*>. IMAGE EVALUATION TEST TARGET (MT-3) y A {/ y % v\^ ^ Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y MS80 (7)6) 872-4503 CIHM/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 Technical and Bibliographic Notes/Notes techniques et bibliographiques The Institute has attempted to obtain the best original copy available for filming. Features of this copy which may be bibliographicaily unique, which may alter any of the images in the reproduction, or which may significantly change the usual method of filming, are checked below. L'institut a microfilm^ le meilieur exemplaire qu'il lui a 6X6 possible de se procurer. Les details de cet exemplaire qui sont peut-dtre uniques du point de vue bibliographique, qui peuvent modifier une image reproduite, ou qui peuvent exiger une modification dans la m^thode normale de filmage sont indiqu^s ci-dessous. D Coloured covers/ Couverture de couleur I I Covers damaged/ Couverture endommagee □ Covers restored and/or laminated/ Couverture restaur^e et/ou pellicul^e □ Cover title missing/ Le titre de couverture manque I I Coloured maps/ D n D Cartes g6ographiques en couleur Coloured ink (i.e. other than blue or black)/ Encre de couleur (i.e. autre que bleue ou noire) I I Coloured plates and/or illustrations/ Planches et/ou illustrations en couleur Bound with other material/ Be\\6 avec d'autres documents Tight binding may cause shadows or distortion along interior margin/ La reliure serree peut causer de I'ombre ou de la distortion le long de la marge intdrieure Blank leaves added during restoration may appear within the text. Whenever possible, these have been omitted from filming/ II se peut que certaines pages blanches ajout6es lors d'une restauration apparaissent dans le texte, mais, lorsque cela 6tait possible, ces pages n'ont pas 6t6 filmdes. □ □ Coloured pages/ Pages de couleur Pages damaged/ Pages endommag^es Pages restored and/or laminated/ Pages restaurdes et/ou pellicul6es Pages discoloured, stained or foxed/ Pages d6color6es, tachet6es ou piqu^es Pages detached/ Pages d^tach^es Showthrough/ Transparence Quality of print varies/ Quality in6gale de I'impression Includes supplementary material/ Comprend du materiel supplementaire Only edition available/ Seule Edition disponible Pages wholly or partially obscured by errata slips, tissues, etc., have been refilmed to ensure the best possible image/ Les pages totalement ou partiellement obscurcies par un feuillet d'errata, une pelure, etc., ont 6t6 film6es d nouveau de fapon 6 obtenir la meilleure image possible. D Additional comments:/ Commentaires suppl^mentaires; This item is filmed at the reduction ratio checked below/ Ce document est filmd au taux de riiduction indiqud ci dessous. 10X 14X 18X 22X 26X 30X y 12X 16X 20X 24X 28X 32X The copy filmed here has been reproduced thanks to the generosity of: National Library of Canada L'exemplaire film6 fut reproduit grdce d la g6n6rosit6 de: Bibliothdque nationale du Canada The images appearing here are the best quality possible considering the condition and legibility of the original copy and in keeping with the filming contract specifications. Les images suivantes ont 6t6 reproduites avec le plus grand soin, compte tenu de la condition et de la nettetd de l'exemplaire film6, et en conformity avec les conditions du contrat de filmage. Original copies in printed paper covers are filmed beginning with the front cover and ending on the last page with a printed or illustrated impres- sion, or the back cover when appropriate. All other original copies are filmed beginning on the first page with a printed or illustrated impres- sion, and ending on the last page with a printed or illustrated impression. Les exemplaires originaux dont la couverture en papier est imprim^e sont film^s en commencant par le premier plat et en terminant soit par la dernidre page qui comporte une empreinte d'impression ou d'illustration, soit par le second plat, selon le cas. Tous les autres exemplaires originaux sont filmds en commengant par la premidre page qui comporte une empreinte d'impression ou d'illustration et en terminant par la derniire page qui comporte une telle empreinte. The last recorded frame on each microfiche shall contain the symbol — ^ (meaning "CON- TINUED "), or the symbol V (meaning "END"), whichever applies. Un des symboles suivants apparaitra sur la dernidre image de chaque microfiche, selon le cas: le symbole — ^ signifie "A SUIVRE", le symbole V signifie "FIN". Maps, plates, charts, etc., may be filmed at different reduction ratios. Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Les cartes, planches, tableaux, etc., peuvent dtre filmis i des taux de reduction diff^rents. Lorsque le document est trop grand poLr 6ue reproduit en un seul clich6, il est film^ d partir de Tangle sup^rieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images ndcessaire. Les diagrammes suivants illustrent la mdthode. 1 2 3 1 2 3 4 5 6 IMPERIAL CrsTOMS UNION IMPERIAL CUSTOMS UiXION A PRACTICAL SCHEME OF FISCAL INION FOR THE PIRPOSESOF DFFENCE AXI) PREFERENTIAL TRADE FROM A (OLONIST S STANDPOINT BY K. N. MACFKi:, M.A., B.CL. 1. ON DON EFFIXGHAM WILSOX ROYAL EXCHANGE, E.G. 1800 8450 pkefacm:. The fiscal union outlined in the followiiif^ pa^'es is submitted to the public as a simple and practi- cal)le plan of stren^'tbenin^' the ties which unite the several parts of the iMiipire, acceptable to protectionists, yet consistent with free-trade principles. Durinj^ my lon<^' residence) in Canada, the most protectionist of Colonies, I became con- vinced that moderate, protection was benefi(;ial to Colonies in the early years of their development, thou^di free trade is un([uestionably the most advantageous policy for Great J^ritain. In formu- latin*,' this scheme I have avoided, on the one hand, the Scylla of extreme protection, and, on the other hand, the Charybdis of universal free trade. The proposed union be^^nns with free trade throu«{hout the Empire in seven products — flour, wheat, mutton, cheese, tallow, hides and skins — which are important exports of nearly all the self-governing Colonies, and with a duty of either ten per cent, or fifteen per cent, upon the imports thereof from foreign countries. This duty pro- VI 1'J{j:i'A( K. (luces a])()ut .l''),0()(),()0{), wliicli is used in a pro rata nuluction of otlier taxation. It represents a protective l)onus of al)out .t'2,(K)(),0()() annually in favour of British af^jriculture, and an e(jnal amount as a stimulus to Colonial production. Tliis is justified on fiee-trade princi|)les as a nu-asure of precaution aj^'ainst food famine in time of war, and as such is an increase of ahout six per cent, in our total expenditure for dtifence. It is offset^ besides, by the pi'oposal that the (^olonies shall assume one-half the cost of tlie Imperial n imports. ^J'his confeisa benetit upon British tradei's of about l'SOO,000 annually, on the basis of the trade of 1S04. The t^overmnental control is vested in a con- sultative intiM'-Colonial conferen(!e holdinfjj biennial mGetin<^^s, and in an administrative council of Colonial agcuits in London. K. N. MACFbLK. London, 30/// Mai/, 1S%. TAIJLK OF CONTKNTS. <'HAr. I'AOK 1. Int»odlctuuy * 1 II. TiiK Poi-rriCAi, and C'ommkikiai, Unions ok tmk I'ast 5 SkcU'ii of tlu' Acliiiiiiii, Pxi'Dtiiin, and .I'ltoliaii r.i'U^iics, i)f tlie HiUisfatic I.cai^iu', the Swiss Ffdcnition, the (tfiinan /ollvcicin, and tlio Cuiiffdcration of the I'Mited States of America. J 1 1. Imi'kkiai- Dkfknck IG liritisli and Colonial Systems Tahlc of Mxpcudi- tures of each Devflopiueiit of Colonial Feeling in favour of Assist in;^ in Defence of the Empire— Necessity of I'nited Action. IV. (tOVkunmknt and Contuol 28 Natural (iiowth of Constitutional Systems Inter- colonial Conferences a Nucleus of the C^onsulta- tive Branch of an Imi)erial L'nion— Colonial Agents (ieneral as Members of an Imperial Admiiiistrative Council— List of luter-Colonial Conferences. V. Imi'kuiai, Takiffs ... ... 44 Uespective Merits of Free Trade and Protection Policies Exports the Criterion o^ Prosperity - Table of lmi)orts into United Kingdom of various Colonial Specialties— 'J'ahle of Imi)orts of Do. from Foreign Coujitries, and .Amount of fifteen per cent, and ten per cent. Duties thereon Do. from P.rilish Possessions with same Duties — British Agriculture— Ohjections Answered Table of Imports of same Colonial Specialties into Colonies. VIU CONTENTS. (HA I'. VI. COI-OXIAL Tauiffs liapid ProporliomvU' (Itowtli of Colonial Fort-ign Coimiieive- Tiililf of Import ( of Miimifarturrs into Colonios, with iVrn ntiig»'s— Tal)le of Colonial Duties I'roix.sed Maxinunn and Mininiiun Tarif! into C( Ionics— Objcctious Answered Treaties. VMM 0(1 VII. TnK CoNsriTiTios of tiik Imim-.iiiai, Ctstoms H2 Union ... 