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 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES
 
 THE 
 
 CUSTOMS UNION 
 QUESTION 
 
 W. PEART-ROBINSON 
 
 LONDON 
 KEGAN PAUL, TRENCH, TRUBNER & CO. Ltd.
 
 THE CUSTOMS UNION 
 QUESTION
 
 THE CUSTOMS UNION 
 QUESTION 
 
 W. PEART-ROBINSON 
 
 LONDON 
 
 KEGAN PAUL, TRENCH, TRUBNER & CO. Ltd. 
 
 Patebkostee HorsEj Chaeing Ceoss Road 
 
 1896
 
 >!/
 
 
 AN IMPERIAL CUSTOMS UNION FOR 
 THE BRITISH EMPIRE. 
 
 I. Reasons for the Commercial Federation of 
 
 >- 
 
 ^ the Empire. 
 
 I know of no subject which even approaches in 
 
 importance this question of Fiscal Reform, or in 
 
 other words, the terms upon which we shall do our 
 
 iivast import and export trade with our Colonies and 
 
 foreign nations. And yet there is no question which 
 
 ^is so little discussed among us. I remember the 
 
 ua time when it was sufficient to utter the watchword 
 
 ' Free Trade in order to scare away all argument. 
 
 That time has passed away, and a more intelligent 
 
 and temperate attitude is being assumed toAvards 
 
 this momentous question. 
 
 The reasons for this more tolerant attitude are 
 c3 not far to seek. For whereas the fact that we were' 
 
 t first in the field in manufacturing when the great 
 discovery of steam was applied to the railway and the 
 
 .'584687
 
 ( 2 ) 
 
 different industries enabled us to have a monopoly 
 of the world's productions, now not only have we 
 enormously increased competition to contend with at 
 home, but our former customers have become our 
 competitors abroad and in our Colonies. Hence, 
 instead of the conditions being abundance of employ- 
 ment, with only the desire of cheap food to make the 
 price which we could fix for our manufactures buy as 
 much as possible — instead of this state of things, we 
 are face to face with very different conditions, i.e. 
 every possible commodity, food or otherwise (thanks 
 to free imports or unrestricted competition in our 
 markets), cheaper than has ever been kno"\vn in the 
 history of the world, but a dangerously large number 
 of the community unemployed and unable to profit 
 by this cheapness, so that practically the condition of 
 things under which we adopted Free Trade with 
 such temporary success has been entirely reversed. 
 Instead of unlimited employment with dear food, 
 we find ourselves confronted with unlimited cheap 
 food but lack of employment, so that we have the 
 anomaly of people starving in the midst of plenty. 
 These changed conditions have naturally caused 
 thoughtful men who were not disposed to accept a 
 name or worship a fetish to carefully inquire into 
 the conditions which have In'ought about this change, 
 and as the Free Trade party hit upon the medicine 
 that was most salutary for the condition of the 
 patient when he was some years younger, to en- 
 deavour to find a prescription which will suit his 
 present state of health ; ibr Avhcreas he was then
 
 ( 3 ) 
 
 suffering from the expensiveness of the commodities 
 and means of life, he is now suffering from lack 
 of employment. 
 
 There is a second complaint under which this 
 country is suffering severely, which has also con- 
 tributed very materially to the reconsideration of 
 this question ; that is, the straits into which our 
 greatest industry, agriculture, has been driven by 
 having its profits reduced to zero through foreign 
 untaxed competition, whilst still having to bear the 
 brunt of increasing imperial taxation, which it was 
 well able to do under a system of Protection, but 
 which under present conditions it cannot support. 
 
 Besides, there is another and very important 
 aspect of this question. I mean the folly of becoming 
 dependent upon foreign nations for our food supply. 
 What is the result of this ? We are forced to send 
 them our manufactures in return, but they put a fine 
 on these manufactures in the form of an import tax. 
 AVhat is the result ? That our people have to work 
 harder for their bread and food supplies than they 
 ought to do. This is one of the things which we 
 advocates of the Customs Union wish to remedy, by 
 getting back our bargaining power through the 
 institution of a differential tariff, and by the diverting 
 of our food supplies to our Colonies, where within the 
 Union no fine Avill be imposed. 
 
 But there is one matter which it is absolutely 
 necessary to make perfectly clear at the outset — the 
 objection that it is the foreign consumer that pays 
 the tax, not the English producer. 
 
 B 2
 
 ( -t ) 
 
 Now this is one of those half-truths which are so 
 apt to mislead. 
 
 The fact is this : that the additional cost of an 
 article OAving to an import duty exists and is paid by 
 the producer when there is no competition. It was, 
 therefore, true of our manufactures at the time 
 when Cobden enunciated it, at the time when we 
 held the monopoly of railways and labour-saving 
 steam industries ; but where there is competition such 
 as we now encounter wherever we send our goods, 
 the differentiated taxation which we meet every- 
 where acts as a fine upon our goods. And seeing us 
 gifted with a most supreme simplicity in granting the 
 boon of free ingress to foreign nations uncondition- 
 ally for their goods, they are at no pains to court our 
 good-will by giving us better terms than other 
 nations, and so invariably give us the worst ; with 
 the result that our goods, if they are to compete with 
 foreign productions, must accept a lower price by 
 tlie amount that the duty on them is higher than 
 that on the goods of those nations who by giving 
 blow for blow have won for their working classes and 
 manufacturers more favourable terms for their goods 
 in the markets of the Avorld. This is what I mean 
 by saying that the Customs Union will give us back 
 oiu' Ijargaining poAver. In a word, Avhether the con- 
 sumer pays so much more for the goods by the 
 amount of the import tax depends ui>on who has 
 command of the market and can dictate the price. If 
 the price is dictated by our competitors, then we 
 have to accept tli.it price^ and deduct the import duty
 
 ( 5 ) 
 
 from the actual amount we get for our goods ; and 
 by placing similar import duties on the goods of 
 foreign nations where those goods have not a mono- 
 poly in our market, we should force them to come 
 down in the exchange price they receive for their 
 goods by the amount of the tax. If, however, we 
 made the tax too heavy it would preclude them from 
 competing. 
 
 Of course, a blind and pig-headed policy in regard 
 to Protection would be infinitely more injurious to 
 the country than is now our blind and undiscrimi- 
 nating adhesion to Free Trada in the guise of free 
 imports ; for were we to retrograde back to the un- 
 bending policy of Protection which prevailed before 
 the inauguration of our Free Trade policy and tax all 
 foreign products, especially food coming into this 
 country, we should very seriously cripple our enor- 
 mous foreign trade, for by raising tlie cost of livin"- 
 and of the raw materials for our manufactures we 
 should place ourselves at a disadvantage in the 
 competition in foreign markets for the world's trade. 
 But such a retrograde policy is the very reverse of 
 what is here advocated. I propose to strike a mean, 
 avoiding the extravagance of the apostles of either 
 policy. 
 
 I propose to discriminate between goods which 
 pay imperial taxes and those which do not, and 
 between the goods of those countries who offer us a 
 fair exchange in their markets, and those who deny 
 us this benefi.t. I say at once that blind, uncom- 
 promising Protection, the taxing of all imports into
 
 ( ) 
 
 England, would be the rankest folly, but that, avoid- 
 ing extremes, it is possible to formulate a wise and 
 well-considered scheme by which we may make use 
 to our own advantage as a nation of that weapon 
 which other nations use with such effect, and by a 
 Customs Union secure the following points : — 
 
 1. To get back our bargaining power, and thereby 
 be able to demand for ourselves fair and equal terms 
 for our trade from those nations, like France, 
 America, and Germany, who gain such an inestim- 
 able benefit to their workers by the free and untaxed 
 admission of their goods into our markets, and 
 thereby do away with or diminish the fine which is 
 laid on our goods on their entrance into foreign 
 markets, and win more free trade for ourselves. 
 
 2. By giving a preference to the goods of our 
 colonists, who are our kith and kin, not only receive 
 from them in return a like advantage in their 
 market, but also draw nearer those ties of kinship 
 by the most enduring bond of common interest. 
 
 But the undiscriminating attitude of Free Trade 
 refuses to see any difference between buying goods 
 Avhich pay imperial taxation and those which pay 
 none. It enunciates parrot-like, sententiously, these 
 awful words, "The duty is a tax," and the trite maxim, 
 " Buy in the cheapest and sell in the dearest market." 
 
 But what is cheapness ? And what is a tax ? 
 
 Taxes, though an evil, are a necessary evil, and 
 direct taxes are just as onerous, and in many cases 
 more so than indirect ; witness the fact that the great 
 obstacle to an Imperial Free Trade Customs Union
 
 ( 7 ) 
 
 is the fact that our Colonies find indirect taxation 
 a necessary expedient for raising their revenue. 
 Direct taxation alone would not be tolerated. 
 
 And now with regard to cheapness : let us take, 
 for instance, two pianos, the one made by Messrs. 
 Broadwood, of London, and the other by Messrs. 
 Steinway, of New York. Free Trade teaches that 
 if Messrs. Steinway's piano of same quality can be 
 brouo;ht tax-free to London and sold there for a 
 sovereign less than Messrs. Broad wood's, it is cheaper. 
 This is, however, a gigantic fallacy, because we have 
 put a tax on Messrs. Broadwood's piano works 
 beyond what those works |)ay in rates for school 
 board, poor-rate, paving and all municipal expenses, 
 and beyond the consideration of how much the 
 money paid by the English firm to English workmen 
 enables those men not only to live and support their 
 families, but also to j)ay rates and taxes, support our 
 armies and civil expenses, and give custom to all 
 other industries existing amongst us. This is the 
 Trades Union aspect of the question, and is the 
 reason why the great industrial centres are begin- 
 ning to demand a reconsideration of our unique and 
 extreme attitude with regard to Free Trade. 
 
 How terrible and corroding a fallacy is also the 
 idea that everything should be sacrificed to building 
 up a mammoth foreign trade, since home trade is 
 many times more valuable. " But free-traders 
 somehow can never be made to see that if pro- 
 tectionist countries lose in foreign trade, they on the 
 other hand increase their home trade by double the
 
 ( 8 ) 
 
 amount, so that they are not losers but gainers, that 
 is, if the articles shut out can be made at home. 
 Let me illustrate this in a very remarkable case. 
 Let us suppose that England imports a hundred 
 millions of food (the real figures are about one hun- 
 dred and forty), and pays the food bill with the like 
 amount of manufactures, this would give her two 
 hundred millions of foreign trade. France, on the 
 contrary, puts a duty on and shuts it out, and pro- 
 duces her food at home, and her farm-ers exchange it 
 for home manufactures. Now let us examine this 
 position. England has apparently two hundred 
 millions of foreign trade, but only one hundred 
 millions, or half the amount, is English, as the 
 foreigner has all the benefit derived from producing 
 the food; whereas France, producing her own food, 
 has two hundred millions of home trade, every 
 shilling French. Cobdenites never cease boasting of 
 the vast foreign trade of England ; France nowhere, 
 the rest of the world nowhere. But the question is, 
 does it conduce to the prosperity and, above all, to 
 the safety of the Empire ? I say distinctly no, and 
 it may any day be our utter ruin. FiTince could 
 have just as great a foreign trade, provided she 
 would l)e willing to pay the same price, ruin her 
 agricultural industries, and import her food instead 
 of growing it — but she is far too wise." ^ 
 
 Such is briefly the sanction or justification of the 
 institution of an Imperial Customs Union. Now we 
 
 ^ Quoted from Lord Masham's letter in Pall Mall Gazette 
 of October 3rd, 1895.
 
