COMMERCE A A f-i SOI HJ 1 p^ 7 9 6 1 .LIBRARY FACILI" 4 AND T] EDWARD PULSFORD THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES I\'7 COMMERCE AND THE EMPIRE COMMERCE AND THE EMPIRE EDWARD ,PULSFORD r- SENATOR FOR NEW SOUTH WALES IN THE COMMONWEALTH PARLIAMENT Published by CASSELL AND COMPANY, Limited LONDON, PARIS, NEW YORK AND MELBOURNE MCMIII PREFACE. h- After woi'king many yeai's for Free Trade in Australia I feel em- boldened to make an effort in the wider field of the Empire. The time ^ has arrived when, in my judgment, Free Traders in all the self-govern- £2 ing Colonies should make an effort to bring their respective parts of the Empire into line with British fiscal policy. The task is by no means so difficult as some people think ; race sympathy is making it easier every year ; and the very need of revenue makes the task less instead of more difficult, since it is easier to obtain revenue without than it is with restriction. The necessity of dealing with the preferential phase of the subject has caused me to hurry the publishing, and consequently the book is cp less complete in many respects than I intended. The controversy with regard to preferential duties will have one good result : it will lead to ca a better general knowledge of the wliole subject, and will, therefore, pave the way for the Self-Governing Colonies, one after another, to raise the Free Trade flag. A British Free Trade Empire is a noble object for which to tight. During a period of about nine months, in 1900-1901, immediately preceding the first Federal Election in the Australian Commonwealth, I published a Avcekly paper, under the title of Our Country, dealing ;pr- solely with tlie fiscal controversy. The success of that ]niblication § proves that the cause of Free Trade is tlioroughly alive in Australia, ^ and that its adherents ai-e prepared at all times to fight the policy of ;i84-849 vi PREFACE. restriction in whatever guise, or under whatever name, or by whatever person it may be presented. The manufacturing interest is the one that is specially protected in Australia ; under a similar policy in the United Kingdom it would be the Agricultural interest that would be specially protected. The con- troversy in Austi-alia, therefore, presents points of vieAv somewhat different from those in Great Britain, and consequently has an interest of its own. EDWARD PULSFORD Sydney, Sejjtember, 1903. CONTENTS. CHAPTER I. — A Chapter of Australian History . II. — Some Definitions ...... III.— Aggregation ....... IV. — Steam and Electricity ..... V. — Alleged Decline of British Wealth and Commerce VI. — British Exports ...... VII. — The Empire View of Import and Export Returns VIII. — British Shipping ...... IX. — Re-Exports in Great Britain .... X. — Great Britain and the Self- Governing Colonies XI. — The Relative Extent of British Commerce XII. — The Relative Value of Colonial Trade . XIII. — Finance and Commerce ..... XIV. — The Preferential Tower of Babel . XV. — Colonial Products and Preferential Treatment XYl. — The Colonial Conference of 1902 . XVII. — " Preference " — Further Advocacy . XVIII. — Canada : Her Tariff Preference XIX. — Preferential Possibiuties in Australia and New Zealand XX. — The South African Preferential Tariff XXI. — The Black Flag of Prohibition XXII. — British Open Ports and Foreign Countries XXIII. — Coming Developments and Changes . XXIV. — The United States ...... XXV.— "Quiet Facts" XXVI. — The Hopes of Cobden ver/ius The Fears of Adam Smith XXVII. — Tariff Jingoism ...... XXVIII. — The Political Aaron's Rod .... XXIX. — A Customs Duty : When is it Protective ? XXX. — Taxing — Somebody Else ..... PAGE 1 19 22 24 38 42 50 52 75 80 86 90 94 103 112 115 119 123 124 125 127 J^3 137 139 140 142 144 147 CONTENTS. CHAPTER XXXI.— SroAR XXXII. — The United Empire Trade League XXXIII.— The Use and Abuse of Statistics XXXIV. — Two Colonial Systems XXXV.— Bbitish Countries — Old and New XXXVI. — Crumbs of Controversy . PAGE 150 152 155 159 160 101 COMMERCE AND THE EMPIRE. "We waft good will to every sphere. The links of love to-day are thrown From sea to sea — from zone to zone." — Kendall. CHAPTER T. A CHAPTER OP AUSTRALIAN HISTORY. \VniLST for many years scarce a ripple stirred the placid current of commercial life in the United Kingdom, many a fierce political battle was fought in the main Australian Colonies — now the States — of New South Wales and Victoria as to the policy under which commerce was to be conducted. In Victoria the party which believed that expansion of prosperity results from restx'iction of commerce early won ascendency, and in the sixties succeeded in carrying a restrictive tariff. From that period to the present Victoria has always been the stronghold of Australian restriction. On the other hand, New South Wales has always been true to the policy of freedom of trade ; attacks on this policy have been made from time to time, but a general election has never failed to sweep the danger away. Naturally the free trade cause found powerful support in the example, the legislation, and the faith of the Motherland. It has boeii and still is the hope and determination of the free traders of Australia to establish in the Southern world a great centre of commercial free- dom, after the pattern of that which in the Northern world " stands four-square to all the winds that blow." Was it — is it — too much to hope that wlien once a great self-governing section of the Empire, like Australia, endorses the policy of the United Kingdom by adopting it, that gradually the other self-governing sections will follow the example, till at last the world sees the whole Empire unitedly working out its destiny on those high and beneficent lines which are embodied in the principles of commercial freedom ? The CommonM'ealth of Australia, the union of the whole six States — previously the Colonies of Australia — came into existence on the first day of 1901. The Governor-General had to select an Australian statesman to form the first Ministry, and he ultimately selected the Eight Hon. — now Sir — Edmund Barton, who is a restrictionist. The election for the Senate and the House of Representatives took place u few months later. Both Houses met in the month of May. Jn B 2 COMMERCE AND THE EMPIBE. October, the same year, the Federal tarilT was introduced into the House of Representatives ; it was constructed on purely restrictionist lines tempered only by revenue necessities. A severe party fight at once ensued, which did not terminate till September of the following year. In this fight the free traders gained victory after victory, first in the House of Representatives and then in the Senate. When the tariff finally emerged from the fight it was wonderfully toned down, though still distinctively restrictionist. The free traders are eager for the next electoral campaign, but the restrictionists deprecate a renewal of the strife, a divergence of view wliich carries with it its OAvn explanation. At latest the election must take place early in 1904-, but it will probably be held in December, 1903, and no one in Australia "vvill be surprised if the reins of power then come into the hands of the free traders, under the leadership of the Right Hon. G. H. Reid, who, it may be explained in passing, would have been entitled to the ofl'er of the first Federal Premiership had he remained Premier of New South Wales, the Mother State. An unexpected vote ter- minated a five years' occupancy of that position very shortly before the Federal appointment had to be made, and destroyed at the same time Mr. Reid's right to the higher office. From what has been said of the course of events in Australia it will be clear that the subject of tarifi" policy has been closely studied and keenly debated. It will also be clear that in the keen fight which has raged in Australia, close attention must naturally have been paid to all that transpired in other countries ; especially was it natural that the utterances of public men in the United Kingdom in regard to tariff policy should be closely watched. During recent years every word spoken, or press statement published, which appeared to indicate a tendency towards restriction, a lessened faith in freedom as applied to commerce, in the Motherland, has been eagerly seized on by the Australian restrictionist party to strengthen their cause and to restrict still further all external trade, including that of the Motherland with Australia. Yes, there is no doubt that certain public men in the United Kingdom have done a good deal to play into the hands of those who think it to be good policy for Australia to exclude the goods of other lands, of which the United Kingdom itself is the one principally concerned. Talk about " Fair Trade " and about " Pre- ■^erential Trade " has all along, and most naturally, been accepted by the restrictionist party as indicating the first steps towards a return to the old fiscal conditions. Who can blame the party for using all weapons that come to hand, and who can be surprised if there are many who sorrow when they think of the source of supply of some of these weapons ! In 1896 Mr. Lowles, a member of the House of Commons, visited Australia in the interests of " Preferential," or, as it is better de- scribed, penalised trade. When he spoke in Sydney his platform was graced by the presence of none but restrictionists ; not one free trader took a seat beside him. The three Sydney free trade papers all repudiated his mission ; the one Sydney restrictionist paper COMMERCE AND TEE EMPIBE. 3 said that tlio mission meant that England was tired of free trade, adding that for New South Wales "a protective policy is urgently required against all the world, including Great Britain." The Mel- bourne Age, by far the most important organ of the restrictionist party in Australia, referring to Mr. Lowles's visit, claimed that it represented the failure of free trade in England. Shortly afterwards the same paper, dealing with a speech by Mr. Chamberlain, said that that gentleman may rest assured that the people lof Victoria have no intentiou of jeopardising their future or subordinating theii- interests to those of Manchester or Birmingham or Bombay. It is clear enough that all the talk and agitation about " Pre- ferential Trade " is but grist to the restrictionist mills, and it is time his fact was recognised. Those who in the United Kingdom are the cause of all this are but throwing out arguments which, like the Australian native weapon, the boomerang, return with injurious result'i to the United Kingdom itself, whence they were thrown. The developments in England this year, 1903, have carried delight and encouragement into all Australian restrictionist circles. " England's eyes open — Preferential Trade " is the heading of a x'e- strictiouist pamphlet, which is being issued in preparation for the coming general election. The following is an extract from the Melbourne Ags of August 10th : — The great upheaval against free trade in England — its last stronghold — is a mighty object lesson in Australia. The Chamberlain policy is a loud pro- clamation that Cobdenism has failed in the British Isles, as everywhere else, and whatever may be the outcome of the approaching protectionist campaign ia England, it cannot fail to clinch the detennination of this progressive Common- v/ealth against any sort of retrogression into the discredited fiscal delusions, which have been condemned in every country upon earth. Perhaps the Australian papers which the most keenly rejoice over the movement in England are those which during the late war were distinctly pro-Boer. One of them* published a cartoon founded on the death of Caesar. The Australian free trade leader, Mr. Reid, represents the dying Ccesar ; Mr. Chamberlain represents Brutus. " Et tu, Brute ! Joseph Chamberlain has abandoned the free trade idea and declared for an Imperial Protective Tariff." Another pro-Boer paper t contained the following : — Chamberlain's speech has been the greatest blow English free traders have ever received, and the leading free traders of New South Wales are recUng under it. The free traders of Australia are so accustomed to every incident in the controversy being represented as meaning the triumph of restriction that they pay little heed to these assertions. It is well, however, that those persons ia Great Britain who are responsible should understand that they are strengthening the tariff walls of Australia, and playing right into the hands of the anti-British. * The Bulletin, June 27th. \ The Catholic F,ess, June Ith. 4 COMMEltCE AND THE EMFIliE. A work entitled " The Coming Reaction " has recently been pub- lished, in the course of which the author claims that tlie position of Great Britain in textile manufactures is due to restriction in past years. Tlie Australian organ of the restrictionist party — the Age — referring to this, says it is a lesson for Australia, adding : — If we were to allow our markets to become the undefended prey of all the world, how could it be possible that the raw material of the great Australian pastures could ever hope to be manufartured on the spot ? Wo arc a wool pro- ducing nation. We ought to be a cloth manufacturing nation for all those countries that cannot produce wool. If we were to copy English policy (of the past), we might yet become so. The •' Legislator " who wrote " The Coming Reaction " is by no means working in a direction likely to promote a demand for British woollens. Whilst Australian free traders are accustomed to the style of the local restrictionist, and expect nothing different ; they do not think a statement such as the following should appear in an English review : — The importance of the hostihty expressed by the so-called free trade press of the AustraUan colonies should not be over-rated. These newspapers and the trading interests they represent have completely failed to convince the Common- wealth Parliament of the wisdom of their views. Thoy are Cobdenite extremists crying in a wilderness of protection ; and though they may represent important mercantile interests at Sydney, they in no sense speak for Austrahan sentiment as a whole.* The most kindly thing that can be said of the term "so-called" as applied to the " free trade press of the Australian colonies" is that it is written in complete ignorance. There are seven morning papers, in all, published in Sydney, Melbourne, Brisbane, and Adelaide, and of these hve are free trade, not of the milk-and-water kind, but straight out and uncompromising. Each one is edited with ability, and taken altogether it would be difficult in any part of the British dominions to find five papers that could be honestly called superior. Every sentence in the quotation is a misrepresentation. To speak of " crying in a wilderness of protection " infers that Australia is wholly protectionist, yet any political infant knows that in the Mother State, New South Wales, containing more than a third of the whole population of the Commonwealth, free trade is distinctly in the ascendajit, and has never yet been beaten at the polls. The youngest State, Western Au.stralia, at the Federal election returned ten free traders out of the eleven members to which it is entitled in the two Houses. So much for " the wilderness of protection." Then, as to " Aiistralian sentiment as a whole," it can be affirmed positively that the Australian free traders as a whole regret and oppose the preferential movement because they recognise nothing but re- striction in it, and that the Australian restrictionists as a whole rejoice in it, because they recognise in it a blow to free trade, and support to their own policy. * National Bevieic, July, page 868. CHAPTER II. SOME DEFINITIONS. It will be observed that the writer uses the term "restriction" rather than that of "protection." The reason for this is that as the policy in question I'estricts the operations of many and only protects the opera- tions of few, the word " restriction " is more appropriate. The word "protection," as generally used, is distinctly misleading.,'. The term " free trade" is used to mean trade free from all taxation except such as may be needful for strictly revenue purjjoses, and the term "free trader" to mean a person who insists on the tariff being for revenue only, and also on the total re\'enue so collected being as small as possible. The terms "high tariff" and "low tariff" are looked upon as misleading, and therefore objectionable. Three hundred per cent, is certainly " high," but levied on tobacco, and so that every penny paid by the consumer goes into the public treasury, it is defensible, provided the revenue be wanted ; whilst 10 per cent, is certainly " low " ; but levied on any commodity, so that the money paid by the consumer goes wholly or partially into private pockets instead of into the public treasury, the tax is quite indefensible. The free trader recognises that all duties, in proportion to their amount, increase the cost of the commodities on which they are levied ; that as the cost increases, the trade decreases ; and that as trade decreases, the employment of labour and the profits of cajntal are correspondingly lessened. Consequently he watches with a veiy jealous eye the impo- sition of a duty even for the sole benefit of the public treasury, and lie can never consent to the imposition of a duty the product of which goes wholly or partially into other channels. The term " penalised trade " is used instead of " preferential trade," and " penalty " instead of " preference," because the volume of trade and the number of people who would suffer exceed the volume of trade and the number of people who would benefit by any system of differential duties, and, therefore, as far as a term can convey any sense of the woi'king of a policy, the larger consequences, and not the smaller, should be embodied in the name by which that policy is known. CHAPTER III. AGGREGATION — IKCBEASKD AND INCREASING FREEDOM OF TRADE. Steam and electricity have done something to destroy the old- fashioned virtue of patience. Man did not invent these powers ; since time began steam has always issued fi'om hot water, and electricity has always been known to flash through the heavens. It took man thou- sands of years to recognise and to harness to his own use these latent powers of Nature. To-day, now that steam and electricity are his servants, he api)ears to think that he must emulate them and always be in a hurry. Haste ! the pressure of life ! herein lie some of the most potent dangers of the twentieth century. Seed-time and harvest are still separate seasons, but man seeks to sow and to reap on the self- same day, and too often all the knowledge he desires, or gives himself time to acquire, is the latest news of the political weathercock. But it is well, after all, to stop to think and study. And the subject of what has been the greatest influence at Avork in this world of ours for the last two or three hundred years will well repay studious investigation. The greatest influence has undoubtedly been, and is to-day, the movement for aggregation of interests : aggregation versiis segrega- tion. It took man nearly as long to discover the power that lay in aggregation as it took him to discover the powers that lay in steam and electricity; but the selfish and the segregative instinct had to be fought, and fought everywhere, to make progress possible. Aggregation has its first and most elementary example in the family. Then follow the local or parochial aggregation ; the provincial aggregation ; the national aggregation ; the racial aggregation ; and, finally, the world aggrega- tion. " Age of progress," " prosperity growing," and similar expressions-, are heard on all sides. " Splendid result of the United States and of Germany being each more or less segregated from other nations." "Well, segregation is the death principle, aggregation is the life prin- ciple, therefore neither the United States nor Germany has grown and prospered because it was segregated from other nations, but both have grown and prospered because of the ever-increasing aggregation within their own wide borders. Wherever it is sought to bring into force this principle of aggrega- tion of interests there is sure to be oi)])Osition, more or less keen, from those who believe — often honestly believe— in segregation as a better policy. Yet a cai'eful study of the world's history will make it abundantly clear that progress has always been associated with, and has resulted from, aggregation. Take the case of the United Kingdom first of all. In no other instance among the nations of Europe was COMMERCE AND THE EMPIRE. 7 the principle of segregation so successfully fought as in the United Kingdom. Long before what is called the free trade era arri%ed, internal freedom of trade had been secured, not only within England, Scotland, Wales, and Ireland separately, but within the whole of them as one aggregation. The United Kingdom of to-day would not have existed, would not have been a possibility, if the four countries had been separated each one from the others by a separate and opposing tariff, and if this segregation had further kept the different countries apart. A very competent writer — McCulloch — says : — The freedom of internal industry has ever since (1624) been vigilantly protected ; full scope has been given the principle of competition ; the whole kingdom has been subjected to the same equal law ; no obstacles have been thrown in the way of the freest transfer of commodities from one country or place to another ; the home trade has been perfectly unfettered ; and though the public have not been supplied with commodities at so low a price as they might have obtained them for had there been no restrictions on foreign commerce, they have obtained them at the lowest price that would suffice to pay the home producers the cost of producing and bringing them to market. It is to this freedom that the comparatively flourishing state of indastry in Great Britain is mainly to bo ascribed. In 1624 the well-known statute of James I. declared that mono- polies of every description were "altogether contrary to the laws of this realm, void and of none effect." In this was heard the voice of a free people. It indicated a spirit and a policy under which the United Kingdom — in comparison with any other country — greatly prospered. Thei'e was a time when goods passing between British cities like London, York and Bristol were subjected to taxation as to-day they might be bstween London and New York, or Hamburg. But these internal restrictions were tlirov/n off mostly centuries ago ; centuries, in fact, before the corresponding restrictions, the segregating influences, were thrown off in Europe. The United States are claimed as a great triumph for segi-egative policy. Yet if there be any country in this world which clearly has advanced by leaps and bounds through a policy of aggregation, that country is the United States. This has been recognised and well put by Carnegie in his work " Triumpliant Democracy " : — The Mississippi and its tributaries traverse the great Western basin, a miUio and a quarter square miles in extent, and furnish an internal navigable system o twenty thoiisand miles. A steamer starting from Pittsburg in Pennsylvania, four hundred and fifty miles inland from New York, and two thousand from the mouth of the Miebissippi, passing through these water highways, and returning to its starting-place at the smoky metropolis of iron and steel, will sail a distance much greater than n^und the world. Nor will it in all its course bo stopped by any Government official, or be taxed by any taritf. Tlie flag it carries will ensure free passage for ship and cargo miimpedcd by any fiscal charge Avhatever, for the whole continent enjoys the blessings of absolute freedom of intercourse among its citizens. In estimating the influences which promote the consolidation of the people, much weight must be given to this cause. Fifty-six milhor.s of people [now over eighty millions], occupying an area which includes climatic ditferences so great that everything necessary for the wants of man can readily be produced, exchange their products without inspection or charge. Truly, here is the most magnificent exhibition of free trade which the world has ever seen. It would be difficult to 8 COMMERCE AND THE EMFIBE. set bound* to tbo beneficial effects of the wise provision of the rational constitution which guarantees to every member of the vast confederacy the blessings of unrestricted commercial intercourbe. Yes ; that half a hundred states should be aggregated is magnificent indeed. If the segregative policy had been supreme internally it would have taken generations for these states to have obtained even a puny existence. The authors of the United States constitution were wise when, by Article 1, Section 8, they expressly declared that " All duties, imposts, and excises shall be uniform throughout the United States." This provision, ensuring as it does perfect freedom of trade and inter- course throughout the whole of this vast country, is probably worth, says one writer, more in practical value than any other provision in the constitution, and it cannot be forgotten that it was the spirit and policy of segregation so astoundingly displayed by the Motherland to her own offspring that drove the American colonies into rebellion. A century ago the United States acquired Louisiana by purchase from France, and afterwards by war acquired Texas from Mexico. These acquisitions, which meant more than the names of the states at j)resent indicate, opened the way for development, for the grand polii'y of internal aggregation, i-ight through to the waters of the Pacific. It is in Germany, perhaps, that it is most easy to trace, £rst, the evil of segregation, and second, the good of aggregation. Oivilifiation is probably older in Germany than in England, but development has been infinitely slowei-. Surrounded by other nations, the necessity for aggregating all German interests was clear enough, imperative enough. But not till well into the nineteenth century was this neces- sity heeded. For generation after generation, century after century, segregation was the order of the day. Where progress was made it was made by some limited aggregation. The Hanseatic League was the earliest of those limited aggregations. It included Hamburg, Bremen, Lubeck, some other North German ports, and some ports out- side Germany. The success of this league was remarkable, and in the fourteenth century it exei'cised great power throughout Europe. Had the union of Germany taken place in that century, and included the German cities of the league, the German Empire would probably at once have dominated Europe and grown rai:)idly in population and wealth. The German Empire of to day is the aggregation of more than thirty separate governments which existed at the beginning of the nineteenth century. Each with its own tariff and its own set of customs ofiicers, each living a segregated existence, and fearing above all things that aggregation which alone could lift its people to a higher plane of national life. The poverty of the Germans in those days was something deplorable, but the poorer they were the moi'e deadly seemed their hatred of trade with one another. 8tatc after state prohibited the admission into their midst of goods from si:5ter states, and indeed the internal trade of Germany was only carried on subject to such restrictions as to-day are only known of between countries independent one of another. It is not needful to detail the various stages by which German aggregation was brought about, it is not needful even to load up this COMMEIiCE AND THE EMPIRE. 9 page with the names of more tliau thirty separate tariffs that were wiped out of existence. A few small states tirst of all united ; then others united ; after which the German Customs Union, or Zollvereiu, was formed. Though still an incomplete Germany the aggregation had become great and strong, and after the Franco-German war all sections of Germany came together, and that powerful aggi-egation, the German Empire, was complete. Long may it prosper and soon may it recognise that the principle of aggregation which has been so successful internally will win yet more triumphs when applied to its external commerce. Writing in 1841, long before the Zollverein reached its full magni- tude, Macgregor said * : — It must now be e^'ident to all that the spirit and object of this confederation has been to unite and strengthen Germany as one gi-eat nation, by throwing down tho3e barricades of material warfare, and of international intercuur.se — the numerous lines of customs and cufitoms officers, which previously belted every large and petty Htate in Germany, and the removal of which has laid open to an uninterrupted intercourse from the frontiers of France and Belgium to thorfs of Austria and Russia, from the Alps to the Baltic. The .states have therefore established a free trade among themselves. The commodities of the one are interchanged for those of the other without the i^ayment of duties; and more than oU, the free opportunity of interchanging ideas and of receiving intelUgence is afforded and promoted, when passing to and fro, for the purpose of interchanging commodities, all these circum::tances constituting the greatest material, moral, and civilised blessmgs ever enjoyed by the German people. Yes, in their increasing aggregation lay the seeds of the future greatness of Germany. In McCuUoch's " Dictionary of Commerce " the article on the Zollverein concludes as follows : — We have little doubt, shoiild peace be preserved, that the advantages of which the Zollverein must be productive, wiU be so many and so great, that it will lay the foundation of a lasting intercourse, of which we can neither foresee the extent nor the beneficial influence. These quotations will show that by thoughtful observers the expansion of Germany which lias taken place was foreseen ; was predicted as the natural result of the internal aggregation wdiich, it may be remarked, took some sixty years to bring to full maturity. To-day some people are found shutting their eyes to the great fact of German aggregation, and arguing that the policy of segregation, which Germany now only uses externally, is the main cause of her growth. The past century was remarkable for the sweeping out of tens of thousands of miles of political boundaries. You may move commodities wherever you choose within a political boundary, and no one troubles his head about them, but send them across a political boundary and the prophets of evil fall on you and denounce a^ou as an enemy of your ra.ce. Let that political boundary line be remo\ ed and you may then expect to be well spoken of for doing that for wdiich you had pre\iously been denounced. The ,<.reat aggregative movements of the past century have, therefore, had wonderful results ; they have made possible the trade and commei'ce of to-day ; the trade and commerce which to-day gives * " Commercial Tariffs," Part V., p. 7. 10 COMMERCE AND THE EMPIRE. food and clotliing, hccarth and home to extra millions. The sweeping out of political boundaries and with them of separate tariffs, the failure of segregation, made the nineteenth century noted for an almost continuous advance for free trade principles. If you want to know what has been done and the value of it all, put back all those boundary lines, reimpose all those tariffs, re-establish all those lines of custom houses, and think out the results ! Italy — well, there was a time, and not so long since either, when the Italy of to-day was divided into the Lombardo- Venetian Kingdom ; the Kingdom of Sardinia ; the Grand Duchy of Tuscany ; the Roman States ; and the Kingdom of the two Sicilies, and some of these divisions ■were again politically subdivided. To-day one country, one tariff, one political and commercial aggregation. France has a great history. Centuries before either Germany or even the United Kingdom became aggregated, France was more or less one country and enjoyed the blessings that follow aggregation of interests over a wide area. France was great even in the thirteenth century, and that greatness could never have been won had the country been divided against itself as Germany was and remained for centuries. It was the greatness that came from aggregation. In a notice of the life of Colbert * the great restrictiouist, the following appears : — "With regard to international commerce Colbert waa unfortunate in not being in advance of his age ; the tariffs ho published were protective to an extreme. The interests of internal commerce were, however, wisely consulted. Unable to abolish the duties on the passage of goods from province to province, he did what he could to induce the provinces to equalise them. The roads and canals were improved. The great canal of Languedoc was planned and constructed by K.iguet under his patronage. This indicates that even in France the internal aggregation was not perfect in the seventeenth century, but there is no doubt that the position generally in that country in comparison with Germany was as has been stated. The Dominion of Canada has arisen, the aggregation of several colonies ; the Commonwealth of Australia has arisen, the aggregation in another part of the world of several other colonies. The question may be askt d, and it is a very interesting one, whether, after all, in these aggregations there may not be some triumph of segregation in the matter — that of commerce — which is here being specially dealt with. The re[)ly must be in the affn-mative. Take the State of New South Wales. The aggregation of the Australian States gives New South Wales the run of the Australian markets, but the fact of the Australian Commonwealth having adopted a segregative tariff now limits the power of buying from the outside world which New South Wales previously enjoyed. But the freedom of access to adjoining markets is now won for as long as the Commonwealth endures, and must become more valuable every year ; as to the policy of the Commonwealth tariff, that may be altered, and the lost liberty of buying be regained, after any general election. If the case of New South Wales be taken alone it * "Encyclopaedia Britannica." COMMERCE AND TEE EMPIRE. 