1 GO ^'ort'ign ii(!turt's ,l)lc of n Hud CHAPTKK 1. IrSTOMH 82 INTUODUCTOUV. The political and conimercial union of indepen- dent communities lias been attempted with vary- in"; success at all periods of history, and numerous instances of such union may be cited as examples for our f^uidance. But in ancient and mediaeval times the obstacles to be overcome were very dif- ferent from those which beset a commercial union of the British Empire. In the former case the dilliculties were chiefly material and objective, whereas those which we have now to encounter are larpjely sentimental and subjective. In earlier times tlie semi-civilised condition of the members of the organised union, the turbulent cliaracter of many of their citizens, the inefficient means of communication even between countries not widely separated from one another, and the consequent lack of frequent intercourse between the difterent members, all tended to render an organised union of independent communities most difficult. And when such a union was accomplished, the same inQuences tended to weaken the bonds by which IMPERIAL CUSTOMS UNION. they were !ifc first joined. In modern times, however, the use of steam and electricity has ehminated distance and l)rou<,dit into intimate relationship connnunities l)etween which, in earlier times, intercourse was almost impracticable. The development of international trade and the ex- tended habit of forei<,m travel whicli characterises the citizen of modern civilised states have begotten a feelinp; of fellowship and an identity of in- terests between widely separated connnunities which make strongly for organised union. But with this elimination of material obstacles by the advancement of science, there have grown up sentimental and subjective principles of action which counterbalance to a large extent the cen- tralising agencies of this greater freedom of inter- course. Among such principles of nationalistic action may be mentioned, on the one hand, the dogmatic belief entertained by the inhabitants of the British Isles of the universal efficacy and applicability of the principles of free trade, and, on the other hand, the strenuous maintenance by nearly all the continental nations of Europe, by the great majority of the British self-governing Colonies, and by the United States of America, of the benefits of a protective tariff as applied respectively to the peculiar circumstances of each of them. Therefore, in fornnilating a plan for the commercial union of the whole, or of a large INTRODUCTORY. 8 portion of the British l^]mpire, allowance must be made for obstacles arising from these diverse tenets of national belief, and means must be devised for overcoming such subjective difficulties. In studying the influences which operated in the creation of the political and commercial unions of the past, and in their continuance and extinc- tion, the existence of war or peace, or the prospect of either, stands prominently forth as the most potent principle of action. The fear of external enemies and the pressure of war have, in nearly every case, l)r()ught about this political and com- mercial union of independent communities, and the bonds which united them have been strength- ened or relaxed according as the influence of war was more or less perceptible. In times of peace such unions tended invariably to slacken ; domestic difiiculties between the members com- posing the union began to show themselves, resulting in some cases in open rebellion ; and the centralising influences became reduced to a minimum. But when an attack from without threatened the members of the union jointly, or any of them individually, the bonds of union grew taut ; the citizens of the respective communities made up their private quarrels and rivalries ; and each member of the community became willing again to strengthen the central authority even to the diminution of local rights. The same results 4 IMPERIAL CUSTOMS UNION. were observable v/hether the union was both poHtical and commercial like the Everlasting League of Switzerland, or chiefly commercial like the Hanseatic League, as will be shown in detail later on. This inter-relation of a state of war, either actual or prospective, with conservancy of political or commercial union is the key to the formation of an Imperial Customs Union for the British Empire, and must hold the foremost place in any successful scheme for such a union. both asting al like . detail )f war, yiicy of to the for the st place ■J* CHAPTER 11. THE POLITICAL AND COMMERCIAL UNIONS OF THE PAST. The earliest instance of successful and widely diffused political and commercial union of which any details have come down to us is that of the Achaian League, which existed from B.C. 274 to B.C. 146. This union was formed of several Greek city communities which agreed to organise themselves into a league for mutual protection against external enemies, and in so doing to assign certain rights and certain control belonging to each member of the group as a sovereign com- munity, to a central body which should exert authority over all the members of the league in those matters assigned to it. There was a central assembly of which the members were elected by the constituent cities ; and this central assembly had control over everything relating to war and peace ; but the separate cities were allowed great local autonomy, even to having themselves subject districts whose inhabitants had no direct share in the general federal citizenship. ** It was an Achaian nation with a national assembly, a (5) 6 IMPERIAL CUSTOMS UXIOX. national government, and a national tribune to which every Achaian citizen owed allegiance."' But the cities were not municipalities, they were sovereign connnonwcalths. In all external matters the federal government reserved to itself full authority. No independent diplomatic action could he taken by the individual cities, though particular embassies were, on several occasions, allowed by licence of the federal government to the constituent cities. The central assembly was not a representative body, but a primary open meeting. Every free Achaian, thirty years of age, could vote and speak, no matter where he resided. The president of the assembly had large personal powers, and had a number of counsellors, analo- gous to a modern Cabinet, to advise him. These usually fcu'mulated the federal measures, and proposed them in the assembly. The main object of this union was, however, political rather than commercial, and we do not hear of any measures of commercial import being passed by the federal assembly. The constituent cities were requisi- tioned for troops and moneys as they were re- quired, but we do not know of any special powers conferred upon the assembly to enforce its ordi- nances, nor of any penalties prescribed against cities wliich refused to comply with the demands ^Freeman's Federal Government ^ p. 2.53. POLITICAL AND COMMERCIAL UNIONS. lie to .nee. they terniil . itself action hough asions, tent to ily was { open of age, -esided. ersonal aimlo- These !S, and 1 ohject 31' than easures federal equisi- ere re- powers s ordi- I against I 1» lem ands of the federal power. We read of two cities refusing to pay the federal contributions, but we have no information as to whether they were coerced into doing it. For this reason it was chiefly a feeling of self-interest which kept the union intact; and in time of peace, when the incentive to union was very slight, we find that the federal power greatly weakened, but in time of storm and stress the constituent cities drcnv more closely together, and obeyed with alacrity the behests of the federal authority. The Achaian League was weakened, *' indeed it finally perished by nothing so much as by the attempt to retain members in the federation against their will ".^ Many points of resemblance between this constitution and that of the British Empire may be indicated. P^very British Colonist exerts an influence politically upon the Imperial l^irliament, when, and only when, he resides in the United Kingdom. 8o the Achaian citizen had to be present at the capital in order to make good his vote. Certain British Colonies have also occasion- ally been allowed to nominate representatives who were practically ambassadors. The union of the British Empire is kept intact mainly by a feeling of self-interest and of patriotic loyalty, as was the case with the Achaian Leafrue. 1 Freoinan's Frdrrtd (ion riiincnf, p. 111>. 8 IMPERIAL CUSTOMS UNION. In the Boeotian League, and the iEtolian League, the same principles were maiiifest, and they give us no further Hght upon the successful manage- ment of a union of independent comnnmities. These various leagues differed somewhat in their principles of union. The Achaian League gave each city an equal vote ; the Boeotian League gave Thebes two votes, and each of the other cities one. The Lycian League gave votes, some one, some two, and some three, according to the size of the cities. Prof. Freeman says,^ " All federations except the German Empire (and that is a federation only in form) have been formed by a number of small states which agreed in the face of some greater power that threatened them to become one state for all purposes that touched their relations to other powers. This description suits all the main federations of the world, old and new." The lessons we learn, therefore, from the several Greek federations are, that they were originally constituted for the purpose of defence ; that the bonds became tighter in times of trouble, and relaxed in times of peace ; and that these various unions attained great power, carried on succesf-ful wars and maintained their federal independence through several generations, though the individual m. ■1^ ■f ^ Freeman's Greater Greece^ Greater Britain^ p. 62. POLITICAL AND COMMERCIAL UNIONS. 