 ( 9 ) 
 
 come to the very definite consideration of wliat form 
 is that Customs Union to take, and what will be the 
 exact provisions of the measure ? 
 
 II. Suggestions for Commercial Federation. 
 
 Firstly, the object which I put before us is Imperial 
 Free Trade. Free Trade within the protected area 
 of our Empire. This I know and confess is at the 
 present moment unrealizable, but this is the object or 
 ideal which we must aim at. 
 
 Secondly, What is the first step, and what is now 
 feasible ? Preferential trading with our Colonies, that 
 is to say, that we should give to subjects of her 
 Majesty living in the Colonies, paying imperial taxa- 
 tion, a preference for those goods which they send 
 into the mother country over foreign nations, our 
 rivals in commerce and in war. But here comes a 
 most important point and a most necessary reserva- 
 tion. The raw materials used in our industries must 
 in no case be taxed, otherwise we should be en- 
 dangering our vast foreign trade by making ourselves 
 less able to compete in those markets. 
 
 What is it that stands between the very solid 
 advantage to be gained by the fulfilment of the 
 mutually expressed desire of the Colonies and the 
 mother country for a closer commercial and political 
 union ? 
 
 It is the ghost of Free Trade. 
 
 It is an idea. 
 
 Each desires the Union. But the old country is
 
 ( 10 ) 
 
 still under the spell of past associations linked to 
 Free Trade. 
 
 The new countries, the Colonies, are with all other 
 countries disillusioned from this dream. 
 
 All that is needed is a ofive and take arrano-ement. 
 Tliat each should for the sake of a great practical 
 benefit be ready to make some concession in abstract 
 theory. 
 
 It is surely monstrous that when the children of 
 the Empire ask the parent State for the bread of 
 commercial recognition that they should give them a 
 stone of out-of-date political economy dogma. 
 
 It was the Avisdom of the greatest rulers the world 
 has ever known to build up that mighty fabric of 
 the Roman Empire by the granting of special com- 
 mercial privileges to those cities which they wished 
 to bind politically to themselves. 
 
 And what is the objection to this revision of our 
 existing Customs duties ? 
 
 Is it the raising of revenue by means of Customs 
 duties ? We do this already to the tune of 1 9 
 millions annually. 
 
 Is it the fear lest the incidence of the proposed 
 taxation should fall more heavily on the working 
 class? This is not so. Every working man is a 
 producer before he is a consumer. 
 
 Is it the reluctance to tax articles of food ? 
 
 If so, why is the present duty on tea tolerated, 
 which is useless to benefit our producing industries, 
 whilst it enhances the cost of living ?
 
 ( 11 ) 
 
 Ts it a fear that our producing industries, the 
 actual source of the wealth of the community, miglit 
 get some advantage from the imposition of Customs 
 duties on competing instead of non-competing in- 
 dustries ? 
 
 Why this sentimental fear of doing any dis- 
 advantage to foreign industries, and cynical disregard 
 of British trade interests ? 
 
 Cobden and Bright were idealists. Their concep- 
 tions were beautiful and noble. Their advocacy of 
 universal peace, as represented by the Peace Society, 
 must be taken into consideration in relation to their 
 views on Free Trade. Given the acceptance of the 
 doctrines of the Peace Society — all nations one family, 
 all quarrels amicably settled by arbitration without 
 recourse to the arbitrament of the sword — in other 
 words, universal disarmament, then and only then 
 would real Free Trade be a practical possibility. 
 But until then the one is, as the other, only a pious 
 aspiration. 
 
 For the consideration of this subject it seems to 
 me that perhaps, more than any other, we require to 
 divest our minds of what Bacon calls the " fallacy of 
 names." The mind requires to be a tabula rasa, able 
 to accept ideas free of prejudice ! Now the word 
 " protection " to some people at once means some- 
 thing bad, before they have listened to any argument 
 or allowed themselves to weigh what can be said. 
 But protection, when applied to the military defence 
 of our Empire, seems a good thing ; and protection
 
 ( 12 ) 
 
 when applied to Labour is a thing which the work- 
 men of this country have accepted as an article of 
 faith, and which no sane man would now attempt 
 for good or bad ever to eradicate from his mind. 
 But when the word " protection " is applied to our 
 trade, for some reason or other the majority of people 
 are unwilling to reasonably consider it. Yet the 
 protection of trade is a good object if it can be 
 shoA\Ta that it can be gained without any outweighing 
 disadvantage. And at the outset I cannot for one 
 moment admit that if the capital indictment (as it 
 appears to some minds) of Protection could be 
 brought home to my proposals it would prove them 
 harmful. I go further, and say it is useless to be at 
 an enormous expense in protecting our trade by 
 ships and men, and in developing huge tracts of 
 country which entail still further expense in military 
 armaments for their defence, if we do not protect 
 or defend that trade which is the object of our 
 incurring these responsibilities, and which is the 
 mainspring of our existence as a trading com- 
 munity. If we cannot protect and defend our 
 trade from being taken from us by foreign nations, 
 our very existence as a nation is threatened, as I 
 shall explain when I come to the imperial aspect of 
 the question. 
 
 I therefore submit that it is desirable for us to 
 give a preference to goods made within the EmjDire, 
 and to mulct unpatriotic consumption, with the intent 
 to educate John Bull, the consumer, that he is richer 
 by consuming what he, John Bull, as producer
 
 ( 13 ) 
 
 makes, instead of paying an outsider to make it for 
 him. 
 
 How can we do this ? Of course we shall have 
 the bugbear of the big and little loaf hurled at us. 
 
 But in relation to this obsolete piece of party 
 stock-in-trade, which was applicable enough to the 
 question of the repeal of the Corn Laws under Sir 
 R. Peel, but which has no more point in reference to 
 my present suggestion than it would to the Avritings 
 of S. Anselm or the Monroe Doctrine, I do not 
 think I can do better than quote a passage from the 
 Preface of a series of Letters published by Mr. Wm. 
 Farrer Ecroyd, the most distinguished pioneer of 
 this movement : — 
 
 " Working men are proving their ability to 
 understand the diiFerence between the former pro- 
 tectionist duty of 20s. to 30s. ^er quarter on wheat 
 levied for the purpose of raising rents, and the 
 differential duty of 4.s'. per quarter now proposed only 
 for the purpose of transferring our food-growing 
 from those who will not buy our manufactures to 
 those who will. They see that the latter Avould soon 
 bring them a new supply of duty-free food from our 
 own Colonies which would probably compel the 
 Americans to accept As. per quarter less in order to 
 neutralize the duty which thus would never raise the 
 price in England at all ; and what is far more im- 
 portant, would bring them good custom in return for 
 that food which would increase employment and sus- 
 tain wages. The well-worn cry of the big and little 
 loaf has therefore lost its power, since they see that
 
 ( It ) 
 
 there are duties aimed against the -working man and 
 duties to be used for his defence ; and that reason 
 and common sense can distinguish between the two." 
 
 In view, however, of the historic associations of 
 the Anti-Corn Law agitation, it would perhaps be 
 inexpedient to weight a measure of so much joromise 
 to Imperial Unity with the opposition which it would 
 encounter from prejudice were it associated with the 
 proposal of any tax on wheat. But in the articles 
 at present subject to Customs duty, such as tea, coffee, 
 tobacco, wines, etc., we could give a preference to the 
 Colonies, x^nd, if necessary, as a quid pro quo, we 
 could further extend this preference to Colonial meat 
 and livestock ; or if objection were felt to increasing 
 Customs duties, an equivalent might be found in the 
 amount paid by us for the common Defence of the 
 Empire, 
 
 The Colonies in return might give us a preference 
 over foreign countries in their markets. They cannot 
 afford to abolish indirect taxation, as they could not 
 yet raise the necessary revenue by direct taxation. 
 They must therefore have duties on imports, and as 
 their imports are almost exclusively British, they would 
 lose almost all their revenue were they to allow our 
 goods in duty free. But if they would lower tlie 
 duty on our goods and correspondingly increase that 
 on goods of foreign origin we should as effectually 
 retain our hold on the Colonial markets. Of course 
 at present our manufactures have no competition in 
 the C(jlonics from goods made there ; but if, as Avill 
 probably iKipjJcn in the lapse of time, manufactures
 
 ( 15 ) 
 
 grow in those Colonies, Ave shall have to ask, as we 
 have done in Lancashire, for a corresponding excise 
 duty to counterbalance the import duty, otherwise 
 that duty would become protective against Great 
 Britain. 
 
 The next question is, what is to be the arrange- 
 ment between our Colonies for intercolonial trade 
 within the Imperial Customs Union ? So far as this 
 is concerned, I do not think we in Great Britain need 
 trouble ourselves about it. I think we could fairly 
 leave it to the different Colonies to make their own 
 Customs arrangements with one another ; recom- 
 mending, of course, a j^olicy of giving a preference to 
 intercolonial trade over foreign, but leaving them a 
 free hand in respect to their arrangements with one 
 another, only stipulating that they should not give 
 more favourable terms to any Colony than they did 
 to the mother country, otherwise this w^ould act as 
 protection against ourselves. Their arrangements 
 as to tax on foreign imports would, of course, be 
 regulated by their tariff with us as above explained. 
 
 Such is briefly my proposal for the outline of an 
 Imperial Customs Union. It is not what I should like 
 it to be, a Customs Union on the basis of free trade 
 within the Empire, but it is in my judgment the 
 nearest we can attain to it at present. I put this 
 Imperial Free Trade before me as an ideal. 
 
 But on earth we must content ourselves with what 
 is feasible and attainable, and cease crying for the 
 moon, or losing solid advantages in the obstinate 
 adherence to an abstract theory.
 
 ( 16 ) 
 
 And now that I have unfolded my scheme, I shall 
 endeavour to show how this scheme will be beneficial 
 to this country and the Empire. 
 
 III. Advantages Claimed for the Scheme. 
 
 First of all, I will look at it from the point of vieAV 
 of the working classes. A working man said to me 
 the other day, arguing against Protection, " The 
 working classes are better off now than they were 
 under the Corn Laws. It is not to our interests 
 therefore to return to Protection." That remark is, 
 I think, abundantly answered by the above quotation 
 from Mr. Ecroyd's pamphlet. 
 
 Protection has never been tried in this country 
 under a democratic suifrage such as it exists under in 
 Germany, France, and the United States, and it is a 
 noteworthy fact how those pro-tectionist nations are 
 catching us up in spite of the start we had of them. 
 And that poverty of the British workman previous 
 to the Repeal of the Corn Laws in comparison with 
 his present condition, is not to be wondered at if one 
 reflects that it would have been a strange thing if the 
 marvellous discoveries of steam and electricity in con- 
 nection with railways and manufactories had not in 
 some way ameliorated his lot, through the enormous 
 labour-saving and wealth-producing aspects of these 
 inventions. 
 