11 must be admitted that the cause of segregation has won something, but if, on the other hand, the Commonwealth of Australia as a whole be taken, it must equally be admitted that the cause of aggregation has won more. Human nature has to be considered, human nature has to be dealt with. Once on the low level, once thoroughly given up to segregation in a very small community, the closer and the more constant are the appeals to the selfish instinct, and the more hopeless is the outlook. On the other hand, once on a higher level with aggregation after aggregation obtained, the brighter becomes the outlook, because appeals to selfish instinct have less power, they do not touch so closely. The sweeping away of thousands of miles of political boundaries, the substitution of a comparatively few big countries for numberless little ones, have allowed a vast increase in the trade of the world which other- wise would have been impossible. The enormous strides the world has taken in the path of free trade during the past century are really neither known nor appreciated as they should be. Lovers of segregation are apparently very easily pleased ; the shadow satisfies them, even when the substance is falling from their grasp. If the whole world, with the exception of say Patagonia, were aggregated under one government, and its tariff' consisted of one triumphant segregation line, " Goods prohibited from Patagonia," the great prosperity of the world would still be con- fidently attributed to the glorious policy of segregation alias protection, though in fact the said policy would be as dead as Julius C'fesar. TariQs by the dozen have disappeared, custom houses and officers by the hundred and the thousand have gone for ever; prosperity has grown, and as aggregation has increased and segregation decreased, the lovers of segregation cheer themselves by claiming the world's better days as their work. The public are asked to believe that the markets of the world are gradually being closed to British goods ; that trade is not be- coming more but less free. Yet one thing is quite certain, the tariffs of the world are not so antagonistic to the United Kingdom as they were in the years 1840-50, when resti'iction was boldly tlirown over- board. It may even be advanced with a great deal of truth that the financial position of many countries compels them to hold in check their otherwise keen wishes to restrict importations. During the past half century expenditure has rapidly increased in most counti-ies, and in consequence but few of them are at liberty to do what they would like with their tariffs — they must look to their tarifis for revenue. This is thoroughly recognised by the restrictionist financiers of Australia, who have even in consequence claimed sympathy from both sides ; from their followers because they restricted importation as much as the financial position permitted ; from their opponents because the tarilF was largely framed on revenue, instead of restrictionist lines. Whilst this is undoubtedly the position as regards important British communities, like Australia and New Zealand, it is also most certainly the position in a large number of foreign countries. They must keep duties up for revenue and they must keep duties down for revenue ; that is, the need of revenue comi)els the continuance of fairly high rates, and the same necessity compels the keeping of the rates low 12 COMMERCE AND THE EMPIRE. enough to permit of importations. There is no escaping from the obvious truth of this contention. Then there seems a strange want of logic in the talk ahout the United Kingdom being driven by adverse tariffs out of certain markets, and of the same markets being captured by Germany or the United States. It seems reasonable to expect that the adverse taritt' that would drive the United Kingdom out of a certain market would at the same time exclude Germany and the United States so far as regards the class of commodities specially exported by the United Kingdom. When the whole position is carefully surveyed, when the experience and the history of the past are brought to bear on the present and on the future, the fears which will till some minds will probably cease to alarm. Herewith is a fairly comprehensive bird's-eye view of the tariff policy of foreign countries about fifty years ago. The informa- tion is taken from (1) Macgrcgor's ollicial rej)orts published during the forties, and (2) Newdegate's tarilfs published in the fifties. AUSTRIA, In his report on the tariff of Austria for the year 1841, Macgregor * shows, that whilst not absolutely prohibiting the importation of certain articles, the authorities required that otEcial permits should be obtained ; and that the delays that resulted v/ere so intolerable as to have almost the effect of prohibition. As the principal articles so dealt with included the manufactures of cotton, wool, linen, and silk, as well as hardwares, it will readily be seen how British goods were affected. Newdcgate,t in his work showing the Austrian tariff of 1852, gives : — Cottons Woollens... Iron manufactures — Very common Common Middle tine Fine... Superfine . . . 40s. to GOOs. prr 123 J lb. 25s. to 300s. ,, ,, 108. 20s. 303. ,, ,, 50s. ,, ,, 200s. Belgium. Duties in force, October, 1311 J : — Cottons Iron manufactures Duties in 1850.:^ :— Cottons... Iron manufactures WooUens 8 to 15 per cent, ad valorem. £4 3s. 4d. to £9 7s. 6d. per 2,205 lb. llOs. lOd. to 23Ts. 6d. per 220 lb. 03. 5d. to 19s. 9d. ,, ,, oOs. 3d. to 2968. lOJ. ,, * Macgregor, vol. v., p. 7. % Macgregor, Report 2. t Newdegate, p. 117. \ Newdegate, p. 89. COMMERCE AND THE EMPIRE. 13 Dexmark. JIacgregor's report dated 1842 contains the following: — Formerly woollen and cotton goods, altbougli not absolutely pro- hihited, were on importation taken possession of by the customs and sold at public auction, the officers deducting 30 per cent, for the Crown and paying the balance of the proceeds to the importer, who was usually the purchaser. Special and very high duties have, since 1834, been substituted for the 30 per cent, deducted from tlie auction values of cottons and woollens. The tariff includes the following duties : — Cottons from 7d. to 98. per 17f oz. Iron manufactures ... 3s. 6d. to 7s. pei- 110;]: lb. Some descriptions ratjd ... from ^d. to Is. l^d. per 171- oz. Clothes duties on the material, with the addition of 50 per cent. All goods passing through the Sound and Bolts of the Baltic were subjected to tolls by Denmark, and nearly every foreign article passing through her territory was subject to transit duty ; special tariffs existed for these charges. Fjiance. Macgregor's report on French commerce is long and interesting. On page 60 he says the bases of Colbert's tariff of 1664 were (1) reduction of export duties, (2) reduction of import duties on raw materials, (3) increase of import duties on foreign manufactures. Then, on the following page, follows this significant remark : — Colbert, who is considered the founder of the restrictive system, never contemplated, as far as we can learn, ono-himdredth pai-t of the restrictions by which the existing tariff of France limits the commercial relations of that kingdom with other countricf. In 1836 France removed the prohibition of import against a number of articles, some being manufactured goods. But still practically all cotton manufactures, all woollen manufactures, and all iron manufactures remained proliibited, and the exceptions were only admitted on payment of heavy duties. JNIacgregor said that from the statement given of the prohibitory system of France as affecting the throe great staple l)rauches of British m.-mnfactures : " It will appear that nothing of consequence is admitted, but under the presumption of aiding French manufactures." Newdegate's " Customs Tariffs " shows tliat up to date of publication, 1850, or soon afterwards, the position in France remained practically the same. It may be interesting to Australians to know that imported wool was subject to 20 per cent, ad valorem, with a small specific duty added if imported in any other than a French ship. German Zollvereix. The important and interesting facts connected with the founding, the history, and the results of the Zollverein have alrer.dy been dealt 14 COMMEECE AND THE EMPIRE. Avitli, From Macgregor's report, dated 1842, the following rates of duty are taken : — Cottons £7 lOf. per 110 J lb. Iron manufactures — Comnum ... ... ... lf>s. ,, ,, Fine SOs. ,, ,, ■Woollens £1 10s. ,, ,, At the date quoted tlie ZoUvcreln did not contain a number of tlie German states, they joined at a later period ; in these other states the duties were generally very much lower. The Hanseatic Republics or Hanse Towns were also outside. Their customs duties were almost nominal, say from | to f of one per cent. The tariff of the ZoUverein, officially published on the 4th December, 1853, as given in Newdegate's "Customs Tariffs," continued the duties on cotton, iron, and woollen manufactures as before. Other states had then joined. Holland, The commercial history of Holland is a deeply interesting one. In 1843, says Macgregor, " the tariff of duties on foi'eign commodities is the lowest of any country in Europe, excepting those of Switzerland, Tuscany and Turkey." The following are some of the rates : — Cottons... ... ... ... 4: -per cQJit. ad t'alvrctn. Iron manufactures .... ... 2 to G per cent. ,, Woollens £3 6s. 8cl. to £15 10.^. per 220 lb. Newdegate, bringing the tariff i-ates down to 1854, showed practically the same figures, except that the duties on woollens were lower. Italy. The political divisions that existed in Italy in the middle of the last century resulted in a corresponding number of tariffs which cannot be separately examined. In some duties wei'e low, in others, high. Thus : — Cottons in Naples equalled fully 100 per cent., on the descriptions principally consumed ; in Tuscany 12 percent., the rates for the other states ranging between. Like other figures, these are taken from Macgregor. Russia. From Macgregor's report on the Russian Empire, published in 184?, the following information is taken. The importation of a very con- siderable number of articles was absolutely prohibited : included in the list of prohibited articles were beer, boots and shoes, all kinds of printed cotton and half cotton goods (with some exceptions), clothing, carriages and equipages of all kinds, all manufactures of hemp or flax unless specially excepted ; various kinds of hats and caps, linen of all kinds, leather and manufactures thereof (with some exceptions), various kinds of millinery, many manufactures of metals, porcelain ware of all kinds, salt at certain ports ; certain silk manufactures ; brandy ; refined COMMERCE AND THE EMPIRE. 15 sugnr ; tea ; umbrellas ; nearly all -woollens — that was sonietliing like restriction ! Among the items graciously permitted to enter on payment of duty were : — Cottons (the kinds not px'ohibited) ranged from a few pence per English lb. weight. Woollens (the kinds not prohibited) ranged from about two shillings to over eighty shillings per English lb. weight. Iron manufacture.s, and also those of other metals, ranged from a fev/ to over one hundred pounds sterling per ton. Most of the prohibitions and duties here given had been in force from the beginning of the century. Russia maintained in Poland her general tariff in a most peculiar way ; she prohibited the importation from foreign countries of a A^ery large number of articles unless on pay- ment of 250 to 450 per cent, ad valorem, the object, of course, being to force Poland to buy from Russia, The crushing effect of the Russian tariff on the export of British and Irish produce can be seen by reference to Macgregor's report, p. 338. The aggregate exports of British and Irish produce to Russia in the ten years 1831-40 only totalled something between 16 and 17 millions, and of this no less than 12 millions con- sisted of cotton twist and yarn. Outside this article the whole of the manufacturing industries of the United Kingdom did not average a yearly export to Russia of half a million sterling. Newdegate publishes the Russian " Official Tariff of 1851." Apparently most of the prohibi- tions had been removed, but the duties imposed were probably fairly effective in that direction : — Apparel, men's and children's ... ... 60 per cent. ,, ladies' dresses, etc. ... ... 75 ,, Cotton manufactures ... ... ... 2s. Cd. to 20s. per lb. Woollen manufactures ... ,.. ... Is. 8d. to 7s. 4d. Iron, and manufactures tliereof, still mainly prohibited. Sweden. The Swedish tariff, Macgregor's report, 1844, shows that a consideralle number of articles were prohibited, and that many of the ad valorem duties were made heavier in amount, by a system of fixing arbitrary and excessive values. Cottons and woollens both came under the head of woven goods ; some descriptions were prohibited — on the desci'iptions allowed to be imported the duties appear to have averaged 25 per cent. Iron, some descriptions prohibited ; on some kinds and on iron manu- factures generally the duties may again be taken as having averaged 25 per cent. As before stated, all these duties were levied not on actual but on fixed and excessive official valuations, so that the nominal 2.5 per cent, might easily be much more in fact. Macgregor says : — In addition to prohibition and liigli import, export and transit duties, convoy duties of 5, 10 and lo per cent, are charged on the amount of all other duties, or valuations of duties ; tovm dues of 2^ per cent, by privileged, and 40 p3r cent, by non-privileged, vessels are charged, and tonnage duties of 12 skellings p^r cent, on Swedish, and 36 on non-priviljged vessels. Saila, cordage, gunpowder, refined sugar, iron, stoel, the greater number of articles of cottons^wooll.us, eaithouware, etc., aiD prohibited. 16 COMMERCE AND THE EMPIIiE. The British Consul-General at Stockholm in 1842, in a report on the extent of the duties on British goods, calculated some of them as follows : blankets, 40 to 75 per cent. ; carpets, 75 to 110 per cent. ; calicoes, 30 to 40 per cent. ; candles, 56 per cent. ; cutlery, 30 to 35 per cent, ; fustians, 75 to 110 per cent.; agricultural implements, tools, 40 per cent. ; leather, 30 to 80 per cent. Newdegate's "Customs Tariffs " gives the Swedish tariff of December, 1854. It shows certain changes and relaxations as well as a lessened number of prohibitions : — Cottons and woollens ... from lOd. to 28. 6d. per lb. Manufactiires of iron ... generally 25 per cent., but implements, steam engines, etc. , 5 per cent. Norway. Macgregor's report on the Norwegian tariff shows that greatly increased duties came into operation in 1843; it gives a list showing the percentage which the duty bears to the invoice value on some of the main lines of British manufacture : — Calicoea, unbleached ,, bleached .. , , striped Cottons, printed , , quilts Fustians and corduroys 50 to 80 per cent. 60 to 100 „ 80 to 120 „ 50 to 80 ,, 50 to 100 ,, 90 to 125 ,, Hardware and iron goods of the coarser kind-, unpolished ... 100 to 200 ,, ,, ,, ,, rough polished 150 to 250 ,, Iron castings finely polished ... ... ... ... ... 1 50 to 300 , , The Norwegian tariff laAv of 1854, published by Newdegate, shows but little change. Spain. "Spain," says Macgrogor, "exclusive of her numerous prohibition.'?, has imjio.sed high discriminating duties of from 50 to 100 per cent., for more than two centuries, on such foreign ships and cargoes as have been admitted into Spanish ports." A new tariff came into force on 1st November, 1841, says the same writer. The importation of the following articles was prohilntcd, viz. : Cotton manufactures of all kinds, brandy, corn and grain, horses, caps and gloves and stockings of all kinds, soap, wool, books, saddlery and harness, wrought iron, fish, gunpowder, wearing apparel, salt, tobacco, candles, glass, and numerous other ai'ticles. On the articles allowed to be imported duties ranged from 15 to 40 per cent, on values fixed by law — so that, in fact, they were higher than stated. In addition, if the goods were imported in foreign vessels, an extra charge of from one-fourth to one-half of the duty was payable. Portugal. Some carefully prepared tables are published by Macgregor giving COMMERCE AND THE EMPIRE. 17 the duties on British goods calculated on the actual value of the goods : — Cottons and ■woollens Hardware Duties levied on the weight, equal to from 17 per oenf. to over 600 per cent, ad valnrcm, the average being weU beyond 50 per cent. Duties were from about 40 to SOO per cent. ; roughly, might be reckoned 100 all round. In 1852 the duties remained much the same. United States. Macgregor's report on the United States gives the following duties : — Cottons Woollens ... Iron manufactures 30 per cent, ad valorem. 30 At this time Texas had a separate tariff, the three divisions of manufactures here given being each dutiable in that state at 45 per cent. In 1852 the United States duties, according to Newdegate, were : — Cottons ... Woollens Iron manufactures ... 2-5 per cent. ... 30 ,, ... 30 It is not necessary to burden this statement with details of the large number of smaller or relatively unimportant foreign countries outside the foregoing list. It is, however, interesting to note the duties that were being collected in the vwrious British colonies at the time Newde- gate published his " Customs Tariffs of all Nations " in 1855 — that is, in the colonies which were then, or have since become, self-governing. They can be put together in the f crm of a table : — Ebitish Colonies. Canada New Brunswick Prince Edward Island Newfoundland Nova Scotia ... New South Wales . . . Victoria Tasmania Western Australia ... South Australia New Zealand... Cape of Good Hope Natal Duties on manufaclure.s 0/ Cotton Wool Iron Per rent. Ter cent. Per c.-nt. 12i 12i I2i 7i n n 5 5 5 5 5 5 Ji H H Free Free Free Free Free Free I'ree Free Free Free Free Free 5 5 5 10 10 10 6 5 5 5 5 5 18 COMMEBCE AND THE EMFIIiE. In the last two named colonies the 5 per cent, became 12 per cent, vhen the goods were of foreign manufacture. It is sin;;ular that ■whilst in foreign countries, taking them as a wh' le, the restrictions on British goods have decreased durincr the half century, in British self-governii g colonies the restrictions have increased. Reviewing the positicn as a whole, it must be admitted that the constant tendency towards aggregation that marked the last century brought about a really marvellous increase of freedom altogether inde- pendent of, and additional to, that resulting from less restrictive tarifls. The world has grown in a wonderful way through this greater freedom. But the growth and the aggregation carry with them dangers of their own, and lovers of freedom liover needed to be more alert than to-day. The segregationist of to-day points a warning finger at millions of pounds' wf rth of imported goods where his forefathers, perhaps, could not point at more than thousands. The goods which are groaned at in one country as imports have been rejoiced at in another country as exports. Everywhere there are those who groan, and as the volume of commerce grows greater and yet greater they have more and still more at which to gioan. Let them groan. But let lovers of the freedom which has made such strides push on to-day more resolutely than ever ; the barricades between sections of the same nations have been fallicg ; it is the barricade between the nations themselves that now have to ha attacked. They will fall one after another if attacked with faith and couroge. The flag of peaceful commerce will yet win many a victory. 19 CHAPTER IV. STEAM AND ELECTRICITY INCREASE THK FREEDOM OP TRADE. The remarkaWe movement from the segregation to the aggregition of communities, which has done so n.uch to promote the prosperity and happiness of the workl, has had a worthy and powerful rival in science in this good work. During the nineteenth century science may be said to have put on "six-league boots." It has done wonders. What secrets lay hidden in the bosom of Nature for century after century ! Science studied and loved Nature and won her secrets — that is, some of them ; otliers, greater than all, perhaps, have yet to bo won. It is said that science overcomes the difficulties of Nature, but this is incorrect : science creates nothing ; it discovers and utilises that which is already created. In Australia a man at his breakfast table finds that electricity has collected for him the news of the world's principal events daring the preceding twenty-four hours, and he knows that steam can take himself and his letters and his goods to Europe in one month. The means whereby these wonders are done always existed. It is man's fault and misfortune that he did not sooner utilise them. The wonders, the progress, due to steam and electricity are but the culmination of long-continued effort. See from what the world has emerged ; h o'i at this graphic pen picture written in the "forties " by an able writer : — It was but late in the world's history when a ^ Dutch ship performed the Transatlantic voyage by leaving Rotterdam or Amsterdam in the spring of one year — sailing dui'ing tlie day, and furling her sails and laying-to during the night — and on reaching New York, then called New Amsterdam, this ship was discharged, unrigged, and laid up for the winter. On the following spring this ship was rigged, her condition examined and repaired, then laden with wood, fish, or furs, and then made her homeward voyage during the summer, as slowly as her outward voyage was performed the preceding year. The voyage was afterwards performed out and home during the same year. English ships, some time after, made two voyages during the year ; and, growing bolder, three voyages to and from America wero made annually by the same ship.* The comparison of the sailing ship that only ventured to make one trip across the Atlantic in the course of a year with the " greyhound " of to-day that crosses the Atlantic in five days, winter and summet alike, is indeed remarkable. The restrictions on trade, due to time and space, have been reduced to a marvellous extent. In those old days a merchant had also to be shipowner, banker, and insurer of both ship *Macgregor'8 " Commercial Tariffs," Vol. vii., p. 61. Tas^^dSfgo. Tq Tliat is what Mr. Schooling says. Let us see what commoaities the United States actually imported, taking the classification of the United States : — * * Absence of the detailed fi^mes for 1900 has made it needful to compare these years. D 34 COMMERCE AND THE EMPIBE. 1881-1889. 1891-1899, Million f. Jlillion £. 1. Articles of food and live animals 2. Articles in a crude condition, which enter into the various processes of industry 3. Articles wholly or partially manufactured for use as materials in the manufac- tures and arts 4. Manufactured articles, ready for consumption . . 5. Articles of voluntary use, luxuries, etc. Total Increase. Decrease. Mllion £. Million £. 405-7 . . 463-0 . 57-3 . — 285-4 , ,. 362-1 . 76-7 . — 149-6 . . 116-1 . . — . 3-5 2G5-1 . 252-2 • — . 12-9 160-1 . . 167-8 . 7-7 . — ,265-9 . . 1,391-2 . . 125-3 It will be observed that this new table puts an entirely different face on the matter. In view of the fact that the aggregate imports of manufactured goods decreased, there need be no sui'prise at there being a decrease in the imports from Great Britain. A further study of the returns will show that in some specially British lines imports were very reduced. With regard to British exports to Japan, Mr. Schooling says : — Our exports for Japan were:— 1881-1890, 29-3 milUons; 1891-1900, 52 1 millions — a rise of 228 millions, or of 78 per cent. The imports from all sources into Japan were :— 1881-1890, 71-1 millions; 1891-1900, 167-7 millions— a rise of 96-6 millions, or of 136 per cent. Tliis very large increase in the imports into Japan from all sources causes even the large increase in our exports to Japan to be below the expectation. We see this when we look at the two percentages shown here. Apparently Mr. Schooling does not notice that he is here — as indeed in all these comparisons — comparing value minus freight with value plus freight. These British exports are entered in the United Kingdom at free-onboard prices ; in Japan the same goods become imports and are entered at the landed value. To be compared they must be brought to the same standard. The voyage from the United Kingdom to Japan is one of the longest in the w-orld, and the freight, etc., is probably fully 20 per cent, or more on the shipping cost. Taking this cost, the 22-8 millions increase in British exports would be reckoned in Japan as 27 '4 millions increase in the imports from the United Kingdom. The consequence of this correction — and it is essential to accuracy — is that the British increase comes out at 94 per cent., instead of 78 as given by Mr. Schooling. It is taken for granted that the figures given by him are correct. It is the deductions from them that are criticised. Of course, if a corresponding correction were made — as in the case of the United States — where there is an actual decrease, the effect would be to enlarge the percentage of decrease. The statistics relied on by Mr. Schooling cover twenty years — 1881-1900 — which he regards as securing "a stable basis" for his deductions. Of course, he is perfectlv correct in pointing out, as he has COMMERCE AND THE EMFIBE. SS done, that the comparison of the return of one year with those of another might easily be misleading, but, after all, one series of ten years compared with another ten years may also be misleading. For certain reasons the comparison of the ten years ending with 1900, with the ten years ending with 1890, yields results which do not do justice to British trade. According to the figures laid before the Colonial Conference of 1902, the loans obtained by British countries aggregated 158 and 113 millions in the first and second periods respectively, a falling off of 45 millions in the second period. Of course, loans inflate exports, and if these 45 millions had not been lent in the first period, and had been in the second period, that alone would have materially altered the position. It is rather a singular fact that whilst ilr. Schooling is deploring the small growth of British exports to foreign countries during 1891-1900, as compared with 1881-1800, he does not mention the fact that there was a positive decrease in the exports to British countries. The figures compare as follows : — Exports of British and Irish Produce. 1881-1S90. 1891-1900. Increase. Decrease. Millions. Millions. Slillions. Millions To British Possessions 812 . 8U3 — 6 To foreign countries . . 1,531 . . 1,592 . 61 — The abnormal rise in the value of coal is responsible for the whole increase in exports to foreign countries, and also for the decrease to British Possessions not being larger than shown. " Exports of coal are exports of national capital," says Mr. Schooling, which is surely a strange remark. At all times coal exported represents payments to labour and to capital. In the years in question the world at large was paying great prices for coal, perhaps a sovereign for a quantity which in its unmined state — " national capital " — might be worth only a shilling. Surely remarkably good business. Every farthing the United Kingdom receives for her coal is her own, whilst out of her sales, say, of cotton goods, she has to pay away millions for cotton. A million for coal is a clear gain ; a million for cottons is subject to a big reduction. The figures supplied to the Colonial Conference showing the per- centage of increase in British exports for the five-year period 1896- 1900 o\er the five-year period 1876-1880 have already been quoted, but it is worth while finding out the percentages for the ten-year period 1891-1900 over the ten-year period 1881-1890. They compare as follows : — Increase ob Decrease per cent. Exports British and Irish Produce. To British Possessions To foreign countries . . 1896-1900 over 1S76-1S80. lSOl-1900 over 1881-1S90. Increase. 27-55 24 41 Decrease. Increase. 4 02 Decrease. 0-78 36 COMMEBCE AND THE EMTUiE. This result, this comparison of the results of two comparisons, teaches the desirability of caution in accepting figures even for periods of years without first learning what were the governing factors in commerce during such periods, but that loans and other financial proceedings have great intluence on the value of British exports is clear enough. Mr. Scliooling gives a table in which he shows the fall or rise in twelve leading lines of export during 1891-1900, as compared witli 1881-1890. He shows in nine lines an aggregate fall of 130-74: millions against, in three lines, an aggregate rise of 50 '40 millions. He says : — I suggest that the facts ought to cause an impartial observer to doubt the wisdom of continuing to regard the increasing excess of oiu: imports over our exports as a sure sign of the prosperity of British commerce. Xearly all pohtical economists of the older school pin their faith absolutely to the maxim that an excess of imports is a sure sign of prosperity. But this maxim is faulty when, as in this in3tance, it ignores the cause of the excess of imports. It may be admitted at once that an excess of imports may mean one thing in one country and something else in another, and also in the same country one thing at one period and another thing at a ditl'erent period. In Australia it has meant that the country was getting into debt ; ia the United Kingdom it has meant something widely different. But Mr. Schooling is too easily frightened. Nearly one-half of the aggregate fall referred to is in cotton manufactures and yai'n, 60'81 millions. Now, raw cotton is all imported; it is not a product of the United Kingdom. Did the raw material cost more or less in these years of lessened value in exports of manufactures 1 Declaeed Value of Raw Cotton Impo?.ted into the U^-ITED Kingdom. 1 Ile-e:cporis deducted. £ £ 1881 38,858,112 1891 42,292,823 1882 40,365,103 '1892 33,352,419 1883 39,788,373 1893 26,077,009 1884 39,105,850 1894 28,277,426 1885 32,009,093 1895 26,891,552 1886 34,152,543 1 890 32,700,359 1887 34,429,567 1897 27,878,930 1888 34,470,387 1898 30,627,271 1889 39,770,428 1899 22.911,114 1890 38,006,082 •1900 Total .. 36,173,124 Total .. . . 370,955,538 . . 307,072,032 These figures alter the position entirely. If the United Kingdom received 60*8 millions less for her exports of manufactured cottons, she paid G3"9 millions less for her raw material. If a fifth of this be reckoned to have been saved on the home consumption of cottons it would leave 511 millions saved on the exported. It is clear enough that the fall in the value of cottons exported is simply the antecedent fall of the value of the raw cotton, and does not mean loss of trade. The fall in the value of wool during the nineties also explains the smaller value of woollens exported. COMMERCE AND THE EMPIEE. 37 Mr. Schooling gives details of the growth of the exports of other countries, and says : Now I have to examine the facta for the purpose of afscertaiiiing who has been getting the trade that we failed to get. As in the case of nearly every outside country the largest shaie of the increased exports represented British purchases and consisted mainly of food products, it is idle to inquire why the United Kingdom " failed to get " that export business. Then, as to the great bulk of the rest of the increased foreign exports, seeing that they also v^'ere food products or specialities, why should Mr. Schooling worry ? The United Kingdom is a buyer not a seller of food products. A manufacturer, generally fully employed, need not get sore because he cannot accept orders which a farmer can. It is worth while pointing out that the manufacturers of the United Kingdom have often been so full of home orders that they have had to decline export orders. Thus in the year 1900 British exports were not so big as they would have been if the home business had not been so brisk ; for this reason many orders went to America and to Germany. Mr. Seddon, tlie Premier of New Zealand, speaking in the House of Representatives, on August 3rd, 1900, said : — They had increased the British area by milUona of miles during the last few years ; tliey had, of course, increased the population under British rule ; but the British manufacturers had not increased their trade in the same ratio, and they were not able to supply the increased demand that they had been called on to provide for. The Government had proved that in New Zealand them- selves. They wanted locomotives for this colony, and they could not get tliem from British makers into New Zealand under eighteen months or two years ; they wanted railway machinery, and could not get it ; they wanted rails, and could not get them. They had practically to look twelve or eighteen months ahead before they could get supplies from the Old Country. They then went to America, and orders that the English manufacturers wanted eighteen months to fulfil, they got from America in six weeks or three months. Orders for locomotives, maclunery and rails for a big cash buyer are in ordinary times eagerly sought after, yet so full of orders were the British makers that they were unalile to supply New Zealand. In this way orders for locomotives and other railway plant running into six figui'es ultimately appeared in the United States export returns instead of in the British. Since that occurred the position appears to have been reversed, for United States workshops have been too full, causing orders to go to the United Kingdom. Such facts as these are to be remembered in considering export returns. There are numerous statements in regard to British exports based on some fallacy or othei', but they must be passed. Many ^yriters appear to be quite overcome by the impudence of other countries ia dai'ing to manufacture certain goods for which Great Britain has a name. It miglit do these people good to remember that " purple and fine linen," for instance, were known ages before even the existence of Great Britain was known. Certainly whilst the extent of the commerce of the Empire is such that it causes the envy of other countries it neid not cause any alarm in Gr^at Britain. 