9 League, ey give nanage- es. v'hat in League League e other iS, some I to the cept the . only in of small greater ne state tions to |he main several •iginally that the )le, and various iccest-ful (endence Idividual members of each federation were bound simply and voluntarily by a bond which they considered themselves at liberty to sever whenever their own interests should so dictate. The history of liome shows us the acme of centralisation, with the minimum of connnercial development, while the story of Carthage displays the same extreme centrahsation with a wide range of connnercial development. But in the former ■case, and probably in the latter case also,^ '* each ■community retained for the most part its own commercial laws and customs duties, which operated to some extent in impeding the free interchange of their diverse commodities ". Cus- toms duties were established for revenue, not protection, and duties were paid back in case of re-exportation or lack of sale. In neither case was there an}^ scope for a political or a commercial union. The most interesting experiment for the purpose of our subject was that of the Hanseatic League, which comprised from sixty to eighty cities, and which was both a political and a commercial union. These cities were divided into four leading divisions, each division being grouped around its chief city, — Lubeck, Cologne, Brunswick, and Dantzic. A congress met every three years and comprised ). 52. ^Meri vale's Hint or y of Rome, vol. viii., p. 3.5(5. f 10 IMPERIAL CUSTOMS UNION. deputies from the various towns. It was a de- liberative assembly. When their deliberations were completed, the decrees were formally com- municated to the magistrates of the city at tbe head of each circle, by whom they were com- numicated to the minor cities. The deputies always insisted upon referring every important matter to the town council at home, as their own powers were insufficient. " It was only in time of danger that the league displayed any real consistency ; when the immediate danger was withdrawn, the want of union soon made itself again manifest. The towns joined the league of their own accord, but never considered them- selves bound to send deputies to the general assemblies." ^ Notwithstanding the voluntary character of their association, for three centuries the Han- seatic League held together, and not infrequently sacrificed their individual advantages for the common good. Their primary purpose was to promote the commerce of the federated towns, and to defend the highways and waterways of commerce. The penalty for non-observance of their decrees was expulsion from the league^ and as the advantages of commerce and of pro- tection were important, especially in time of war,. ^ Eiu-i/clopirdia J3ritannica, art. "Hanseatie League";, MacCulloch, art. Fonujti Quarterlij, 1831, p. 132. POLITICAL ANP COMMERCIAL UNIONS. 11 this constituted a inciiiico a;,'iiinst non-compliance with the ft'deial decrocs. ('onnn(>rce was free between the several cities of the leagiu\ and they ol)tain(Ml many very valuahle privile^^es in foreign countries in regard to the estahlishment of manu- factories and hanks. ''In the fourteenth C(>ntury the Hanseatic League changes from a union of merchants ahroad to a K^ague of towns at home. The league thus formed could scareidy liave held long tog(!ther, or displayed any federal unity, but for the pn^ssure of external dangers." ^ The constituent cities were requisitioned for moneys to carry on the war, but the weakness of the federal assembly made it largely a question of ])argaining between the general assembly and the constituent cities, when each levy or tax was im- posed, as to the proportionate amount of each. The rivalry of the English and Dutch and the discoverj'^ of America eventually weakened the league, and gradually most of the towns broke away, the last assembly being held in lOi'yd. The German Zollverein is anotlu^r instance of a successful Customs League. In this case the contracting states, with Prussia taking the lead, entered into a Zollverein which provided that per- fect freedom of commerce should be established between the contracting states ; that duties on * Encyclopndia /iriiamu'ca, art. " Hanseatii.' Lea<;iie". r 12 IMPERIAL CUSTOMS UNION. importation, exportation, and transit should be identical ; that these should be char^'ed alon^' the frontier of the dominion of the contracting parties; and that each should participate in the produce of such duties in proportion to population. There were a few exceptions, such as patents, copyrights, and monopolies. This was an ideal Customs Union, providing for free trade within the terri- tories of the league, and a uniform tariff against all foreign countries. An assembly of representa- tives, one from each of the allied states, met annually to hear complaints and to adjust diffi- culties ; they had to be unanimous in their decisions. This union eventually merged into the present German Empire, in which the same principles are now in force. The story of Swiss development from the ori- ginal union of the three forest communities into the Everlasting League ** for the purpose of self-defence against all who should attack or trouble them," until the new constitution of 1848, is a striking manifestation of the principle that the federal bond is strained almost to the point of snapping in times of peace and prosperity, but is tightened and strengthened in periods of danger from external attack. A learned writer states : ** The original contrasts between the social con- dition of the different members of the league became very marked when the period of conquest POLITICAL AND CUMMKHCIAL UNIONS. 13 be;^^an and led to quarrels wliicli a few years later ripened into civil wor ".^ At first common action was limited to the meetinf^ of two envoys from each mem])er of the leaf^ue, and one from each of the Socii, or depen- dent associates in the diet. The powers of this diet included forei<,'n relations, war, and peace, and connnon arranj^'ements as to police, pesti- lence, customs duties, coina^'e, etc., but they entailed frecjuent references to the representative Government, which gave their envoys very slight powers, The decision of the majority did not hind the minority save in the case of the affairs of the bailiwicks ruled in common. Thus everything depended upon common agreement and good-will, but quarrels arose as to a division of conquered lands. During the seventeenth and eighteenth centuries the country was distracted by religious wars, and very little progress was made in political or commercial development. But in 1798 a paper constitution was imposed upon the Swiss Confederation by the French liepublic. This was re-modelled in 1802 by Buonaparte and was subsequently changed in 1815 by the Vienna Congress, which gave to each of the twenty-two cantons one vote in the diet wherein an absolute majority dt^.cided all questions except foreign affairs, ^ KncijvlopiviUn J)ri(((iiiiic(i, art. " Switzorliin) impp:iual defence. 17 respective requirements of each part. The army comprises two distinct classes, viz., that which is maintained continuously in service, and that which combines military duties with civil occupa- tions. The latter is essentially an army of de- fence and cannot be moved outside of the Colony or country in which it is trained. It comprises tlie volunteers and militia of the United Kingdom, paid out of the revenues of the United Kingdom ; the volunteers and militia of Canada, paid by the Government of Canada ; and the militia and volunteers of the other Colonies, paid by their respective Governments. The former is our movable army, which numbers about 219,400 officers and men, and is used to guard the most important and most vulnerable portions of the empire. A large part is kept continuously in India, which pays the total cost of the portion kept there. Another large contingent is kept in the United Kingdom as a reserve force in case of attack, while a few battalions are centred at points of strategic importance throughout the world to guard the lines of communication l)etween the Mother Country and the Colonies. As regards the navy, it is practically all main- tained by the United Kingdom. The people of Australia have several gunboats which are manned by British officers and men, but are paid for by a fixed annual subvention from the Australasian 2 it/' 11 i I 18 IMPERIAL CUSTOMS UNION. Colonies to the British Government. The pro- portion of expense, therefore, paid by the Colonies for the maintenance of the navy is infinitesimal, the Mother Country having to pay almost the whole. The proportion is estimated at about 19s. 6d. to Od., that is as 39 to 1. The Colonies have become so accustomed to the idea that the navy is the British navy, that its maintenance at its present state of efficiency is essential for the protection of the commerce of Great Britain, and that the existence of the Colonies as Colonies does not increase the naval expenditure of the Mother Country by even one ship, that it becomes a serious problem to induce them to pay any larger share. It cannot be doubted, if Great Britain were engaged in a war which threatened her Imperial position, that the Colonies would sacrifice their last man, and expend their last coin in coming to her rescue. This has been stated explicitly by Sir Julius Vogel and other prominent Colonial statesmen. The loyalty of the Cfouadians and their devotion to the empire are strikingly set forth in these noble words of the Toronto Globe in its issue of 21st December, 1895. Speaking of the bellicose message of President Cleveland respecting the Venezuela boundary, it says : " Grave as i« the situation thus created for Canada, it is one which she accepts absolutely without murmuring. She IMPERIAL DEFENCE. 