 And our working classes and their powerful 
 organizations must sooner or later awake to the fact 
 that they are having the bread taken out of their
 
 ( 17 ) 
 
 mouths by the woi-kmen of foreign countries, and call 
 out for more equal conditions. The English work- 
 men possess only one free market, and that is England, 
 but this one free market is absolutely packed with 
 goods manufactured abroad. The conditions are 
 unequal, for the foreign workmen and firms have a 
 preserve of their own (their home markets) which 
 gives them a sure demand, enabling them to produce 
 on a very large scale and send the surplusage over 
 here to sell at any price. Our o^wn people, on the 
 other hand, with foreign markets closed against them 
 or subject to heavy duties, cannot even do themselves 
 justice in the home market. 
 
 The present policy of free imports in the face of 
 hostile tariffs abroad is therefore in direct anta2:onism 
 to the aims of our great labour organizations. Trades 
 unionism, which must now be recognized as an accom- 
 plished fact, and a very powerful factor in determin- 
 ing all public policy in connection with trade, has for 
 its aim to keep up the wages artificially to ensure at 
 least the living wage. This is common sense and 
 common expediency, and not facile acceptance of 
 the abstract and unfounded-upon-practice theories 
 enunciated by Regius Professors in their class- 
 rooms. This practical standpoint accepts man as a 
 human being and not as a greed machine, to turn out 
 mechanically so much wealth for the capitalist. 
 
 Hence the more modern and enlightened school of 
 political economists recognize that political economy 
 as a science must be taken in conjunction and rela- 
 tion to its sister science, with which it is closely 
 

 
 ( 18 ) 
 
 wrapped up — Social Science. The instinct of nation- 
 ality prompts nations, the desire to protect labour 
 and ensure a living wage prompts trades unions, to 
 repudiate Free Trade. Since we cannot stamp out 
 nationality, and must sympathize with trades union 
 aims to raise the standard of comfort of the work- 
 ino- classes, Free Trade within the Empire, and a 
 differential tariff for outsiders, is the policy which 
 the patriotic instinct of national preservation 
 and the desire for the progress in prosperity of 
 our toiling millions points out to us as the most 
 expedient. 
 
 I Avill just illustrate what I call for clearness the 
 trades union aspect of the question by one illus- 
 tration, and then pass on to the aspect of national 
 preservation. 
 
 Extract from Lord Masham's letter to the Times, 
 dated Oct. 19th, 1895 :— 
 
 '' Suppose that foreign iron girders could be de- 
 livered in England at, say, Al. per ton, but that 
 similar girders would cost the British maker 4/. 10s. 
 Under such conditions the British iron girder trade 
 would either have to collapse or it must be protected. 
 Let us now consider wliat the nation would gain in 
 this case by protection — probably four times as much 
 as the consumer Avould lose. Consider well the vast 
 amount of capital and labour employed in jDroducing 
 that girder. Look at the vast sums and the labour 
 expended upon iron mines, coal mines, blast fur- 
 naces, &c. What is the loss to the consumer? A 
 mere bagatelle in comparison to the destruction of
 
 ( 10 ) 
 
 such a trade by free imports. And then again, l)y 
 producing the girder at home instead of importing it, 
 you provide double employment both for capital and 
 labour, as the British girder would be exchanged for 
 ' something else ' exactly the same as if it had been 
 made abroad. Consider well the enormous amount 
 of capital and labour expended in obtaining the 
 crude ore from the bowels of the earth, and also the 
 coal necessary to smelt and manufacture it, and the 
 serious outlay in blast furnaces, and the vast sums 
 paid in wages in all these operations, and the traffic 
 gain to the railways, and also the profits of the shop- 
 keepers and all the subsidiary trades that depend 
 upon the iron industry. All these things are vastly 
 more profitable and of far greater importance to the 
 nation than a trifling saving in cost to the con- 
 sumer. 
 
 " Let me now explain the difference between wise 
 protection and unwise, taken from my pamphlet 
 published in 1892. 
 
 " For illustration, suppose we take a piece of 
 Bradford soft goods. The wool comes from Australia, 
 is British-grown, and carried in British steamers. 
 It is warehoused in London, is sold at auction, and 
 forwarded to Bradford, where it is sorted by the 
 wool merchant, combed and spun, then manufactured, 
 and finally dyed and finished for the merchant. 
 Now it is evident that there must be a large national 
 gain in all these operations, both in capital and 
 labour, to subsidiary trades, such as coal, iron, soap, 
 leather, wood, dyewares, &c., &c., consumed in its 
 
 n ^
 
 ( 20 ) 
 
 manufacture, and also the shopkeepers' profits de- 
 rived from the wages earned by the operatives. 
 Should 1 be wrong in estimating the national advan- 
 tage or gain at 20 per cent. ? It is probably much 
 more. Now comes the whole important question. 
 Is it for the national advantage and general pros- 
 perity to allow this industry to be destroyed because 
 French goods can be imported 5 per cent, cheaper ? 
 It appears to me, as a man of business, that it is not 
 the way to get rich, to lose 20 per cent, to gain 
 5 per cent., but that is what we are doing to the 
 extent of millions. The consumer, by buying French 
 goods, saves 5 per cent., but the Bradford producer 
 loses 20 per cent. I again ask, is not production the 
 source of all wealth ? 
 
 " The real point to be considered, from a national 
 point of view, is whether the duty enhances the 
 price to the consumer in a greater ratio than the 
 united gains (and other advantages) of aU the pro- 
 ducers ? If not, the nation must gain. If the duty 
 Avere fixed at, say, 20 per cent., any increase of price 
 up to that point paid by the consumer would be no 
 national loss, as it would be more than gained by the 
 great army of producers. Now this is not protec- 
 tion, but wise production. But if you fix your duty 
 beyond 20 per cent., that would be unwise protec- 
 tion, because then the price might be enhanced 
 l)eyond the possible gains of the producers, and so 
 the nation might lose to that extent. Therefore, 
 the rule should Ix; in all cases to fix the duty at 
 ;il)out A\]i;it iiiiglil. nil a liberal estimate, be con-
 
 ( 21 ) 
 
 sidered the gain and national advantage to the great 
 army of producers. 
 
 " America, and most other nations, fix their scale 
 of duties so high that the loss to the nation must be 
 enormous. They make as great a mistake in having 
 their duty too high as England does in having none 
 at all." 
 
 Protection of trade logically follows from the ac- 
 ceptance of trades unionism, which is the protection 
 of labour. 
 
 Universal and unrestricted competition of each 
 nation to undersell the other in some particular 
 line, and therefore secure the world's trade for that 
 speciality, is the ideal of the Cobdenite free-trader, 
 but it is not of the trades union or labour organizations. 
 
 The free importation of foreign goods means 
 cheap labour in England, but trades unions would 
 have dear labour in England, so that a Customs 
 Union, and not free imports, is the policy dictated 
 by their interests. The working classes would, of 
 course, resist the idea of a heavy tax on all corn 
 coming into England, such as existed before the 
 repeal of the Corn Laws in the interest of the land- 
 owners. But what is now suggested is the pro- 
 tection, not of the landowners, but of the trade of 
 the country, in which every working man is m- 
 terested, to afford more employment, thereby 
 doing away with the unemployed, and saving 
 that shameful waste of wealth which now takes 
 place through our paying others to do what 
 we could perfectly well do ourselves. To be
 
 ( 22 ) 
 
 self-sufficing is the ideal ol' us advocates of the 
 Customs Union. 
 
 And this brings me to the next division of my 
 subject — the nationality aspect. I have said above, 
 the instinct of nationality repudiates Free Trade. 
 
 I will explain what I mean by this. 
 
 There are two ideals. 
 
 The ideal of the Free-trader is to take up a 
 speciality and lick creation at it. 
 
 The ideal of the Protectionist is to make his 
 nation self-sufficing, like the typical Athenian of 
 Pericles, who was more than any other dvrap/cy^s. 
 
 And (as has been pointed out very ably in a most 
 readable little book, which had a great circulation 
 in the North, " Merry England ") what a terrible 
 thing for our country it would be if this hideous 
 ideal of the free-trader were really to be carried 
 out, and we were to become the workshop of the 
 world ! 
 
 Fancy our country, from Land's End to John 
 o' Groat's, one hideous repetition of the Black 
 Country of Staffordshire, or the black manufacturing 
 district of north-enst Lancashire ; and fancy our 
 country and agricultural population wiped out, and 
 all having to work like white slaves, and only having 
 their foreign food supplied to them from hostile 
 countries on the couditiun that they could make 
 their speciality cheaper than any other nation, 
 because they were willing to work longer hours than 
 any other ! But as I have already pointed out, our 
 working classes have already said Xo, through their
 
 ( 2:5 ) 
 
 organizations, to this inviting Cobdenite picture, and 
 the great industrial centres are notably becoming 
 protectionist. 
 
 But why have all the nations of the earth repu- 
 diated Free Trade, and what is the truth which 
 underlies this consensus? To ttoXXoIs dp-qixeuop 
 aX-qdovq tlvo^ ju-ere^et — there must be some reason for 
 this universal repudiation of so specious a proposal. 
 
 The fact of the matter is, that at the present 
 moment there is no such thing as Free Trade. 
 Free Trade means unhampered trade, and trade is 
 everywhere hampered by duties. 
 
 No one desires real free trade more than I do, 
 but I understand by it free admission into the 
 markets of other nations, and not giving other 
 nations that privilege, which seems to me like 
 the ostrich, which, we are told, buries its head 
 in the sand, under the idea that it is concealing 
 itself. 
 
 The advantage of free trade is in the receiving, 
 not in the giving, and when Cobden advocated it 
 half a century ago, he did not overlook this point, 
 but honestly believed that other nations would 
 follow our example, and do what Avas so eminently 
 for the benefit of that abstract good — universal 
 trade. A river would run faster if there were no 
 dams in it, but the dams are of inestimable advan- 
 tage to those who live along it. So it is with trade. 
 Trade would benefit by the adoption of universal 
 free trade, but many nations, as nations, would be 
 ruined.
 
 ( 24 ) 
 
 And Cobden, in his prognostic that in ten years 
 every nation would adopt free trade, ignored one 
 most important point, i.e. that free trade, whilst 
 being the ideal from a commercial standpoint, is in 
 some cases prejudical from a national point of view. 
 
 Nationalism is (to borrow a Darwinian term) the 
 natural check to free trade, and for this reason, that 
 whereas free trade would, if universally adopted, 
 commercially benefit the human race probably more 
 than any other measure, it would correspondingly 
 interfere with the national principle or idea. 
 Universal free trade would cause populations to 
 gi'avitate towards those centres most favourable to 
 each special industry, with the result that each 
 industry would be carried on under the most favour- 
 able conditions, and that the human race would 
 benefit by having all the products of the earth and 
 of human industry at the least possible cost. Every 
 individual would be proportionately richer, and the 
 working classes would have better opportunities of 
 earning what they require. But what would become 
 of the national idea ? 
 