38 CHAPTER VII, THE EMPIRE VIEW OP IMPORT AND EXPORT RETURNS. Those who assume to be interested above their fellows in the Empire, and in the unity of the Empire, ought to be capable of taking a broad, comprehensive view of the commerce of the Empire, but this is Just what they do not appear to be capable of doing. They take the import and export returns of the United Kingdom and point to the fact that a certain country has sold, say, £10 worth of goods for every £8 worth it has bought, and there they leave the subject. When the firm of John Bull and Company has branches almost everywhere it would be better to hnd out the aggregate business, instead of simply that which is done at the headquarters, heavy though that may be. In all the complaints hitherto made about the effect of the tariffs of other countries it has always been the effect on British manufactures that has been specially spoken of. There has been no general examination of such tariffs in the light of the whole of the commodities which the Empire has to sell. The moment this broader view is taken a greatly improved position unfolds itself. The United Kingdom is mainly interested in manufac- tures, the other portions of the Empire in food products and raw materials. Speaking generally the Rest of the World restricts imports of manufactures, and also restricts imports of food products, but welcomes imports of raw materials. As the United Kingdom itself cannot take all the surplus food products of the other parts of the Empire the re- striction in this direction is of little consequence, but as the United Kingdom cannot take the whole of the raw materials the fact that the Rest of the World admits them — generally free of all duty — is singu- hirly advantageous to the Empire, both as regards the United King- dom and the colonies, including India. If the Indian returns be looked at it will be found that, in 1900, India exported in the aggregate to Germany, Holland, Belgium, France, Austria, and the United States, commodities to the value of twenty millions sterling, and only imported from them to the value of between six to seven millions. India by these sales obtained a credit balance of between thirteen and fourteen million pounds sterling in the aggregate in these various countries, which became available towards the large amount of interest which India has to pay to Great Britain, and towards the cost of the large quantities of manufactui'ed goods which India purchases from Great Britain in excess of the value of the commodities which Great Britain buys from her. If India could not sell to the Rest of the World the large quantity of commodities which she COMMEItCE AND THE EMPIRE. 39 does, she would not be able to buy as much British manufactures as she does. If reference be made to the returns of Australia, a similar position is seen. Great Britain cannot take all the supplies of wool, etc., that Australia produces, but tlie continent of Europe comes to the rescue. Look at the wool export from the two States of New South Wales and Victoria in 1901 as compared with 1881 : — Wool Shipped 1S81 .. 1901 . . To Great Britain. lb. .. 148,170,784 .. . . 193,050,451 . . To foreign countriea. lb. 6,274,323 .. 154,944,211 Increase . . 44,879,667 . . . . 148,669,888 Of the shipments toother countries in 1901, France took 5G-3, German}'' 52'4:, and Belgium 34"4 million lb. These figures are only part of the truth, for of the wool shipped to Great Britain a lai'ge portion ulti- mately also found its way to the continent of Europe. Considerable credits here again became available, this time to pay interest and to buy British goods for Australia. These two illustrations prove the truth of the statement that if the Empire trade be looked at as a whole, the tariifs of other countries are not so prejudicial as they iindoubtedly are when they are looked at merely in connection with the exports of the United Kingdom. !N"aturally the preferential agitation has not escajjed the notice of Fi-ench and German residents in Australia. The Council of the French Chamber of Commerce of Sydney lias, through the Consul-Genex'al for France, sent to the Prime Minister of the Commonwealth a series of resolutions referring to the subject. The concluding one contains the following statement : — The average yearly value of the exports from France to Australia for the past three years (according to the official statistics) is about £510,000, and the average yearly value of Australian products bought by France is about £2,051,000. "With regard to German trade the Consuls I'cpresenting Germany in Melbourne and Adelaide have prepared a detailed statement of the trade between Australasia and Germany. Of these the total figures only need be given : — German Imports German Exports from Australia. to Australia. 1878 . . . . £4,338,900 .-. . . £1 043,200 1899 .. .. 6,053,750 .. .. 1,892,500 1900 .. .. 6,107,850 .. .. 2,395,950 1901 .. .. 5,392,650 .. .. 2,611,300 As, in 1901, France relieved the British wool market of wool to the value of £3,431,860, and Germany did the same to the extent of 40 COMMERCE AND THE EMPIRE. .£2,995,197, nearly all of wJiich was the proiluct of Australasia, the gentlemon naineil only partially showed the strength of their case. Those persons who suffer from nightmare by reason of the excess of imports in the United Kingdom may be comforted a little by looking at the complete Empire figures : — Imports. Exports. Excess of Imports. United Kingdom .. .. £528,000,000 .. £349,000,000 .. £179,000,000 Colonies and India . . 244,000,000 . . 238,000,000 . . 6,000,000 772,000,000 587,000 000 185,000,000 The excess of imports, it will be seen, is relatively much smaller when the return for the whole Empire is examined. The official figures that have been published have failed to do justice to the value to the colonies and India of the trade with other countries. In fact, Table IX., laid before the Conference, contained a gross inaccuracy. It purported to give the " trade of each British Colony and Possession with the United Kingdom, other British Possessions, and foreign countries respectively." In August this year a new table was published, and it is worth while comparing the two ; they are for the year 1900 : — Imports from the United Kingdom Imports from the British Possessions Imports from foreign countries Total Percentage foreign imports Exports to United Kingdom Exports to British Possessions . . Exports to foreign countries First Table. £117,000,000 . 32,000,000 . 95,000,000 , Second Table. . £117,000,000 46,000,000 , . 81,000,000 244,000,000 , , . 244,000,000 39 108,000,000 . 49,000,000 . 81,000,000 , 34 . . 108,000,000 . 43,000,000 . . 87,000,000 238,000,000 238,000,000 34 37 Total Percentage of foreign exports . . The mistake was made in connection with India. The effect of it was to reverse the position with regard to the trade with foreign countries, their sales being overstated and their purchases understated. The corrected table shows an excess of exports to foreign countries of 6 millions instead of an excess of imports of 14 millions. The corrected table itself, however, needs correcting, there being important omissions in it. The trade of Hong Kong is omitted. It is true that there are no regular statistics of imports and exports available, but it would not be difficult to prepare approximate estimates. If the COMMERCE AND THE EMPIRE. 41 export returns of tlia United Kingdom, India, Ceylon, Straits Settle- ments, and Australasia be looked at, they will show lOh millions (£) exports to Hong Kong, all which (jplus freight) were imports there. The import returns of the same countries sliovv 7 millions imports from Hong Kong, all which (mimis freight) were exports there. All this is extra trade within the Empire, what there was besides with the Empire and what with foreign countries might surely be appi'oximately esti- mated, at this time of scrutiny. But this is not all. The returns take no notice in any way of the trade with Gibraltar, Malta, Cyprus, Malay Protected States, North Borneo, Sarawak, Solomon Islands, Gilbert and EUice Islands, Zanzibar, East Africa, Somali Coast, Uganda, Central Africa, Territory South Africa Company, Bechuanaland, Southern Nigeria. These sixteen different possessions have an aggregate import and export trade quite worthy of notice, probably not far from fifteen millions of imports and the same of exports. This does not exhaust the omissions ; the figures for India only give the trade by sea, that by land not being included. The Statistical Abstract, however, shows, in 1901, imports by land, £4,276,584; exports by land, £3,617,448. If all such trade as here mentioned were included, it would make a useful addition to the bulk of the colonial trade, and it would show still more vividly the extent of the ti'ade with foreign countries, and the value this is to the Empire outside Great Britain, and it would also show how effectively Great Britain itself is helped by foreign tariffs in fiifhtinor foreign tariffs. 42 CHAPTER YIIL BRITISH SHIPPING. Ix considering the subject of British commerce, it is impossible to dissociate it from the position and importance of Britisli shipping. Any policy calculated to affect commerce must affect shipping also. The interests of the two are entwined, and the records of the two ought to be read together. The following figures are of the highest interest: — Imports and exports, United 1880. 1900. Increase. Kingdom £698,000,000 £877,000,000 26 per cent. Shipping registered in the United 1,000 Tons. 1,000 Tons. Kingdom G,575 9,304 41 British shipping entered and cleared in the United Kingdom 41,349 62,711 51 The actual increase of British shipping — the cari-ying power — is much greater than here shown ; since, roughly, the sailing tonnage has been halved and steam tonnage doubled, therefore, though the registered tonnage shows an increase of as much as 41 per cent., the carrying power probably shows the great increase of not less than 90 per cent. The carrying power of British shipping has thus increased between three and four times the percentage of increase shown in the value of imports and exports. Tlie question that naturally arises is. What is the explanation of this discrepancy ; what becomes of all this apparently surplus tonnage ? The answer is a three-fold one. In the first place. Although the imports and exports only show a growth of about one-fourth, they have actually increased in bulk, probably by one-half. The heavy fall that has taken place in the value of many commodities, food especially, has brought about a greater employment of tonnage than is disclosed by the mere statistics of value. In the second place. The proportion of tonnage employed in long voyages is continually increasing. An increase of a million in the trade between Europe and Great Britain is good, but an increase of a million in the ti'ade between Australia and Great Britain is better, because it means several times as much employment for tonnage. Whilst one vessel might in the course of a year bring a lai'ge quantity of produce from a near European port to Great Britain, it would require, perhaps, ten vessels of a similar size to bring the same amount of cargo from Australia. In the third place. Shipping is now less dependent on freight traffic than formerly ; the passenger traflSc has gradually reached dimensions of an important character. With a good passenger list, a big steamer may be run with holds half empty, and yet return some profit to her owners. The number of people who now take extended COMMEBCE AND THE EMPIBE. 43 trips, tours round the world, etc., for pleasure and for health is considerable. The comfort and safety associated with life on board the big liners draw many passengers ; they delight in the change, especially as it may be enjoyed at a moderate cost. At the last annual meeting of the P. & O. Company, the chairman said the company's receipts from passenger traffic had been £1,218,936, which sum, he added, was almost double the revenue from the same source twenty years ago. The employment of the truly wonderful amount of tonnage now registered in the United Kingdom is then explained by (1) the greater bulk of cargo in proportion to the value ; (2) the greater number of long voyages, and (3) the greater passenger traffic. It is to be regretted that there are no figures available which make clear the earnings of British shipping, but it is clear enough that thei-e has been a great increase in ^he last twenty years. The earnings of British shipping are, of course, connected with the excess of imports, which has now become so marked. There is only one reason why these evei'-increasing earnings should be looked on with regret, that is because of the sorrow they have brought to a number of people ; the bigger the earnings, the bigger the sori-ow. As the hateful person, who lives over-sea, "dumps" his millions into the "dumping ground" (pardon the use of classical terms), and asks for nothing in exchange, because he is really only paying for services already rendered, the persons referred to are consumed with grief. Possibly they may some day, after having undergone operation for catai'act, see the truth that is now hidden from them ! The earnings of shipping in the passenger traffic have probably now reached an aggregate far beyond ordinary expectations. If one com- pany receives in fares nearly one and a quarter million, how many millions do all the passenger lines receive ? The question cannot be made a rule of thi-ee, for the company specially referred to is pre- eminently a passenger line. To arrive at a reasonably approximate estimate detailed information is essential, and this information is not available to the writer. An estimate will probably be prepared in better informed quarters, and it can scarcely fail to throw a useful light on the subject of the excess of imports. Evidently British shipping has had a good time, but if certain statements, which are very freely and confidently made, are correct, foreign shipping has had a still better time. The following figures bear on this subject ; — Tonnage Owned in the Countbies Named. Countrv. 1889. 1899. Increase Tonnage. 1,000 Tons. 1,000 Tons. United States* 1,022 .. 848 . . 174t — 17 per cent. Germany 1,321 .. 1,738 .. 417 — 32 France 933 . . 958 . . 25—3 Belgium 70 . . 109 . . 39 — 55 United Kingdom 7,759 .. 9,164 .. 1,405 — IS The figures for the two years are taken from the "Statistical Abstract" for 1901. As in the case of the United Kingdom, the improvement shown by foreign countries is really greater than the figures indicate — * Foreign going only. t Decrease. 44 COMMEIWE AND THE EMPIRE. sailing tonnage decreasing, steam increasing. Thus, in the case of Germany, the steam tonnage has grown from <)18 to ] ,150 thousands of tons, so that the inci-eased carrying power is really substantial. But taking the whole of these figures, the position they indicate is remark- able. Notwithstanding the great lead possessed by the Unit'.Nl Kingdom in 1889, the four foreign countries together increased their tonnage less than one-third of the British increase, so that at the close of the ten years the British lead was much greater than before. The point of view of the entries and clearances must be looked at as well as that of ownership. The figures, on which the comparisons following are based, are taken from the report of the Colonial Conference, 1902 ;— Shipping. — Entered and Cleared. Excess National. Foreign. National. 1,000 Tons. 1,000 Tons. 1,000 Ton.?. United Kingdom .. .. 1880 .. 41,349 .. 17,387 .. 23,962 1899 .. 65,649 .. 32,134 .. 33,515 Excess Foreign. United States 1880 .. 6,218 .. 1J,329 .. 8,111 1899 .. 6,796 .. 37,345 .. 30,549 Germany 1880 .. 5,109 .. 7,958 .. 2,849 1899 ., 13,384 .. 14,796 .. 1,412 France 1880 .. 7,522 .. 17,510 .. 9,983 1899 .. 10,137 .. 25,556 .. 15,419 Belgium 1880 .. 826 . . 6,290 .. 5,064 1899 .. 2,831 .. 14,323 ., 11,492 Truly this is a remarkable exhibit for the United Kingdom. In the nineteen years covered by this return, foreign shipping entering and leaving British ports increased by 15 million tons, and yet at the end of the period it was found that the excess of shipping under the Britisli flag was nearly 10 millions greater than at the beginning of the period. The position as regards entries and clearances is not complete without the figures for the Colonies, India, etc. ; — Shipping Entered and Cleared. Throughout the Empire — outside the United Kingdom. British. Foreign. Excess British. 1 ,000 Tons. 1 ,000 Tons. 1 ,000 Tons. 1880 .. 45,376 .. 10,937 ., 34,339 1900 ,, 96,039 .. 35,113 .. 00,926 To this return thei'e may very well be added another, giving the figures for the whole Empire : — Shipping Entered and Cleared. Throughout the whole Empire.* British. Foreign. Excess British. 1,000 Tons. 1,000 Tons. 1,000 Tons. 1880 ,. 86,725 .. 28,324 .. 58,401 1900 .. 158,750 .. 70,926 .. 87,824 * The 3'ear3 and the tonnage are those of the Colonial Conference Report. The British excess was greater in 1899. In 1900 much British tonnage was chartered by the Government depleting the ordinary returns, _ 1902 shews krge: British figures. COMMERCE AND THE EMPIRE. 45 It will be seen that the aggregate entries and clearances throughout the Empire in 1900 reached the enormous total of about 230,000,000 tons. These figures must be taken with a grain of salt, or, perhaps it would be bettei" to say, with an explanation. This is all the more needed when ifc is seen that this aggregate includes 131 millions outside against 99 millions inside the United Kingdom. There is a great deal of dupli- cating. Thus, when a 10,000-ton steamer comes to Sydney, the port of New South Wales, she calls, as a rule, first at Perth, Adelaide, and Melbourne, and on her return from Sydney again visits the other three ports — so that she enters port seven times and leaves port seven times — • a total of fourteen entries and clearances, equal to an addition of 140,000 tons to the tonnage returns by reason of one trip of a big steamer to Australia. It is needful to refer to this point, because by the help of this rather Munchausen-like method of recording tonnage, it is possible to paint a vivid picture of the "encroachments" of the foreigner, if half-a-dozen extra foreign steamers visit Australia. This review of the position of British shipping yields surprising results. Probably the development that has taken place during the first twenty years in this direction has rarely, if ever, been surjiassed in any branch of human enterprise. Had it taken place under a system of bounties, it would have been held to represent a great triumph for that system. Perhaps there is such a thing as being drunk with pros- perity ; when a man arrives at that stage of exhilaration his reasoning powers take a holiday. To argue with people who can find evidence of national decadence in these special figures is surely a waste of eflbrt. At the Colonial Conference Mr. Chamberlain appeared to be quite blind to a grave danger in connection with any agitation for dealing with the navigation laws. He was playing with a double-edged weapon. You cannot give support to restrictive measures without strengthening the hands and the efforts of those who believe in i-estriction and have the power to direct it against yourself. Mr. Chamberlain was well aware that the government of Sir Edmund Barton had placed on the statute-book of the Australian Commonwealth a postal Act prohibiting the giving of a mail conti'act to any company whose steamers carried any coloured labour, thus, for example, prac- tically excluding the P. and O. Company, after the expiration of its present contract, from carrying mails from Australia. l^his Mr. Chamberlain already knew, and had he inquired he would have learnt that Sir Edmund Barton's Government contemplated legislation to prohibit both British and foreign vessels carrying either passengers or cargo from one port to another on the coast of Australia. It Avas to be done by making the payment of Australian wages compulsory, a proposal accepted as practically simply prohibition. Happily this measure has not yet been brought forward ; wlien it is, the t;isk of defeating it will be all the gi-eater because of what took place at the Conference. It is startling to find the Conference passing a resolution that " it is desirable the attention of the Government of the Colonies and the United Kingdom . . . should be called to the advisability of refusing the privileges of coastwise trade, including trade between the Mother 4G COMMEBCE AND THE EMPIRE. Country and its colonies and possessions, and between one colony or possession and another," to countries refusing privileges of coastwise trade to British vessels, when at least one member of the Conference was prepared to refuse coasting privileges to British vessels, even though done as a matter of wages. The information placed before the Conference showed that the coasting trade done in British waters by countries which refused corresponding privileges was of the most paltry description. To reserve that trade to the United Kingdom, whilst Australia reserved to herself her own coasting trade, would be ludicrous. When once a Government makes up its mind to meddle it is difficult to know where the meddling will end. In February last — six months after the Conference closed — the Earl of Onslow, Under- Secretary for the Colonies, told the Edinburgh Chamber of Commerce, that trade with South Africa was being impeded by the high freights that were being charged, and that the Colonial Office would endeavour to secure a reduction to moderate rates, even if steamers had to be chartered for the purpose. If exorbitant freights v.'ere being charged, a public service was rendered by drawing attention to the subject, but obviously the course to pursue then was to show that the remedy lay in the hands of the people concerned, the merchants of London and South Africa. Any amount of rival tonnage could be chartered, foreign even if needful, far more than ample to break up any monopoly in twenty-four hours. A system of through freights, from any railway station in Great Britain to any railway station in South Africa could have been recommended : anything almost would have sounded better than the suggestion of chartering by a Government that had only a little while previously been paying exceedingly high rates for the conveyance of troops and stores to and from South Africa itself. There certainly exists at present no direct attack on the shipping of Great Britain and no excuse for suggestions about fighting foreign shipping. Suppose the subject of the position of British shipping be looked at from the world's standpoint ; that is, taking the whole of the foreign countries and treating them as one unit. How, then, does the aggregate of all shipping entrances and clearances divide^ and look when divided, between the British Empire on one side and the Rest of the World on the other 'i First as to the aggregate : — Entries and Cleaeances. Tons. Ports in the British Empire 230,000,000 Ports in the Reat of the World 360,000,000 Grand Total 590,000.000 Five hundred and ninety million tons ! The returns of the Empire have already been divided between British and foreign lings, a similar division on a corresponding basis is, therefore, given for the Rest of the AVorld ; in each country the national shipping is shown, separate from the shipping under the other flags. The first thing that will be COMMEBCE AND THE EMPIEE. 47 observed is the small proportion of national shipping entering and clearing in foreign countries. Taking the average, 28 per cent, of the shipping entering and clearing fly the national flag ; whilst in the British Empire the national flag is carried by 69 per cent. That means that the Rest of the World can say to the British Empire, " You have the pleasure of knowing that out of every million tons of shipping arriving at and departing from your ports no less than 690,000 carry the British flag; in our countries on the average out of eveiy million tons no more than 280,000 carry the national flag." Travel furthei-, investigate the ownership of the 258 million tons of non-national shipping in foreign ports. British 1 Mainly British. The Colonial Conference report shows the tonnage of British shipping arriving from Empire ports, deducting this from the total there is left the tonnage arriving from and clearing for foreign countries, and of course this tonnage represents the British shipping trading direct with the Empire, included in that 258 million tons in foreign ports. Then to that figure must be added the British shipping trading between foreign ports. The 258 millions divide as follows: — 3 ENTERED AKD ClEABEE IN Other Countries.* Divided into National and Foreign. National. Foreign. Tons. Tons. Russia 1,843,503 15,523,110 Norway . ' 4,219,600 2,157,000 Sweden 6,271,049 10,113,708 Denmark . . 6,609,165 4,712,927 Germany . . 13,383,514 14,796,312 Holland 4,697.251 14,128,659 Belgium 2,831,033 14,322,924 France 10,137,277 25,555,535 Portugal 1,247,448 15,881,087 . Spain 15,069,359 17,070,971 Italy 19,028,051 19,929,203 United States 6,796,012 37,344,878 Mexico 196 5,053,806 Chili 794,252 5,704,299 Uraguay 7,035 4,487,495 Ai-gentine . . 4,468,717 10,838,735 China 615,367 10,377,348 Japan 2,853,723 4.986,694 100,872,552 . 232,984,097 Brazil, Turkey, Egypt, Pci 'U. etc., sayt 1 000,000 25,000,000 Total . 101,872,552 . 257,984,697 * Year 1899. Figures taken from the 1901 " Statistical Abstract " for foreign entries. t No returns for these countries. This rough estimate is probably much too low. ^a COMMEBCE AND THE Iho British tonnage arriving witliin the Empire from foreign countries mudt represent the British tonnage departing from foreign coun- tries for the Empire — henco . . The National tonnage in foreign countries is 102 milUons, as 72 with the British Empire, the difference is between foreign countries, and forms parts of the 258 — hence.. A balance of lUO remains, representing further trade between foreign countries. Divide equally* . . Total The aggregate shows EMlUItE, British. Tons. Foreign. Tons. 128,000,000 . — — . 30,000,000 50,000,000 . . 50,000,000 178,000,000 .. 80,000,000 258,000,000 In the British Empire In the Rest of the World Grand Total British. Foreign. Tons. Tons. 159,000,000 . . 71,000,000 178,000,000 .. 182,000,000 337,000,000 253,000,000 590,000,000 This table shows that whilst foreign shipping enter and clear from ports in the Empire to the extent of 71 million tons ; British shipping enter and clear from the ports of the Rest of the World to the extent of 178 million tons. If any grumbling is to be done who should do if? Had the Briton not been born with a predisposition to grumble he might have been entirely happy with regard to shipping. It is evident that the Empire is enjoying an extraordiiiary proportion of the work of carrying cargo and passengers, not only for itself, but for the Rest of the World. If the ligures point to anything at all they certainly point to the wisdom of exercising great care so as not to do anything to prejudice the shipping of the Rest of the World in whose ports the British Empire is reaping such a harvest. The suggestions which have been made for navigation laws, subsidies, bounties, etc., to fight foreign shipping seem to be entirely regrettable and uncalled for. The trade that has been looked at is over-sea. Is it in the coasting trade that the foreigner is making him.sclf conspicuous ? It may be well to make sure. The following is the record of the coasting trade in the United Kingdom for the last three years : — Tonnage Enteeed and Cleared with Cargoes in the Coasting Trade OF THE United Kingdom. British. Foreign. British. Foreign. 1,000 Tons. 1,000 Tons. Per cent. Per cent. 1900 60,000 425 99-31 00-69 1901 60,401 378 99-38 00-62 1902 62,204 370 99-40 00-60 * This division is an entirely arbitrary cue, but it probably favours foreign shipping. COMMERCE AND TEE EMPIBE. 40 The foreigner, it will be observed, in the coasting trade of the United Kingdom is only conspicuous by Jiis absence. Tlien, -what is the foreigner's position in tlie extended meaning of "coasting trade'? What foreign tonnage is to be found trading between the United Kingdom and other portions of the Empire ? The figures herewith are from the Colonial Conference r.'port : * Tonnage Entered and Cleared with Cargoes in the United Kingdom FROM and to THS BRITISH POSSESSIONS. British. Foreign. British. Foreign. 1,000 Tons. 1,000 Tons. Per cent. Per cent. 1880 7,809 040 89 11 1890 8,858 1,097 89 11 1900 9,552 960 90 10 The same report also shows in another table the division of the tonnage trading from one Colony to another; by tLis the percentage < f foreign is 14, and takiiig the whole of the divisions of the Empire — that is, the United Kingdom, the Colonies, India, etc. — the percentage of foreign is 12. Eemembering the extent to which British shipping is employed between foreign countries tiiis is very small. It is, then, made quite char that if any .special legislation afTectiiig navigation were passed, it would Ije the trading facilities of the Colonies rather than of the United Kingdom that would be affected. At the Conference Mr. Chamberlain very frankly s.iid : Tlie navigation laws were repealed, I understand, largely at tlie instance of the Colonies. I believe it was complaints from the Colonies that competition was interfered with by our laM-s, which was the prime mover in the repeal of that legislation. Under these circumstances it is inconceivable that the United Kingdom should reimpose laws which lessen the competition for the carrying of the commodities of the Colonies. If the profits which accrue from the presence of foreign shipping in Colonial ports were lost, the " complaints from the Colonies '' would soon be revived. Better let well alone. * Appendix Xo. 20. 50 CHAPTER IX. RE-KXPORTS IN GREAT BKITAIX. TiiK re-export trade of Great Britain is very important and valuaule ; it is built into the commercial system of Great Britain. Sixty-five millions of re-exports j)lus 10 millions of transhipments mean a total of 75 millions brought into the United Kingdom, and the same amount taken out — equal to 150 millions in all. The employment to shipping here disclosed is great, and the bulk of such employment goes, of course, to British shipping. The employment, too, in handling — in landing, carting, warehousing, delivex'ing, reshipping,etc. — represents an aggregate sum which brings comfoi't into thoui^and.s of humble homes, all British. The re-exports indicate the fact that Great Britain is the world's emporium and financial centre. Commodities are drawn from all the ends of the earth to be sold, and they are redistributed as buyers are found : a commerce in which bankers, merchants, brokers, warehouse- men and others gain much profit. This class of business has its headquarters in London, the hub of the commercial world. Fancy, London and a restrictive tarifi' ! Surely never till common sense commits suicide. If a new fiscal system were introduced, a system of general tariff taxation, commodities could be placed in bonded instead of free ware- houses, and be re-exported as at present, but the change would entail increased charges, and increased charges would inevitably tend to lessen the business. There are many lines of steamers lunning which are largely sustained by the movements of re-export goods ; to check the movements of these goods is to injui-e the shipping trade and to aim a blow at the enviable position Great Britain now holds. Every com- mercial man knows how small a change will often influence the direction of trade. It is, of course, natural for all countries to desire to secure direct supplies. Years ago the European woollen trade bought most of its wool in London ; now the buyers come to Australia and purchase ■wool, which is shipped direct to European ports. This has been facilitated by the establishment of French and German lines of steamers. Couisidering the gnat changes that hav^- co:ne about, of which wool is only one illustration of the extent to which direct has replaced indirect trade, it is simply remarkable that the volume of re-export trade in Great Britain is sustained. In the fifties the highest value reached in one year was 25 millions, in the sixties it averaged 45 millions. Since those years there has been a fluctuating increase, the trade standing at an average of 65 millions for the years 1900-1-2. The fall in the price of commodities the past twenty years has, however, been so great that COMMEIiCE AND THE EMTIBE. 51 fin actual increase of bulk of a marked character has taken place. As ttie profits of this business, carrying, handling, are to be measured by bulk rather than by value, this is important. Proportionately the Colonies send, and foreign countries take, the lai'gest amount of the re-export goods, and it is singular that those foreign countries which take the largest quantities are those whose tariffs are the most unfriendly. The mutual benefits that arise from commerce are here made clear : the Colonies, Great Britain, and other countries all benefit. This special branch of Britain's trade is toe important in itself and too useful in connection witli other branches for any stirring up of international strife to be viewed without alarm. CHAPTER X. GREAT BRITAIN AND THE SELF-GOVERNING COLONIES. It has of late years been affirmed in certain quarters that the United Kingdom has not, since the free-trade era, helped the new and growing portions of the Empire as she should have done ; that, in fact, she has been indifferent, has withdrawn benefits they formerly enjoyed, and has treated them no better than she has treated foreign countries. These statements have mainly been made by Canadians. Dr. Parkin says : — * The system by vhich each self-governing division of the Empire regulates trade policy in accord with what it conceives to be its own interest, treating other parts of the Empire exactly as it does foreigners, was not initiated by Colonists, but by the people of the United Kingdom, in connection with the adoption of free trade in 18-46. Previous to that period mutually beneficial trade relations, both as regards exports and imports, existed between the Mother Land and the Colonies- Many of the Colonies — and especially Canada — protested vehemently agaiixst this change of national policy, and suffered severely from the completed reversal of the trade relations which had previouslj^ existed. The same writer also says that it is asked in the Colonies : — How can we luiite more cloeely with a Mother Land which in trade matters makes no distinction between her greatest enemy and ourselves ? The Hon. Geo. W. Boss, Premier of Ontario, in a letter written in 1901 to Lord Avebury, referring to Canadian trade, says : — Our trade with Great Britain is greater to-day than ever, not because of any- thing the British Government has done for us, but because of our ovm enterprise and the investments of our o^vu capital. Mr. J. G. Colmer, in his Statist prize essay, says : — They (the Colonies) cannot be said to have received any special encouiage- ment from the parent country. This statement has sometimes been criticised but its truth cannot be denied. . . . The Mother Country has extended the same commercial treatment to the Colonies as to foreign countries since the developments that followed the repeal of the Corn Laws. These three writers are Canadians. It would be a matter of las-ing regret if it could be shown that Bi'itish communities abroad S " Imperial Federation," page 280. COMMEECE AND IHE EMPIRE. 