19 will not complain that she will be involved in the consequences of a dispute with which she has no concern, because it is of her own free choice that she remains a member of a world-wide empire with world-wide responsibilities. In such a situa- tion there is but one feeling, and that is a desire to co-operate heartily with Great Britain in her efforts to bring the controversy to a peaceful and honourable issue." The same sentiments were expressed by other Canadian papers. But in times of peace each Colony vies with the other in her endeavours to minimise her contributions to the general defence, and allows her sense of security to overshadow the duty of making pre- paration against attack. Besides, they have come to rely upon the ^Mother Country for naval pro- tection. When the Colonies were granted self- government, the Imperial Parliament omitted to give it subject to the payment of 'd pro rata share of the general defence of the empire. This omis- sion was mentioned by the late Lord Beacons- lield as a matter of special regret. The Colonies are therefore like a son who has been set up in business for himself and who has been granted, say, the free use of his business premises. After a series of years he considers he has a prescriptive right to the continuation of the free occupancy of such premises, and the attempt to make him pay for them, or to eject him from them, would be U 20 IMPERIAL CUSTOMS UNION. resented as luijiist treatment. In the same way the Colonies have come to regard the protection afforded by the Imperial fleet as their right without payment. In order to induce them to contril)ute their share of expenses it is necessary to enter into a new arrangement by wliich, for a considera- tion, the Colonies will undertake, in addition to other concessions, to pay a share of the burdens of Imperial defence. This consideration will be set forth in another chapter, and must partake of the nature of a preferential tariff upon Colonial produce coming into the United Kingdom. Other mutual advantages will also be set forth as inducements for the contracting parties to enter into such an agreement ; at present, however, we are dealing simply with Imperial defence. The apprehension of a great war or of attack from external enemies may be necessary to induce the Colonies to enter into a new arrangement of this character. Still, a great deal may be done to create a feeling in favour of this proposal by pressing the question firmly and continuously upon the attention of the Colonies. The amounts expended during the years 1892-98- 94 (the last years in wliich full returns are at hand for all the British possessions) by the respective portions of the British Empire, with their popula- tions and expenses per head, w^ere as shown in the Table (page 21). IMl'KKIAL DEFENCE. 21 -^ T rO I- -r of — — . ro OJ Ol ^ Q 3 i -r ci panitlUKi.) }o tioij.uxloaj oi I- r3 o o ■aniioASH •>) JO IliiI).ln(I().I([ c s o o 0-1 o a o be a n « a ^ ^^ ?o o Oi ■H(>jj»iiml(»(f — ri ;o pvMfi .19(1 a.injij(uo{ 1 1 • , -^ >>\ CO rH "-I t- C5 O -H •<}< ♦^ CO o.uispii Q Q (M 1 - ^5 o t"" r- Ol ^s -H a O O L— 1^ IT- t- o rti c 5 i c: O O f^ t^ '^ '^^■ -^ r^ ^, -i t V-H O So Z^ oi s o ^ 1 O i of c4 cc t^ -r' ,^ ^ s§ -:^ I— ^ '^ m 1 ^ iJ - i "1? • oo . •— < s--^ >> 3^ X '^, - 2 S • > ^ y, JO !■- *^ 'r X ii n 0; -ti _r 8 = => O S >-. ■A >> • * •J! ;<: O s. ^.S a o e 5 r-i ^ < . o la vc: ^ -^ >> S .7 ^ ~ 1 ^ ' o H > o in O H » a cS u o •*^ > o u en c3 ^i r X) 5-" a: a o o CO o 3 a o u i;. rv 22 IMPERIAL CUSTOMS UNION. Canada expended for defence from 18(58 to 189H inclusive .17,000,000. Australasia to 1898 had incurred a debt for defence of i,'2,()r2,744, besides large expenditures out of annual revenue. These figures show that the United Kingdom pays a very much higher proportion than tlie Colonies, whether it is estimated as regards population or revenue, or combined exports and imports. In making a new arrangement it would no doubt be possible to induce the Colonies to increase their proportion, just as a first step was made in 1887 when the Australasian Colonies agreed to contri- bute £126,300 annually, and the interest at five ptr cent., not exceeding £85,000 annually upon the capital outlay, for an Australian squadron to be built and manned by the British Admiralty. Such an increased contribution would probably be most easily obtained by asking the Colonies to under- take jointly with the United Kingdom the expense of the maintenance of the naval bases outside the United Kingdom, which amounts to about £2,000,000 per annum. These naval bases, main- tained as Imperial naval stations, are : Simon's Bay, Trincomalee, Bermuda, Esquimault, Halifax, Malta, Gibraltar, St. Lucia, Hong Kong and Ascension. These are all points of strategic im- portance, and are quite as necessary for the pro- i '.lion of the sea-borne commerce of the Colonies as of that of the United Kingdom. To these IMPERIAL DEFENCE. 23 might be added : Cyprus, Natal, ^lauritius, Sierra Leone, St. Helena, Ceylon, Straits Settlements, Barbados, and Jamaica, all of which still possess Imperial garrisons. The total number of troops stationed in the Colonies is 82,000 men, towards the cost of which the Colonies contribute now al)out £250,000. If the expense of these naval bases and Imperial garrisons outside of Great Britain is fixed at £2,000,000 a year,^ it should be possible to get the Colonies to pay one-half, which is the proportion they are now contributing to the erection of fortifications at Esquimault, Cape Town, Freetown, St. Helena, Singapore and Hong Kong, towards which the Imperial Govern- ment also now contributes about one-half the esti- mated cost.'*^ This contribution would raise the annual expenditure of the self-governing Colonies upon defence from its present amount of ,i' 1,500,000 to £2,500,000. The Colonies have gradually been worked up to the point of contributing more and more to their own defence and that of the Empire. In 1875 Lord Carnarvon asked two of the Australasian Colonies to contribute i-4000 each towards the government of the Fiji Islands, but they declined. ii m I' I ^ The amount estimatod by Sir Charle^^ Dilke and Spencer Wilkinson in their work on Imptrial Di'/ence, p. 181. - The Colonial List for 1895, p. 11). 24 IMl'KKIAL CrSTOMS UNION. Since that time the several Austrahisian Govern- ments have undertaken the payment of the maintenance of an Aiistrahan squadron, and have joined with the British Government in fortifying* strategic points both in and out of their respective countries, which were deemed necessary for joint protection — for example, Albany in West Australia and Thursday Island off the coast of Queensland. Canada, too, has undertaken the suppression of a r.'bellion within her borders for which a few years ago she would have expected the assistance of Im- perial troops. She has also subsidised the Canadian Pacific liailway, which is invaluable as an Imperial military route. Both the Australian Colonies and Canada voluntarily offered assistance to the Im- perial Government at the time of the Egyptian campaign, and recently for the Ashanti and Soudan expeditions. It is therefore only a ques- tion of appealing to the Colonies in a proper manner, stimulated perhaps by an apprehension of attack, in order to induce them to contribute more largely than they do at present to the defence of the Empire. The reply made by the Colonies now to charges that they do nothing towards the defence of the Empire is a general denial, and not a plea (which would have been alleged a few years ago) that they are not under any obhgation to do so. They now allege that they do contribute a fair share towards Imperial defence. IMPEiaAL DEl'KNC'E. 25 The serious results which would follow a defeat of the Imperial navy — results (juite as iin[)oi-tant for the Colonies as for tlie ISIothei' Country — must be manifest to all. The sea-borne commerce of the Colonies with foreit^n countries is incrcasinjj; more rapidly than that with the United Kin^'dom, and the injustice of relying upon the British fleet to protect this foreign-^'olonial commerce without any contributions from them, emphasises this demand for a larger contribution than that at present made. " Besides, the sea-borne commerce of the Colonies with Great Britain is increasing year by year, and the importance of these lines of •communication being maintained at all times for that commerce is becoming more fully realised. A total external trade of about ct'.58,00(),UOO in 1800 has grown to ,i'97 8,000,000 in 1898. In the same period the Colonial population needing com- munication with the United Kingdom has grown from about '2,750,000 to 21,000,000. The movement of this vast volume of trade is the life-breath of the Empire. Unless communication between the scattered members of the nation can be maintain- ed, the Empire must be broken into fragments." "It is true that the provision of an Australian squadron marks a distinct advance (upon the idea that defence can be localised), but it is not yet realised that the highest interests of Australasia might demand the employment of this squadron 26 IMPERIAL CUSTOMS UNION. thousands of miles from her shores. Strain every nerve to hold the vital communications of the Empire, prepare the army for offensive opera- tions across the sea, make ready to defend at short notice against naval raids such ports as will be needed in war. These, in order of importance, are the measures by which alone the national safety can be secured." ^ It is necessary therefore to render these stra- tegic points more impregnable, and to increase their potential usefulness