 Take Germany, for instance, hemmed in by two 
 formidable powers, France and Russia, of whose 
 intentions she is always apprehensive. As soon as free 
 trade was universally adopted it is probable that, 
 tlie protection laws for her home industries being 
 removed, a part of her population would emigrate to 
 some country where the conditions of agriculture 
 or manufacture were more favourable. 
 
 The result of this would be a diminution in the
 
 ( 25 ) 
 
 men capable of undertaking military service and 
 fighting in iier battles for the existence of that 
 political unit, the Fatherland of Germany, which 
 the national idea teaches them to look upon from a 
 political point of view as the supreme good. 
 
 Thus it is obvious that the instinct of national 
 preservation militates against the adoption of 
 universal free trade. The desire is felt to foster 
 home industries with the object of keeping as many 
 persons as possible employed within the boundaries 
 of the political unit capable of defendmg that national 
 unit in case of war. 
 
 And this brings me to the last and perhaps the 
 most important and interesting branch of the subject 
 — the Imperial and Colonial aspect of the question. 
 
 The British Isles, which constitute the entire area 
 we have at present for free trade, are manifestly 
 insufficient for the volume of our trade. In the 
 British Empire, however, a sufficient area would be 
 found which might even grow. And in this 
 establishment of free trade we should not have the 
 national idea in conflict with us. We should, on 
 the contrary, have it acting in our favour, for the 
 instinct of national preservation, instead of taking- 
 fright lest there should be a loss of population 
 towards centres outside the national boundary more 
 favourable to certain industries, would be gratified 
 by the prospect of a protected area capable of 
 affording sustenance for an overwhelming military 
 force. 
 
 English statesmen now recognize that they must
 
 ( 26 ) 
 
 bestir themselves to fight for markets for English 
 goods. If at the present day there is one cause 
 which is more worth fighting for between nations, 
 whether by force of arms, or, still better, by 
 diplomacy through the offer of reciprocal commercial 
 advantages, it is, in my opinion, the right of free 
 markets. For in the present day, when the 
 financial question seems to be at the root of our 
 whole political and social life more than it has ever 
 been before, this right of open markets appears to be 
 the greatest benefit that one nation can confer upon 
 another, or the greatest injury whicli, by being- 
 withheld, one nation can inflict upon another. And 
 yet England, at the very zenith of her power, quietly 
 acquiesces in a state of things irretrievably damaging 
 to her enormous accumulated capital, whether sunk 
 in land or manufacturing industries. She offers for 
 nothino; to the foreio-ner an inestimable benefit, the 
 finest market in the world, for the use of which she 
 could get a very high price from foreign nations, the 
 price of entrance into their markets of our com- 
 modities, or at least a reduction of their tariff. By 
 giving this market away gratis ^v^i are doing a wrong 
 to our o^vn peoj^le. 
 
 For I am convinced that Avhereas the spectacle of 
 an isolated country not even enjoying Free Trade with 
 her Colonies, and suffering IVoiii tlic liiilhiciiiation of an 
 imaginary free trade, was calculated to make other 
 nations hesitate to adopt free trade ; a large con- 
 federacy joining together to practise real free trade 
 on a workable scale, would, by the quick adhesion of
 
 ( 27 ) 
 
 smaller units, soon assume such proportions as might 
 possibly ultimately result in the universal adoption 
 of free trade. 
 
 Thus it will be seen that even from the abstract 
 and theoretical standpoint of the ideal free-traders, 
 this policy of a Customs Union might in the end 
 bring about the adoption of this universal free 
 trade which they have been taught is so much to be 
 desired in the interests of the whole human race. I 
 do not myself think it will ever come about, or is any- 
 thing more than a pious aspiration ; but I honestly 
 believe that our taking up arms to fight and join the 
 melee to win fair terms for our workers, is not only 
 imperatively demanded as a duty to our own, but 
 also is the greatest means we could take towards the 
 bringing about of universal free trade. 
 
 The full evil of our policy of allowing our trade 
 to be taken away from us by foreign tariffs, without 
 retaliating and demanding reciprocity, has not yet 
 been felt, and will not be as long as we can go on 
 acquiring fresh territories as markets to take the 
 place of those we are always losing. Thus the full 
 mischief of our false system is not yet realized. 
 
 But in xime we must exhaust the area on the 
 habitable globe disposable for us to annex for this 
 purpose. And in view of this and of the fact that 
 these territories have been acquired at a vast cost 
 to the British taxpayer (computed at some 2000 
 millions : National Debt, 862 millions — 680 millions 
 still owing ; public loans, 700 millions ; private 
 advances, 450 millions at least), and in view of the
 
 ( 28 ) 
 
 fact that these vast territories are maintained by the 
 British taxpayer at an annual cost of some 
 56,000,000/. (for Army and Navy 31,000,000/., for 
 National Debt 25,000,000/.), it seems unjust to him 
 that he should enjoy no preference in those markets 
 which he has created over foreign nations who deny 
 him theirs, and whose hostility necessitates the above 
 expense in acquisition and maintenance, and who 
 keep what territory they can get as a peculiar market 
 for their trade. 
 
 It is a manifest injustice that when, after great 
 sacrifice in money and lives, we acquire and develop 
 and open out to trade vast tracts of land, we should 
 do so for the foreigner, and throw these new countries 
 open to his trade on equal terms with our own 
 people, whilst at the same time he is excluding us 
 fj'om every inch of territory he can. He is prac- 
 tically playing Avith us on the principle of " Heads I 
 win, tails you lose." 
 
 A comparison of exports and imports with the 
 two great protectionist nations, shows that whereas 
 they become less indebted to us by manufacturing 
 their ovm requirements, we become more indebted 
 to them, and so the advantage they gain is not 
 counterbalanced by any loss to them of export trade 
 with us. For whereas in 1865 we exported to 
 Germany 11,541,540/. more goods than we imported 
 from them, in 1898 we exported only 1,590,643/. 
 more than we imported from them, being a gain to 
 them of 9,950,897/. Whilst with regard to France, 
 our imports from them, which in 1 865 only exceeded
 
 ( 29 ) 
 
 our exports by 6,270,159/., in 1893 exceeded them 
 by 23,862,500/., or an improvement for them in the 
 balance of 17,592,431/. The figures being : — 
 
 Imports into United Kingdom. 
 
 18G5. 1893. 
 
 £ £ 
 
 From France . . 31,625,231 . . 43/i58,090 
 
 „ Germany. . 16,611,852 . , 26,364,849 
 
 Exports from United Kingdom. 
 
 £ £ 
 
 To France . . 25,355,072 . . 19,795,500 
 
 „ Germany . . 28,153,392 . . 27,955,492 
 
 The rapid growth of France, Germany, and the 
 United States is still further illustrated by the 
 following quotation from the Minority report of the 
 Royal Commission on the Depression of Trade, page 
 114, paragraph 51 : — 
 
 "In the eight years from 1876 to 1884, France, 
 Germany, and the United States increased their 
 annual consumption of wool by 325,000,000 pounds, 
 or allowing for the estimated diminution of the 
 home production of France and Germany, 
 295,000,000 pounds, that is, 45 per cent. ; whilst 
 ours increased only by 12,000,000 pounds, or 3^ per 
 cent. The simultaneous progress of the silk manu- 
 facturer in the United States and decay in this 
 country, during the last twenty or twenty-five years, 
 is not less remarkable, especially Avhen taken in 
 connection with our quadrupled import of silk 
 manufactures. 
 
 "It is equally important to observe that whilst
 
 ( «o ) 
 
 foreign tariffs have operated to limit our export of 
 the three classes of textiles just named, they have by 
 no means prevented the protectionist nations, who 
 manufacture under their shelter, from immensely in- 
 creasing the value of their exports of the like manu- 
 factures to this country during the same period, in 
 spite of the great fall of prices, and of the fact that 
 much labour and machinery connected with those 
 industries in the United Kingdom were all the while 
 wholly or partially unemployed. This is illustrated 
 by the extraordinary fact that, whilst the value of 
 our exports of worsted and woollen manufactures in 
 the five years 1880-1884 exhibited, as compared 
 with the five years 1865-69, a decrease of 43'1 per 
 cent., the value of our im])orts, comparing the same 
 periods, showed an increase of no less than 214*9 per 
 cent. These facts confirm the evidence given before 
 us by witnesses connected with various industries, 
 that in the case of countries like Germany, possess- 
 ing in an ample measure the population and other 
 resources required for successful manufacturing 
 enterprise, the adoption of a system of import duties 
 on manufactures, and even on primary articles of 
 food, has not disqualified them from successful and 
 growing competition with us in the home and 
 Colonial as Avell as in neutral markets." 
 
 The following quotation is from a speech of Mr. 
 Cecil Rhodes in London, January 18th, 1895 : — 
 
 "Tlicre arc 60,000,000 of your people in tlic 
 United States. You created that country ; that is 
 your production, if I may call it so. They adopted
 
 ( '^1 ) 
 
 Protection, and they cannot get rid of it now. What 
 is your trade with the United States and its 
 60,000,000 people ? Your exports there are about 
 24,000,000/. per annum. In South Africa and 
 Egypt we have only 600,000 whites, but your 
 exports there amount to 20,000,000/. You have 
 15,000,000/-. with the Cape and Natal, almost 
 entirely British goods, and 4,000,000/. with Egypt, 
 where you have a fair chance for your goods. You 
 are doing 20,000,000/. with these two small depen- 
 dencies, as against 24,000,000/. with another creation 
 of yours which has shut your goods out, and where 
 there are 60,000,000 of your own people. If they 
 gave a fair chance to your trade you would be doing 
 150,000,000/. with the United States — to your advan- 
 tage, and the advantage of the American people." 
 
 These statistics show us what much better cus- 
 tomers our Colonies are to us than foreign countries, 
 and therefore the true policy for us to pursue is by 
 favourable treatment to induce emigration towards 
 our Colonies rather than to the United States and 
 other countries. 
 
 What Ave ought to do is to endeavour to establish 
 a larger population of food-growers in our Colonies, 
 who will purchase our manufactures in exchange for 
 the food we require. 
 
 Then we shall get the full value of the work we 
 do, and the foods we make to exchange for the 
 means of living. 
 
 I must here quote another passage from Mr. Farrer 
 Ecroyd's pamphlet : —
 
 ( 32 ) 
 
 '' What, then, are the capabilities of our Colonies, 
 either as customers for our goods or as growers of 
 food? In the year 1877 (the last of which I happen 
 to have the returns before me), our Australian 
 Colonies, with two millions of inhabitants, purchased 
 our exports to the value of 1 9,285,7 18Z. ; whilst the 
 United States, with about forty millions of inhabitants, 
 purchased only to the value of 16,370,814/. In the 
 same year the Dominion of Canada (with Newfound- 
 land), containing four millions of inhabitants, took 
 from us exports to the value of 7,613,547L ; whilst 
 Russia, with nearly eighty millions of people, bought 
 only to the extent of 4,178,614/. In other words, 
 every xYustralian is as large a customer to us as 
 sixteen Americans, and every Canadian is better to 
 us than thirty-five Russians. Thus, should we 
 succeed, by the aid of a differential duty, in settling 
 only four or five millions more inhabitants in our 
 Colonies, their custom would be as large as the 
 whole of our present export trade to the United 
 States and Russia combined. 
 