53 had suffered through the present commercial policy of the United Kingdom. It is worth while, therefore, looking somewhat closely into the matter : examining British policy with regard to the British beyond the seas in the old days before free trade was introduced and then extending the inquiry over the period since the new policy came into operation. It may unhesitatingly be affirmed that the development and the prosperity which to-day may be found under the British flag in so many parts of the globe are very largely the outcome of British fiscal policy combined with the use of British capital. It may further be affirmed without hesitation that this development ancl prosperity would have been impossible of attainment had these new lands lived under the flag and policy of any other nation under heaven. As to the past. What was the spirit that animated British policy 1 What were the conditions under which commerce was carried on with the new communities 1 It may safely be said that that spirit was one of absolute selfishness, and that those conditions tended to prevent, rather than encourage, enterprise ; delayed, rather than stimulated, prosperity. The early settlers, the pioneers, the heroes of the dawn of British rule in the new lands, were taught, by bitter experience, that the Old Country had to be considered first, last, and every time. Cer- tainly in some cases, and at some times, the tarifl" gave a preference to goods from a British Colony over goods from an outside country ; but, as a rule, at the bottom of this usage was the purpose of safeguarding the British capitalist and none other. The greatest of all the British Colonies wei-e those which have since developed into that great nation the United States of America. This is what Bancroft, the American historian, sa3's of the usage to which the American Colonies were subjected by British policy : — American independence, like the great rivers of the country, had many sources, but the head-spring that coloured all the stream was the British Navigation Act. . . . This odious measure provided that no commodities whatever, being the growth, product, or manufactiu-e of Asia, Africa, or America, should be imported into England or her Colonies except in sliips belonging to British subjects, and of which the master and the greater part of the crew were also English. Subse- quently the ordinance was re -enacted with additional clauses, virtually excluding foreign ships from American harbours, and sacrificing to English monopol)'' the natural rights of the Colonies. Further he says : — In 1G99 the British Parliament prohibited the Colonies from exporting wool, jam, or woollen fabrics, and fi-om carrying them coastwise from one Colony and place to another. In 1719 Parliament declared that the erection of manufactories in the Colonies tended to lessen their dependence on the Mother Country ; and the English manufactm'crs memorialised Parliament that the Colonies were carry- ing on trade and erecting manufactories, with a view to obtaining legislation to arrest it. In 1731 the Board of Trade was instriicted to inquire as to the Colonial laws made to encourage manufactm-es, as to manufactories set up, and as to trade carried on in the Colonics and to report thereon. In 1732 it reported that Massachusetts had passed a law to encourage manufactures ; that the people of New York, Connecticut, Khodc Island, and Maryland had fallen into the 54 COMMEBCE AND TUE EMFIBE. manufacture of woollen and linen for the use of their own families, and of flax and hemp into coarse bags and halters, all of which interfered with the profits of the British merchants. The Board recommended that the minds of the people of those Colonies [should be immediately diverted, and a stop be put to it, or the practice would be extended. The same year Parliament prohibited the exportation of hats from the Colonies, and trading in them from one Colony to another by ships, carts, or horse. No hatter should set up in business who had not served seven years, nor have more than two apprentices ; and no black person should work at the trade. Iron mills for slitting and roUing, and plating- forges, were prohibited under a penalty of £500. This system of prohibition and restriction continued to increase till the Colonies rebelled, and declared in- dependence in 177G. Uuder such circumstances rebellion became a sacred duty, the natural harvest of the seed tliat had been sown. The following is an extract from Macgregor's official report on the United States : — * 1718. Import Bill of Massachusetts. An import Bill was passed by the legislature of ]\Iassachusetts, which laid a duty on West Indian goods and wines, and on English manufactm-es and a duty of tonnage on English ships. The duty on English goods was 1 per cent. Before the session in May, next year, the Governor received instructions from the King to give all encouragement to the manufactures of Great Britain, and afterwards received a reprimand from the Lord Justices, the King being absent, for consenting to the duty on English goods, etc. The Court, on receiving official notice of this reprimand, readily acknowledged that the exceptions taken to that clause in the Bill were just and reasonable. To-day a Colony may put a prohibitive duty on goods which are a specialty of English manufacture, whilst less than two centuries ago a duty of even 1 per cent, brought a reprimand. The same writer also says : — t 1699. Wool manufactures of America. Complaints being made in England that the wool and woollen manufactures of North American plantations began to be exported to foreign markets, formerly supplied by England, a law was passed by which no person might export in ships, or carry by horses into any other place or Colony out of the King's dominions, any wool or woollen manufactures of Enghsh plantations in Amt .ica, under forfeiture of ships and cargoes, and aLo of £500 penalty. This is the first notice in the English statute laws of woollen manufactures in the Colonies. Here is an extract from Mr. McCulloch's *' Commercial Dic- tionary " : — I Besides compelling the colonists to sell their produce exclusively in the English markets, it was next thought advisable to oblige them to buy such foreign articles as they might stand in need of entirely from the merchants and manufacturers of England. For this purpose it was enacted, in 1063, that " no commodity of the growth, production, or manufacture of Europe shall be imported into the British plantations but such as are laden and put on board in England, Wales, or Berwick-upon-Tweed, and in English-built shipping, whereof the master and three-fourths of the crew arc English." The preamble to this statute, which effectively excluded the colonists from every market for European * Page 66. t Page 965. t Page 349. COMMEBCE AND IHE EMPIBE. 55 produce except that of England, assigns the motive for this restriction to be " the maintaining a greater correspondence and kindness between the subjects at home and those in the plantations ; keeping the Colonies in a firmer depend- ence on the Mother Country ; making them yet more beneficial to it, in the further employment and increase of English shipping, and the vent of English manufactm-es and commodities ; rendering the navigation to and from them more safe and cheap; and making this kingdom a staple, not only of commo- dities of the plantations, but also of the commodities of other countries and places for their supply, it being tlie usage of other nations to keep their plan- tation trade exclusively to themselves." It was also a leading principle in the system of Colonial policy, adopted as well by England as by the other European nations, to disco. irage all attempts to manufacture such articles in the Colonies as could be pro-.ided for them by the Mother Comitry. The history of oiu: Colonial system is full of efforts of this sort ; and so essential was this principle deemed to the idea of a Colony that Lord Chatham did not hesitate to declare, in his place in Parliament, that the British Colonies of North America had no right to manufacture even a nail for a horseshoe! (Edward's "West Indies," Vol. ii., p. 566.) And when such were the enactments made by the Legislature, and such the avowed sentiments of a great parliamentary leader and a fiiend to the Colonies, we need not be sur- prised at a declaration of the first Lord Sheffield, who did no more, indeed, than express the opinion of almost all the merchants and politicians of his time, when he affirmed that " the only use of American Colonies or West India Islands is the monopoly of their consumption and the carriage of their produce." The quotation speaks of an enactment in the year 1663, but it M'as probably about a hundred years later when Lord Chatham — he died in 1778 — made the diclaration referred to, well on in the eighteenth century. It is no use piling up instances of the cruel and selfish legisla- tion of the British Parliament in regard to British over-sea communities, but it may be worth while to recall something of the treatment meted out to Ireland ; because if Ireland was treated badly, Canada and other Colonies were not likely to be ti'eated well. And, also, because it will be seen that the Colonies were not allowed to trade with Ireland, except to a very limited degree. Customs TariQsof the United Kingdom — really a history of British tariffs — compiled in the London Custom House and presented to Parliament in 1898, gives a great deal of information on the subject of British legislation in i-egard to British trade. The following is an extract : — The commercial code of Ireland stood at the beginning of the eighteenth century in a condition winch was most unfavourable to the development of those in- dustries and trades as to which her natural resources and geographical position would have best fitted her to compete successfully with other countries. Situated in the direct highway from the British American plantations to the Mother Country and the civilised communities of Europe, she might not receive, by direct importation, the produce of those settlements. A pastoral country by climate and soil, she might not export her farm produce or her cattle to the market of her great neighbour. Her coasts indented with magnificent harbours, yet her mercantile marine was shut out from the enormous privileges secured by the Navigation Act to English ships. Successful as growers and manu- facturers of wool, she might not export a yard of the produce of her looms to any country whatever ; and even in her painfully built-up linen manufactures she was obliged, in days when free trade was unkao.vn, to .raare British and foreign markets vrith her English and Scotch competitoi-s. though they were protected from her competition with their woollen trade. 5G COMMEBCE AND THE EMPIRE. Whilst Great Britain would not allow Irish produce that competed with hers to be lauded at her own ports, she was ^\■illing for stich com- modities to be shipped to the Colonics, at the same time she refused Ireland the right to export thereto any of her woollen manufactures. She also would not allow the Colonies to ship goods direct to Ireland. Mr. Hutchison, Provost of Trinity College, Dublin, in 1779, published a work on the Commercial Restraints of Ireland, the following extract from which is given in the Customs Tariffs of the United Kingdom ; — Money caiuiot be expected for our (Iris'i) goods there (in the Colonies) ; we must take tlieirs in exchange, and this can never ans'.ver on the terms of our being obliged to pass by Ireland, to land those goods in England, to ship them a second time, and then sail back again to Ireland. Legislation such as pointed at here injured both the Colonies and Ireland, and could never have been assented to if the interests of either had been a source of genuine concern to the Mother Country. It was not till 1780 that trade between Ireland and the Colonies vras put on the same footing as between Great Britain and the Colonies. But it is alleged, at the time when the United Kingdom adopted free trade, these new communities enjoyed certain })references as against foreign countries, and the removal of such preferences was a blow to them. Of course. It is only human nature to accept all advantages and to grumble at any disadvantage that may accompany them. A Treasurer who remits a vast amount of taxation will not thereby save himself from keen attack in connection with a relatively trifling impost, and the statesmen who paved the way in the "forties " for future development in the Colonies did not escape attack from those who lost, or thought they lost — it counts all the same — any advantage or privilege. The people of, say, Canada as a whole, however, will have little difiiculty in making up their minds as to whether or no the changed policy of Great Britain was a help to them. What was the position shortly before the free trade era ; what were the advantages that are now mourned? It may be said without the least hesitation that Great Biitain did not grant one single privilege or advantage to any of her young communities that could in any way clash with the interests of people— that is, protected people— actually resident in Great Britain. Certain commodities which she did not and could not produce herself she admitted at relatiAely very low rates when imported from the Colonies as compared with the rates when imported from foreign countries. The two ]:«rincipal commodities so admitted were sugar and timber. The West India Islands were the seat of the sugar industry ; but no Bi-itish labour, only British capital, was here employed. Connected as the industry was with the slave trade, it covers a page of British history of which no one can be proud. For years after the slaves — at a cost of twenty million pounds— had been freed an enormous discount off the ordinary rates of duty was still granted; the consumers of sugar in Great Britain being heavily taxed for the benefit of owners of the sugar estates — mostly residing in Great Britain itself. But even in regard to sugar the true spirit of the COMMEECE AND TEE EMFIEE. 57 old fiscal policy had to show itself, as will be seeu by the following extract from McCulloch's "Commercial Dictionary" : — We ako thought fit to interdict the West Indies from the refining, or, as ifc is technically termed, tlie claying of sugar. Tiiis is one of the few manufactures that might advantageously be set up in the Islands. The process adds con- siderably to the value of sugar ; and it might be carried on in the building--, and by the hands that are required to boil the cane or prepare the raw sugar. Instead, hov.ever, of being allov.ed to refine their sugars on the spot, and where it might be done for a third part of the expense that is required in England, the planters were proliibited from engaging in this branch of industry, and obliged to export all their sugars either raw or crushed to England. So much for sugar. Now with regard to timber. Supplies of British timber became exhausted in the sixteenth century and importations became a necessity. There being no British timber to " protect," the Customs duty on imported was purely a revenue duty, and Great Britain became willing to give Canada the advantage of very heavy reductions on the rates paid on foreign timber. It was not till the beginning of the nineteenth century, however, that this position developed. There is no doubt that for those actually engaged in the lumber trade, as it was called, the tariff preference secured considerable profits for a good many years. Whether Canada, as a whole, was benefited is another question. There is a strong body of evidence to the effect that the results not onl}' were not beneficial but vrere actually injurious to the best and permanent interests of Canada. The following extract is from McCulloch :— * It was objected to the abolition of the discriminating duties on timber, that it would be injurious to Canada and the shipping interest. We believe, how- ever, tliat the injury was not nearly so great as has been represented — that it was, in fact, quite inconsiderable. . . Mr. Richards, who was sent out hy Government to report on the influence of the timber trade, represented it as most unfavourable, and observed that '■ when time or chance shall induce or compel the inhabitants to desist from this employment, agriculture will begin to raise its head." The statement of Captain Moorsom in his " Letters from Nova Scotia " are exactly similar. He considered the depression of the timber market, although a severe loss to many individuals, " a decided gain to the Colony," from the check it gave to the ' lumbering mania." . . . The fact is, that in so far as the interests of the Colonies are concerned, it is plain they did not really lose by the repeal of the differential duties on foreign timber. An amusing error with regard to the timber duty occurs in Mr. Colmer's prize essay on Commercial Federation. He gives, page 43, " some instances " of British " preferential treatment," This is one : — Timber, British Possessions. About 700 to 1,000 per cent, lees than foreign countries. * " Commercial Dictionary," Timber. 58 COMMEECE AND TUE EMPIRE. Of course neither £1,000 nor even £700 can be taken off £100. As a matter of fact, the difference allowed was very great, the duty on colonial might have been not unfairly represented as only from 7 to 10 per cent, of that on foreign. Jt seems quite safe to say that it is in the very nature of things for anything partaking of the character of a Government bounty to attract people. It is a gold mine, or thought to be such, and a gold mine, in proportion to its supposed richness, draws people from other occupations, and this withdrawal from, or lessened attention to, ordinary industries may lessen the reward of capital and labour more than the gold mine increases them. So, probably, it was with Canada and the British timber duty preference. Probably also, after all, the British shipping gained more than Canadian lumbermen : the shipowners warmly opposed the arrangement, and they were people who counted. Next in importance to sugar and timber probably corn is to be reckoned. What a labyrinth the British Corn Laws were ! But certainly here, if anywhere, centred the full strength of restrictionist policy. The landed proprietor of Great Britain was also the ruler of Great Britain. The landlord exacted all the rent he thought the fpainer could pay, and to sustain the ability to pay rent he used his political power to the utmost to prevent the farmers of other lands competing with his tenants. Nothing can be more mistaken than any belief that the Bi'itish Corn Law s were of advantage to the Colonies. They were distinctly intended to ])revent any importation of wheat and other grain. The difference in the rate " from British Possessions " was of a veiy illusory character. To-day the position of the Biitish wheat market is practically as well known in every wheat-producing country of the world as in Great Britain itself, thanks to the electric telegraph ; and steam tonnage can quickly and to great amount be moved to any part of the world from which it is desirable to bring supplies. Go back to the " thirties," the " forties," when there were no stean)ers and no telegraj»hs, and it will be easy to understand what a will-o'-the-wisp sort of thing this prefer- ence must have been to the colonial farmer, and no wonder will arise that figures such as the following were to be found in the British records : — Wheat Cleared for Consumption. Foreigi Wheat. Colonial Vi'heat. 1 Year. I Quantit}' : quarters. Averagt dv.ty. jQuautity : quarters. Average duty. s. (I. 1 .•!. d. 1831 1,102,451 4 4 109,347 2 1832 165,872 27 V 160,035 5 1833 1,005 33 11 59,985 5 1839 2,500,045 4 11 32 6 1840 2,011,773 7 2 4,703 4 1844 778,787 17 2 40,975 4 7 Preference that resulted in this sort of thing could only be looked on as a delusion and a snare. It is singular that Mr. Colmer, in the Statist COMMEBCE AND THE EMFIBE. 59 prize essay, should venture to quote the British Corn Laws as supporting his conviction that Great Britain gave a kindly consideration to the Colonies that to-day she will not give. Amongst other references he says, " Even in the famous Act of 1846 practical discrimination was made in favour of wheat imported from the Colonies," and he seems to think that the rates of the 1846 tariff lasted till 1849. As a matter of fact, exactly seven months afterwards, January 26, 1847,* the duty was suspended till September 1 ; the duties on other kinds of grain vrere also suspended, and in regard to most of them the suspension lasted till March 1, 1848. The duties were several times suspended under pres- sure from a starving people, and several other times Acts were passed under which bounties were actually paid on exportation when, wheat being plentiful, the price fell below a certain point. It is also true that certain discriminations appeared in the " forties " on the tariff in regard to butter aud cheese. But these were entirely a dead letter, for science had not at that time made it possible to transmit these articles for many thousands of miles without damage. The interests of wealthy British shareholders, who were largely great landowners and members of tlie House of Lords, in the Hudson's Bay Company, and in the East India Company, led to preferences being granted to commodities in which they were concerned. These reduc- tions of duty of course stimulated trade, and so far they benefited the exporting communities, but great care was taken all the time that the preference should not be granted where an article was improved by any manufacturing process — to the danger of the British manufacturer ; he had to be " protected " all the time. Thus, skins and hides : there was one set of duties for the undressed and another set for the dressed, about one-half in either case being taken off on imports " from British Possessions," but the rate that had to be paid on the dressed was gener- ally several times that on the undressed — so that every care was taken to prevent the tanning industry growing in the Colonies. There is also one other branch of the British tariff to which reference need now be made ; that is meat— dead and alive. From 1823 to 1842 the importation was absolutely prohibited of the following : cattle, pigs, mutton, sheep, beef, poi'k. None of these might be imported from any- where during the twenty years named ; but the prohibition excepted heavily salted meat. With regard to these salted meats the duty was the same wherever produced. The prohibition was removed in 1843, and various duties were imposed, of v.hich one-half or more was remitted on imports from the Colonies. In 1846 all the items were placed on the free list. The remark made about butter and cheese applies equally here, viz. : — it mattered nothing to the Colonies whether these goods were prohibited absolutely, and it mattered nothing if they were on the tariff at com- paratively nominal rates of duty, because science had not yet found means for the safe conveyance either of live animals or fresh meat over thousands of miles of ocean. Having made a careful survey of the field of commerce in the days * "Customs Taiifi's of the United Kingdom," 1897. 60 COMMERCE AND TEE EMPIRE. when the restrictionist policy ruled the British tariff, it is clear that not one jot or tittle of that policy was ever given up for the sake of any colony. It is also true that, taken as a whole, the reductions that were made in various duties on goods from British Possessions were made rather for tlie advantage of British investors and British shipping than with any honest desire to promote the well-being of these young off- shoots of the nation. In the year 1850 the North ATiierican Colonies had a total population of about two-and-a-half millions, Australia and New Zealand about half a million, and South Africa about four-tenths of a million. The financial position generally was a cramped one, and development generally of a primitive kind. Soon after the a 1 vent of the free-trade era came the gold discoveries, railways, steamships, telegraphs, of which developments any one alone would have tended to awaken enterprise, but which, coming together, or within a few short years, altered the conditions of life, the extent and the possibilities of commerce, in a way truly marvellous. In every country, whatever its fiscal policy, there was a quickening of commercial movements, a growth in wealth, and an improvement in social conditions. So far as the British Empire, or sections of it, are concerned, it is easy to claim for the change in policy results which S])ring from discovery and invention. But on the other hand, how easy it is to ignore the great truth that it was the free-trade era that gave to discovery and invention their opportunity ! It will be well to trace the growth of self-governing Colonies during recent years, with a view to see whether or no there is not overwhelm- ing proof that the changed fiscal policy of Great Britain has been the main factor in the advances v/hich have been made. First of all the records and position of New Zealand claim attention, as the geographical isolation of that country gives unusual value to her statistics, thej^ are so completely self-contained. The pastoral industry was the first important one. Early in the " sixties " gold was found ; after ten yeai-s the yield exceeded an average of two million pounds sterling. New Zealand early proved a great centre of attrac- tion for the British investor, the total of the investments made being very considerable. That Colony led all Australasia in the matter of public borrowings, and altogether what with production united with a rapid inflow of capital the New Zealanders for a number of years had a very fine time. For their produce the open market of Great Britain offered money, and for their speculations the capitalists of Great Britain offered money. But the very extent of the wealth that seemed everywhere sowed the seeds of disaster, and early in the " eighties " a bad time began ; the British investor wished rather to recall money than to invest more, property fell in value, capital shrank in volume, and employment became difficult to obtain even at low wages. Twenty years have passed since then and another change has taken place. New Zealaiid is this year, and has been for several years, enjoying considerable prosperity. What has occuiTed in this COMMERCE AND TUE EMFIBE. Gl interval to bring it about? In this interval New Zealand im- posed a severe restrictionist tariff, and to many people that is the all-sufficient answer to tlie question. The truth lies in a very different direction, as can be made very clear. That there may be no doubt on the subject the matter will be dealt with at some length. The prosperity of New Zealand as it exists to-day has been most unmistak- ably made possible by, and has resulted from, the open markets — the free-trade policy — of Great Britain. Fii'st of all the complete import and export returns may be looked at:— XEW ZEALAND. IjIPOFwTS .4XD EXFOETS. Excess Exce33 Imports. Exports. Import3. Exports Mill. £. Mill. £. Mill. £. Mill. £. 1881 7o 61 1-4 — 1882 8-6 6-7 19 — 1883 7-9 71 ■8 — 18S4 7-6 71 — 1885 7-5 68 "7 — 1886 67 6-6 •1 — 1887 6-2 6-8 — •6 1888 5-9 7'7 — 1-8 1889 6-3 93 — 3 1890 6-3 9-8 — 3o 1891 C-5 9-6 — 31 1892 6-9 9-5 — 2-6 1883 C-9 90 — 21 1894 6-8 9 2 — 2-4 1895 6-4 8-6 — 22 1896 71 93 — 2 2 1897 81 100 — 1-9 1898 8-2 lOo — 2-3 1899 8-7 11-9 — . 3 2 1900 10-6 i3r> — '.'. 3U 1901 11-8 12-9 — 11 The financial and commercial history of Nev/ Zealand since 1881 may be read in these figures. When the " eighties " arrived the inflow of capital still continued fairly heavy, for it covered not only the actual excess of imports over exports, but that excess plus the interest on prior importa- tions of capital. This interest undoubtedly exceeded two millions, but taking it at that sum the new capital obtained in 1881 and 1882 was well on to four millions each year. The tide, however, had turned, and before the " nineties" arrived New Zealand was exporting three millions in ex- cess of her imports, which meant, practically, that she was paying for her imports by her exports and not only that but was also exporting enough to pay her interest. During these years much private capital was withdrawn, but the Government borrowed sufficient to counterbalance this withdrawal. The pluck with which the New Zealanders met the hard times can be seen easily by the export returns, for they show that 62 COMMEBCE A2^D TILE EMFILiE. within ten years they increased their production and exports hy r;0 per cent., and within twenty years by more than 100 per cent. As the "nineties" went on and the new century approached, the production and export had got Large enough for New Zealand to indulge in bigger imports, and then everyone found that New Zealand was a good land, and financially safe and sound. It is worth while pointing out that the experience of New Zealand in the matter of enlarged imports is also the experience of the whole of the Australian States. Any considerable enlargement in the volume of imports, whether arising from an accession of capital or from increased sales of produce, or from both causes combined, has invariably been the accompaniment of increased prosperity. And further, and more noticeable still, a great increase in the imports, which are !i ainly manu- factured goods, has always been accompanied by an enlarged demand for local manufactures and a considerable increase in the number of hands locally employed in manufactories. Every one wiil readily admit that it is idle to produce or to export goods for which no market can be found. New Zealand, in her time of distress, found the great market of the United Kingdom wide open for all the produce she could send, and she had enterprise enough to enter courageously on new lines of industry for the supply of that market. Look at the record of trade in the expoi-t of frozen fresh meat : — Exports of Frozen Meat. i'ear. Quantity. Value. Million lb. £ 1881 — — 1882 1-7 19,339 1883 9-9 118,328 1884 28-4 345,090 1885 33-2 373,857 1886 38-8 4-27,193 1887 450 455,870 1888 61-9 628,800 1889 736 783,374 1890 100-9 1,087,617 1891 110-2 1,194,724 1892 97-6 1,033,377 1893 100-3 1,085,167 1894 114-8 1,194,545 1895 1270 1,262,711 1896 123-G 1,251,993 1897 157-7 1,566,286 1898 173-8 1,698,750 1899 209-0 2,088,856 1900 206-6 2,123,881 901 208-0 2,253,262 Why was all this meat shipped, and, being shipped, how came it to be worlh all this money 1 Clearly the New Zealand resti'ictive tariff had nothing to do with it. The closed ports of various foreign countries do not explain it, but the open ports of the United Kingdom account for it. Then look at this further table : COMMERCE AND THE EMPIliE. Exports, Butter, Cheese, etc. 63 Year. Butter. Cheese. Provisions, talJo\7, timber, etc. 1881 8,496 1882 52,088 1883 42,020 1884 66,593 1885 102,387 1886 105,537 1887 54,921 188S 118,252 1889 146,840 1890 122,701 1891 150,258 1892 227,162 1893 254,645 1894 251,280 1895 227,601 1896 281,716 1897 402,605 1898 403,690 1899 571,799 1900 740,620 1901 882,406 6,112 10,1.30 6,892 25,074 35,742 45,657 54,562 78,918 67,105 84,986 86,675 91,042 99,626 115,203 ] 50,909 130,166 150,517 135,776 141,818 229,111 238,685 574,880 921,290 1,121,257 1,116,799 1,154,819 1,058,552 1,085,468 1,274,780 1,606,828 1,440,731 1,436,671 1,200,525 1,113,799 1,112,233 1,269,031 1,269,680 1,889,398 1,562,831 1,645,313 1,784,350 1,935,567 The "New Zealand Year Book," 1003, savs : " Of the butter exported in 1901, £740,980 were shipped to the United Kingdom ; of the cheese exported, £1G8,159 were sent to the United Kingdom." Nearly the whole of the balance went to Australia, which was suffering from drought. In ordinary years the United Kingdom took larger propor- tions still of these exports. Here, again, the power of the great open market of the United Kingdom made itself felt. In the matter of wool New Zealand, and the Australian States as well, have been singularly happy, for having succeeded in producing more than the United Kingdom could consume, they ha^e been able to continue increasing production, because in this important commodity Germany and France are free trade. During the period, however, which is being specially reviewed wool did comparatively little for New Zealand. In 1880 the exports of wool were valued at £3,169,300 (they had been worth £3,658,938 in 1877) and in 1901 the total was only £3,699,103 ; though in the " nineties" the value had often been much more. Had there been some millions of pounds sterling increase in the wool exports it might have been said that it was due rather to Germany and Fi-ance than Great Britain that New Zealand had so improved her position. This cannot now be said, for it is clearly in frozen meat, butter cheese, of which the United Kingdom has practically absorbed the whole export, that New Zealand has made such rapid headway. The extra millions which have given solidity to New Zealand prosperity have been paid by the United Kingdom for these special commodities. But the New Zealand tariff must not be overlooked ; if it did any- thing to pull New Zealand out of the Slough of Despond it ought to be 64 COMMERCE AND THE E MP J HE. acknowledged. In this connection it is amusing and instructive to note that in 1899 the allaiisof New Zealand having been adversely criticised in London, the Ageut-General of the Colony wrote on the subject to the Times, giving a statistical view of tlie position in 1897 as compared with 1887 ; in this table he omitted all references to the protected manufacturing industries, from which it may be inferred how much (or how little) he felt had been gained in tliat direction. " The Statistical View," supplied by the Agent-General, referred to the im})orts and exports : the wool, the frozen meat, the tallow, the butter and the cheese industries ; gave details of the output of coal, the gold won ; the number and acreage of holdings, the number of sheep, cattle and horses. But not a word about the manufacturing, the protected industi'ies which had given birth to so much eloquence, which had been, as usual, heralded as the sure and certain cure for all industrial and financial troubles. The " New Zealand Year Book " gives the following figures : — ^Iaxufactokies a>-d Works. — Hands Employed. 