in time of war. Every year naval experts are clamouring for a larger expenditure of money upon these naval bases, and the contribution of the Colonies may at first take the form of increasing the effective strength of these strategic points in case of a war with a great naval power. And in like manner as the representations of the advantages of a Pacific cable have induced most of the Colonies to agree to contribute towards its construction, so there is little question but that they would consent to bear a larger share of these expenditures, especi- ally if such increased expenditure were combined with mutual fiscal advantages. Such new de- parture might not be wholly effected until some war scare had arisen, but if the question were 1 Sir George Clarke, in lilackwootVn Magazine, Juiie^ 1895. IMI'KIMAr. nEFEXt'E. 27 seriously aiul fully discussed durinr, „ thun of peace, any excitement as to an outbreak of war would, without doubt, induce the inunediate adoption of measures which had only been par- tially entertained in time of peace. Ill CHAl'Tiai IV. ClOVKllNMKNT AND CONTROL. Tjih successful ^'ovcnmionts are those wliich liave ^Town up naturally, vvliich luive been evolved by tlie respective circumstances of time and place of each conununity. No practicable working' consti- tution springs full grown like Minerva from the head of Jupiter. The attempts which have been made to establish a paper constitution have rarely, if ever, been fully successful. The great example of a ready-made constitution is that of the Ihiited States of America. But two of its chief features — those which include the essence of the working of the constitution — were not planned by those who created it. When the American constitution was formed the election of president was with- drawn from the direct control of the people, and was committed to a council of wise men, to be specially elected by the people. These were then quietly and with due deliberation to select the best man in the confederation to be its ruler. This feature of the American constitution was a subject of special pride upon the part of its founders, but it is well known that no such (28) GOVEUNMKNT AND COXTROL. 21) object has been attained. Tlu^se iiicn who were to have considered impartially tlie qiiahtic^s of the best persons in the l(e|)ul)he, and to have chosen for Icadersliip In'ni wlio was wisest and l»est, are now siin[)ly forninl niandatoi'ics to rc^^ister their votes for tiie candidate who has receivi'd tlie lar<;est number of votes by states at an election voted upon by universal suffraj^'e. In tlie practical woikin^' of tin; American con- stitution, the seat of power lies in tlu^ nieetinj^a of the pi'iniaiies which are nowhere mentioned in the constitution lior in tlu? discussions re- spectini) -',•>( )(k777 52 IMPERIAL CUSTOMS UNION. Add cheese Duty 15 per cent. . „ 10 „ Add mutton .... Duty 15 per cent. . „* 10 „ Add hides .... Duty 15 per cent. . „ 10 „ Add ttallow .... Duty 15 per cent. . ,, ' 10 „ Add fish Duty 15 per cent. . „ 10 „ Add leather .... Duty 15 per cent. . „ ' 10 „ Add live stock Duty 15 per cent. . » 10 „ Add wood and timber . Duty 15 per cent. . „ ' 10 „ 2,8()7,124 £*:31,i" cent. Add liides >, -skins Duty 15 per cent. Add tallow 10 Duty 15 per cent. Add fish 10 Duty 15 per cent. Add JeatJier 10 Duty 15 per cent. 10 i'<>,72(;,<;(;2 ,82(> £14,01)2,520 1,738,(>{;4 1,151),101» 2,077,004 1,385,200 504,503 i'15,257,023 2,203,878 1,400,252 2,03 ,y>oi i)i u\) £17,804,002 2,288,553 J,rj25,702 2,084,100 1,780,400 ?! 64 IMPERIAL CUSTOMS UNION. A<1(1 animuls (live stock) 1.7H().2(;8 t'll),«;74,S7(» Duty 15 per cent. . • • • f2,051.2:iO „ 10 • 1,0()7,487 Add wood and timhcr . 4.147,124 €23,822,548 J)iity 15 |)or cent. . • • • 3,57:i,:i82 „ 10 „ • • ■ 2,382,254 The total imports of these seven articles, wheat, flour, cheese, mutton, tallow, hides and skins, for the yearly average of 1890-1-2 from foreif](n countries, as shown in the above table, amounted to about ^'35,400,000, upon which a fifteen per cent, duty is i,'5,804,t238 and a ten per cent, duty is £3,58(),15(j. If this duty were collected, a pro- portionate reduction of taxation could be made in other articles. The principles of free trade would in no way be infringed if at the same time the Colonies made a yearly grant to the United Kingdom equal to fifteen per cent, upon the imports of these seven articles from the Colonies, and if an excise duty equal to fifteen per cent, were imposed also upon the home product. The imports of these seven articles from the British possessions into the United Kingdom for the yearly average of 1890-1-2 amounted to nearly .^15,000,000, upon which a fifteen per cent, duty is ^,'2,200,000 and a ten per cent, duty itl, 469,252. It has been proposed in a preceding part of this paper IMl'KUIAL TARIFFS. 55 til at the Colonies should contribute £1,000,000 annually to Imperial defence partly in exchange for this ditt'erential tarili". This leaves a balance of £1,200,000 per annum paid by the United Kingdom as a protective bonus if the price of these articles is increased by the total amount of the tax, and if the imports from the Colonies remain the same as in 1891.^ lUit a protective tariff of fifteen per cent, would so stimulate the production of these articles in the Colonies that they could supply the total demand of the Mother Country, and the price eventually would not be at all increased. The illimitable prairie fields of Canada, the vast sheep and cattle stations of Australasia, the table-lands of South Africa and the wheat-fields of India are ited )rts an )sed of Ions [age )00, )00 Ihas [per J If the Customi^ I'nion wore exteiukMl to inchule the roniaiuiiig Colonial ypeciiilties, leatlier, fish, animals, wood and tiin))er, the duty upon these foreign imports into the United Kingdom woukl be inereased to t'8,780,0(X> and the benefits to tiie Colonies by the free entry of all these taxed produets would amount to£">.5(.M),(XH)aiuuially. The proteetive bonus in that ease would l>e increased from £1,20'),00() to £2,500,00(J yearly. If the duty were reduced to ten per cent, the amount collected upon these foreign imports would be £5,8.")7,1)57, and the benefit to the Colonies £2,382,254 upon all these specialties, about the same as the fifteen per cent, on the seven articles. This enlarged Customs Union would lje more beneficial to the Empire but more difficult of adoption. nc) IMPKUIAL crSTOMS UNION. capable of supplyin^j the entire wantH of tlie Mother Country. Tlujir mutual competition will be sulticicntly kcvn to reduce the [)rice prac- tically to the same level as thou^di they had to meet forei^'n competition as well. This is apply- ing upon a large scale, and in the case of these seven articles those principles of assistance to nascent industries which John Stuart Mill and his followers admit as consistent with the prin- ci])les of free trade. For here we have an industry, that of wheat and cattle raising, which can be carried on upon British territory as cheaply and profitably as in foreign countries. The obstacles to the adequate increase of this industry are the lack of population in some of the Colonies, and of irrigation and railway facilities in others. Time and the temporary restriction of foreign competi- tion would attract the population where it is deficient and would supply the required facilities where they are lacking ; ultimately the full supply would be furnished from within the Empire without any increase of cost. This result and the advantage of being independent of foreign countries for food supplies in time of war justify a temporary du even on free-trade principles. The protection afforded to the agriculture of Great Britain by such a tariff may be justified upon several grounds. First, as a war tax to make this country in time of war less dependent upon IMPKHIAL TAHII'FS. 57 of led ke Ion fort'i«,m couiitrii's for its food supply ; secondly, to offset the local taxation upon land, which under the preyent system amounts to a hounty in favour of forei«,'n j^rowers of these; products, i.e., the KiiLjlisli farmer is handicapped in his competition witli th(! forei^ai and Colonial i)roducer to the i^xtent to which his land contrihutes to the taxation of this country, in addition to the taxes he pays in connnon witli other citizens. Thirdly, tlu; pre- servation of the special skill and capital which have heen applied to a*,'riculture in (Ireat ]>ritain would also be a gain of some vaUu; from an im- port duty on bread-stuffs. This industry is ' £4,708/.»:V.V IMPEHIAL TAHIFFS. 