 " Nor need we fear that by the adoption of such a 
 policy we should lose any export trade to America or 
 Russia which we can retain under the present 
 system, or provoke any action on their part which 
 will not equally be adopted as matters now stand, 
 should they deem it advantageous to themselves. 
 The enormous duties now levied by these nations on 
 our manufactures were imposed by them in the face 
 of our fVcc-trjidc ))olicy, and this may convince us 
 that no consideration of reciprocity or Avant of
 
 ( 33 ) 
 
 reciprocity has influenced their actions at all. On 
 the contrary, we should probably convert into 
 zealous free-traders the carriers, merchants and 
 exporters of New York and the Atlantic States, who, 
 harassed by the favoured comj)etition of Canada, 
 would be anxious to obtain the largest and most 
 direct exchange of commodities with this country. 
 For from the moment when they should see us 
 resolved in earnest to become independent of them, 
 the tables would be turned, and the fear of gradually 
 losino; their vast trade with Eno;land, who now takes 
 
 O 7 
 
 two-thirds of their food exports, would make them 
 instead of ourselves the perplexed and anxious party. 
 Amongst other results we might reasonably expect a 
 considerable migration of farmers from the remote 
 North-Western States into our territories. But it 
 would be a fatal error to allow any offer of recipro- 
 city, even from the Americans, to turn us aside for 
 one moment from the steady pursuit of a policy 
 directed to secure the unity and prosperity of the 
 whole Empire. Instead of that we ought, without 
 delay, to open out and hasten the settlement of the 
 best corn and cattle-growing lands in our depen- 
 dencies. What some of these are the following- 
 extracts will show : — ■ 
 
 "Of the total area of the Dominion of Canada, 
 upwards of two million square miles are agricultural 
 and timbered lands, and of these the wheat zone 
 occupies about one-half. The range of productions 
 is extended in grains from barley to maize : in fruits, 
 from apples to peaches, grapes, melons, nectarines, 
 
 D
 
 ( 34 ) 
 
 and apricots ; in vegetables, from turnips, carrots, 
 and cabbages to the egg-plant and tomato. 
 
 '• North of Lakes Erie and Ontario and the River 
 St. Lawrence, east of Lake Huron, and included 
 mainly within the province of Ontario, there is as 
 fair a country as exists on the North American 
 continent, nearly as large in area as New York, 
 Pennsylvania, and Ohio combined, and equal, if not 
 superior to these States in its agricultural capacity. 
 It is the natural habitat of the combing-wool sheep ; 
 it is the land where grows the finest barley. It 
 raises and grazes the finest of cattle with qualities 
 especially desirable to make good the deterioration 
 of stock in other sections, and its climatic conditions, 
 created by the vicinity of the great lakes, specially 
 fit it to gi'ow men. Such a country is one of the 
 greatest gifts of Providence to the human race. 
 
 " To develop these resources and the like in other 
 portions of our Empire, is the task to which we 
 ought at once and energetically to address ourselves ; 
 but to do this rapidly in the face of the vast food- 
 growing and carrying organizations which America, 
 by the aid of our capital, has already got into full 
 operation, would 1)0 impossible without the aid of a 
 differential duty. The young jDlantatioii will be 
 strong ;iii(l healthy enough when full-grown, but it 
 must be fenced and sheltered during its infancy. 
 And probably this is the best investment possible 
 for England lierself, for past experience and the 
 clouded future both warn us that, in the absence of 
 such legitimate openings fur capital and enterprise,
 
 ( 35 ) 
 
 wc may totally lose, during the next few years, in 
 unsound home and foreign investments, in the forced 
 idleness of many workpeople, and in the reduced 
 Avages of the rest, an amount sufficient to have 
 opened out new lands that would sustain a couple of 
 millions of people in plenty, and supply half our 
 import of corn, cattle, bacon, butter, and cheese. 
 What would have been our position in these respects 
 at this moment had such a policy been adopted ten 
 years ago, and had one or two hundred millions of 
 the money now hopelessly lost in foreign loans and 
 foreign railway bonds been directed, by the wise 
 initiative of Government, to the development of 
 our own territories and the growth of our own 
 food ? " 
 
 What is the attitude of the Colonies on this ques- 
 tion ? They have taken the initiative in the cause of 
 commercial federation of the Empire by adopting 
 through their representatives the following resolu- 
 tion : — 
 
 "Intercolonial Conference at Ottawa. 
 " A Customs Union. 
 
 " The Conference, after two days' debate, finally 
 passed the reciprocal trade resolution yesterday, as 
 follows. It was moved by the Hon. G. B. Foster, 
 and seconded by Sir Henry Wrixon : — 
 
 " ' That, whereas the stability and progress of the 
 British Empire can be best assured by drawing con- 
 tinually closer the bonds which unite the Cjlonies to 
 
 D 2
 
 ( 3G ) 
 
 tlie mother country, and by the continuous growth 
 of a practical sympathy and co-operation in all that 
 pertains to the common welfare ; and whereas this 
 co-operation and unity can in no way be more 
 effectually promoted than by the cultivation and 
 extension of the mutual and profitable interchange 
 of their products, it is therefore resolved that the 
 Conference records its belief in the advisability of a 
 Customs arrangement between Great Britain and 
 her Colonies by which trade within the Empire may 
 be placed upon a more favourable footing than that 
 on which trade is carried on Avith foreign countries.' " 
 
 Such is the officially-expressed opinion of the 
 Colonies. It is surely a fortunate circumstance for 
 us that it is our Colonies ■who assert this patriotic 
 and sound doctrine, and not that we have to try and 
 convince them of it. 
 
 They call upon us to do what is for their interests 
 and ours, and if avc do not respond to this call, we 
 must lessen ourselves in their estimation as beino: a 
 nation wedded to the theories of learned Professors 
 of political economy instead of great rulers and prac- 
 tical men of business, worthy to wield the affairs of 
 a great Empire. AVe have a chance of strengthening 
 <»ui- })oliticul connection Avith the Colonies by the crea- 
 tion of common commercial interests. If Ave neixlect 
 this opportunity Ave shall not leave that connection 
 as it is, Ave shall loosen it. This is no party question. 
 It is a national, ;ui imperial, a commercial question, 
 Avliicli (MiLiht to appeal to the heart of every English- 
 jjiaii. a- it <l'K's to the lieart of every English colonist,
 
 ( -57 ) 
 
 which ought to appeal to the understanding of every 
 business man, when he sees that, whatever Regius 
 Professors may write or enunciate in their poUtical 
 economy class-rooms, workshops and factories are 
 being shut up, trade and wages being lost to the 
 country, by other nations having resolved to destroy 
 our trade and to become self-sufficing, whilst the 
 British Empire, which, better than any other political 
 unit on the globe, could be self-sufficing, and supply 
 all its wants, carries on a Quixotic and unnatural 
 policy of allowing its own workers and producers to 
 be injured and destroyed by hostile tariffs, and still 
 continues to benefit these hostile countries by free 
 admission, when they have declared commercial war 
 upon us. This is a pusillanimous policy, and the 
 spirit of every Englishman Avill rebel against it, when 
 the free importers say, " We dare not retaliate, other 
 nations are too strong for us ; we cannot do without 
 their goods." Are they too strong for the British 
 Empire ? 
 
 And should the Customs Union be adopted, then 
 safe and remunerative investments would al^ound for 
 English capital, under the protection of the English 
 flas:, and the coincidence would be achieved of 
 favourable natural conditions, Avhich make capital and 
 labour well remunerated, whilst at the same time 
 avoidino; the great drawbacks to the investment of 
 money abroad where conditions are now favourable, 
 i.e. the uncertain, and even in some instances un- 
 trustworthy character of foreign Governments, 
 and the loss in every case to the British nation
 
 ( 38 ) 
 
 of the labour-employing aspects of the capital so 
 invested. 
 
 By a mistaken policy we have been using our 
 capital to de^'elop, by railways and other enterprises, 
 the resources and trade of foreign countries in com- 
 petition Avitli our oAvn Empire, and to the neglect of 
 our Colonial resources. A preferential treatment of 
 Colonial investments in the matter of taxation would 
 tend to remedy this injury to our trade and working 
 classes. 
 
 Railways and telegraphs have made the whole 
 Avorld so near together that it is as absurd, in the 
 present day, tliat different portions of our Empire 
 should be separated by tariff Avails, as it would have 
 been a century ago for municipalities within England 
 to be deliarred from free commercial intercourse. 
 
 The Colonies ask that the British Empire should 
 awake to these changed conditions, and, recognizing 
 the spirit of the times in Avliich Ave live, should show 
 a broader conception of the national idea, by forming 
 a Customs Union for the British Empire. The great 
 argument of the belieA- ers in free imports Avas that 
 A\'e dare not lift up our heads among the nations of 
 the earth to fight, by connnercial treaties, for fair and 
 erpial conditions for the goods made by our Avorking 
 classes, because Ave Avere too small and too dependent 
 upon other nations for our supplies. Noav the 
 chance is offered to us by our Colonies to join Avith 
 them in a commercial syndicate. 
 
 This is the ""reatest and iirandest idea the Avorld 
 has ever conceivccl, and, should Ave adopt it, so far
 
 ( 39 ) 
 
 from being too small to bargain for favourable trade 
 conditions in our exchange of commodities with 
 foreign nations, we should be stronger than any, 
 and none would be strong enough to suffer exclusion 
 from a Customs Union embracing so large an area as 
 the British Empire. 
 
 If we were bound up in one trading company, we 
 should be better able to ask the colonists to help us 
 to pay for the vast outlay necessary to keep up a 
 fleet adequate to protect our Imperial shipping and 
 ports, which it is unfair should fall entirely upon us 
 in England. And the objection to our assisting the 
 Colonial trade by the subvention necessary to carry 
 out the recommendations of the Colonial Conference, 
 to have a better service of steamers to improve the 
 communication between Australia, Canada, and the 
 mother country, would be done away with when we 
 felt we were developing an integral part of our own 
 trading community, and not a distant part of the 
 earth to which we were bound by a political tie abso- 
 lutely unsupported by any mutual bond of commercial 
 interests. 
 
 Now, the advantage of the Customs Union to us is 
 that it tends to help both land and manufactures (the 
 two wealth-producing industries) — manufactures by 
 a tax (for revenue) on competing imports, land by an 
 alleviation of the present intolerable burden of taxa- 
 tion in proportion to revenue that would be received 
 from the differential tariff. 
 
 But I have been asked what inducement can we 
 give our Colonies to join us and take off their tax
 
 ( 40 ) 
 
 against us? The ansTver is, We offer them a pre- 
 ference in our market, the best in the world. 
 
