beginning in a matter of this kind is the best beginning. In Australia we are very much in the same position as Sir Albert Hime has just described; that is to say, we must have the revenue.

We must have it for this reason, that we are bound under our constitution to make certain returns to the States, which requirement is for the maintenance

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