59 proportion, and tliat not the lar^^est proportion, of this total quantity is consumed in manu- facturing. All that portion which is consumed by persons living upon their incomes from invest- ments, or upon incomes from fixed fees, and by persons whose work does not directly or indirectly concern manufacturers, has no effect in increasing the cost of manufactured products. The duty upon tallow, hides and skins might at first injure the trades requiring these products, but would not otherwise affect general manufacturing. Secondly, as has been shown above, the increased price, if any, of the foreign importations which actually pay the duty, is offset by a decrease in the price of other things upon which the taxes may be reduced. For instance, the duty upon beer is practically as much of a tax upon manu- facturing as w^ould be a duty upon any of the pro- ducts herein mentioned, and it would be possible to reduce the duty upon beer, and consequently the price of beer, to the extent to which the Treasury is benefited by the duty upon the seven articles above mentioned. It is, of course, argued tluit a duty upon beer conduces to the morality of This is only one aiifi a half pci- cent. ui»on the valiu' of the annual ex[)orts from llic I'nittMl Kinj^rdoni and about threo-(iuartors [)0i' cent. u[)ou the trade piofits upon whicli income tax is paid. A ten i)er cent, fluty would be stil! less. I ! «p 60 IMPERIAL CUSTOMS UNION. tlie people, but beer is simply mentioned as an illustration, and the reduction of taxation may be made on any other taxed product, such as tea, currants, coffee and raisins, which yielded about .i'4,000,000 of revenue in 1894-5. Thirdly, the certainty that the British posses- sions can ultimately supply the total wants of the British Empire in these seven products as cheaply as other countries, and the stimulus ^iven to Colonial production by this duty, ensure that the price of these products icill not he increased to the extent of the duty imposed upon the foreign pro- duct. Fourthly, the resultant extent to which the cos^i of manufacturing will be increased by this duty may be regarded in the light partly of an insurance premium against famine in time of war, and partly as the cost of the increased unity and the consequent increased stability of the British Empire. The amount of the increased cost of home-grown wheat, caused by an import duty, is clearly in- dicated by the following estimate. The yield of the wheat crop of Great Britain for 1895 is esti- mated by the Board of Agriculture at 4,047,000 quarters. Of this, 500,000 quarters are required for seed, leaving 4,147,000 quarters for consump- tion. Adding '200,000 quarters for Ireland makes the total wheat crop of the United Kingdom for 1895 IMPERIAL TARIFFS. 01 )wn in- of jsti- looo ired |np- Ithe ^95 for consumption — 4,847,000 quarters. The aver- age price of wheat for the twelve months ending 30th April, 1896, was 24/9 per quarter, which gives the total value of the wheat crop, £5,879,412, upon which the duty would amount to 4i*80(),911. It a. duty of fifteen per cent, gave such a stimulus to agriculture that the wheat crop of the United Kingdom would be doubled, the value would only amount to £10,000,000. A duty of fifteen per cent, upon this value gives £1,500,000, which is the maximum increased cost of home-grown wheat due to this protective tariff. If the price were increased by the full amount of the dut}', which is not likely, and if the production were increased twofold, which would be surprising (the average production of 1891-2-3 was 7,000,000 quarters Or this increased price considered as a war premium against famine is insignificant and amounts only to an increase of five per cent, in our total ex- penditure for defence. As increasing the total cost of our manufactures it is infinitesimal. 1 The official return of the wheat crop of the Triited Kin(f(loiii for the years speeified is as follows: — Aveiiittt! priie. 18i»2, ()0.77r),(M)() hiisliels, - 30/;}. 18iKi, r)O.Oi:i,(XK) „ . 2(1/4. 1804, (>0,70r),(HX) 18*)5, 38.7(W,0()0 yearly average, 02,775,250 22/10. 24/1 >. 26/. about (),507,()IX) (luarters. 62 IMPERIAL CUSTOMS UNION. Imports of Specialties into the Colonies. As an Imperial Customs Union in these seven products requires the imports of them into the Colonies to have the same duty as into the United Kingdom, it is necessary to consider shortly its effect upon their importation into the Colonies. The following table gives the quantities imported of the principal of these products into the leading Colonies, and shows that a change from the present duties upon these imports from all sources, to a duty of fifteen or even ten per cent, upon importations from abroad, and free entry for im- portations from the British possessions, would be insignificant compared with the advantage to be derived from a Customs Union and from the preferential command of the home market. Bread-stuffs imported and exported in A iistralasian Colonies. Wheat, flour and biscuits {flour re- duced to hushels). Annual average of 1891- 2-8.1 Colony. IiiilHirted Kxi)urte(l Kxcess of Bushels. Bushels. liiishels. Exp. G.135,22G Victoria 318,:22.^ 388,442 Imp. 2,497, 58G Quecjisland 1,H28,7SG 4,747 Imp. 1,824,039 South Australia 291, GOH G,650,728 Exp. (5,25G,0G0 Western Australia 221,GG8 None Imp. 221,(iG8 Tasmania 1.58,524 1,614 Imp. 151,910 New Zealand 2,235 2,337,324 Exp. 2,335,089 5,700,203 15,731,375 Total Excess of Ex] jorts . • • • . 10,030,937 ^ Vvo\\\ Colonial Blue Books. i IMPERIAL TARIFFS. f).S •3S0.)ll.) Il3l0.l(\^ -=5o^5-?-55 ^^^- io u.i,[ -t CO 1— 1 -t< QC »0 Tjt •paj.iaiio.i CM "M 1< X lO -^ <0 O O o 1 rnrso'oo ■«j(0-r-o X K.ll^UQ c>i L- r-j^ CO rs L- O L- i.O 6 JO jiinouiv rH S^f ^^ COCO CO 'M --• 'I' O Tf O t- tH t- O 0 O "M r-^ rH ">1^ L~ X_^ O^ (M O^ lO uO o i •"II -Jiil^A rjT C5 C5 •^ t- »C CO ■^ m y-i CO r-( Ci Ci •»\'\1 ■^'^t'Ti^.'^ O r5 i> ii O L- ^1 O O o i pajjaijo,^ •■^l- O Z i7-\ L~ CO -M O Ci JO ^uuoiuY ^ CO ,5- O X O CM L- O rH'-^l^i-lT -OL-L- rH x" CO c s tH ^ C5 t- CO CO t- t- t- X rH • 't Ci rs ^1 c-1 X o o lO 1— i •|iDi.iod CC^ *>', "^^ CO -^l L~ rH -.^^ o 00 -mi onpj.v o co' CO CO o rH i-T -m' rH O lO rfH CM -C "M CO rH Ctj L- CO rH rH "*- "^ rH ^ •p.vvi^U..,) l^ »0 CJ ^ O O rH -M O V rf O rH rH C: "M L~ s.Mjna *^ of Ofrf lo o o ci 4> JO 'juiiotuv 1^ M ^ OOOCOOQtMXrHO rH O O 'O L- O X ^1 lO iM CO ■^ •pajjod L-^ r5_ O CM CO -^ r^^ O O ,^^ 1 W 1 V '^ Vl ff >1 * lO' -^ O L-^ L-^ r-' O O CO •uii supiy >0 C5 O 1-* -# — ( CO r-* , ^ d ^-* +J .2 H 'S P4 g c o tit u 1 73 a U V^ictoria New Soutli Wi C^ueensland S. Australia \V. Australia New Zealand Tasmania Cape Colons- Natal Canada (for ho S *^ .— -J — x ;i; c X — — 72 s »^ 2 .-a •*-i eo •r' o *■' ri a: O ^ ■^ ? c; t: S 3 5 2- o r; X ^ "^ S 2 /-" jj ^ +j o ■= 'd 2 O Q t, i; 7. . j_j -^ -^ ^^ 7. 11 z: M~t rH 2 o — ' 7i ^ '^'B c! 2 o MH "^tl 4-3 73 o o o —* 15 o "■J c; .w w* .— r— ' 4-> <^ rJn o ::: n^ rH S '^ ~ D X :j C a CJ "^ *j "" 7 ♦J ^ i ;-. — O, i 5 t: — O .■^ ^ ? ^ ^■^ ^ o -; fl a x o 3 A IM •2 = a 64 IMPERIAL CUSTOMS UNION. lilj III As the imports of these products into Canada^ are entirely from foreign countries, upon which the duties in 1891 were ahnost exactly fifteen per cent., the change would practically not be notice- able. The imports into Victoria, New South Wales, Queensland, South Australia and New Zealand are wholly from British possessions, and as the duties collected at present upon them are very small, the loss of revenue from their free entry under a Customs Union is too slight to be taken into account. The exceptions are Western Australia, Tasmania and South Africa. As these South African Colonies derive a large revenue from their import duty on wheat, cheese and flour, all of which come from the British possessions, they would require to obtain a revenue from some other source to make up for its loss under a Customs Union. But as they are free-trade Colonies, with no opposing protection influence, and as only about five per cent, of their customs revenue is derived from these articles, this could easily be arranged by the increase of differential duties on other imports. If the Australian Colonies were first combined in a federation of their own, they would practically supply themselves with all these products and no revenue would be raised upon their import. This loss of revenue amounting to £10,000 in Western Australia, and £5811 in Tasmania, which is less IMl'KHIAL TARIFFS. (55 tbaii four per cent, of tlio total customs rov(>nne would require to be made up from othei- sources' and this could be accomplished by the differential duties proposed in the next cliaptRr and by the increased prosperity due to tlie Australian federation and to the In^perial Customs Union CHAPTEK YI. COLONIAL TARIFFS. TV The fiscal policy above set forth combines ideal simplicity with thorouf^h etfectiveness. It estab- lishes a Customs Union with absolute free trade throughout the Empire in seven most important Colonial products, and it stimulates Colonial trade by imposing a differential duty of fifteen per cent, upon the import of these seven articles from all foreign countries into any part of the British Empire. This union is accomplislied with a minimum of change, a facility of operation, and an avoidance of confusion which are the essential characteristics of a successftd scheme of tariff reform. The duties imposed are few in number, and are easily collected. They produce about £'5,000,000 annually ; which makes it possible to place five other taxed articles on the free list with (66) I COLONIAL TARIFFS. 07 a correspon(lin<^' reduction of taxation. Tlie dis- turl)ai".ce caused in citlier tlie Imperial or the Colonial revenue system is inapprecial)l(\ while the results are most important and far-rcacliing. But the benefit is almost wholly with the Colonies. The other part of this plan of union, however, gives an ecpiivalent preponderating advantage to the United Kingdom, as will now be set forth in detail. In like manner as the exports from tlu; Colonies will he stinmlated by the prefei-ential tariff herein advocated, so the exports from the United King- dom will be promoted by a differential taii ff in the British possessions in favour of imports into them from the United Kingdom. This preferential tariff nuist be a l)enefit both absolutely and rela- tively, i.e., it should reduce the duties on British manufactures imported into the Colonies from that now in force ; and it should also reduce these duties as compared with imports from foreign countries. The former will enable the British manufacturer to compete upon more equal terms than he does at present with the local manufac- turer in the Colonies, as well as with the importer from foreign countries. The amount of this reduction must be a matter of nuitual arrange- ment. The following table gives the percentage of the total imports of each group of Colonies for the 1)8 IMPERIAL CrSTOMS UNK)N. years 1885 and 181)1 wliich uacli ^Moup rcccivcjcl from the UnittKl Kiiifj^doin, the British possessiDiis, and fort;ign countries respectively. i ■ Into I'loni riiit.Ml Hritisli Kon'inn • Kiiigilitiii. I'ossi'ssin.s. ("nuiitries. Fii i^^:..i Austnilasiii 51-()0 38-30 10-70 ('aiiada 30-r.o 4-40 .