 And Ave gain the advantage that, having induced 
 them to join us in this United Empire preferential 
 trading league, Ave give them a reason for being 
 •willing, not merely from sentiment, but from that 
 much more cogent and lasting motive, common 
 interest, to join in sharing the expense of keeping up 
 an adequate navy to guarantee the safety of our 
 enormous Imperial merchant marine, and at the 
 same time ensure the peace of the Avorld. 
 
 That the moment is opportune for the carrying 
 out of this policy Avill be seen from the folloAving 
 Avords of the late Prime Minister of Canada, Sir John 
 Thompson, after a paper delivered at the Imperial 
 Institute, on December 11th, 1894, by Sir Henry 
 Wrixon on the National Significance of the OttaAva 
 Conference : — 
 
 " Xothing could have exceeded the enthusiasm 
 aroused upon the arrival of our felloAv-colonists, and 
 of Lord Jersey as representing Her Majesty's Govern- 
 ment. It Avas felt by our people that in Australia, 
 in XeAv Zealand, and the Cape of Good Hope, millions 
 of (.ur fellow-colonists, interested as Ave Avere in the 
 development of the Empire and the mutual trade of 
 the Colonies Avith each other, had been all these years 
 Avithout the slightest touch or approach of kinship, 
 and that the moment they arrived an opportunity 
 liad coinc to reverse that state of things, and to shoAV 
 rlic Avoilil iliat AV(! Averc a united people." 
 
 ]W t]\'\< policy Ave should l)riiii: back a ofolden acre.
 
 ( 41 ) 
 
 for should we not regain an unquestioned commercial 
 supremacy? Should we not be able to carry on 
 every industry in that part of the globe most favour- 
 able to its success, where nature was most aiding, 
 and yet do so with our own people, paying tribute, 
 out of their earnings, out of their energy and enter- 
 prise, to no foreign sovereign ? 
 
 This would help our labouring classes. For the 
 expansion in our home trade which would certainly 
 result from a preference given to our products 
 throughout the Empire, an increased demand for 
 labour, which would result from this expansion of 
 our trade, would tend to make labour more valuable, 
 whereas the present curtailment of our trade, by 
 hostile tariffs in our Colonies and elsewhere, tends to 
 prevent the natural rise in wages which such in- 
 creased demand would bring about — the less trade, 
 the less profits, and therefore the less to spend on 
 wages, and the less capital accumulating for the 
 foundation of further labour-emj)loying and wage- 
 giving enterprises in England. 
 
 I am convinced that the same difficulty will arise 
 in preserving the stability of our connection with the 
 other Colonies, as occurred with America when com- 
 mercial interest found itself opposed to political 
 sentiment. Let us, therefore, make this tie with 
 our loyal and attached Colonies to keep them with 
 us, and in all probability (though it is not necessary) 
 this will be followed by the rebinding of a commercial 
 tie with tlie United States more enduring than the 
 old political one.
 
 ( 42 ) 
 
 This is a grand religion ; it is a real, not a visionary 
 Free Trade, such as Cobden's, depending upon an 
 unrealized hypothesis that others would follow us. 
 Here are the others, our Colonies, our own kith and 
 kin, ready to join us, and nothing but the most crass 
 ignorance, the most jDurblind folly, can prevent us 
 from seeing how excellent is the opportunity, how 
 fatal to us would be the neglecting of it. As foolish 
 and as fatal would such a rejection of their overtures 
 be as the belated policy which estranged from us the 
 United States in the last centur}'-. 
 
 " The statement * that our excess of imports over 
 exports is due to the largely increasing income accru- 
 ing from our foreign investments, Avhilst satisfactory 
 to financiers as accounting for the balance of trade, 
 is by no means calculated to reassure our working 
 classes. 
 
 " It will certainly, and very justly, alarm them to 
 learn that our imports are acquired more and more 
 in jDayment of rent and interest due from abroad 
 to uvir wealtliier classes, and less and less in ex- 
 change for the productions of their own industry. 
 And they will judge what must be the effect of 
 such a movement as that upon our industrial popu- 
 lation ill the long run." 
 
 I should hope that tlie most advanced Free Trade 
 enthusiast would not wish us to become dependent 
 on this source of revenue. 
 
 For the British manufacturer (i.e. employer of 
 labour other than agricultural) there can be no doubt 
 * From Mr. Ecroyd's pamphlet.
 
 ( 43 ) 
 
 that this scheme as laid down here Avould be most 
 beneficial, because the present state of things is for 
 him the worst possible. 
 
 The trades union puts this dilemma before him 
 — either raise our wages or stop work. Stopping 
 work means letting capital which he has sunk 
 in his business lie idle. And if he has had to 
 borrow a portion of this capital on mortgage, as 
 frequently happens, he is bound to pay a certain 
 interest on it inexorably. The other alternative, 
 however, of the fatal dilemma is equally disastrous, 
 owing (1) to the severity of foreign competition in 
 the Colonies and neutral markets ; (2) to the 
 fact that owing to the fine exacted through foreign 
 Customs duties the margin of profit is reduced to a 
 minimum. 
 
 Thus he is sandwiched between the Trades Union 
 and the Protective Tarifi". The one inexorably 
 raising the cost of i3roduction, the other as surely 
 depressing the price to be obtained for the product. 
 Since the manufacturer lives on the margin between 
 these two, which in many industries has already 
 disappeared and is in others fast vanishing, it is 
 obvious that his interest is in the establishment of 
 this Customs Union, Avhich Avill mitigate this im- 
 possible state of things. 
 
 This state of things not only ruins the English 
 employer, but tends to lessen employment thereby, 
 for he is intimidated from investing further capital 
 in renewing his machinery in industries which are 
 no longer profitable, and is attracted to invest it
 
 ( 44 ) 
 
 abroad under the shelter of a protective tariff, and 
 thereby intensify the severity of foreign competition 
 against his OAvn country. 
 
 Next let us consider the Agricultural interest at 
 home, and how they would be likely to look upon 
 this scheme of the Customs Union. 
 
 Considering the vast loss to the landed interest 
 through the deflection of our food-custom from them 
 to the foreigner, both landowners, tenant-farmers 
 and agricultural labourers must sympathize with 
 a policy which, whilst in no wise protecting the 
 English farming interest, would yet tend to put 
 him on a more just and equitable basis as regards 
 taxation. 
 
 Namely, to relieve him of the excessive weight of 
 direct imperial taxation which he was well able to 
 bear at a time when he was enriched by j^rotection, 
 but from ^vhich noAV that he no longer enjoys that 
 benefit it is only just he should be relieved, and put 
 on a more equal basis with his foreign competitor. 
 AVhilst at the same time a preferential market 
 would be afforded him in the Colonies for any 
 speciality in the way of prize stock which, owing to 
 climate or other conditions, he might be able to strike 
 out to meet some requirement. 
 
 AikI riii;i]lv, let lis look at the Customs Union 
 from the point of view of tlie Colonies. At the 
 present time, owing to the facilities of carriage 
 intensifying universal competition, and the abundance 
 of commodities due to the constant improvements in 
 labour-saving machinery, it is not the difficulty of
 
 ( 45 ) 
 
 getting the requirements of life, but the procuring a 
 market for those commodities — that is the prevailing 
 anxiety of everyone, workman or employer. 
 
 And therefore there can be no doubt that the 
 arrangement of the scheme as here formulated would 
 appeal to every class of the community in every State 
 in the Empire. 
 
 One more word with respect to the Imperial 
 aspect of the question, and the necessity of the 
 Imperial federation of the English-speaking nations. 
 
 The great merit of this scheme in my judgment 
 is, that it is not only commercially sound and im- 
 perative, but it is equally necessary to the consolida- 
 tion of the British Empire, consisting of so many 
 nations and languages, into one united and self- 
 sufficing Empire, 
 
 Self-sufficing not only in respect to being able 
 to supply its own Avants, but also in being able to 
 hold up its head among the nations of the world, 
 and speak with a voice Avhich no one dare gainsay 
 on behalf of its gigantic trade and its toiling 
 millions ; and when it has spoken, to be able 
 to enforce its word without seeking help from 
 outside. 
 
 This is what I understand by a self-sufficing 
 Empire. 
 
 The Customs Union makes for this end in 
 a way that no other measure could : and it is 
 not a matter where by action we can gain some 
 great benefit, and by neglecting to act we do no 
 harm.
 
 ( 46 ) 
 
 If Avc do not seize this golden opportanity, and 
 respond to the invitation of the Colonies to Imperial 
 unity, we shall, in my opinion, break up the Empire. 
 
 And I Avill explain why I believe this would 
 follow a rejection of the proposals of the Ottawa 
 Conference, 
 
 Take, for instance, our two greatest colonies, 
 Canada and Australia, and consider what will surely 
 happen if we do not at this critical juncture in the 
 history of the Anglo-Saxon race bind them indis- 
 solubly to us by a commercial tie. 
 
 They will not always be merely sending us food 
 and raw materials. 
 
 They will in time develop manufacturing industries 
 similar to our own, and be compelled by the tyranny 
 of foreign protective tariffs, in order to win fair 
 terms for their own industries, to differentiate 
 against the mother country, and so become protec- 
 tionist against us. 
 
 Lord Farrer, in speaking on this question of the 
 Ottawa Conference, enunciated that if the Colonies 
 wished to draw nearer the ties Avhich bound them to 
 the mother country, they must do so by approxi- 
 mating to our free-trade policy. 
 
 " If," lie says, " Imperial unity is to be strength- 
 ened by commercial arrangements, those arrange- 
 ments must be in the direction of free trade, and 
 not of protection ; by the reduction of protective 
 duties in the Colonies, and not by the imposition of 
 difiereiit ial diilics in (Ji-cat liritain." 
 
 This sounds verv iinc. Ijut the Colonies are not
 
 ( 47 ) 
 
 going to immolate themselves upon the altar of an 
 abstract idea. And never having bowed their heads 
 before Cobden, I do not think they are likely to 
 become converts at the present day in the face of the 
 universal consensus of the civilized nations of the 
 world. 
 
 Free trade would bind us to the Colonies ; but 
 free trade with ourselves, not with foreio'ners. 
 
 And I have already pointed out that the Colonies 
 cannot do without revenue duties. 
 
 The Colonies are the youth of the Empire ; they 
 keep us up to date, and the old country from wearing 
 out and becoming obsolete. We cannot associate 
 ourselves too closely with them. 
 
 These Colonies, like children, will not always be 
 young. They will not always lean on the support of 
 the mother country. Like the United States, they 
 will one day be able to stand alone. 
 
 I am not one of those who say, " It is inevitable ; we 
 must lose them as we have done the United States." 
 
 I feel rather that an awful responsibility rests 
 with us of the present generation, to whom in this 
 privileged age has been entrusted the task of 
 shaping the destinies of our race. 
 
 And it is just such bigoted refusal to consider 
 their interests as lost to us America that would, I 
 believe, ag-ain lose us what now remains. 
 
 Let us choose the better and nobler path, and 
 keep this mighty Empire not merely as something to 
 be proud of, but as a special and peculiar market for 
 the toiling millions of our people.
 