1886. 1891. 1893. 1901. Male . . . . Female 19,601 2,494 . . 22,664 . 2,96;) . 22,983 . 4,403 . . 35,433 6,288 22,095 . . 25,633 . . 27,339 . 2,453 . . 41,726 Establishments 1,943 . 2,254 . , 3,163 These figures include the meat freezing, preserving, and boiling- down works, 2,232 hands ; tanning, fellmongering, and wool-scouring establishments, 1,963 hands; flax mills, 1,698 hands; butter and cheese factories, 1,188 hands; gasworks, 572 hands; brickyards, etc., 838 hands; breweries, 682 hands; printing establishments, 3,13-4 hands; sawmills, etc., 6,812 hands. These various industries in 1901 accounted for one-half of the total male labour employed, and they were practically all outside the possibility of taritt" influence. Still there was an important increase in employment in industries to which the tariff' certainly did give considerable stimulus. But it will be observed that the increase was mainly in the last five years — the very Ave years in which the most noteworthy advance in the imports took place. The industries protected in the " eighties " scarcely began to move until the closing years of the "nineties." Why was this i Simply because it was not till then that the natural industries of New Zealand had expanded suflicienlly to give increased business to the protected indus- tries. The lesson is that it is always the natural industries — those that cannot be protected by a tariff" — on which the protected intlustries have, after all, to rely for prosperity. The point is important and interesting ; it is worth making still clearer. Here are the imports into New Zealand for the last five years in special articles enjoying great " protection " : — COMMERCE AND THE EMPIBE. 65 Imports FOR Five "i .'ears. 1897. 1898. 1899. 1900. 1901. £. £. £. £. £. Apparel and slops Boots and shoes . . Hats and caps Woollens . . 362,389 . . 132,203 . . 63,310 . . 293,449 354,940 130,912 06,416 286,911 393,689 151,593 68,184 297,387 451,879 194,811 66,799 330,713 463,194 211,215 70,013 348,666 Machinery 368,416 422,011 405,551 536,429 600,019 The question seems almost to arise whether the "protected" indus- tries of New Zealand were not themselves more stimulated by the indirect action of the open market of the United Kingdom than they were by the direct action of the New Zealand tariflf? At any rate, it may confidently be submitted that a careful study of the progress and the struggles of New Zealand makes it certain, beyond doubt, that the fiscal policy of the United Kingdom has been an important factor in promoting her expansion and prosperity. Iv cannot be said to have been the controlling factor ; that has been the industry, the enterprise, and the endurance of the New Zealanders themselves. Nor can it be said that because the fiscal policy of the United Kingdom lias enabled New Zealand to transact a very profitable business, that, therefore, New Zealand owes the Motherland a debt of gratitude. No such thing. The benefit has been mutual. New Zealanders have the gratification of knowing that the trade which has been a blessing to themselves has also been a blessing to their brothers on the other side of the world. Canada. How has the Dominion progressed since its federation, and what has been the influence on that progress of the free-trade policy of the United Kingdom 1 Canada in the year 1 850 had about two ar)d a-half millions of population against half a million in Australia and New Zealand combined — that is, five to one. At the census of 1901 the former had increased by rather less than three millions, whilst the latter had increased by four millions. To be exact, the Dominion had reached 5,371,051 ; Australia and New Zealand combined had reached 4,555,803. The Dominion had a little more than doubled ; Australasia had increased ninefold. As British policy was the same in regard to all her Colonies, Free Trade in the United Kingdom was not responsible for the slower growth of population in Canada. Then, the United States more than trebled their population whilst Canada was doubling hers But as, since 1847, the Canadians have had the power to fix their own tariff, and have fixed it much on the same lines, from time to time, as the United States fixed theirs, they have had all the expansion that could be expected to flow from restriction, and consequently the slow growth cannot be laid at the door of free trade in Canada. When the Canadian census of 1871 was taken the federation had but recently been completed ; the decennial returns since then are worthy of a passing note : — • F 66 COMMEBCE AND THE EMPIBE. Population, Canada. Census. Number. Increase in number. Increase per cent. 1871 3,485,761 — — 1881 4,324,810 839,049 24 1891 4,833,239 508,429 12^ 1901 5,371,051 537,812 11 The 24 per cent, covered the time before the restrictive tariff came into existence ; the 1 2 and the 1 1 per cent, cover twenty years after- wards. It will have to be admitted that the restrictive tariff did not increase population. The milder climate of the United States, and the greater develop- ment already attained there, gave that country superior attractions in the eyes of emigrants. Whilst as regards Australia, the attraction of gold far more than outweighed the serious drawback of the longer and more costly voyage. It is mainly these causes that explain why the population of Canada did not gi"ow, relative^, faster than it did. It may be said that if the United Kingdom had given Canadian produce a preference, as against foreign, that then Canada could and would have made more headway. But the sufficient reply is that any system of unequal treatment of commerce would have prevented the British expansion which has taken place, and that the United Kingdom to-day would have been a much smaller buyer than she is of the world's pi'oductions. And at present the outlook for Canada is bright in the extreme. The United States cannot now offer the advantages to the immigrant it did, for its best lands are all occupied. The continued growth of population in the United States, in the United Kingdom, and in Europe, indicates an increasiug demand for the very productions which Canada can best produce. For the Canada of to-day it is reasonable to assume that the position and the prospects of the com- merce of the world, and of the United Kingdom, are infinitely superior to what they would have been had the British policy of to-day been what it was in the days before freedom of trade was adopted. Canada, however, has made progress of a very substantial kind. Her growth has been steady and solid ; and this growth can largely be traced to the influence of British fiscal policy and British capital. The commerce of Canada for the three first years of the federation was : — Imports. Exports. Excess of Excess of Imports. Exports. IMill. £. Jlill. £. Mill. £. aiill. £. 1868 .. 160 .. 11-8 .. 4-2 .. — 1869 .. 15-4 .. 130 .. 2-4 .. — 1870 .. 17-3 .. 158 .. 15 .. — The figures show that capital was being imported, and the public revenue was increasing yearly about a quarter of a million sterling. It may be taken as certain that British investments in 1870 are under- estimated at 50 millions, and this sum may therefore be safely accepted as erring on the right side. The annual interest payable may be COMMERCE AND THE EMPIRE. 67 reckoned at two millions. Now take the commerce for the next five years : — Imports. Exports. Excess of Imports. Excess of Exports. Mill. £. Mill. £. Mill. £. Mill. £. 1871 20-5 15-7 4-8 1872 23-2 17-2 60 1873 26-7 18-7 80 — 1874 26-7 18-6 81 — 1875 25-6 16-2 9-4 — Total excess of imports . . 36 3 Interest retained, 5 vears at 2 millioiis . ." . . . . 100 Total accession of capital 46-3 These five years were famous in British finance ; any country — good, bad, or indifferent — had only to ask for a loan to get it, and, therefore, it is not to be wondered at that a country like Canada— substantial, and withal British — obtained more than 40 millions sterling. Appa- rently it was a good time in the Dominion : the public revenue advanced rapidly, though only 3-3 millions in 1870, the five years under review showed 4-0, 4-3, 4 3, 5 0, 5-1 millions. Of course the great addition to public and private debts meant a material addition to the yearly burden of interest. Bringing the principal from 50 to 96 millions, the yearly interest burden may be reckoned as foui millions. The five years 1876-1880 now clami attention ; — Imports. Exports. Excess of Imports. Excess of Exports. Mill. £. Mill. £. Mill. £. Mill. £. 1876 19-4 16-9 2-5 1877 20-7 15-8 4-9 1878 19-4 16-5 2-9 1879 171 14-9 2-2 1880 18-0 18-3 — 0-3 Total excess of imports . . 12'2 Interest retained, 5 years at 4 millions 20-0 Total accession of capital 32-2 When these five years began, the wild lending mania in Great Britain had ended. The British investor had burnt his fingers very badly ; he had to mourn his foolish willingness to lend money to third-rate foreign countries. He declared that in the future he Avould prefer lending to British communities, but he had so crippled himself that he had now but little to lend even to them. At the end of the " seventies" came 68 COMMEBCE AND THE EMPIRE. the financial crisis resulting from the failure of the City of Glasgow Bank, and this had a marked efiect in reducing the volume of invest- ments in 1880 in all directions. The fall in the excess of imports from 36-3 millions in the preceding five years to 12*2 millions was veiy severe, and was naturally accom- panied by a fall in the public revenue. Spite of the larger popula- tion the revenue year by year was only 4'7, 4"6, A'T, 4"7, 4-9 millions : roughly ten per cent, greater population and ten per cent, smaller revenue. Although the excess of imports only reached 12 2 millions, yet the accession of capital totalled 32"2 millions because the amount lent covered the interest as well a.s the excess of import'*. The year 1880 is reckoned as ending with an indebtedness of 128 millions and an interest chai-ge of 5 millions. In these last live years the imports into Canada had fallen oflf by an aggregate of no less than 28 millions or nearly one-fourth. It is singular that this period should have been chosen in which to seek by legislation the general restriction of imports. Canada had had big imports and a good time, followed by small imports and a bad time : and forthwith Canada determined to prevent big imports in the future. The logic at the back of this seems rather shaky. The experience of Canada is the same as that of Australia and of New Zealand ; pros- perity has accompanied a full volume of imports, and depression has generally prevailed after any marked shrinkage. So much for 1876-80. Now for 1881-85 :— Imports. Exports. Excess of Imports. Excess o Exports. Mill. £. Mill. £. Mill. £. Mill. £. 1881 21-9 20-5 1-4 — 1382 24-9 21-3 3-6 — 1883 27-6 20-4 7-2 — 1884 24-2 190 5-2 — 1885 22-7 18-6 41 — Total excess of imports .. 21.5 Amount of interest retained, 5 years at 5 millions . . . . 25 "O Total accession of capital . 46-5 These figures bring out, and illustrate a peculiar position. The years in question are those following immediately on the introduction of the restrictive tariff. Ye\ spite of that taritf, the imports for the five years total 26-7 millions more than in the preceding five years. Why is this 1 Simply because Canada largely increased her borrowings, and at the same time continued her exports. In the fight " import duties versus capital" it is always safe to back capital. The restriction-loving Colonies have not been able to resist the tem})tation offered by the open markets of Britain, forgetting that the more they poured their products into Great Britain the more they compelled themselves to take British, or other goods. Nor yet have they been able to with- COMMEItCE AND THE EMFlItE. 89 stand the temptations of tlie Briti.sh money market, forgetting that when they borrowed money they had to accept goods. It is amusing to watch a parliament passing laws to restrict importations, and then deliberately entering into financial arrangements — obtaining loans — that compel the admission of increased imports. During the years, 1881-85, Canada would have had to export five millions sterling yearly in excess of her imports for interest, if she had not obtained more capital — she did this not only to the amount of the interest but four millions annually in excess. At the close of 1885 the aggregate indebtedness may be placed at 175 millions — and the yearly burden of interest — taking now a lower rate — at 6 millions. For 1886-90 the figures are :— Imports. Exports. Excess of Imports. Excess of Exports. Mill. £. Mill. £. Mill. £. Mill. £. 1886 21-5 17-5 40 — 1887 23-2 18-4 4-8 — 1888 22-8 18-5 4-3 — 1889 23-7 18-3 5-4 — 1890 250 19-9 51 Total excess of imports . . 23 6 Amount of interest retained, 5 years at 6 millions 300 Total accession of capital. 53 G This period presents the same charactei'istics as the preceding one. The total indebtedness in 1890 may be placed at 229 millions, and the yearly interest at eight millions. Now for 1891-95 : — Imports. Exports. Excess of Imports. Excess of Exports. MiU. £. Mill. £. Mill. £. Mill. £. 1891 24-7 20-2 4-5 — 1802 26-2 23-4 2-8 — 1893 26-5 24-4 21 — 1894 25 4 241 1-3 — 1895 22-8 23-4 — 6 Total excess of imports . . lO'l Amount of interest retained, 5 years at 8 millions 400 Total accession of capital. 601 The figures of 1891-95 fairly reflect the British financial position. Capital was relatively scarcer, and it was difficult to obtain loans. This position in Britain affected Canada, and the public revenue which, in 1890, had been 8-2 millions fell to 7-9, 7 6, 7 5, and then to 7 millions sterling. It was again made quite clear that the restrictive 70 COMMEIWE AND THE EMI'IIiE. tariff of the Dominion had no power to remove depression. The protected industries can smile and be happy when there is surrounding prosperity on which they can feed, but when the surrounding atmo- sphere is one of depression they are sad, limp, and helpless. The charitable institutions of a country never yet stemmed the tide of misfortune. New capital to the extent of 50 millions, of which 40 are retained to cover interest on preceding supplies of capital, has a very ditlerent effect to what it would have if the whole sum were available for importation. The total indebtedness at the end of 1895 is now brought to 279 millions, in which an interest burden of ton millions annually can be reckoned. "We years : — come now to 1 SOS- 1900— five remarkable and interest Imports. Exports. Excess of Imports. Excess of Exports. Mill. £. Mill. £. Mill. £. Mill. £. 1896 24-2 24-9 0-7 1897 24-5 28-3 — 3-8 1893 28-8 33-7 — 4-9 1899 33-4 32-7 0-7 — 1900 39 39-4 — 0-4 Excess of exports . . Amount of interest, 5 years at 10 millions 300 91 Total accession of capital . . 409 Here, indeed, are changes of a most healthy and pleasing kind. The most important is the great expansion of exports. It is not often that any country has ever been able to show expansion like this. The improvement has continued since 1900, as the figures for 1901-2 show : Imports. Mill. £. Exports. Mill. £. Excess of Imports. Mill. £. Excess of Exports. Mill. £ 1901 1902 391 43G 40-4 43 "5 ! 01 1-3 Will it be wrong to read the lesson of the last five years as follows I — The first half of the " nineties " was a time of depression. Canada had to do something ; she found — perhaps without confessing it — that the tariff had no lifting power. What was to be done? Canada quickly and spontaneously found the answer. It was to make the best use of the blessings with which Nature had endowed her ; the bles.sings which lay to her hands. Canada and natural industries did what Canada and a restrictive tariff had not done and could not do. It was also better to use the Avorld than to fight it. Canada waited on Nature, reaped her bounties, and sold them to the outside world. The advance in production and export is startling. The 24 millions of exports in the early " nineties " advances by rapid steps, until, in 1902, COMMEECE AND THE EMPIBE. 71 <;he high figure of 43-5 millions is reached. Soon the import trade — vhich is but the harvest, the result of the export trade — feels the quickening, and a rush of imports come ; the 25 millions of the early " nineties " become 43 millions in 1902. There are times when a restric- tive tariff is very much like Daine Partington. That good lady with her broom could manage a mud puddle, but the Atlantic was too much for her. So, when a wave of imports — caused by big sales of produce, or of bonds — comes along, Dame Partington and her tariff broom look rather foolish. Of course the comparison does not hold good all round, for the Canadians were not allowed to handle the enlarged imports, which they had bought with their enlarged exports, till they had paid the Customs an extra ten million pounds ; of course these millions went into the public Treasury and were spent, perhaps wisely, perhaps not so, in the public interest. But how many millions, in the rush of the good times, those charitable institutions, the protected industries, managed to divert into their own pockets cannot be said. Suppose these big exports be followed up, what became of them, especially those in which the great expansion took place 1 liook at a few items. 1901-2: 1.— Cheese. Total Exports, $19,686,291 :— ; Shipped to the United Kingdom $19,620,239 Shipped to the Rest of the World . . . . $66,052 2.---Butter. Total Exports, $5,660,541 :— Shipped to the United Kingdom $5,459,300 Shipped to the Rest of the World . . . . $201,241 3.— Eggs. Total Exports, $1,733,742:— Shipped to the United Kingdom $1,691,524 ' Shipped to the Rest of the World . . . . $42,218 ; 4.— Bacon. Total Exports, $12,162,953 :— Shipped to the United Kingdom $12,119,342 Shipped to the Rest of the World .. .. $43,611 5.— Cattle. Total Exports, $10,663,819 :— Shipped to the United Kingdom $9,742,738 Shipped to the Rest of the Wodd . . . . $921,081 It is in these directions especially that the great growth of Canadiau export trade is proceeding. Taking the aggregate of these five items they show : To the United Kingdom $48,632,643; or 97-45 per cent. ; to the Rest of the World, $1,274,213, or 2-55 per cent. This result seems a crushing, certainly a sufficient, answer to those critics, previously quoted, who say that the Colonies have received no special encourage- ment from the parent country since the free trade era began. Even the figures given do not quite render full justice to British policy, for one-fifth of the shipments to the Rest of the World are to British Colonies — Crown Colonies and others. 72 COMMETtCa AND THE EMPIBE. In the expansion of the Canadian wheat tiade the United Kingdom is again well to the front, taking of wheat and flour S-0, 3 14,3 13, against $2,342,629 to the Eest of the World. Another division of this export shows as follows: The British Empire $21,922,378, the Rest of the World, $734,564. The total exports — year 1901-2 — of Canadian produce were disposed of as follows : — To the United Kingdom §109,347,345 To other parts of British Empire .. .. 811,566,664 Total British Empire 120,914,009 To the United States 66,567,784 To all other countries 8,537,970 Grand Total $196,019,763 To fully understand the potent influence of British purchases it is worth while examining the list of the exports to the United States, which stand here at a little over one-third of the total. Here are some of the items. Gold quartz, dust, etc., $19,660,485 ; silver ore, $2,055,428 ; metals : copper, lead, nickel, in ore pig, etc., $4,103,137 ; iron ore, $1,298,101 ; coal, $4,318,681 ; timber, $15,700,000. It will be observed that gold and silver in quartz, ore, etc., rather money than merchandise, constitute about 32 per cent, of the Canadian shipments to the States. The commoner metals bring this percentage to 40, whilst timber and coal raise it to 70 per cent. A dollar is a dollar whether it be obtained in exchange for metal, timber, butter, or cloth. There are some people in Australia, and they have relatives elsewhere, who ridicule raw materials, laugh at mere produce, and worship manu- factures. A chair leg, being a manufactured article, is, to these people, a more wonderful thing than a cargo of timber, and as for a yard of cloth, all the wool in the country is not worthy of being named the same day. 27i.ese people, however, are not writing this book, and a dollar is a dollar whatever the commodity given in exchange. The United States market is most certainly very valuable to Canada in connection Avith certain industries, but it is needful to bear in mind that it is of very little value in connection with the great producing industries of Canada, those which provide the great bulk of her exports. The details which have been given prove to demonstration that it is the United Kingdom, and not any other country or group of countries, or all the Rest of the World combined, on which Canada has to rely to turn her main productions into wealth. It will be understood that the figures which have been given regarding the capital lent to, or invested in, Canada are crude estimates which local investigation may vary. As 200 million pounds have been in- vested in Canadian railways alone, the estimate given is perhaps under the real total, even after allowing for the considerable sum which Canadians themselves have subscribed to their public works. Railways which in Australia and New Zealand have been constructed by the various COMMEBCE AND THE EMPIIiE. 78 govei'nments have in Canada generally been left to private enterprise, but as a rule it was the same British capitalist who was applied to for funds. When a Government borrows capital all the world knows about it, as to-day it knows how many millions Austi-alia — the various States — has borx'owed. Although the population of the Dominion is greater than that of Australia and New Zealand combined, and its expenditure on railways much the same, yet the public debt is only one-fourth of the total of that of the last named countries. According to the estimate here given the capital obtained by Canada is 370 millions, which is a long way below the acknowledged estimate for Australasia. It seems to be fairly supported by figures published by Mulhall ; by the Economist in 1887 ; and by others. It is not necessary to farther pursue this line of investigation. Those who are not satisfied by what has been shown with regard to New Zealand and Canada, that the British policy of the last half century has been of substantial assistance to the new British com- munities, would not be convinced by any history of the course of development in the other self-governing colonies. At the same time a brief reference to;Victoria may be allowed. That Colony, now a State, in 1866 decided to follow industrially the stand-alone policy. By some failure of mental machinery the Victorians came to the conclusion that they could stand alone all the better if they were propped up with borrowed money, and they borrowed with considerable vigour till early in the "nineties," when this prop being removed they had a bad tumble. The financial crash of 1893 was very severe. In a few years 127,212 people, the pick of the workers, left the State, the revenue fell about 25 per cent, from the highest point, and the manufacturing in- dustries, the special pets of Victorian policy, were grievously distressed ; all of which facts are fully set forth in the statistics. Something had to be done. The duties against the foreigner had been put up and up without improving the position, so now they were put down somewhat. The industries for which Victoria in her prosperity had done the most, did the least for Victoria in her depression. Victoria did not give up her Will-o'-the-wisp policy, but she ceased to rely on it ; entering with energy into the dairying industry, she gradually increased her production of butter, and the export, which had been £60,000 in 1890, grew until in 1899 it reached £1,404,000. 'J here are many public men in Victoria who believe that it was principally the butter export that brought Victoria out of her severe depression. Of course the butter had to go somewhere — yes, the United Kingdom took it and paid for it. It may after all be said : "Well, granting the truth of everything stated, is it not clear that if the United Kingdom had had preferential duties favouring the Colonies, that the Colonies would have reaped a still richer harvest *? " The answer to this must be an unmistakable negative. In the first place the question coolly assumes that the United Kingdom would have consumed the same quantity of Colonial produce if the prices had been higher than they have been during the free-trade period. Obviously, and in the light of experience, it is clear that the consumption of any commodity depends on the extent to which it comes within the ability of the people to buy it, and of course smaller 74 COMMEItCE AND THE EMPIBE. consuuiing power on the part of the XJmted Kingdom would have meant smaller outlets for colonial produce. "Granting the force of this reply, and it cannot be denied that con- sumption is checked by any increase of cost, still it is clear that if the United Kingdom's total consumption of a given commodity is repre- sented by the figure 100, of which the Colonies have been supplying 30 ; that while a duty by increasing the cost might reduce the whole to 80, yet by reason of a preference, the Colonies might be able to supply 40, then they would have a distinct advantage. The foreigner would lose 30, the colonial would gain 10." Yes, that apparently is the way in which the Colonies could be benefited. The action of the differential duty — prefei-ence in one direction, penalty in the other — in the first place is undoubtedly to lessen consumption. Put one penny per pound duty on all butter imported into the United Kingdom from foreign countries : the effect will be that the consumer will pay the penny on all butter — British, Colonial, and foreign. Having no more money than before he must save the penny in some way, buy less of something or other. For one thing less butter will be bought. The people will eat less, their welfare will be abridged. Do the Colonies desire a gain accom- panied by a loss — a greater loss — on the part of the British consumer ] If there be any lingering doubt as to the beneficial influence of British fiscal policy in Colonial development it will be dissipated at once by a study of the truly remarkable effect of that policy on the value of land in the United Kingdom. Land has fallen in value in Great Britain, and has risen in the British Colonies, the United States, and elsewhere. To-day the wheat and pastoral lands of the Mother Country practically sell for about the same price as similar lands in the Colonies 2yh(s the advantage represented by the expense of conveying the produce of the Colonies to the British market. The prosperous farmers and settlers in the new countries as they count up the wealth represented by the value of their land, must remember that to a considerable extent the very policy that was bringing them prosperity was lessening the prosperity of the British landowners. Even between 1885 and 1900 the annual value of British lands fell from 65 to 52-8 million £. It was estimated by Mulhall that in 1888 British lands were worth £136,000,000 less than in 1840, and of course in the interval very large sums had been spent in improvements, which value had also dis- appeared. Since 1888 the fall has become accentuated. Of course it is true that the policy which decreased British wealth in land, increased it to the same extent many times over in other directions. No one can fail to see that had the old policy of restriction continued in Great Britain the increase of population could not then have taken place. British land values would have kept up and still further advanced, but the great consuming market which encouraged Colonial food production would not have existed, and the British Empire would have been very different to-day from what it actually is. The key that opened British ports was destined to open Colonial lands. CHAPTER XL THE RELATIVE EXTENT OF BRITISH COMMERCE- TiiosE people who believe that British commerce is in a state of decay often also largely believe that " in the good old days " Great Britain had a greater hold on the world's commerce than she has to-day. In Mulhall's " Dictionary of Statistics " (page 128) a table is given showing the commerce of the various nations at twelve different periods, begin- ning with 1720 and ending with 1889. It is worth while comparing the figures for 1720, 1800, 1810, and 1889 :— The World's Commekce in 1720. Total. British Empire. Other Countries. ]VIill. £. Mill. £. Per cent. Mill. £. Per cent. 88 .. .. 24 .. 27-27 .. .. 64 . . 7273 The figures must be taken for what they are worth ; statistics were not very reliable, nor money values very certain in 1720. Probably, however, the element of uncertainty affected all the figures much alike. The World's Commeece in 1800. Total British Empire. Other Countries. . Mill. £. Mill. £. Per cent. Mill. £. Per cent. 302 ^. .. 79 .. 2616 .. .. 223 . . 7384 In the eighty years a three-fold increase is shown, the rate of increase being much the same for both British and foreign. Now, for the period before the first steps in Fi'ee Trade were taken : — The World's Commerce in 1840. Total British Empire. Other Coimtries. Mill. £. Mill. £. Per cent. Mill. £. Per cent. 673 .. .. 155 .. 2705 .. .. 418 .. 7295 If there were any period on which the believers in the past could base any argument it ought to be this one. It will be seen that the aggre- gate total had risen considerably, but that the British trade still showed about the same percentage which it had done in 1720. Now T« C02IMEBCE AND THE EMPIRE. for Mulhall's last date — after a long period of free trade, and phenomenal development in steam and electricity : — Total. arm. £. 3,327* Thb World's Commerce in 1889. British Empire. Other Countrias. IVKll. £. Per cent. l,iiS* .. 33-63 Jfiill. £. Per cent. 2,20S . . 66-37 These fjgure.-i A\ow that whilst the comrneroe of foreign countries increased to rather more than five times its volume in 1840, the com- merce of the British Empire increased to rather more than seven times its volume. Great as was the foreign increase, the British -was so much greater that the percentage of British commerce rose from 27*05 to 33-G3. These figures yield no solace to the believers in bygone days. The latest available returns which the presen'j w^riter has are those published by the Board of Trade in 1901, these contain, however, only the commerce of foreign countries up to 1899. Tabulating on the same basis as that used previously by Mulhall, the following results are shown : — The World's Commerce in 1899. Total. British Empire. Other Countries. Mill. £. Mill. £. Per cent. Mill. £. Per cent. 4,011 .. 1,297 . . 32-33 . . 2,714 . . 67-67 The growth of commerce continued — large in the British, larger still in the foreign. But the British proportion of the whole was far in excess of that existing prior to the free trade era. But there is another and very interesting view which may be taken of the world's commerce. It is obtained by dividing the whole of the commerce into two parts, first, that which is carried on by the British Empire with its Colonies and with foreign countries ; and, second, that which is carried on by foreign countries with foreign countries. Commerce of the World. Commerce of and Commerce, foreign with the British countries with Empire. foreign countries. ■'- Million £. MiUion £. United Kingdom. Imports Exports 485 330 815 British Colonies and Possessions Imports Exports 244 238 482r * Reduced by 50 millions on account of Australian inter -state trade. Colonial Conference figures, Australian inter-state trade deducted. COMMERCE AND THE EMPIBE. Commerce of the World {continued) — 77 Commerce of and Commerce, foreign with the British countries with Empire. foreign countries. Milliou £. Million £. Russia. Imports Exports It 14 28 55 52 107 Norway. Imports Exports 5 4 9 12 5 17 Sweden. Imports Exports 8 9 17 20 11 31 Dsnmark, Imports Exports 6 12 IS 21 8 29 Germany. Imports Exporte 55 .... 47 102 219 163 382 Holland. Imports Exports .... 27 .... 29 53 133 103 — 236 Balgium. Imports Exports .... 18 .... IS 34 72 62 134 France. Imports Exports .... 37 .... 51 83 144 113 259 Switzerland. Imports Exports .... 3 .... 8 11 4S 75 Portugal. Imports Exports .... 3 .... 2 8 5 5 13 Spain. Imports Exports .... 12 .... 12 24 30 23 53 Italy. Imports Exports .... 15 .... 7 45 50 95 78 COMMERCE AND THE EMPIRE. COMMEHCE OF THE WoRLD (lOnti)lUed) — Commerce of and Commei'ce, foreign Avith the Biitish countries with Empire. foreign countries. IMillion £. Million £. Austria-Himgary. Imports Exports .. .. 10 .. .. 8 18 57 67 124 Egypt. Imports Exports .. .. 5 .. .. 9 14 7 7 14 United States. Imports Exports .. .. 50 .. .. 138 188 116 128 — 244 Mexico. Imports Exports 2 2 -—4 8 12 — 20 Argentine. Imports Exports .. .. 9 .. .. 4 13 14 33 — 47 China. Imports Exports .. .. 29 .. .. 14 43 12 15 . . — 27 Japan. Imports Exports .. .. 9 .. .. 6 — 15 14 17 — 31 Sundry.* Imports Exports .. .. 9 .. .. 