%-oo South Africa 7rr(iO IMO 13-30 India 70-50 11-10 18-11 III is"i.--' 1 Canada 35 -OS 01 -i)!^' Australasia 43-00 40-70 10-40 South Africa R3-oa li)-00 III This tal)le sliows that in Ansti'ahisia and South Africa the imports from foreifj^n countries in 1885 were ahout one-fiftli of those from the United Kin<]jdom, wliile in Canada tliey were one-half more. Since tliat date the forei<^n trade of the Colonies has heeii increasin^^^ more rapidly than that with the Mother Country, and those propor- tions are now even more favourahle to foreif^n countries. The total foroij^n trade of the British possessions with forei^^n countries has increased 1 From Rnwson's Tnl»h'- 2 From nine Books. (ii) ("I.IINIAI, TA]|ll'l-s. in a ymuer „uio Umn tl„U witl, tl,.. United th<. (oIlowuiK tal.le ,>xl.il,it.s. I'rororti,,,, ,.f tk,. tra,lc ,ntk th. U.iU.l Ki„„l,„n t" the total forei,,,, tnale „/ the JJrithh jms- sessions. .1M71 1S75 LSSO 1884 1885 1887 1888 188'J Ib'JO 1891 1892 , 1893 , IVr ci'iit. 5) -41 ^2-33 W-3(\ U',-7'2 48--11 4o-ai 14-14 47-7G 47-71 40-51 45-r,5 il-33 44 -OS ' Ibe „ext table gi^•es the a.uount of the exports of the United Kingdcn for 1«9I for each of the ch.e divisions of articles (made by the Board of to thiVv . ' '"""'''*'" "' ""^'' '-••^P'"-'« -">t to the Lritish posnessions. ' From tlie statistical Yrar ll,,d- nf f ; , 70 IMI'MIIIAL CUSTOMS UNION. Kxjiorts fr(>}n the United KiNydofti for 1891 of the jyroducc and vKinufacturcs of tJir United King- dom, with the proportion sent to the British jwssessions} IVri-niitjiK'' "^t'lit Article.s. Value. to British I'uSSUSrtillllH. C!otton ISruiiufacturcs jt;r.().ii;j(),25(; 44 ,, Yiivn ll,i77.:MM 20 Woollen Miimifiu'turcs lH,.M(),(;i() 28 Woolluu and Worsted Yarn 3,910,0.01 2i Linen Mamifactures 5,0:}2,l'jr) 17 J', to 2,501,872 10 Apparel and Hahoidashery 7,1.51,032 HO Iron and Steel Mamifaclurcs 20,877,000 37 ihudware and Cutlery 2,r.27,57.'5 50 Copper 3,K2H,112 ^ ^Machinery 1.5,817,515 25 t;oal, Cinders, Fuel, etc. 18,895,078 12 Clicnncals 8,877,712 20 Avcra<,'e proportion sent to i British Posses- sions 30 Proportion sent to self-governii ig Colonies 15 These tal)les hIiow that tliirty per cent. of the total exports of the United Kingdom go to the British possessions, of which al)oiit fifteen per cent, go to the self-governing Colonies, and that foreign countries are gradually getting a larger share of the Colonial trade at the expense of the British trader. The chief articles the export of which may be stimu- ^ From Imperial Institute Year Book, Statesman's Year Book, and Ojjieial Blue Book. COLONIAL TAUIKKS. 71 Ijitod 1)}' a Colonial preferential taiifT are eottoii nianufactiu'cs, woollen manufaetnres, hardware and cutleiy, and iron and steel inaniifaetines, in- cluding' maehineiy. An Iniperijil Customs I'nion must therefon^ includt^ a second ^'roiip of articles of connnerc(> upon which uniform, or nearly uniform, duties shall Ix; levied in the self- -governing Colonies, compiMsing th(3 |)rincij)al of the ahove-meiitioned articles. As a con- siderable proportion of the revenue of the Colonies is at present d(.'rived from the impoi't duties on these articles it would not he [)ossihle to induce them to al)()lish such duties entirely, ])Ut they might estahlish a maximum and a minimum tariff; the maximum tariff to apply to imports fiom foi'eign countries, the minimum tariff to be levied wholly upon articles coming from the United Kingdom. The maximum tariff should be about ten per cent, in excess of the minimum tariff, and be carefully ananged upon the various articles so as to cause the least inconvenienct!. It should be so imposed that the average difference shall amount to ten per cent., and shall constitute as nearly as possible a reduction of five per cent, on the average in favour of imports from Great Britain as compared with the present tariffs. Year 72 IMPERIAL CUSTOMS UNION. Bates of Duties levied on Imports into several Colonies, 1891 to 1H\)'1} II i 1 res. ^. a^ r* ^^ ■z >.f. J 11 p- ; "t^ 'i'^~z y ""1 11! 1^ - cd *M - <, *rs u A '-. ^H Australasia : — New South Free Free, Free to Free Free Wales some 10% 10",, and specifi I duty to lOVo to lUVo i Victoria Free Free to Free to Free Free ] 40% 35% to 35% to 35% H, Australia Free 10 to 15% Free to 25% Free to 25% Free W. Australia 10% 5 to 10% Free to 15",, and specific duty 5% 5 to 10% Tasmania 12A%. 15% Free to 15% and specific duty 5 to 7i% 12,^ to 20% N. Zealand Sonic free, 20% Free to Free to 25% others 25% and 20% 10% specific ciuty Queensland S% 5 to 15% Free to 25% and specific duty Free to 25% 25% Natal 5 to 15% 5 to 15% Free to 5% Free to 5% 5 to 15% Cdpe of Good 12% 12% Free to Free to 12% Hope 12% 2% Canada 15 to 25% 20 to 27 i% 12.V to 10 to 35% 5 to 20% and 1% plus 35%' and per yard specific duties sj)ecific duty From the Sfy taking the porcentage of tlioso duties to the total Customs tUuies eolleeted in Now Zealninl, which ai'e giwu accurately for that Colony, and applying the same percentage to tl\e Customs duties of the other Australasian ('olonies which do not give se[)arately the duties upon British imports. COLONIAL TAIUFFS. t'.y th to 1.1. he because of revenue requirements. But it may be pointed out — (a) Tbat the foreign trade of the Austrahisian Colonies is growin;^^ much more ra[)idly than their trade with the Britisli Empire, and that in arranging the diffeience of the maximum and minimum tariff an average reduction of, say^ three per cent, might be sufficient, combined with an increase of seven per cent, upon imports from foreign countries, in all the Australasian Colonies except Victoria and South Australia. (b) That South Africa has not a protective tariff, and that the preferential tariff in favour of Great Britain might be arranged with reference solely to revenue purposes by a greater increase of duty upon foreign imports, the same as suggested for Australasia. These are details which a spirit of conciliation and a desire to obtain the advantages of the Customs Lnion would arrange. (c) That there is a sti ig sentiment in Canada for a reduction of duties, and for a preferential tariff applicable to tba Biitish Enipire, and the time is opportune for applying such a reduction as the country now demands to imports fi'oni Great Britain in connection with the import duty on bread-stuff's into the United Kingdom as proposed herein. {d) That a reduction of duty is usually accom- 7() I.Ml'i;i{IAI. CUSTOMS UNION. piinicd hy an incicaso ul' iiiipoitalioii, and up to a certain point tliere would hv. no loss of r(3V(!nue. 2. It may l)e objected that the Colonial Govern- ments would d(?cline to alter their tariffs for the benefit of Great Jji'itain, but under the pi'esent syst(.'m of le<^nslation in tlie ]^)ritish l^mpire the J^irliaments of the self-^'ovcrnin^^' Colonies are obli^^ed to consult the wishes of the Imperial railiament with respect to quite a mmiber of subjects, as coina<4e, copyri^^ht, mei'chant ship- pin<,% and the avoidance of diffei-eniial tariffs aj^^ainst the j^Jother Country in favour of foreign countries. It would not ];e more diilicult for these same Legislatures to avoid legislating upon those special features of Imperial policy which an Imperial conference should in the course of a few years decide to ])e essential to the unity of the JMupire. ''\. It is further objected that a differential tariff througliout the British Empire against foreign countries would induce retaliation by them, and that it would be necessary for Great Britain to denounce her present tnuities of commerce with Belgium and Germany. It cannot be alleged under our present system that any foi'eign country shows Great Britain or her Colonies any favour. Tlu^y have at ])resent, almost withou.t exception, as hostile tariffs as it is possible for them to have, consistent witli what COLONIAL TAHIFFS. 