 ( 48 ) 
 
 If we let it go, we lose our command of the sea 
 through the coaling stations. We lose, instead of 
 being able to regulate, the markets of the Avorld. 
 We lose a population of 280 millions, nearly ten 
 times that of the mother country, and able under 
 Imperial federation (realizable through the Customs 
 Union) to afford an army and navy capable of 
 placing our trade beyond the fear of war. 
 
 The wealth and population of our Colonies is 
 nothing to what it would be unde]- a sound fiscal 
 policy ; but even as it is the mutual inter-dependence 
 of our commercial supremacy in trade, and our Im- 
 perial ascendency in politics, is abundcintly evident. 
 
 And I for one believe that the nations (were we 
 either divested of our Empire through loss of trade, 
 or of the Avealth necessary to defend our Empire 
 through the loss of our union with Colonies) woidd 
 not allow us to exist in peace as a second-rate power, 
 shorn of our greatness, pitiable as such a position 
 would be to our pride. 
 
 But there is one suggestion which I cannot refrain 
 from putting forward, and Avhich is to my mind the 
 most useful practical step Avhich could be taken 
 towards bringing within the domain of practical 
 politics this most desirable consummation, and 
 thereby bringing witliin a reasonable prospect of 
 realization the resolution of the Colonial deleirates at 
 Ottawa. 
 
 I mean the appointment of a Royal Commission on 
 our fiscal policy, which should inquire into : 
 
 1. ('() The effect upon our trade of foreign
 
 ( 49 ) 
 
 protective tariffs and bounties. In support of this 
 I quote Minority Report on Depression of Trade, 
 p. 138. 
 
 " The most conspicuous, we do not say the most 
 important, case is that of sugar bounties. The 
 abolition of these bounties is admitted to be 
 desirable, for it has been the object of repeated efforts 
 on the part of the Foreign Office. So long as the 
 bounties are maintained, therefore, it is evident that 
 the imposition of a countervailing import duty must 
 be desirable. Its effect would be to restore to the 
 producers of sugar in this country the just right 
 of competition on practically equal terms, and to 
 transfer to our own Exchequer the export bounties 
 given by foreign nations. The position of the 
 British consumer would be the same as if we had by 
 negotiation obtained an equivalent reduction of the 
 bounties, whilst in his quality of tax-payer he would 
 be a gainer by the diversion of foreign money into 
 our Exchequer, so long as the bounty-receiving 
 importations continued. A countervailing duty of 
 one farthing per lb., or 2s. Ad. per cwt., on all foreign 
 refined sugar and raw beetroot sugar would sub- 
 stantially effect the purpose." 
 
 The bounties and subsidies now given by several 
 foreign countries, on the building and working of 
 ships of their respective nationalities, have probably 
 not yet produced their full effect on the interests of 
 our shipbuilders and shipo"\vners. It is clear, how- 
 ever, that they cannot but suffer by being exposed 
 to subsidized foreign competition. 
 
 B
 
 ( 50 ) 
 
 Value of our imports of fish : 
 
 £ 
 In five years, 1870-74 .... 4,323,910 
 1875-79 .... 7,561,597 
 1880-84 .... 10,429,262 
 
 So large and rapidly increasing an import, whilst 
 the fisheries on large sections of our own coasts are 
 undeveloped, and the people suffering for want of 
 employment, is a matter which we think demands 
 attention. 
 
 Sir Thomas Brady, inspector of Irish Fisheries, 
 remarks, under date 2Tth September, 1886 : " There 
 were over 8000 tons of salted fish imported into 
 Ireland last year ; treble the quantity might and 
 ouglit to be exported." 
 
 Also Mr. George Auldjo Jameson's report (ibid.) : — 
 
 " These diplomatic eflbrts have failed ; the question 
 therefore which those Avho continue to suffer from 
 these bounties have presented to us is whether 
 legislation can effect what has baffled diplomacy. It 
 is tills a|)pc*al for legislative aid which the evidence 
 shows is by many so keenly resented ; yet if diplomacy 
 was right in its object, how can legislation directed to 
 the same purpose be wrong ? Is it only the method 
 that is obnoxious ? 
 
 " The evidence before us su^iplies proof that the 
 system so in jiii'ious to one industry threatens to affect 
 others. 
 
 " Shi])l)uilding is already subjected to attack, and 
 there are other industries far more vulnerable which 
 ^\■ould certainly succumb if subjected for five years
 
 ( •■il ) 
 
 to the treatment whicli lias proved so fatal to 
 sugar. 
 
 " I am further of opinion that the Report is 
 defective in failing to point out that it is only a 
 question of time when this system of bounty, if 
 persevered in, although at present it seems to injure 
 only the industries and apparently benefits the 
 consumers, will come to injure the latter ; the astute 
 politicians of foreign countries, who for the present 
 deem it advantageous to tax their citizens in bounties 
 which enrich our consumers, are not likely to con- 
 tinue that policy after it has effected its purpose, and 
 the industries have been transplanted from this 
 country to theirs. When that is done, the same 
 ingenuity which has thus accomplished its purpose 
 will readily devise a method of making the British 
 consumer recoup to the foreigner the sacrifices of the 
 past ; and it will be vain to expect British capital, 
 proverbially timid and now made justly distrustful, 
 to re-embark in an enterprise which the British 
 Government was impotent to defend. 
 
 " On the other hand, I think our Report ought to 
 have recorded in very distinct terms that the 
 evidence before us had shown that these foreisrn 
 bountieshave proved highly injurious to one important 
 industry ; that there is evidence of their tendency to 
 extend them so as to affect other industries ; that 
 they are regarded by a large section of the industrial 
 community as fraught with danger ; that if per- 
 severed in and extended, these bounties may prove 
 injurious to other industries and ultimately to the 
 
 E 2
 
 ( 52 ) 
 
 consumers also; that the efforts hitherto made to 
 induce foreign nations to abandon this system have 
 proved abortive ; and that the adoption of some 
 method more efficacious to accomplish that purpose 
 is a duty imperatively imposed on the Government." 
 
 (6.) And especially in regard to the depression of 
 profit rather than volume of our trade (due to the 
 necessity to compete in markets where these tariffs 
 have to be paid) to carefully consider the statistics 
 of our foreign trade, subject to the following con- 
 siderations contained in Minority Report, pp. 107 
 and 108 :— 
 
 " Attempts to indicate the condition of our 
 industries and to measure the growth of our pro- 
 ductive capacity by the total value or volume of our 
 imports and exports are necessarily misleading. For 
 everything depends upon the changes in their 
 character and the particular direction of their 
 gro^vth. 
 
 " All increased imports of agricultural produce, 
 consequent upon the withdrawal of labour from the 
 cultivation of our own soil, the deterioration of its 
 condition, and the diminution of its produce, and all 
 additional tonnage of shipping employed in carrrying 
 such imports, are indications not of the growth but 
 the decay of our productive capacity. 
 
 " So are all imports of manufactures, of what- 
 ever kind, which might have been produced at 
 home by the employment of labour and resources 
 which have remained unemployed or inadequately 
 employed.
 
 ( 53 ) 
 
 "So are all exports of coal, machinery, and instru- 
 ments of industry, which might have been employed 
 at home in the production of food, or manufactures, 
 or other commodities, imported under the conditions 
 just described. 
 
 " For imports of such articles can only be advan- 
 tageous on one condition, viz. that all the labour 
 which could have produced them at home is fully 
 employed in some equally profitable work. Of this, 
 however, we have no evidence, but much to the 
 contrary. 
 
 " On the other hand, the larger our imports of those 
 articles of food and other commodities, which either 
 could not at all or could not legitimately be pro- 
 duced at home, and the larger our import and 
 retention of the raw materials upon which our 
 industries are to operate, the stronger the proofs of 
 the prosperity of those industries and the increase of 
 the national wealth," 
 
 2. (a.) To consider the effect upon our Home 
 Trade of the loss of purchasing power of all classes 
 interested in agriculture, and consequently to the 
 home market, their principal customers. 
 
 Cp. Minority Report, p. 124, par. 81 (ibid.) : — 
 
 " There can be no doubt that the demand for our 
 productions has been considerably restricted by 
 various influences, both at home and abroad. 
 
 " First, as regards our home market. We have, 
 as above pointed out, suffered a serious loss in our 
 purchasing power, by reason of the deficient or 
 unremunerative character of the produce of the soil.
 
 ( 'o4. ) 
 
 Sir James Caird estimates the loss in recent years 
 of the purchasing power of the classes engaged in, 
 or connected with, agriculture, at -42,800,000/. per 
 annum. This amount has been withdrawn from the 
 market in which it was formerly spent, and cannot 
 fail to have had an important influence upon the 
 demand for manufactured goods. This, we fear, 
 must be reckoned among the permanent elements of 
 the depression." 
 
 (&.) And especially to consider the loss to the 
 wealth of the community, through the diminution 
 of stock kept on the land (owing to the undue 
 incidence of taxation, coupled with the unfair 
 foreign competition favoured by exemption there- 
 from, and the consequent disinclination of capital to 
 invest itself in raising English land to its full pro- 
 ductiveness), and through the increased severity of 
 that competition due to the attraction of English 
 capital and labour to foreign countries to benefit by 
 a protected area and the desire to escape the evils of 
 exclusion. 
 
 Cp. Minority Report (ibid.), pp. 141 and 142, 
 paras. 136-138:— 
 
 " It is a striking fact that during the j)ast twenty 
 years 67 per cent, of our emigrants have gone to 
 the United States, and only 21^ per cent, to our 
 Colonies. Tlie more extreme protectionist policy of 
 the United States, so far from repelling immigrants, 
 has operated as tin effectual bribe to both capital 
 ajid Ial)(;ur, by hold inn- out the inducement of higher 
 prices and liigher wages.
 
 . ( 55 ) 
 
 " It would be an act of suicidal folly on our part 
 to attempt to counterwork these influences by a like 
 system of enormous import duties, designed to raise 
 the price of commodities for the advantage of home 
 producers. We have a far better and more effectual 
 remedy at command. A slightly jDreferential treat- 
 ment of the food products of India and the Colonies 
 over those of foreign nations would, if adopted as a 
 permanent system, gradually but certainly direct 
 the flow of food-growing capital and labour more 
 towards our own dependencies, and less towards the 
 United States than heretofore. 
 
 "When it is noted that in the year 1884 the Aus- 
 tralian colonies, with only 3,100,000 inhabitants, 
 purchased 23,895,858/. worth of our manufactures, 
 whilst the United States, with about 55,000,000 
 inhabitants, purchased only 24,424,636/. worth, it 
 will be apparent how great would be the effect of a 
 policy which should lead to a more rapid peopling 
 of the Australian colonies, in giving further employ- 
 ment to our working classes at home, and thus 
 increasing the healthy activity of the home trade, 
 as well as the import of raw materials for our various 
 industries to operate upon. On the other hand, it 
 must be pointed out that the growth of our colonies 
 in population, wealth, and the other requisites of 
 successful manufacturing enterprise, and the ne- 
 cessity felt by them of counter-bidding to some 
 extent the bribe which the high tariff of the United 
 States offers to capital and labour, must operate to 
 convert gradually the revenue duties of the Colonies,
 
 ( 50 ) 
 
 Avhioh now permit so large an import of British 
 manufactures, into protective duties, which will 
 seriously restrict that import." 
 