10 19 26 ' 22 ■ — 48 Totals 2,025 1,986 Grand Total 4,011 The commanding position occupied in the world by the commerce of the British Empire is seen when these figures are grasped. They indicate that if the British Empire were swept out of existence, everywhere sunk out of sight, at least one-half of the world's commerce would be swept away at the same time. This also means that the commerce of the whole of the foreign countries of the world between themselves is scarcely equal to that carried on by and with the British Empire. There really Includes Greece, Bulgaria, Roumania, Chili, and Uruguay, ? - COMMERCE AND THE EMPIBE. 79 seems more justification for the envy of the foreigner than for the tears which some Britons are shedding just now ; all the more because the returns for 1900, 1901, and 1902 are all of them more favourable still to the British. The veil of the future none can lift, but it is certainly to be expected that the present century will see a great expansion of commerce between foreign countries. Commerce is after all merely siipplementarj to home trade, and it is in the aggi^egate of the two, not in the extent of either alone, that prosperity is to be found. The talk of any one country monopolising the world's commerce is idle, ignorant talk. So long as any people anywhere are not so prosperous and happy as they might be with a greater exchange of commodities the expansion of commerce is not complete. What an expansion is implied in that, and what directions that expars'.on must take ! 80 CHAPTER XII. THE RELATIVE VALUE OF COLONIAL TRADE. Is it safe to assume, as some writers so often do, either, first that the "per head " purchases by the British self-governing colonies from the United Kingdom will, in the future, be as great as they have been in the past, or as they are at present ; and, second, speaking broadly, that the volume of the British colonial trade which the United Kingdom can secure is expanding and will expand more rapidly than the corre- sponding volume of foreign trade 1 In short, are the prospects of British trade with the Colonies so good as to warrant indiflerence as to the future of British trade with other countries 1 The answer to these questions must be in the negative. But the very raising of the question is regrettable, for it suggests the making of proposals for legislative interference ; for attempting to do by legislation that which is always better done by the self-interest of the people. There is, happily, not the least reason to doubt that a great and a growing future awaits the self-governing Colonies, but it is forgotten that in the ordinary course of events, and quite apart from any restrictive legislation, a young country after a certain period manufac- tures more, actually and relatively, than in the early years. The volume of external trade may increase, whilst the " per head " amount is decreasing. It is forgotten also that a large proportion of the colonial imports of the past and of the present repi'esent moneys lent : a tem- porary movement. The tendency to accept as permanent a condition which is, or may be, only temporary, is too common with regard to the imports of the Colonies. The stimulation of loan money is an important, but at the same time only temporary condition. Especially in new countries which are opened up under the influence of gold discoveries is this temporary condition very marked. Look at the imports of some of the Australian States on the " per head " basis, taken from Australian statistics and including'inter-state business : — State of Victoria. — Imports per Inhabitant. Year. £ Year. £ 1850 10 1870 17 1852 24 1875 21 185.3 71 1880 17 1854 56 1885 19 1855 33 1889 22 1860 28 1890 20 1865 21 1895 11 1867 18 1900 15 COMMERCE AND THE EMVIKE. SI Ic was in the early " fifties," as the figures clearly indicitte, that Victoria came to the front with a rush. Goods of every description had to be imported ; food and manufactures. It was not long before the food was locally produced, and gradually the commoner and more bulky kind of manufactures were also locally made. Towards the end of the " eighties "' a great riood of capital carried the imports up to £22 per head, from which they dropped in six years to exactly one-half, when the reaction from the financial fever was complete. Western Australia is the last State to develop the gold-mini;.'^ industry; — State os Western Austealia. — Impoets pee Ijthabitant. Year. £ Year. £ 1880 12 1895 37 1885 lU 1896 47 1890 19 1900 33 1834 26 — It was in the " nineties " that Vv'tstern Australia " boomed." Gold discoveries and an inrush of merchandise. It was in the early " sixties " that New Zealand went aliead : — Xew Zealand. — Impoets pee Ixhabit.nt. Year. £ Year. £ 1858 20 1880 13 1861 25 1SS5 13 1862 37 1890 10 1863 43 1895 9 1870 18 1900 14 1875 21 — The increase and decrease '-'per head " is clear enough in the fore- going figures, but the best view of these movements is probably to be obtained from an examination of the returns laid before the Conference o£ Colonial Premiers in London in 1902. Commonwealth of Austualia.— ExpoBrs tiij[;reto of British and Irish Produce ; also Debts incurred by Austraua in o-year Periods. Period. 1856-18G0 1868-1870 1876-1880 1881-1885 1886-1890 1891-1895 1896-1900 Exports. Aggregate Amount. £50,550,298 49,854,376 72,423,728 100,097,254 97,349,417 76,839,932 91,767,855 New Debta. £ 8,088,941 12,027,105 22,425,599 48,990,247 35,169,904 27,375,737 23,569,720 The growth in the volume of the exports, it will be observed, is c in.siderable but very fiuctuating, and tlie fluctuations largely corre- spond with the greater or smaller amount of new debts incurred. But Q 82 COMMERCE AND THE EMPIIiE. now test these export returns on the population basis (wliicli was not done for the Conference), and note the result : — Exports to Australia op United Kingdom Produce. Population of Australia. -Per Head of Period. 1856-1860 1866-1870 1876-1880 1881-1885 1886-1890 1891-1895 1896-1900 Aggregate 5 years. . . £50 . . 33 . . 35 . . 41 . . 33 . . . . 23 . . Average 1 year. £10 6i 7' 8 6.V U 5 To understand the full force of these firv.res it is needful to I'emeniber that they begin after the close of the remarkable years of the early "fifties," when the unprecedented rush to Victoria took place. To make it still more clear how, especially in certain lines, local manufacture gradually and naturally supersedes the imported goods, the following table is well worthy of study * : — Exports of British and Irish Apparel and Haberdashery. — In S-yeab Periods. Period. 1856-1860 1866-1870 1876-1880 1881-1885 1886-1890 1891-1895 1896-1900 New South Wales. £2,729,264 2,688,078 4,188,872 5,033,711 4,454,846 3,954,794 3,943,878 Victoria. £4,711,898 4,138,848 3,249,003 2,948,243 2,835,623 1,882,106 1,612,790 All Australia. £8,803,059 8,647,465 9,963,301 11,313,667 10,352,550 8,848,604 8,634,970 In New South Wales, with a free-trade tariff, whilst the popu- lation increased fourfold these imports only increased one-half ; in Victoria, with a restrictive tariff, whilst the population more than doubled, these imports fell to one-third. In Australia (all the six States together), with nearly a fourfold increase of population, the imports fell off. Like the preceding table of exports, this one will make its lesson clearer on the " per head " basis, the calculation of which shows as follows : — Exports to Australia of British and Irish Apparel and Habbedashbrt per Inhabitant — Average of One Year. New South Wales. Victoria. All Australia 1856-1860 £8-4 £9-7 £8-7 1866-1870 5-9 6-2 6-7 1876-1880 6-3 40 4-8 1881-1885 6-0 3-2 4-6 1886-1890- 4-3 2-7 3-5 1891-1895 3-3 re 2-6 1896-1900 30 1-4 2-4 * These figures are also taken from the Conference Report. COMMEBCE Am) THE EMPlliE. 83 The returns for New ZeaLand, Canada, etc., indicate tlie same movement — that is, the gradual development of the simpler forms of manufacture. Tlie movement is, perhaps, more clearly seen in regard to apparel than in any other article ; the use of machinery is here at a minimum. But, slow or quick, the movement is one that is always proceeding in some direction or other. It is in those manufacturing industries where special skill, elaborate machinery, and abundant capital are needed that the self-governing Colonies make the least pro- gress ; thus, in the Southern Hemisphere the manufacture of cotton goods has not yet been even attempted. If, then, experience, history, as embodied in statistical returns, make it clear that the internal development of the Colonies has reduced and is reducing their " per head " requirements, it cannot be wise to consider to-day's requirements as a certain guide to the require- ments of to-morrow. During the past half-century there has been a more or less constant flow of British capital to the British Colonies, or, in other words, a more or less constant inflation of the exports fi'om the United Kingdom to the Colonies. In addition to this flow of capital, there have been repeated rushes of population — due mainly to gold discoveries — either in advance of, or prior to, local production, which enlarged temporarily the demand for certain classes of British goods. To ascertain what can reasonably be considered as the average future "per head" requirements of the Colonies, it is necessary to eliminate from the figures of to-day, first, the amount that represents loans rather than purchases, and, second, something for the amount which, for tho reasons stated, represents only temporary business. When these deductions have been made, and not till then, will the figures have been arrived at for a fair comparison of the value of Colonial trade with foreign. South Africa furnishes the latest illustration of a trade which is temporarily largely increased in volume by purchases of goods "which will ultimately be produced or manufactui'ed in the country. But it may be said, whilst there is much truth in these statements, yet the Colonies are growing so fast ; population is increasing so rapidly, that the aggregate of a smaller "per head " trade in the future will far exceed the aggregate of the lai'ger " per head " trade of to-day. So it may, so it probably will, in the course of time, yet it is not Avise to count chickens before they are hatched. It is time the Empire took some notice of the ultimate results of the widespread decline in the birth-rate that has marked late years in English-speaking countries. For this decline to take place in a country that has already attained a high total population is one thing, for it to take place in a huge country with a small population is quite another thing. Another factor has to be taken into consideration, and that is that there is a distinct falling off in the volume of emigration from the United Kingdom. It is a singular commentary on, and it shows the hollowness of, the agitation for a change in tariff policy, that the pei'centage of British people who now, year by year, seek new homes in other lands is much less than it was. The following figure are worth examination : — 84 COMMEECE AND THE EMPTBE. Population in 1S71 and 1901. Australia New Zealand Canada The Cape and Natal 1871. 1,668,377 2.')6,393 3,635,02-1 250,000* Total .. .. 5,809,794 United Kingdom 31,845,379 1901. 3,832,850 787,660 5,371,315 563,821* 10,555,646 41,607,552 Increase. 2,164,473 .'531,267 1,736,291 313,821 4,745,852 9,762,183 Of course, the percentage of increase is much greater in the Colonies than in the United Kingdom — viz. 82 against 31 ; still it is a fact worthy of note that, although multitudes left British shores and helped to build up other communities, including the Colonics, the home population in thirty years increased in the aggregate more than twice as much as the population of the whole of the self-governing Colonies. With regard specially to Australia, the table herewith is full of instruction, and will teach caution in regard to population estimates : — AUSTBALIAH COMMONWEALTH. — INCREASE OF POPULATION, BY DeCADES. Period. Net Natural Total Increa3e per cent Immigration. Increase. Increase. per annum. 1831-41 . . 110,320 . 8,116 . 118,436 11-25 1841-51 156,971 . 68,063 . 225,034 8-43 1851-61 . 551,561 168,660 720,221 10-92 1861-71 . 176,880 335,357 . 512,257 3-75 1871-81 195,245 391,987 . 587,232 313 1881-91 . 386,903 . . 537,083 . 923,983 3-50 1891-01 4,451 . . 588,585 . 593,036 1-72 1 1901-02 t 3,230 . 97,649 . . 100,879 1-52 This is a noteworthy table. It shows that during the past twelve years the increase of population has been very slow, and has been practically limited to that arising from the excess of the number of births over the number of deaths, and, as other tables would show more definitely, the birth rate is a declining one. Happily the position in both Canada and South Africa is very much better, and very material accessions of population are taking place. In Australia, too, with better seasons greater prosperity will not long be delayed, and a stream of population may again be expected. In brief it may be taken, that increasing internal production is ahvays tending to lessen the Colonial " per head " requirements of the commodities of other countries, and, further, that whilst the aggregate trade must grow, that growth may not be as rapid as expected, owing to the consequences of a lessened birth rate and a lessened desire to emigrate. It also needs to be remembered that if Australia and other parts of the Empire produce commodities which the United Kingdom * Approximate estimates, -whites only. -^ If yrara. Tbis table is published by Mr, Fen ton, the Victorian statist. COMMERCE AND TEE EMVIBE. 85 cannot buy, but which other countries can buy, it would follow that those other countries would be put in a better position for exporting commodities which they wished to sell. It is out of the power of the United Kingdom to consume all the wool that Australia produces, the United Kingdom can scarcely, therefore, expect to sell all the com- modities for which that extra wool may be exchanged. Is it not wise to let the Colonies grow as fast as they can by all the freedom of trade of which they have the wisdom to take advantage? Let them grow — as far as they will — as the United Kingdom grew. That is a policy worthy of the Empire. 86 CHAPTER XIII. FINANCE AND COMMERCE. Every year conimcvcc is more and more influenced hy matters of finance, and it becomes more and more difficult to trace that influence ; that it cannot be traced wholly is no reason Avhy it should be over- looked in the way it is. Ignorance on the subject is apt to lead to serious mistakes. The United Kingdom has greatly enriched itself by investing vast sums of money in other countries, but the full con- sequences of these investments do not seem to have been anticipated in the past nor to be fully understood in the present. *' Commerce is exchange of commodities " ; this statement used to cover the ground. To-day it might be said that " commerce is exchange of commodities, varied by movements of capital and of interest thereon." Those who desire to thoroughly understand the position of British and of Colonial commerce must give a little attention to this branch of the subject. It is one that is especially full of deep significance to the Colonies ; their future is greatly concerned in it. The first result of investing a certain sum of British capital abroad is to increase British exports the same year to a corresponding amount, but the ultimate result is to increase British imports to the extent of the interest for every yetir in the future so long as the principal is owing. The efi"ect is that imports come in every year for which theie is no corresponding export, though, of course, there may be other exports rejn-esenting other capital going abroad. As this procedure continues there comes a time when the interest-imports become so considerable that the volume of exports is made to look relatively small. This is the position in the United Kingdom to-day ; and the more money invested abroad in the future, the smaller relatively will the ultimate exports be. It ought not to require a veiy keen intellect to see that the United Kingdom is enriched by being able to obtain millions of imports in exchange for bits of paper — called interest receipts — instead of having to give manufactured goods to a corre- sponding value. Of course, the larger the interest-imports into the United Kingdom the heavier are the burdens the borrowing countries have to carry ; and the heavier those burdens the smaller the ability of those countries to buy British manufactures. Whilst, therefore, exportation of capital gives an impetus at the time to British manu- facturing, its after effect may be to depress that industry. Borrowing and lending are undertaken often with very light hearts and without due knowledge of the subject. Experience shows that there is a distinct limit to the j^ower of any country to absorb new COMMERCE AND THE EMFIBE. 87 capital. Of course a country may borrow enormous sums of money which may be wasted, and, in a given sense, that money may only too truly be said to have been absorbed. There is no limit to the extent of absorption for the purposes of waste, but there is a distinct limit to such absorption if the capital is to remain in existence and benefit the community in a lasting manner. The line dividing what is an advan- tageous use of new capital from the mere expenditure or waste of new capital is often difficult to ascertran ; but the results of the use of new capital on the wrong side of the line are often of the most calamitous character — that which at first was a benefit becomes a burden. The borrowing and expenditure of one million may be wholly or permanently beneficial, whilst the borrowing and expenditure of two millions may be temporarily beneficial but ultimately permanently injurious. How far the Colonies of Great .Britain may have ovei'-borrowed it is difficult to say. That the Australasian Colonies would have been better off to- day if they had borrowed less there can be no doubt. Kor can there be the least doubt that the yearly payment of millions of interest is putting a great strain on them. Their people are, of course, bearing the sti-ain as men of their race might be expected to bear it : though, in passing, it may be said that some of the ci'iticism to which they are subjected comes with ill grace from the mouths of (hose into whose pockets these millions of hard-earned money is yearly being poured. Possibly, also, advantage should be taken of this ojiportunity to refer to the subject of Colonial contributions towards the defence of the Empire. Let it be remembered that the Australasiaii Colonies alone are every year sending to the Motherland the gigantic sum of from fifteen to eigliteen millions sterling for interest. The United Kingdom collects money for the interest on its own debt, and then distributes the whole amount within its own borders. Australasia collects money for her interest and sends it right away. There is a mighty difference between a collection of money that is to be redistributed and be available for new enterprises within your own borders and a collection of money that is to be drained away, taken clear out of your country. Roughly the money may be reckoned as <£4 per head of the people of Australasia. Besides this Inirden during recent years the fall in the prices of produce has been so marked that it takes a vastly larger proportion of the total production than it did to make up the interest. Perhaps, too, critics might be asked to differentiate between the wealth of a, country and the wealth in a country : the wealth of Australasia can only i e the balance after deducting the proportion owned outside.* So long as the Colonies continue borrowing they do not feel the full burden of the weight of interest, but it is there all the same. It has grown faster than the strength to carry it, and until the strength has grown so that the interest burden is less in proportion to the wealth produced than it is to-day, Australians and New Zealanders, at any rate, cannot do what they would be proud to do in the matter of defence. * Certainly critics can be asked to be a little more careful in the statements they publish about the Colonies. The revenues of the Colonies include so much railway receipts that a comparison of the aggregate with the British, that covers no railway receipts, becomes misleading. 1871. 1881. 1801. 1901. Mill. £. Mill. £. Mill. £. Mill. £. 231 . . .".1-3 . . 43 J . . 53 I 4 . 80 . . l.VO . . 170 101 . . 23-2 . . 2!! -2 . . 421 170 . . 2G0 . . 350 . . 29 83 . . 740 . . 650 . . 710 88 COMMEliCE AXD THE EMIT RE. To get back to the subject, which, of course, is to provide information affecting commerce. The following table will show in a very vivid manner the results of Australasian borrowings on the possible purchase of British manufactures : — 1861. Mill. £. 1. — Total exports, Austral- asian products .. .. ir.O C— Aggregate interest, Aus- tralasian debta . . . . 2 3. — Balance arailablc, the purchase of imports .. I'G 4.— Percentage of exports required to pay interest 120 5. — Percentage of exports available to buy iTnport.3 880 The figures to which special attention is directed are those showing that of the aggregate exports the percentage required to pay interest on Australasian indebtedness rose fi'om 12 to 17, then to 26, then in 1891 to 35. Ti'ouble was then not far off; the pace was too hot. Since the year named the exports have been enlarged — Australasians haA'e produced more and borrowed less — so that the percentage of exports required to pay interest has fallen to 29. But it is the last line of the table that is interesting to those who want to know to what extent Australasian buying power is affected by their indebtedness. To see the percentage of exports available to pay for purchases falling as shown by the figures 88, 83, 74, 65, was not reassuring ; the advance to 7 I is more so. The calculations of interest cover, of course, both Govern- ment and private borrowings. Here are some figures which illustrate in a singular way how British exports are influenced by financial events. Excess of Import.? or Export.? in* thk Colonies kjmktv Exccaa of Exports. ],397,065 Victoria. Excess of Importi^, £ 1870 1880 1881 580.308 406,418 Mew South Wale?. 1879 1880 1891 1,112,028 1.279.207 Xew Zealand. 1879 1880 1S81 2,631,459 1,396,179 Cana'la. 1.S7!) 18.S0 ISSl 2,004,(534 '.. 1,408,003 1.575,063 '90,681 284,34. COMMERCE AND THE EMFlltE. 89 For some years prior to 1880 there had been a considerable and sometimes very heavy flow of capital to the Colonies named, but in 1880 this flow absolutely stopped and the Colonies were called on for remittances. The cause of this marked and decisive change was the financial crisis in Great Britain consequent on the failure of the City of Glasgow Bank, which took [»1 ice at the close of the " seventies," and in 18S0 so afiectcd the British export markets as to liring about the results shown. It ought also to be pointed out that the interest already actually paid on the borrowings of the Colonies are in some cases really equal to the borrowings themselves, gigantic though they are. On this point the following extract from the last edition of the " Seven Colonies ''* is instructive : — Under the condition of equilibrium between the introduction and the with- drawal of capital. . . Australasia would show an excess of exports representing the interest on State and other public loans, and the tribute due to private in- vestors. This export for 1901 was £16,261,000, and it is, therefore, plain that Australasia might increase its indebtedness to the extent of over fifteen millions in any one year, and at the same time show an equality between its imports and exports. With this explanation in mind it will not be diflicult to under- stand how, in spite of the fact that during the last thirty-one years the indebted- ness of Australasia was increased by £314,816,000, the money or money's worth actually received, as represented by the excess of imports, was less than that sent away by £4,910,000. Such is the operation of interest as affecting a debtor country. It is well to notice all these facts ; to observe what have been Boiue of the principal factors in working the exports to the Colonies up to the high figures they have assumed of late. If capital has not been flowing to one Colony it has been flowing to others and so sustaining this export. But if a lengthened period of commercial depression were to exist in the United Kingdom, the outward flow of capital might be absolutely suspended. The increase of public expenditure in all countries, and the great piling up of debt in many of them, has created conditions that distinctly tend to increase the volume of commerce. Revenue is so essential that the advocates of restriction of imports find themselves compelled to be moderate rather than extreme; they cannot close the door, they mui;t allov," it to remain more or less open. * Pa^e 753. 00 CHAPTER XIV. THE PREFERENTIAL TOWER OF BACEL. There is a charm in mystery, and mystery is the charm of the system of Penalties and Preferences. If explanations, details, are not wanted, the language of the exponents of the system flows on bravely, just like that of the prospectus of some Avonderful El Dorado ; but if explana- tions, details, are invited, then the language of the exponents becomes like unto that of the Tower of Babel. The race-iustinct of the British heart is appealed to, but not the practical instinct of the British brain. The proposals are brought forward as something new in the way of fiscal policy, but they find adherents mainly amongst those who have never ceased to love the old policy which was discarded by Britain half a century ago ; others who, attracted by the glowing prospectus, have given support, have generally been found slipping — at an ever- accelerating speed — into the same old ditch. Born in fog, the pro- posals have lived on and in fog, and after ten or fifteen years' existence they show no signs of emerging therefrom ; the searchlight must, therefore, be turned on. The searchlight will dissipate the mysterj', and with the mystery will also disappear all the charm. Kow for the Tower of Babel : — Discord No. 1. The Colonies will supply the Empire with all food and be the market for British manufactures, and so increase Colonial commerce. The Colonies can be used as a lever lo force foreign countries to make treaties with Great Britain and so increase foreign commerce. Discord No. 2. The United States supply Great Britain with vast quantities of food. By putting taxes on American products the trade would be trans- ferred to the British Colonies. It would be statesmanship of the highest order to exempt American products from taxation. Discord No. 3. There would be no probability of offending foreign counti'ies by making preferential arrangements with the Colonies. A tariflf war would certainly be provoked with America if Great Britain enabled Canada to secure trade now done by America. COMMERCE AND THE EMPIBE. 91 Discord No. 4. Put taxes on food. Avoid taxing food. Discord No. 5. Put taxes on raw materials. Avoid taxing raw materials. Discord No. G. The Colonies would get better The cost of living would not be prices for their products, increased. . Discord No. 7. Each part of the Empire to Each part of the Empire has receive equal, mutual benefit. special products, some cannot be " preferred," i.e. benefited. Discord No. 8. The Empire to be considered The self-governing Colonies to as one unit. be specially favoured. Everyone seems to be stamping on the corns of everyone else. 'Tis, indeed, a concert of discord. The strains of " Home, sweet home," come at times througli the din, and much may be forgiven and forgotten in consequence, but the brain must be alert when sentiment is active. Criticism as keen as the interests are vast is essential. Each of the eight pro[)Ositions, and each of the eight counter- propositions, have been put forward and been held with more or less force. That these discords can make harmony is, surely, impossible. There can be no disputing the fact that it is desired to encourage pro- duction in the Colonies by — what I " A preference." Now " prefer- ence " (like Mesopotamia) is a word that has a comforting sound, but is it translatable into £ s. d. ? There can be no doubt that it is so translatable — and that, in short, it means money. If it does not mean that, then it means nothing. That it does mean money is proved by the fact that some preferentialists are afraid to bring raw materials within the circle of influence because it would increase prices and so endanger manufactures. " Preference " means money to those who produce the commodity that is "pi'eferred.' If, then, money is to be paid, whence will it be obtained ] That is the kernel of the whole matter. In Australia the restrictionists have a theory — occasionally approaching a belief — that the foreign exporter (not the consumer of the goods) pays any customs duties. It is just here that the fog, the mystery, is most in evidence. But when men take tlieir heads out of the clouds, and look at the matter with the eyes of everyday common sense and lifelong experience, there is no longer any fog or mystery. It is clear enough. If the man who grows the wheat obtains more money, the man who buys the bread must pay it. Preference means money, and the payment of money means taxation — public taxation jAus private taxation in this instance. The British Parliament is to 92 COMMERCE AND THE EM PI BE. say that there shall be a certain tax laid upon all wheat imported from fo.elgn countries into the United Kingdom — that would be public taxation. The producers of Colonial and British wheat finding foreign put up in price by tlie public tax would raise their prices the same amount —that would be private taxation. Hence, whether a British consumer ate bread made of foreign, Colonial, or British wheat, or a mixture of two or of all three, he would equally pay the taxation. As with wheat so with other articles, in proportion to the preference or tax. One of the most singular results of the preferential campaign has been a suggestion by the Times with regard to the United States. There is no doubt that Canada is hurt both in pocket and in sentiment by the action of the United States tariff", and that that hurt feeling is largely responsible for the desire to get " preference " for Canadian ]iroducts in the United Kingdom against those of the United States. The Times espouses the cause, and then knocks it all to bits. When people get their heads in the clouds they hardly know where their feet are taking them. Look at this table : — iMrORTS INTO THE UmTED KINGDOM, 1902. Froiii British Colonits. From I'aitcd States. From other Foreign Countries. Totj Mil!. £. Mil!. £. Mill. £. Mill. 10 s 25 22 12 6 47 36 Meat (dead and alive) Wheat and flour . . Meat and bread are the two great food products, and the imports aggi-egated 83 millions. Out of the whole total only 18 millions came from foreign, outside Anglo-Saxon, countries, and this 18 could be supplied abso, out of the shipments now &ent to Europe. This means that as the British Colonies, phu the Uiiited States, are already able to fully supply the United Kingdom with meat and bread there would be no scope for the operation of a preference. You must want moi'e than you have to be able to give a preference — if you already have all you want then you can give no preference. The aggregate imports into the United Kingdom from British countries and the United States combined are about one-half of the total of British imports. If to the one-h.-df be added the raw materials in the other half, which Mr. Chamberlain wishes to exempt, three-quarters of the whole would be exempt. After which it would be a s-'mple thing to add the other quarter, and the result would, of course, be the British tariff as it exists to-day. All the world alike, no penalties and no preferences. The Times has found out that successfid discrimination against the United States would be sure to provoke a tariff war. If the United States retaliated, why should not other countries do likewise 1 If a country not only professing but believing in the wisdom of a policy of free commerce should adopt a system of restriction, it is only natural to suppose that countries tliat liotli pi-ofess and practise restriction should COMMERCE AND THE BMI'lliE. 93 eagerly press that policy to its utmost extreme when they found tlieni- selves diflerentiated against. It must never be forgotten that in many countries the policy of restriction is so moderate as scarcely to be worthy of notice. It is foolish to talk of those countries where the policy is severe as if the}' were the world. If Great Britain, expecting uUiuiately to reap some harvest by the outlay, agreed to a scheme under which tlie British people paid so many millions a year extra for certain Colonial products, it would be foolish, it would show ignorance of human nature, not to expect that there would be dissatisfaction in any Colony that received little or nothing out of such money. Take South Africa : it has passed through a very sorry time of late ; it would ill accord with the fitness of things to shut South Africa out of participation in any favours that other Colonics were obtaining because she had no wheat, or meat, or butter to export. Dissatisfaction and heartburning would be an inevitable result of Imperial favours lieing distributed with a partial hand. Although this is 80, it is certain that the Colonies are being put in a false position ; they are being made to appear as willing to accept large gifts of money from the people of the Motherland. Nothing coukl be more mistaken or unfortunate than such an idea. In Canada, where the preferential scheme has its greatest support, it is certain that the people generally are of the opinion that the tariff concession v,hich tliey have made is an ample return for all they would obtain ; they have only to be made acquainted with the burden that would be put on the people of the Motherland to at once withdi'aw theii' proposals. It has to be recognised that the admission that raw materials would be made dearer by duties at once cuts away all the ground from under the feet of those who argue that a similar result would not accnie from duties on food products. The subject of these duties is dealt with in other parts of this work. 94 CHAPTER XV. COLONIAL PRODUCTS AND PREFERENTIAL TREATMENT. One 01 the first things discovered in examining the proposal for giving " preferential " treatment in the United Kingdom to Colonial products is that, though it would be possible to benefit some articles, it is not possible to benefit others. The truth is that the Empire as a producer is greater than those people who want to coddle it think it is. The United Kingdom is a great manufacturing country, but the other sections of the Empire have already attained importance as producers of raw materials and food. The Empire, big as it is, is not big enough to consume all that the Empire already produces of some commodities. The people who are unhappy about the trade conditions of the Empire seem to have two troubles, (1) the world is not buying enough from the United Kingdom, and (2) the world is buying too much from the Colonies. Again and again refei-ence is being made to the trade done between the Colonies and foreign countries, but if the United Kingdom cannot buy all the Colonies have to sell, and the surplus is in com- modities that other countries can buy, what then 1 In commodities such as these it is idle to talk about " preference." There are almost as many ideas as to the method of carrying out the penalty and prefer- ence scheme as there are advocates of it. Some would draw everything into the net, some would exempt raw material and attack food, others would exempt food and attack everything else. For this reason ground must be gone over, some of which might have been avoided had there been unanimity. One of the greatest products of the Colonies, by far the greatest of Australia, is wool. What is the position in this trade? In 1902 the United Kingdom imported wool as follows : filillion £. From the Colonies . . . . . . 