77 they consider tlie interest of tlieir own conmierce. It is possi])le that at first a feeliii^r of irritation might cause forci<^n countries to enact a liigluM- retahatory tariff if the treaties of commerce pei'- mitted it ; bat as they at present refrain from doing so, not out of consideration for (Jreat Britain, but from a sense of the injury it would cause to tlieir own business interests, it would only reriuire a very short time for the citizens of the foreign country prejudicially affected to make their influence felt in the withdrawal of the ob- jectionable measures. Besides, other countries include their Colonies in free-trade relations with themselves and in protective taiiffs against the outside world. Algiers and Tunis in that way favour h'rance as against foreign countries. Alsace-Lorraine and Heligoland are now com- prised in the Customs Union with the other parts ;)f the German hhn))ire and under a pro- tective tariff against foreign countiies. Alaska is also included in the protective tariff of the United States. Tlieie would, therefore, be no real ground of complaint against Great Britain for entering into a Customs Union with her Colonies, and che feeling of irritation would soon pass away when the reasonableness of this policy came to b(^ fully understood. The despatch of Lord Kipon upon his vacation of ofHc(^ last summer respecting Colonial trade sets 78 nirERIAL CUSTOMS UNION. forth very strongly tlu3 disadvantages wliicli the denunciation of tlie treaties witli B(!lgiinn and Germany for the henefit of the Colonies would entail upon Great Britain. He shows that the trade of Great Britain witli Jkilgiuni and Germany is so large in pro})ortion to tliat with the self- governing Colonies that it would he suicidal for her to denounce these treaties, and he expresses the helief that neither of these countries is willing for the Bi'itish Colonies to l)e witlidi'awn from its operation. ^J'hese tieaties [)rovide that the pro- duce of these countries, Belgium and Germany, shall receive in the British C(jlonies no worse fiscal treatment than the produce of the United Kingdom. The Belgian treaty declares that *' articles the pi'oduce or manufactures of Belgium shall not he suhject, in the British Colonies,, to other or higher duties tlian those wliich are or may he imposed upon similar articU's of British origin". The treaty with Germany has a clause to the same effect. The ohjections which the Colonies have lo these treaties arc that it ohliges them to treat Great Ih'itain in the sanui way as foreign countries, and to give to Belgium and Germany precisely the same treatment as they give to tlie United Kingdom. The " favoured nation" clause in treaties of commerce with other countries ohliges Great Britain to extend the advantag(»s which she has accorded to Jk;lgmm COLONIAL TAKIFl-'S. 79 and Germany undcL" tlit'ir troutios of coniincrcc to those other countries ; therefore the treaties with Bel^niini and Germany prevent Great Britain fioni f,nvin advantage from the point of view of the advocates of free trade. And we have seen in our sketch of the Customs Unions of the past that their development has always been in the direc- tion of increasing the free trade area comprised within the union. As the Colonies become more intimately associated in trade affairs with the Mother Countrv, her influence will be exerted C(JL().\i.\i, rAi:ii'i'\s. 81 more and more ]"»ow(n-t'ully in favour of Inipt'iial free trade. The protective Colonies will ^a'adiially come to appreciate its advanta<^'es as practised throu^diout the I'hnpire reciprocally, and adopt it more and more completely. This partial Cn>toms Union will \h) the germ of a pei'fect Customs Union with complete free trade within the Em- pire, and a uniform tariff against the outside world. It might also compel foreign countries to grant reciprocal free trade. The more intinuite relations established hy the management of this Customs Union will beget a closer feeling of union than could be created in any other way. Each part will be considered as essential to the whole, as the foot or the hand is to the human body. P'ach part will consequently make as great sacrifices for any other portion "^f the Empire as for itself. The added strength which this union of feeling will give to the whole is innneasurable. Increased trade and prosperity may be expected from this more intimate union. The proverb, " Trade follows the flag," has been stated more accurately by Lord Playfair as *' Financial confidence follows the Hag ". The union of the various portions of the J^ritish Empire by a stronger and more lasting l^ond must also beget greater fmancial confidence, and we may add to the proverb and say, " Financial confidence follows union and the flag ". G CIIArTEU VII. THK CONSTITUTION OF THE IMPKKlAr. CUSTOMS UNION. The practicability of a British Tiuperial Customs Union having been established in the preceding pages, it is necessary in conclusion to state briefly the measures which nuist be taken in older to place it upon a thorough working basis. They may be set forth in the following order : — 1. Th(! Imperial Government shall summon a conf(M'ence of Imperial and Colonial delegates to meet in London for the purpose of elaborating the details of an agreement between the Mother Country and the various Colonies. This agreement should be for a fixed period — not less than ten years — and should comprise — (a) An midertaking by the Imperial Govern- ment to expend a definite sum in increasing the effectiveness of the navy, and in strengthening the strategic points which command the lines of connnunication between the Mother Country and the Colonies. The present Government have applied a portion of their surplus this year for this purpose, and it is admitted ahnost universally (82) CONSTITUTION OF THE L'NIUN. 88 to the ler lout ten irn- the ling of biid lave for tliat the safety of the Empire reciuircs an addition to the strengtii of our navy and its buses, vvh(!ther the Colonies join in l)earing their share, or not. It is suggested that this amount sliould not he less than £10,000,000, spread over several years. (h) Tlu; various Colonies should agree to pay an animal subvention towards the cost of maintaining the strat(>gic points above mentioned, and this subvention should be not less than £1,000,000 per annum throughout the whole term of the agree- ment. The proportions to be paid by the respective Colonies to be determined either ^>ro nita to popu- lation or to revenue, or to imports and exports, as may be deemed most equitable. It might l)e advisable to form a scale of contribution which shall be determined by all three of the above- mentioned factors instead of by any one of them. (c) The Mother Country should bind herself to impose during the continuance of this agreement an import duty of ten or fifteen per cent, upon such food and other products as may be decided upon which are imported into the United Kingdom being the produce of foreign countries, and to admit free of any duty all such products as shall be imported being the produce of the British possessions. The products suggested should be : Wheat, flour, cheese and mutton, tallow, hides and skins, with the possible addition of live IMAGE EVALUATION TEST TARGET (MT-3) /. A .<^>^, i/x ^ III.O I.I 1^ 12 8 o- |32 2.5 2,2 m ' — ^ IAS illlio 1.8 1.25 1.4 1.6 ^ 6" ► V] <^ /i "¥ rj*. • ^V'. / '/ /A Hiotographic Sdences Corporation 33 WEST MAIN STREET WEBSTER, NY. 14S80 (716) 873-4503 < C^x x$> TV 84 IMPERIAL CUSTOMS UNION. animals, fresh or frozen meats, Hsh, leather, furs and timber. Other articles mi^ht be included which would benefit those Colonies whose exports do not include the ab(ne products. id) The Colonies should undertake in con- sideration of the advantages above conferred to make a differential tariff in favour of imports into the Colonies bein<,' the produce and manufactures of the United Kingdom, of, say, ten per cent, as compared with tlie tariff imposed upon imports from foreign countries. And this differential tariff should apply to manufactures of cotton, wool, linen, iron and steel, with a provision for its being extended to all other imports, should it be found practicable when the experience of the working of this preferential tariff in these articles has accus- tomed the Colonies to this system. The delegates to this conference should be in- vited from all the self-governing Colonies, and also from India and the leading Crown Colonies, but it is essential that the agreement should apply at least to the principal self-governing Colonies. The initiative in this conference should ])e taken by the Imperial Government, wliich should under- take to recommend the proposed ]5ritish con- cessions to the Imperial Parliament. This first conference should decide as to establishing itself as a permanent institution having annual or biennial meetings, and as to its CONSTITUTION OF THE UNION. 85 powers. Tlicse should include the consideration of the extension of the tariff arran«^'enients set forth in suh-sections {c) and (d) and the alter- in«i[ oi any tariff inequalities which hear unequally or oppressively upon any individual Colony. Iv- should also consider questions of Imperial defence, and the strengthenin*,' aj^ainst external attack of such portions of the Empire as may he found hy Colonial experience to he dan^a^-ously vNcak. Its decisions may at first he suhjisct to ratification l)y the respective Le«,'isiatures hefore heingcairied into execution. The consideration of questions relating; to the encourai^ement of trade and commerce hetween the various portions of the British l^mpire such as foreshadowed in iVIr. Chamherlain's recent circular to the Governors of the Colonies mi«,dit also constitute a function, of the conference. The tendency would he, as time rolled on, for a representative hody such as that herein out- lined to ag«^'regate to itself othei' powers and functions in the same way that the British House of Commons has «^fradually engrossed the management of the constitutional affairs uf the Empire. 2. After these questions have heen discussed and the conference has passed a resolution in favour of the cuurse ahove outlined, the Colonial Govern- ments shall he invited to put these resolutions 80 IMPKHIAL CUSTOMS UNION. \v into elTcct, in the same way that tlie resohitions of the Ottawa C'onference and of the Conference of 1887 were carried out hy the respective Le