 3. To consider the feasibility of any legislation to 
 counterbalance the destructive action of such pro- 
 tective tariffs and bounties on our industries, and 
 especially of a Customs arrangement between Great 
 Britain and her Colonies on the lines indicated by 
 the Ottawa Conference. 
 
 It is impossible to lay do^vn any hard and fast 
 lines as to what should be the exact terms of the 
 arrangement between Great Britain and her Colonies, 
 one can only indicate the broad lines on which one 
 thinks such a scheme would run the greatest chance 
 of realization, for the equal benefit of both contract- 
 ing parties. The terms would require to be carefully 
 discussed in an Im23erial Conference. 
 
 The hopes of those interested in this movement 
 have been raised during the past year by the attitude 
 taken by the Colonial Minister, Mr. Chamberlain, in 
 officially taking up this question. 
 
 The following extract from his speech to the 
 Congress of Chambers of Commerce of the Empire 
 on June 9th, 1896, is important as marking an epoch 
 in our Colonial policy. 
 
 "1 11)1(1 that you are called upon to consider the 
 necessity for improving communication within the 
 limits of the Empire ; that you are asked also to 
 consider the possibility of greater and cheaper 
 facilities for inter-Imperial postage ; that you are 
 asked to see whctliLT some approach may not be
 
 ( S7 ) 
 
 made to greater uniformity in commercial laws and 
 laws regulating inter-Imperial commerce ; and I note 
 one Resolution, which comes, I think, from my own 
 city of Birmingham, in favour of the creation of 
 an Imperial Council for consultation and advice. 
 All these proposals are of great and of pressing im- 
 portance, but they are, I was going to say, dwarfed 
 into insignificance in comparison with other proposals 
 which also will be put before you, and which are 
 intended to secure the commercial union of the 
 Empire ; and it is, I cannot help thinking, to your 
 deliberations and to your discussions on these ques- 
 tions that the public will look with the greatest 
 interest and the greatest expectation, because it must 
 be evident to you that if these questions could once 
 be satisfactorily settled, all the others to which I 
 have referred would follow as matters of course in 
 their turn. If we had a commercial union throughout 
 the Empire, of course there would have to be a 
 Council of the Empire, and that Council would be 
 called upon to watch over the execution of arrange- 
 ments that might be made, to consider and make 
 amendments in them from time to time ; and when- 
 ever such a Council is established, surely there will 
 naturally be remitted to it all those questions of 
 communication, of commercial law, and others, in 
 which the whole of the parts of the Empire are 
 mutually interested. Even Imperial defence could 
 not be excluded from its deliberations, for Imperial 
 defence is only another name for the protec- 
 tion of Imperial commerce ; and to such a Coun-^il
 
 ( 58 ) 
 
 as I have imagined to be possible tlie details of such 
 defence, and the methods of carrying it on, and the 
 provisions to be made for it, Avould naturally be 
 remitted, and gradually, therefore, by that prudent 
 experimental policy by which all our greatest in- 
 stitutions have slowly been built up, ^ve should 
 ill this way, I believe, approach to a result which 
 Avould be little if at all distinguished from a real 
 federation of the Empire. That, in my personal 
 opinion, is a question Avhich dominates all other 
 Imperial interests, and to which everything else is 
 secondary, and which is at the root of the problem 
 with which we have now to deal. The establishment 
 of a commercial union throughout the Empire would 
 not only be the first step, but it would be the main 
 step, the decisive step, towards the realization of the 
 most inspiring idea that has entered the minds of 
 British statesmen. . . . We have a proposal by 
 British Free Traders, which is rejected by the 
 Colonies, and Ave have a proposal by Colonial Pro- 
 tectionists, which is rejected by Great Britain. We 
 have, therefore, if we are to make any progress at all, 
 to seek a third course, a course in which there shall 
 be give and take on Iwth sides, in which neither side 
 will pedantically adhere to preconceived conclusions, 
 in which the good of the whole shall subordinate the 
 separate interests of the parts. T admit that, if I 
 understand it correctly, I find the germs of such a 
 proposal ill ;i llesolution which is to be submitted to 
 you (jii behalf (A the Toronto Board of Trade. What 
 is that liesulutiun? Again, 1 say, I hope I am cor-
 
 ( 59 ) 
 
 rectly explaining it. That Resolution I understand 
 to be one for tlie creation of a British Zollverein or 
 Customs Union, which M'ould establish at once Free 
 Trade throughout the British Empire, but would 
 leave the separate contracting parties free to make 
 their own arrangements with regard to duties on 
 foreign goods, except that this is an essential con- 
 dition of the proposal, that Great Britain shall con- 
 sent to replace moderate duties upon certain articles 
 which are all a large production in the Colonies. 
 AVell, now, if I have rightly understood it, those 
 articles would comprise corn and meat and wool and 
 sugar, and perhaps other articles of enormous con- 
 sumption in this country, which are at present largely 
 produced in the Colonies, and which might be, under 
 such an arrangement, wholly produced in the 
 Colonies, and wholly produced by British labour. 
 On the other hand, as I have said, the Colonies, 
 while maintaining their duties on foreign imports, 
 would agree to a free interchange of commodities 
 with the rest of the Empire, and would cease to place 
 protective duties upon any product of British labour. 
 That is the principle of the German Zollverein, that 
 is the principle which underlies the Federation of the 
 United States of America ; and I do not doubt for a 
 moment that if it were adopted it would be the 
 strongest bond of union between the British race 
 throughout the world. I say that such a proposal 
 as that might commend itself even to an orthodox 
 Free Trader. It Avould be the greatest advance that 
 Free Trade has ever made since it was first advocated
 
 ( 60 ) 
 
 by Mr. Cobdon, to extend its doctrine permanently 
 to more than 300 millions of the human race, and to 
 communities, many of which are amongst the most 
 thriving, amongst the most prosperous, and the most 
 rapidly increasing in the world. And, on the other 
 hand, it would open up to the Colonies an almost 
 unlimited market lor their agriculture and other 
 productions." 
 
 What is required for the realization of this scheme 
 of a Customs Union is not a radical departure either 
 by the Colonies or by Great Britain from their 
 existing fiscal policy, but a modification and revision 
 of the Customs arrangements of each, so that they 
 may act for the greater development of inter-Imperial 
 trade and to the furtherance of political unity and 
 defence. The questions of Commercial and of De- 
 fensive Federation of the Empire are one, and cannot 
 be treated as separate. It is to be hoped that the 
 sixtieth year of Her Majesty's reign may be cele- 
 brated by the assembling of an Imperial Conference at 
 London in which, through the ability and enterprise 
 of our Colonial Secretary, the dream of Commercial 
 Federation may become a reality. It is certain that 
 the war clouds whicli at the beginning of the year 
 hung so heavily around the mother country 
 liave aroused a feeling of brotherhood throudiout 
 the Empire, and of i)rofound loyalty to the person 
 of the Sovereign, whicli could not fail to promote 
 a determination on the jjai-t of the representatives of 
 tiic ICiiipij-e U) iiiiiiiniize all jxjssible points of con- 
 flicting interest and to assure to all the benefit of a 
 United Empire.
 
 ( 61 ) 
 
 I must recommend all who take an interest in this 
 question to read ]\Ir. J. G. Colmer's article in the 
 National Review of July, 1896, and also his essay on 
 the Commercial Federation of the Empire, which 
 can be procured from the offices of the United 
 Empire Trade League, St. Stephen's Chambers, 
 Westminster, to whose Secretary, Sir Howard 
 Vincent, I have been much indebted for information 
 on this subject. 
 
 Summary. 
 
 I. Reasons for the Commercial Federation of the 
 Empire : — 
 
 (1) If we do not offer the Colonies an inducement 
 by preferential treatment of their imports to join us 
 in commercial union, they will be forced by the 
 tyranny of foreign tariffs into a commercial alliance 
 with foreign nations, by which theyAvould differentiate 
 against our trade in order to win fair terms for their 
 own. Thereby the political connection with the 
 Colonies would be endangered. 
 
 (2) The necessity of common action for the defence 
 of the Empire. 
 
 (3) The necessity for us to regulate our fiscal 
 arrangements so that our trade does not suffer from 
 the consensus of foreign nations in favour of Pro- 
 tection. 
 
 (4) The alarming growth of foreign, especially 
 German, competition in our home, colonial, and 
 neutral markets, fostered by the above unfair con- 
 ditions. 
 
 (5) The fact that the protection of labour by trades
 
 ( <>2 ) 
 
 unionism postulates the protection of trade, by which 
 means alone can the benefits gained by the protec- 
 tion of labour in shorter hours and better wages be 
 assured to our workers in face of the underselling 
 competition of foreign countries where these advan- 
 tages are not enjoyed by the working classes. 
 
 Advantages of the Scheme. 
 
 1. Owing to the dispersed situation of the Colonies 
 it is not possible to establish a uniform Customs 
 tariff throughout (as if the Empire were within a 
 ring fence like the German ZoUverein). This scheme 
 therefore gives latitude to each Colony to arrange 
 its tariff according to the requirements of its situa- 
 tion. 
 
 2. This scheme endeavours to approximate as 
 nearly as possible to Free Trade within the Empire, 
 using the gift of free commercial rights for the 
 welding together of the Empire by common interests, 
 and preserving the weapon of a differential tariff, 
 with the object of compelling foreign nations into a 
 more favourable treatment of our export trade to 
 them. 
 
 3. The fact that the United Kingdom tariff acts as 
 the minimum tariff throughout the ZoUverein, would 
 by iiiti'oihu'ii]^- a measure of uniformity give us still 
 more leverage in our negotiations with foreign 
 powers for favourable terms for the entiy of our 
 goods into their markets, since the treatment they 
 gave us would, through our differential tariff, regulate 
 the treatment of their exports to the whole British 
 Empire.
 
 ... ( 63 ) 
 
 4. It does away with the objection mentioned by 
 Mr. Chafnberlain to the Canadian resolution, that the 
 uniform tax therein proposed on all foreign imports 
 into the Empire would be unequal in its incidence, 
 and fall more heavily upon the United Kingdom. In 
 this scheme, however, the entire proceeds of the 
 revised Customs of each Colony would still be paid 
 to and administered by the Treasury of that Colony. 
 The Council of the Empire would decide what was 
 the fair contribution to be paid by each to Imperial 
 defence, but each- would be at liberty to raise that 
 amount as was most convenient. 
 
 5. The object of this scheme is not to initiate a 
 policy of high protective tariffs, but rather to arrange 
 such a re\asion of home and Colonial Customs tariffs 
 as will help on the trade of our Colonies and our- 
 selves. But the mere granting of a preference on the 
 present dutiable articles in our United Kingdom 
 tariff would not benefit Canada and Australia, im- 
 portant parties concerned, and it has therefore been 
 necessary to propose something further, which will 
 give them a quid pro quo for the preference they 
 are prepared to give to our manufactures. 
 
 THE END.
 
 LONDON: 
 TBtyTKD BT filLBERT AND BIVINQTOK, LD., 
 
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