16-5 From foreign countries . . . . 3 '4 Total 19-9 Of this were re-exported the following --- Quantity. Value Million lb. J.Iillion To Germany • . > . 85-7 3-2 To Holland 21-8 0-9 To Belgium 36-3 13 To France . . . . . . 79-3 2-9 To United States 54-9 1-5 To other coun i.ric3 5-8 0-2 Total .. . . 283-8 100 COMMEIICE AXD THE EMPIRE. 95 These figures are given in full because there are those who persist- ently ignore them. In addition to all this Colonial wool the countries named took £930,000 worth of English grown, and they also took wool direct from the Colonies, mainly Australia, to the value of seven millions sterling. Now it is clear the United Kingdom could by a duty keep out the whole of the imports from foreign countries, but as the quantity of Colonial wool would be still far beyond the British consumption, the surplus would have to go to foreign buyers, and in no shape or form could the Colonies be benefited by the fact that the foreign was kept out of the United Kingdom. Nay, the Colonial would probably be injured because the woollen manufacture both in and out of the United Kingdom would have been interfered with. Whether or not it is desired to give a " preference," i.e. an increased value to Colonial wool, these facts show that it is impossible to do it. But whilst a duty on the foreign would be of no good to the Colonial producer, it would damage the British shipping trade, lessen payments now distributed in London in connection with the handling of the foi'eign, and it v/ould deal a severe blow to the position of London as the world's wool market. One would think that the people who claim a monopoly of love for the Empire would treat import and export returns on an Empire basis, and if they did this they would give Europe credit for the purchases of products which are produced within the Empire, though not within the United Kingdom. Now take a product in which Canada is largely interested — cheese. The course of the cheese trade has been singular and instructive. There was a time when the United States supplied the United Kingdom with almost all its imports ; now Canada is doing so. The change is natural and good for both. The United States require, can afford, the cheese for their own now numerous people. The following are the imports into the United Kingdom during the last three years : — 1900. 1901. 1902. United States £1,740,749 .. £1,274,061 .. £962,112 Canada ., 3,799,223 .. 3,697,660 .. 4,301,859 Holland .. 799,632 .. 747,613 ,. 668,303 New Zealand 218,376 . . 193,868 . . 131,534 There are some other small items, but substantially Canada and Now Zealand supplied 71 per cent. Part of the remainder are specialities with which other kinds do not compete. Of the ordinary makes Canada and New Zealand really supplied about 80 per cent. They are, there- fore, on the very verge of supplying all the consumption, and with a return of good seasons in Australasia, the quantity of Colonial cheese available may soon not only equal but exceed the requirements of the United Kingdom. Cheese production, then, has nothing to gain from " preference." Take next that very important commodity — t«a, in which India and Ceylon are so greatly interested. The development of this trade in a brief period is quite remarkable ; indeed, it is one of the wonders of commerce : — AG COUUmiVE AND THE KUrilil'l Tea Impokts i.nto 'i:n& Umxku Kinudom. From Cliina. From India and Ceylon. ronr. Quantity. Mill. lb. ^ ^'aKn•. Mill. £. Quantity. Mill. lb. Value. Mill. £. 1881 1902 162-2 17-4 8-0 0-5 41-4 •Jti4-8 31 8-0 Increase Decrease 144 8 7-5 210-4 4-0 If twenty years ago a " preference " had been given to the tea.s of India and Ceylon in British markets, and only one-half of the growth indicated above had taken place, the result would have been claimed as a triumph for the penalty and preference sy.steni. India and Ceylon, unaided, have gradually taken po-ssession of the market, and last year, for precisely the same sum of money, gave the United Kingdom 63 per cent, more in quantity and probably 90 to 100 per cent, more in quality than China gave in 1881. Who can measure the increase of the enjoyment of life which these simple figures indicate ? And do not the.se figures show how safe it is to allow development to proceed on natural lines ^ But the point just now is that India and Ceylon jiractically supply the British market, and that therefore the tea of the Empire cannot be helped by any preferential scheme. The Australian import returns show similar results to those of the United Kingdom. Tallow and Stearine. — Here again Australasia is interested, and here again the United Kingdom fails to consume the surplus of the Colonies. A fair amount is exported direct from the Colonies to foreign countries, and the British returns themselves show the following results : — Tallow.— Imports and Exports, United Kingdom. Aggregate of years 1900, 1901, AND 1902. ;, . Imports from IiDporls from >;» Re-Exporta. Australia. Otlier countries. £4,267,396 .. .. £3,609,754 .. .. £3,691409 Without taking count of the shipment made direct to foreign countries from the Colonies, or of the shipments from other Colonies included with " other countries," it is clear that the United Kingdom is fully supplied at present by Australasia alone. It is idle, therefore, to talk of " preference " in regard to tallow. Hides and Skins. — In these lines India alone yearly exports to the value of six or seven millions sterling, which, witli the exports of other portions of the Empire, provides an aggregate which makes the purchases of foreign countries very comforting to the producers who, here again, Avould be unable to benelit by any scheme of penalties and preference. Tin. — This is another not inconsiderable commodity where foreign countries come to the rescue. Australia is interested in tin, but it is COMMmCE AND THE EMPIBE. &7 a speciality of another British country — viz. the Straits Settlements, which alone, unaided by any other part of the Empire, pi-oduces more than the United Kingdom requires ; thus : — Tim. — Imports and Exports, United Kingdom. Aggregate of years 1000, 1901, 1902. Imports from Imports from Re-Expoita. Straits Settlements. Other Countrie3. £9,825,483 .. £2,903,G37 .. £7,834,501 It seems certain fi-om these figures that the people of the Straits Settlements would find their " preference " to consist very much of the stuff of which dreams are made. Jute. — This is a specialty of Indian production. India exports a good deal direct to other countries, and of the quantity imported into the United Kingdom about one-third is re-exported to foreign buyers. Again is " preference " impossible. Rice. — It is enough to say that in this commodity India alone could supply the wants of half a-dozen United Kingdoms. There are a considerable number of other commodities which have to be classed with the foregoing, such as palm oil, cocoa-nut oil, pepper, ginger, rum, sago indigo, woods such as mahogany and teak, certain seeds and nuts for expressing oil, dye Avoods, various drugs, gutta- percha, pearl shell, fish such as salmon, etc., in all of which com- modities the production of the Empire is in excess of the consumption of the Empire, consequently in none of these would any advantage accrue to the producers by reason of any " preference." Looking at the long list of important articles that could not possibly be given pi'eferential treatment — in plain English could not be protected — it nmst at once be admitted that the scheme would be, as all such schemes are, a delusion and a snare. The British Customs return.'^ do not separate the re-exports of Colonial goods from those of foreign, and indeed it is quite remarkable how little attention is paid to the re-exports ; how small a part they play in the general discussion of the position of British commerce. These re-exports in 1902 amounted to 66 millions. A careful study of the figures indicates that the re-export of foreign goods was about 9 per cent, of the total of such imports, whilst the re-export of Colonial goods was equal to about 26 })er cent, of the total of these imports. This calculation assumes that if, say, 50 per cent, of the imports of a given article be from the Colonies, that the re-ex[)ort of the same article will also contain 50 per cent, of the Colonial ; a calculation which is sure to be wrong at times, but is probably fairly correct in the aggregate. It appears, then, that out of 107 millions of imports from tlie Colonies that about 28 millions were re-exported, having been bought almost wholly by foreign countries. Hei'e is a fact to ba weighed and remembered in both the United Kingdom and in the Colonies. What a satire it is on the argument about a self-contained Empire and on the proposals to augment Colonial production ! Here are great quantities of goods produced by the Colonies, which the Ji 98 COMMERCE AND THE EMPIBE. United Kingdom does not want and which foreign countries do want, and wliicli are sinij)!}' additional to the large purchases made in the Colonies tliomselvos by foreign countries. These ligures show another thing : that is that the Free Trade policy of Great Britain is good for the Colonies since it makes a market which otherwise might not exist. *' Look wliat the Colonies buy from Great Britain." Well, look at this transaction — Australian wool goes to England, thence to Germany. Germany pays England with sugar, and England pays Australia with manufactured goods. The three countries are all benefited, but the people who do not look below the surface fail to see the connection between Germany and Australia. There have been many a million pounds' worth of goods sent by the United Kingdom to Australia because Germany had bought Australian wool. Of the whole re- exports probably 38 millions represented foreign and 28 millions Colonial goods. Having looked at that portion of the Colonial trade which " pre- ferential " policy in the British market could not benefit even at the outset, now look at the portion which for a time, at any rate, cer- tainly Avould under the cover of a tariff be able to exact from the consumer the amount of a tax in addition to the market value. It is mainly under the heading of food that the imports are to bo found that could be subjected to " preferential " treatment. Food is the material on which the life, the health, the strength of the people depend, and it might be thought doubtful wisdom to do anything that would restrict the supply of food, and so lessen strength and health and shorten life. But when once a man gets thoi-oughly inoculated with the preferential or protective virus he rises superior to all these small feelings of senti- ment. A beneficent Creator may provide ample supplies of food, but that does not prevent superior wisdom stepping in and restricting the quantity. (The whole of this last paragraph is taken from an article written by the author in 1896 and published in Sydney. It is copied and the fact is mentioned in order to show how, at the very first, taxes on food looked to the author.) Important as are the commodities which could not be preferentially treated, they are comparatively small in comparison with the big items of food which could be so ti-eated. The principal of these are bread, meat, butter. The question to be looked at now is how far could these commodities be preferentially treated in Great Britain for the benefit of the Colonies, and how far in the end would the Colonies be likely to be benefited ] Just a cold-blooded mercenary view of the business, without any remembrance of the life-interests at stake. Suppose the British consumption of the three commodities named be taken as follows : — Imported. Mill. £. Meat (doad and alive) . . 47 Bread (wheat and flour) .. 3G Butter .. „ .. 21 104 76 180 British. Total. Mill. £. Mill. £. 5G .. 103 10 46 10 31 COMMERCE /ixVD THE EMPIBE. 99 The people of Great Britain spend 180 millions sterling a year on these three descriptions of food ; careful investigation may vary the figures, but the argument will not be affected thereby. If Customs taxation on the imports from foreign countries be imposed, the result is, of course, to raise the cost of the foreign by the amount paid to the customs ; but if the value of the foreign be raised, the value of the Colonial and of the British is raised at the same time and equally. There can be no mistake about this being the case, but the point is dealt with elsewhere. If, then, the duty on the foreign be fixed at 10 per cent., or its equivalent, on meat, bread, and butter, it would mean that the consumers would have to pay 18 millions sterling extra on the amount of the commodities now being consumed. But the consumers have to make ends meet. For years values have been decreasing and quantities have been increasing ; it is easy to reverse the process, and by increasing the values decrease tlie quantities. If the people have only 180 millions to spend on these foods, then the result would be: food 164 millions, plus duty 16 millions, total 180 millions. Tliat is on the basis of quantity a fall of 16 millions. It would not work out quite \\he this, for the commodities in question are the necessaries of life, and it is in luxuries that retrenchment begins. But, please note, the moment you give the British producer the natural price plus 10 per cent, he has inducements to enlarge his jiroduction. What happens, then, is this ; more is produced locally, and at the same time less is being consumed. If the total con- sumption weie i-educed by only five millions and the local production Avere increased by five millions, then the final result would be that ten millions less would need to be imported. That result is arrived at by taking very moderate fig-ures, but what a result to achieve in an eifort to increase trade with the Colonies ! One of the admitted objects of the advocates of a changed fiscal policy is to increase agricultural production in Great Britain. It is a fact for Colonial preferential ists to bear in mind. The two influences working together — decreasing consumption, increasing local production — would rapidly and radically alter the position, and the Colonies would find the great markets of the United Kingdom shrinking, slowly perhaps, but surely. The effect of a tax upon a commodity is necessarily in proportion to its amount, but of course it may be assumed that the supporters of the scheme for diverting from foreign countries to British Colonies the demand for food products wish for duties high enough to bring about the result they seek. Let us think of what takes place in the ordinary family when living becomes dearer. Savings have to be effected, and naturally they begin in the luxuries. Dress, amusements, food specialities suffer, then come articles like meat and butter. The con- sumption must be cut down. The law of necessity reigns. Probably the sale of bread, instead of decreasing, might increase, because whilst less meat is eaten more bread must be eaten. To the Colonial producer, especially the Canadian, the British consumption of meat and butter is far more important than that of grain, and therefore they should look KJO COMMEIiCli AND THE EMVIM, closely into tl.e subject of the iucvituljle result of making meat aud butter dearer to the consumers. Probably in no other two commodities h;AS consumption increased by the leaps and bounds which have marked these two. The Colonial producer of these articles is deeply interested in maintaining the trade at its fullest volume ; that is the policy that will, over a period of years, yield him the best results. It is a safer basis than any political scheme. It is quite in the power of politicians to destroy the trade in some of the lines which to-day are the most profitable of all to the Colonies. As for wheat, the quantity required by Great Britain is so enormous that it would take a good many years in spite of a " preference " for the Empire to overtake it ; but the time would come v.'hen that point would be reached, and when it was reached there would, of course, be an end of any "preference" for the wheat producer, and whether in Great Britain or in the Colonies he would awake to find that he had been made a fool of. In all soberness it may be asked if steps were taken to stimulate the production of grain in the Colonies is it not very likely that the results would be highly unsatisfactory 1 In few other com- modities has the profit of production fallen so low, and probably nothing could happen so likely to prove injurious to the world's producers at Inrge as for the greatest import market of the world to ofier induce- ments for a great increase of production. It is well to remember the ultimate result of increasing the supply ; it would tend to decrease the value all the world over. A preferential duty of sixpence per bushel ■w ould probably, in the course of three or four years, so stimulate the production in the Colonies that tlie world's price might be brought down more than sixpence per bushel, in which case the British and Colonial producers might find themselves by this action of the duty jihis sixpence but minus ninepence. It is obvious that foreign countries would continue their full production of wheat, for they would continue selling as they do now at the world's value. A British " preference," therefore, might lead to a disastrous surplus. Such perils do men risk who outrage natural laws. The increase that is taking place without any "preference" in the proportion of agricultural pioduce which the United Kingdom is receiving from the Colonies ought to satisfy every reasonable man. With regard to the United States, their population is now becoming so great that it is more than doubtful if they will long be able to spax'e the large quantities of meat and grain which they have done for some years, and there exists, therefore, a natural opening for the Colonies. The States have had no butter worth speaking of to spare for export for seme time, and the same position is fast coming about with regard to cheese. As to mutton, the Colonies have the bulk of the trade. In bi.ef the States supply lai'ge quantities, dead and alive ; but it a])pears only requisite for improved shipping facilities to become general for the Colonies to take a much larger share of this business. At best, the preferential scheme could only foi'ce a position that seems coming about naturally, and wliich, so coming, would rest on a solid foundation. At the Colonial Conference of 1902, Sir Wilfrid Laurier, the Premier of Canada, said : — COMMERCE AXD TEE EMFIRE. 101 In Canada I know the wheat fields are all the time increaaing, and I have no doubt that bj'-and-bye she will not only be able to supply the markets of Great Britain, but also the markets of the United States, because I look upon it in the near future that the United States will not be the exporters of wheat, but rather the importers.* It is clear, then, that even in Canada itself, the view is held that the expansion of the wheat trade of the Colonies is coming about naturally. Dr. Parkin, in his " Imperial Federation," refers at some length to the subject of the increasing internal consumption of the United States, and he quotes from a number of authorities with a view to show that changes are coming about. He says : — f Whatever may be thought about the precise point of time, the tendency is manifest. Within a measurable time the Empire will, by the natural progress of cvent3, mainly supply its own markets with wheat, and, it may be added, with the second mo3t important article of consumption — meat. Space cannot be taken for extended infoiination or argument on this subject, but it may be said that the progress of wheat-growing in the Empire is sufficiently rapid for sound and profitable farming, and that as the margin of proht on wheat production is so admittedly small ic would be a grave mistake to do anything that would tend to o\er- production : glutted markets and prices lower than ever. Colonial advocates of preferentialisra must be blind indeed if they do not see certain consequences that would result from the policy they desire Great Britain to adopt ; the same policy is being advocated by other persons for reasons and objects not only different but antagonistic to the reasons and objects which actuate them. Their only desire is to make the Colonies tlie markets — almost the sole markets — for what Britain sells, and sources of supply — almost the sole sources of supply — for what Britain buys. But other people argue that if special arrange- ments are made with the Colonies it will then be easier to arrange commercial treaties with foreign countries. Britain now is disarmed, they say, arm her with tariff powers of difTerentiation, and foreign countries will then make treaties with her which to-day they will not. A writer, referring to Great Britain and the United States, says : — | If, therefore, Mr. Cliamberlain's policy is adopted, one important result wil! be to make the path of British diplomatists easier. Instead of causing friction, as many persons believe, it will, on the contrary, brin;^ the two peoples closer to- gether. The British market is too valuable to the L uited States to be lightly lost ; it is 30 valuable that it is worth while making extraordinary efforts to retain it. So long as the American people feel secure of this market they can be indifferent, but with the knowledge that a British Colony may be favoure-d to their cost they will be willing to make concessions, both jjolitical and com- mercial concessions, which will be for the advantage of England. From that standpoint, dissociated from the broader and more complex question of Imperial policy and the complicated fiscal system of world-wide Empire and trade, a pre- ferential tariff between the Mother Country and her Colonies must be. regarded as a very wisr-, far-seeing, and statesmanlike policy, bound to produce practical result?. * C'on.'erence Report, page 50. t Pago 151. \ A, Maurice Low, National Review, July, 1903. 102 COMMERCE AND THE EMPIBE. " Practical results '"' — not in the direction of commerce with tlie Colonies, but with other countries ! It is reasonable to expect that if people in one part of the Empire try to use the Empire to further the interests, or, what they judge to he the interests, of their part, that people in other parts of th? Empire will also try to use the Empire similarly in their respective parts. If Colonial producers will weigh the subject carefully they cannot but come to the conclusiou that if a system of penalties and preferences be introduced into Great Britain that change will follow change, that interest will clash with interest, and that the promises of advantage, iri'egular and uncertain at the start, will prove disappointing in the end. M. Yves Guyot, with very clear insight, says : — * The protectioniat spirit produces in a man both the mania of persecution and the mania of being persecuted. Every claimant for protection wants to make out, and ends by bebeving, that lie is the victim of all his compatriots, who are more favoured than himself, and he diverts a large share of his strength, initiative, and vital energy to endeavouring to procure more protection at the expense of others. France is cut into sections by tlie protectionist spirit, and it is a strange delusion to suppose that differential tariffs will draw closer the bonds of solidarity between the United Kingdom and the self-governing Colonies. Every Colony will think that it is sacrificed to the others. Everyone who has had experience in the matter knows that the eminent French economist is })erfectly right and that the scheme of penalties and preferences cannot be carried out without causing heart- burnings and misunderstandings between the Colonies themselves. The position of the Colonies, then, as regards preferences in the United Knigdom is (1) that a considerable number of important com- modities, by reason of the already large production, could not be "preferred" ; (2) that as regards the others the value of the pi-eference would be constantly decreasing, and gradually terminating in one com- modity after another ; (3) that the scheme would inevitably reduce the total consumption of colonial commodities in the United Kingdom by (a) increasing Briti.-^h production and (b) raising prices ; (4) that the scheme would be used as a lever for treaties with foreign countries ; and (5) that any benefits would be so unequally divided between the Colonies as to create discontent. The facts show that the Colonies are yearly securing a greater share of British purchases, and it seems to be sound policy to allow Colonial development to ju-oceed on natural lines. * In the Fortni-cjlUhj Bevieir, July, 1U03. 103 CU AFTER XVI. THE COLONIAL CONFERENCE OF 1902, The report of the Conference of Colonial Premiers in 1902 contains ample evidence of the utter impracticability of the system of penalties and preferences, and at the same time demonstrates the fact that the conditions of the Empire vary so much that interference with the natural flow of commerce in one direction must inevitably cause conflict in other directions. The sincerity of everyone who took part in that Conference is undoubted ; that each one desired to promote the prosperity of the Empire is unquestioned. Yet thei-e was no feeling more strongly, if as strongly, expressed, as that of the determination of Colonies that had adopted restrictive tariffs with a view to foster special industries, not to reduce the duties if by such reductions the industries concerned were likely to be aS"ected. Here was the danger-signal distinct enough. The present generation of Englishmen, happily exempt from personal contact with tariff" quarrels, do not know the iron strength, the political power of state-fed industries. But the men who for many a long year have been fighting for free commerce in Australia, and in other distant parts of the Empire — they know. It has to be recognised in Great Britain that at the back of the restrictive policy in Australia, in Canada and elsewhere, not only is there the strength of self-interest, but also much honest con\action. Ho\vever selfish the one, and however mistaken the other, the influences are there ; and where they exist, there they must be fought and overcome. Until they have been overcome, enormous value attaches to them in the minds of the people, thex'efore enormous is the price that is asked in return for any concession. When it is sought to bring into line several communities, all more or less eager to get much for little — for that is really what it is — the floodgates are opened. So far as the commercial aspect of the Conference was concerned it was a hollow sham. The Commonwealth of Australia was represented by its Premier, Sir Edmund Barton, himself a restrictionist of a mild type, but having some restrictionists of quite a " live " character in his cabinet. He must have felt a little the humour of the situation. Whilst he was talking about increasing the commerce between the United Kingdom and Australia he knew that his colleagues were at the same time piloting a tariff" through the Federal Parliament which they claimed would largely decrease Australian imports, and that they had been for eight months fighting the amendments of the Free Traders, in which fight he had himself been engaged until he sailed for London. To 10-i COMMERCE AlSfD THE EMPIRE. make the Australian position clear it is wcitli while showing what had taken place. On October 8th, 1901, in making the first Federal finan- cial statement, Sir George Turner, the Treasurer, said : — * We estimate that the result of the tariff will be to reduce onr imports by about £5,000,000, there being a decrease of manufactured articles and an increase of raw material. Mr. Kingston, the Minister for Trade and Customs, said : — f We have got £26,000,000 to deal with, and from that we propose to mal^e a . . . deduction of £5,000,000, because this tariff will stimulate uidustry in Aus- tralia, and the result will be that we shall ourselves produce many things that we require to import to-day. That will be to our eternal advantage, because we shall become, as we ought to, a self-contained commimity. . . . With the large market, the stimulus of the tariff, and the sheltering hand of protection against foreign and cruel competition, against prison-made goods, or goods pro- duced with the cheapest possible labour and imder conditions Avith which our employers and our men cannot compete, there vdll be a development throughout Australia. Thu,s the ball was set rolling, and for long months the Ministei'S and their supporters filled the air with oratory about the competition of the people who live outside Australia. When the Premier had been thoroughly saturated, he was dispatched to London to the Conference. In this saturated condition Sir Edmund Barton attended the Confer- ence, talked about the Empire, about trade with Australia, said many nice things, smiled, and came back again. He left the Conference with the understanding that he was "prepared to recommend" to his Parliament " preferential treatment of British goods on the following lines : — Preferential treatment not yet defined as to nature or extent." Sir Edmund Barton, having thus been sufficiently comprehensive and vague, lost no time in carefully forgetting the subject, and has now forgotten it for a whole twelvemonth. The matter, has, however, been mentioned in tlic Commonwealth House of Representatives. Ou June 3rd, 1903, Mr. Kingston, the Minister for Trade and Customs, said : — X It is, however, a great disappointment to many that hitherto no preference lias been shown by Great Britain to her Colonics, or by her Colonies to Great Britain ; but may the time speedily come when some arrangement in that direc- tion may be made which will be satisfactory to both the contracting parties. I do not forget our diflBculties in the way of revenue, but it is patent that we might give the United Kingdom preference over foreign coimtries without any inex- pedient loss of revenue by keeping ovr duties as they are so far as England is con- cerned, and raising them against others whom we have no reason to similarly favour. What is the value of our patriotism and imperialism if we do not differentiate between our brothers and the citizens of the Mother Country, and those who would wilhngly bring about our downfall at the earliest opportunity ? Those who brag about the connection with the Empire, and refuse to give her people the slightest consideration, are indubitably open to blame. * " Hansard," page 5,G80. t Ibid., page 5,702. X Ibid., page 462. COMMENCE AXD THE EMPIBE. 103 This may well be followed by a quotation from the budget speech of the Treasurer delivered on July 28th, 1903. Referring to the estimate of customs revenue from imported goods, Sir George Turner said : — It is clear from investigations I liave made, that there have been in many Hnes an increased manufacture of goods in New South Wales. There has been a very large increase in the consumption of Australian goods by the States of New South Wales, Queensland, and Tasmania, and not quite so large an increaaa in the consumption of other States. These quotations repi-essnt practically what has occurred in Australia since the Conference : some tall talk about the Empire, accompanied by the suggestion (printed in italics) and a remark that the policy of keeping goods out ia succeeding. The Conference was arranged on the initiative of Canada. The Coronation was to take place, and it was proposed to take advantage of the gathering which that event insured to bring the Premiers together. So far as the great Coronation function was concerned, the Premier of Australia was indeed the mouthpiece of the heart and intellect of Australia, but so far as the Conference was concerned he had absolutely no power, and the only interest taken by Australians in the Conference was to make it certain that they were in no way committed to anything. That Sir Edmund Barton recognised and accepted this position is made clear enough by replies to questions asked in the Senate, and answered by the Vice-President of the Executi^■e Council, on March 19th and April 11th, 1902, as follows : 1. — The Prime Slinister does not intend to take any important steps of new policy except subject to the decision of Parliament. 2. — The Prime Minister is fully alive to his responsibility to Parliament, and does not intend to pledge the Commonwealth so as to deprive ParUament of its perfect freedom of action. Presumably every other Premier occupied much the same position. The Conference, therefore, was a meeting-ground for friendly talk, not for business : to compare notes, not to create a policy. Now to refer to the Conference Pteport. In his opening address Mr. Chamberlain seems to have taken very strange ground. Tims h« said : — * The United Kingdom . . . derives the greater part of its necessaries from foreign countries, and ... it exports the largest part of its available produce — surplus products — also to foreign countries. This trade might be the trade, the inter-imperial trade of the Empire. It is at the present time, as I say, a trado largely between the Empire and foreign countries. Now, I confess that to mj mind that is not a satisfactory state of things. This is a very remarkable statement. The able Colonial Secretary apparently seems to have lost sight of a most simple and elementary fact, which is, that population is required before trade can exist. There * Pa^e 6 106 COMMERCE AND THE EMPIEE. is absolutely no foundation for the assertion that the foreign trade of the Empire might be the inter-imperial trade of the Empire. The Colonies could not buy the goods which the United Kingdom sells to foreign countries : the Colonies could not produce the goods which the United Kingdom buys from foi'eign countries : they have not the people to consume the former, nor to produce the latter. The point is not even arguable. Mr. Chamberlain continued that " free interchange " was the object for which His Majesty's Government would " gladly strive." Very clearly and accurately he showed how the Colonies might collect more or less revenue from the Customs without infringing on the principle of free interchange : — In my mind, whenever Customs duties are balanced by Excise duties, or •whenever they are levied on articles which are not produced at home, tho enforcement of such duties is no derogation whatever from the principles of Tree Trade, as I understand it. He was right in adding that " it would be impossible to over-estimate the mutual advantages " that would result. Then his argument seemed to proceed : " Well, gentlemen, if we cannot get what we look on as the supreme good, what can we get, what will you give 1 " This was prac- tically Mr. Chamberlain's question. He certainly received an answer of a most emphatic character ; disguised as the answer was by courtesy and political terms, it was nevertheless emphatic. Briefly summed up, it was that the lion in the path, local restriction, was too powerful to be removed, but that, so far as the lion permitted, steps would be taken to promote commerce with the United Kingdom. It was even made clear that the lion dominated the position in Canada, and would not forego any provision to which it had become accustomed, Mr. Seddon, the Premier of New Zealand, said : — * Apart from tlie question of revenue, there is the question of Colonial indus- tries, which are protected under existing tariffs, and which might be interfered with if the tariff now existing were reduced to give the rebate on the British manufactured goods. That, of course, would be a matter to be decided by the respective Parliaments. There are some goods upon which you could give the rebate without interfering with the Colonial industries. Others again, you would have to raise the amount upon the foreign goods, and still give the preference to the British manufacturer. On another occasion Mr. Seddon said : — f As I said in my speech with respect to industries, we may have to raise the duties on foreign goods the same as Canada has done, leaving the present tariff on British goods and not prejudicing our industries. In passing it may be noted that Mr. Seddon expressed very strange opinions as to the value to Great Britain of the concessions he was prepared to recommend New Zealand to make. He proposed that 10 * Page 67. t P?^£c 1C7. COMMERCE AND THE EMPIBE. 107 per cent, should be deducted on duties when the goods came from the United Kingdom. This meant £150,000, which, said Mr. Seddon : — Would be equal to paying the interest on five millions of money at 3 per cent., and correspondingly you might say that the Colony of New Zealand by paying this would be paying the interest on five battleships that might cost a million each. This is a fair illustration of the fog in which the adherents of the penalty and preference system live, and move, and have their being. The taxpaj^ers of New Zealand would not, as a matter of fact, pay the £150,000 at all, they would simply keep that amount extra in their pockets. The interest on the battleships is a piece of fiction. Mr. Fielding, the Canadian Minister of Finance, said : — * We do not profess that we want to introduce British goods to displace goods made by the manufacturers of Canada. That is a point upon which we must speak with great frankness. Whether or not it was a wise policy for Canada to foster her manufactures by high duties is a point hardly worth discussing now ; we must deal with things as we find them. We had very high duties under the former tariff. The present Government have reduced those duties very materially, especially in the case of British goods. Many things of British manufacture paid 40 per cent., 50 per cent., or 60 per cent., but we have reduced these down now to 23 per cent, from Great Britain, and we think that in those cases we have gone about as far as we can without sacrificing our ovvn manu- facturers. The interests are very large: the interests of the capital invested, the labour and the banking interest, and the many other interests which cluster round a great industry. Therefore, if we are asked to reduce our duties and bring in British goods, and displace Canadian manufactures, we must frankly say it is not possible for us to do so. But we say it is quite possible to give an advantage to British goods in some cases by raising the tariff. The honest frankness of this statement is noteworthy. The lion in the path is unmistakable. Further, Mr. Fielding said : — f If you tell us this preference is of so little consequence that it is not to be placed to our credit at all, you must simply force us to consider whether it is worth our while to continue it. We have to fight a battle on this question. Some of our manufacturers fight us. They say, " We are ruined by this very severe competition." Then if we find that on this side of the water (in England) pre- ference is not valued, can we continue it ? Could it be made clearer that an enormous value is put on a small concession 1 The State prizes to the favoured ones are somewhat reduced, and the favoured ones, who have been encouraged to think they hold a mortgage on creation, proceed to grumble. The lion roars, and the politician trembles. " Can we continue 1 " Certainly not, if politicians will keep lions of this sort, their political lives depend on the docility, not of the lions, but of themselves. The Canadian Memorandum contains this paragraph : — It might be noted that the Canadian Government has been attacked by Canadian manufacturers on the ground that the preference is seriously inter- * Page 131. t Appendix XIV., Conference Report. 1897. 1901. $1,396,015 . §2,107,032 592,290 1,618 991 873,183 898,131 607,524 1,032,582 228,427 215,122 108 COMMERCE AND THE EMPIBE. fering with tlicir trade. The woollen manufacturers have been foremo^.t in the attack, and they have made very bitter complaints to the effect that the industry is threatened with ruin through the severe competition with Britain brouglit about by the operation of the preference. In brief, these manufacturers claim that the rates on woollens are too low to be protective of their industry. The Memorayirlnm shows that the Canadian woollen industry works under cover of 35 per cent, on foreign woollens, and 23 per cent, on British, besides the natural advantage of being on the spot. The Memorandum expresses surprise at the growth of imports into Canada from foreign countries, blames British manufacturers for not taking advantage of their opportunitie?!, and gives a list of imports in 1897 and 1901 in a number of commodities. Here are the Grst three of the thirteen commodities which arc named : — Silks from Great Britain Silks from other countries Fancy goods from Great Britain Fancy goods from other countries Gloves and mitts from Great Britain. Gloves and mitts from other countries 287,951 . . 487,456 It is singular that the Canadians should not see the easy lesson of these figures. In 1901 under the influence mainly of a great expansion of production, Canadian prosperity rose rapidly. The people had more money to spend, and they bought the world's luxuries in increasing quantities. In the interval of four years, the imports from France doubled. That a thing is of French manufacture is almost a guarantee of its delicac}'- and quality. The women of Canada, like their sisters elsewhere, know what is good and charming ; when they have the money they buy such things, and if they think at all on the subject they laugh at the foolish legislation that would select their silks, gloves, and fancy articles for them. The British are not also French, Italian, German, Japanese, and a few other nationalities besides ; possibly if they were they might then be able to produce the commodities which are the specialities of other nationalities as well as those of their own, and be able by reason of the " preference " to do trade which at present they cannot. Probably the Canadians have not yet recognised that it would not be good for them to have the range of their markets limited even to the Motherland. The Anglo-Saxon is the world's gi'eat spending race. They grow rich because they spend. The money accumulated is a bagatelle to that which is spent. The Anglo-Saxon is for ever asking, " What can I spend ] " The Chinese, the other extreme, seems to be for ever asking, " What can I save? " — and he remains poor. The figures of Canadian imports first given speak eloquently of the fact that the Canadians know how to spend ; as they can afford to live, so they live. The more they make, the more they spend — sowing the seeds of future han^ests. To return to the more immediate point. There were laid before the Conference copies of resolutions passed by several Boards of Trade in C0M2IERCE AXD TEE EMl'lllE. 109 Canada. The following is from resolutions passed February, 10O2, when it was thought Great Britain would impose a duty on wheat : — Whereas, according to the Press despatches, it is the intention at the present session of the Imperial Parhament to levy additional taxes in order to meet the heavy expenditure caused by the war in South Africa and the large additions to the British Navy, and amongst other products which may be taxed wheat has been especially mentioned. Therefore, Be it resolved : That in the opinion of the Board, any tax placed by Great Britain upon products similar to those produced in this country should be so levied as to grant a preference to the pro- ducts produced within tlie Empire. This resolution was adopted in the same^ or slightly different, terms by a number of Boards of Trade. How could such a resolution be passed anywhere within the borders of Canada ? Only inider a mis- apprehension of a most serious character ; on no other supposition can it be explained. Look at the position. It was knov/n that the war expenditure of the Motherland was very heavy, and that taxes, already increased, were to be augmented in weight and number. It was thought that the bread — mind, the bread — of the people was one of the things that would have to be taxed. Forthwith, resolutions were passed in Canada, practically saying, "Yes, tax the bread of the peoj)le of England, but then so far as Canada can supply the grain, send the product of the taxation to Canada." A mere trifle per bushel on the quantity of wheat which the United Kingdom bought from Canada would mount up to a million dollars ; the people of the United Kingdom were to be asked to pay it becavse of the icar, but the money was not to be placed against war expenses, but be added to the profits of the Canadian farmers. This is the bare, the naked truth. But no one supposes that the people of Canada deliberately wished to transfer big sums of money from tlie pockets of the workers of the United Kingdom to those of the farmers of Canada. What then was the reason ? The Canadians possessed an exaggerated, entirely erroneous, idea of the value to the United Kingdom of the Customs "preference" they were giAnng, and they thought they were justified in asking for the return they desii-ed. Nothing was done at the Conference to put the mistake right ; yet the people of Canada are too sincere, too true, to wish to follow — deliberately follow — a course unfair and unjust and injurious to the Motherland. Between the two paragra])hs of the resolution quoted there was a reference to the " tariff preference " given by Canada, and it was added : — One of the results being that Germany has discriminated in her tariff against U3 by imposing practically prohibitory duties on our cereals, thus closing a valu- able markets to our farmers. This is further evidence of the enormous value put upon the " tariff preference " granted to the United Kingdom, and further evidence of the error that seems to inevitably permeate this subject. Practically, in a business sense, the German market has never been of any value to the Canadian farmer, and even if it had been, when Canada as vet Wool. Grain. Meats. Flour. Sugar. Butter. Tea. Clieese. Hemp. Tallow. 110 COMMEIiCE ANT) THE EM PI HE. is able only to supply a small part of the British domanil for wheat it would have made no difference. Wheat is wheat, and the surplus of the wheat-e.xporting countries is, in fact, only one surplus, and if every country in the world except the LTnitpd Kingdom were to prohibit the importation of Canadian wheat it would not matter to the Canadian farmer. Of course, it is profitable for a country to have shipping coming from all parts of the world, but tliere should be some exactness in these representations. If a merchant loses a buyer who is accustomed to take, say, half of 1 per cent, of his goods, he does not worry about it, if he knows for certain that his chief customer who takes 60 per cent, is quite ready to take the other ^ per cent, in addition. This is Canada's position, and her business men should not have made a mountain of a molehill. The political aspect is different, and is bigger than the business one ; the business aspect was altogether too paltry to put forwai'd with a view to influencing very serious matters. Mr. Seddon handed in the following memorandum : — Proditcts ^\'HICH WOULD Bear an Impost Not Chargeable to the Colonies, BUT Might be Imposed upon Products from Foreign Countries. Live Stock. Hides. Timber. Wines. Everything New Zealand exports is included in this list. What Mr. Seddon asked for is clear enough. If Great Britain imposed a duty on wheat equal to 10 per cent., then New Zealand for every £1,000 worth of wheat which she sent to Great Britain would receive £1,000 phis £100, or £1,100. . What Ml'. Seddon offered to recommend is also clear enough. If £1,000 worth of British goods now subject to 20 per cent, duty were imported into New Zealand, £200 was still to be collected, but if £1,000 worth of similar goods came from a foreign countiy, £220 was to be collected. Local manufacturers, said Mr. Seddon, must not be pre- judiced, so the local manufacturer would still be protected 20 per cent, against his British rival, and would have 22 per cent, against foreign rivals. Because the British manufacturer was to have two per cent, less protection levied against him than against foi'eign manufactui'ers — which would scarcely influence trade in the least — British consumers of New Zealand food products were to be mulcted of tens and hundreds of thousands of pounds. The unfairness is obvious, but it would be an insult to the people of New Zealand to suppose them to be capable of knowingly formulating proposals of a character distinctly unfair to the Motherland. It was here that the Conference was a distinct failure. Proposals were put forward and were entertained which ought not to have been put forward at all, but which, being put forward, ought not to have been entertained. Perhaps the most remarkable thing about the Conference was the easy way in which the interests of those portions of the Empire not COMMERCE AND TEE EMPIRE. Ill directly represented at the Conference were ignored, if not forgotten. The Conference assumed a lofty tone ; " the Empire " was its objective, but it was not an " Empire " Conference. Important, useful, desirable as these Conferences of the Premiers of the self-governing Colonies may be, they yet work — most naturally — only within certain limits ; and those limits are those of the political elements in the ascendant for the time being in the various Colonies which are represented. The Confer- ence did not face the subject of India, and yet it is vital to an " Empire " arrangement. The United Kingdom does not feel alarm at trading with India, but some of the Colonies do. Until the subject is better understood the alarm felt in certain Colonies about the competi- tion of the coloured races will continue ; whilst and where it continues there will be no real relaxation of the restrictions which bar importa- tions in the Colonies. To ask those who fear coloured labour to give it a preference in the case of British countries is to cause trouble, and to compel India to give a preference to countries that have adopted extreme anti-colour legislation, would be unjust. But the Conference was dumb on these points. The possession of India constitutes tlie greatest and most solemn responsibility that has ever rested on an}- nation since the creation of the world. This responsibility cannot be ignored ; it is recognised to-day ; it must be recognised to-morrow. To-day India is at liberty to trade without let or hindrance with all the world. Its merchants and n:ianufacturers may buy from whom they like, and sell to whom they like. Surely the people of Britain are not the people to check or curtail this liberty. Without consulting the hundreds of millions who make up India, without knowing or caring whether they approve or no, could a British (!) Parliament enact laws compelling them, except under certain penalties, to confine their purchases to the land of their conquerors? The very proposal is enough to make one's blood boil, whilst the political stupidity of the thing is remarkable. Pages might be written showing how such legislation would irritate and embitter the people. " Unite the Empire," indeed 1 Free people who can vote and legislate for them- selves can do as they like with their own commerce. It is a different thing to impose restriction on the commerce of the conquered and the helpless. Besides India, there is a long string of British Possessions in various parts of the world where the people have no voice, but where their liberties are now secure. Will the day ever come when Britain will be less mindful of the liberties of her coloured subjects than she is now ? 11: CHAPTER XVir. " PREFERENCE " — FURTHER ADVOCACY. Evidence abounds of the enormous value which the Canadians put on the " preference " which their tariff confers on British goods — of the enormous payment to which they think they are justly entitled. Thus, ]VIr. John Charlton, M.P., and a member of the Anglo-American Joint High Commission on British Preferential Trade and Imperial Defence, says : — * Canada desires preferential entry into the markets of Great Britain for her ■wlieat, floiir, oatmeal, animal products and fish ; and she desires the preferential treatment without surrendering the essential features of her own tariff policy, which is a moderately protective one. She would readily grant to Great Britain preferential treatment to a greater extent than at present, but she would probably decline to permit this preference to reach a point that would threaten her own industries, estabhshed under the moderate protection inaugurated in 1878. It may be assumed with confidence that neither Canada nor Australia can accept absolute free trade with Great Britain. The dream of certain classes in these Colonies is that preference, to an extent that would give them material advan- tage in the British markets over foreign countries, can be obtained, while they will be allowed to retain tlie distinctive features of their own policy at present i n force. There is no mistaking statements like these. " Material advantage " is expected in the British market, but the " distinctive features " of Canadian policy — restriction of imports — are not to be touched. Mr. Charlton further sa^-s : — A preference of this amount (10 per cent.) as against the United States, Russia, and other food-export countries, would give to Canada and to the wool-growing and to the mutton- and beef-raising interests of Australia very important advui.- tagcs. i\Ir. Cliarlton is frank enough to speak of a substantial advantage, not of the almost invisible percentage some writers have named. Ho continues ; — She (Canada) has no preference in the British market \\hatpvcr, while she gives British manufactures the preference above mentioned. When moderate duties were recently imposed upon grain by the British Parliament — amounting to 3d. per cwt. on wheat and 5d. per cwt. on flour — it was supposed that Canada, in return for the preference of 33J per cent., would be relieved from the operation * North American Hevicw. C0M2IEECE AND THE EMPIRE. 113 of this taxation upon her grain products. This supposition was ill-foimded, an 1 no recognition of Canada's preference has been deigned by the British Govern- ment. The result has been a shght soreness of feehng, which could easily be made more acute by injudicious action in the future on the part of the Imperial Government. . . Last session I introduced into the House of Commons at Ottawa the following motion : — " That this House is of the opinion that Canadian import duties should be arranged upon the principle of reciprocity in trade conditions so far as may te consistent with Canadian interests ; that a rebate of not less than 40 per cent, of the amount of duties imposed should be made upon dutiable imports from nations or countries admitting Canadian natm-al products into their markets free of duty ; and that the scale of Canadian duties should be suflSciently high to avoid inflicting iajury upon Canadian interests in cases where a rebate of 40 per cent, or more shall be made upon the conditions aforesaid. " Carefully note the wording of this resolution. Canadian products are at present admitted "free of duty" into the United Kingdom; but it is already clear that the author of the resolution wants the products of other countries to be dutiable, by 10 per cent., so thet Canadian may be raised in value to that amount ; and then — well, then the Canadian duties will be kept " sufficiently high " to prevent the United Kingdom being able to sell goods to any extent that would affect Canadian manufacturers. In brief — much for little. "An Appeal from Canada " is the title of an article in the Contemporary Eevi?iv.* The author, Mr. W, F. Hathaway, writes ; — We ought to . . . show Great Britain that she is unjust and unwise in not giving her Colonies — and particularly Canada and Australasia — a preference in her markets. The present unsympathetic attitude of British statesmen towards Canada, shown more particularly in the failure to readjust their tariff and reciprocate our preferential rebate, is unworthy of their supposed sagacity and foresif^ht. It is deeply to be regretted that such sentences should be penned ; such sentiments be held ; but more still is it to be regretted that a Ministry exists in Great Britain that is not wise enough and strong enough to show Canada how mistaken she is, ajid how deeply she is indebted to the tariff policy of the Motherland for her advanced and advancing prosperity. To show how little real study has been given in Canada to the subject, it may be pointed out that Mr. Hatheway in his article suggests that the United Kingdom should levy a duty of " one penny a pound on all wool imported into the United Kingdom from any countries other than South Africa, Australia, and Canada." Mr. Charlton's idea is 10 per cent, on wool. Now, neither of these writers apparently, has the least idea that it is an absolute impossibility to bestow a fraction of advantage on Australia through any duty levied in the United Kingdom on wool from which the Australian imports would be free. This point is de^dt with elsewhere, but the ignorance that prevails in Canada on the subject is proof of how little thought has been given to the subject. Whilst a British duty on grain, from which ♦ July, 1902. Page 93. 114 COMMERCE AND THE EMPIBE. Colonial was free, would bring Canada the full amount of such duty, a British duty on wool, from which Colonial was free, would bring Australia nothing — not one brass farthing. This is one illustration of what widely varying results the system of penalties and preferences would bring about. It will be seen that Mr. Hatheway asks favours jmrticularly for Canada and Australasia. There is much in this one word. Perhaps it was inadvertently used, but it indicates everything. It shows from what the demand proceeds, and in what direction it points. The demand is based on the self-interest that animates all restrictions, and it points to disunion, not to union. The Protectionist Association of Victoria gives its blessing to the Penalty and Preference system. In July of this year it passed a resolution ending as follows ; — Every tariff alteration made for this purpose must be based on the principle that our Commonwealth jirotcdive duiics continue to cover the difference between the labour cost of production in Australia and that in other parts of the Empire, so that the fiscal preference given shall be by additional duties upon imports from foreign countries, and by discrimination in the free list or in merely revenue producing items. The following month, at a Conference of Australian Chambers of Manufactures, held in Melbourne, the following resolution was passed : — This Conference of delegates of the chambers of manufactures of Australia earnestly recommends the several chambers to support the policy of trade pre- ference within the British dominions, tvith full preservation of the industries of the Commonwealth, to the end of strengthening and developing production, manu- facture, traffic, and commerce within the Empire. On August 27th, Sir William Lyno, a member of the Barton Government, addressing an inter-state Protectionist meeting, at Mel- bourne, said : — Preferential trade did not mean tliat we were going to lower our duties : it meant that, if we were going to trade outside, we should trade to a larger extent with the Mother Coimtry. The following telegram appeared on the records of the Australian Federation Convention of 1891 : — Victorian manufacturers recommend Free Trade throughout Australasia, also Free Trade with Great Britain for all goods not produced or made in Australasia except alcoholic liquors. They all play the same tune, they have played it all the time, and it is no use expecting them to play any other. If a man, by personal interest or political belief, be a restrictionist, he must follow and support that policy. Enough protection to beat English manufacturers and something higher still against other manufacturers, and then they can afford to feel as happy as, no doubt, that gentleman did who once sold " a gross of green spectacles " to an unsophisticated youth, 115 CHAPTER XVIII. CANADA HER TARIFF PREFERENCE. In 1897 Canada decided to allow British goods — with certain exceptions — to be admitted on payment of 87|- per cent, of the ordinary duties ; in 1898 this was made 75 per cent., and in 1900 the amount to be paid was further reduced to 66| per cent. This means that the importer in Canada has only to pay <£66 13s. 4d. on goods from Great Britain, which, if imported from a foreign country, would cause him to have to pay £100. Taking the Cancadian, 1902, returns, it is found that the duty paid on the import of British goods averaged nearly 19 per cent., so that ordinary rates would average a shade over 28. The difference between these two percentages is about 9. The question to consider is how far has this preference of 9 per cent, tended to increase British trade in the past, and how far it is likely to do so in the future. A study of the subject shows that the results so far have not been great. The import returns for the years since the system was inaugurated show increases in all directions, but no specially marked increase in the direction intended. It is found that though the imports of British goods have increased, the imports of American goods have increased still more. The returns for the years (ending June 30) 1897 and 1902 are as follows : — Imports entered for Consumption, Total from From United From Great all countries. States. Britain. 1902 .. .. $203,000,000 .. $121,000,000 .. $49,000,000 1897 .. .. 111,000,000 .. 62,000,000 .. 29,000,000 Increase . . . . $92,000,000 . . 59,000,000 . . 20,000,000 „ per cent. 83 . . 93 . . 69 It will be seen that the increase in the imports from the States is much greater both actually and relatively than the increase in the imports from Great Britain. The explanation lies in the simple fact that Nature has given the United States easy access to Canada. It may be accepted as certain that the 9 per cent, preference on British goods is counted for all it is worth by the Canadian trader, but if by paying that extra duty on goods from the States the trader can save 10 to 1-5 per cent, in transit charges, the order goes to the States. Canadian develop- ment is necessarily Westward. The further AVest the easier for the United States, the more difficult for Great Britain. Notice the move- ment, even in two years, in the nine ditferent provinces, the four more IIG COMMERCE ANV THE EM PI BE. or less on the Atlantic and open to British shipping, and the five all further West, either adjoining the States or on the Pacific. Canadian Imports for ( Provinces. Quebec Nova Scotia New Brunswick . . Prince Edward Island ^Consumption.— 1900. . $72,313,856 . 10,369,943 . 6,680,895 506,374 88,771,068 Dn'IDED ACCORDINO TO PROVINCES 1902. Increase. .. $73,634,001 .. $1,320,145 .. 12,480,164 .. 2,110,221 7,245,827 .. 664,932 648,714 .. 142,340 . . 94,008,706 . 4,237,638 Ontario . . Manitoba . • British Columbia North-West Territories Yukon District . . . 70,221,464 . 6,669,144 . 10,332,819 . 1,108,281 . 2,671,540 . . 85,235,418 . . 8,703,488 . . 10,275,548 . . 2,500,260 . . 2,068,175 . 15,013,944 . 2,034,344 56,271 . 1,391,979 603,365 91,003,248 108,782,889 17,779,641 These figures accord with the well-known fact that it is westward Avhere Canadian expansion is making itself felt ; on the Atlantic side an increase equal to about four per cent., on the Pacific side a small falling off, between the two an increase of nearly 20 per cent. The facilities for communication between the States and Canada are very- great. The 1902 returns show that there arrived from the States at Canadian ports on the rivers and lakes 23,685 vessels, with a total tonnage of 7,595,741 tons, " exclusive of ferriage," says the return. The vessels were mainly steam : about one-half Canadian and one-half American. Some idea may be formed of the extraordinary facilities existing for transit when it is pointed out that shipping arrived from the States at no less than 73 diff"erent ports in the one province of Ontario ; to very few of these can British shipping approach, since it has not yet been discovered how to ascend the falls of Niagara. It seems that merchandise to the extent of 22 millioirs of dollars were imported into Canada from Great Britain and other countries through the United States, and 48 millions similarly exported. It can readily be imagined that in the now rapidly expanding provinces of Ontario and Manitoba the ability to secure supplies of merchandise within two or three days from the great cities of the American West, against at the very quickest two or three weeks or a month from British markets tends to assist the States. " Time is money " in many ways ; it is often wise to pay moi^e for goods that are close at hand and which can be bought in the exact quantities required, be more easily tested, and, if need be, can be personally examined, than to run the risks that attach to importing, and have to purchase the larger quantities which it is usual to ship. Nature intended the countries north and south of the great lakes to trade together. There are many articles in which it would take 100 per cent, preference to beat Nature. COMMEliCn A^W THE EMPIRE. 117 lliere is 1,0 doubt at all that nearly the whole of the one-third allowed off imports of British goods is simply so much reduction of Canadian taxation. The Canadian Treasury does not receive it, and the Canadian taxpayer does not pay it. This is in striking contrast to what would happen if Great Britain established a preference for Canadian grain ; by the amount of the preference the price obtained by the Canadian farmer would be so much increased. The best that is offered by the Canadian preference is a greater opportunity for the British manu- facturer to sell goods at his usual price. This advantage, it is quite clear is, in the majority of cases, less valuable than the natural advantage po-ssessed by the American. It is quite possible, however, in some industry, special to a limited number of firms in Great Britain, thiit Ity agreement amongst themselves they may ari'ange to add that one-third to their own prices at times, if not always, and thus secure so much more profit. If a list were prepared of those industries for which Gi^eat Britain is specially famed, the list would represent also those industries which are specially penalised by the Canadian tariff. There is no getting away from this fact. Textiles and machinery are Britain's specialities, and the Canadian duties on these are 35 per cent. It is true the preference reduces this to 23, but the freight and other charges probably lange from 5 to 15 per cent. ; taking an average of only 7, it brings the duty — the preferential duty — up to 30 per cent, protection for the Canadian manufacturer. It is worth while referring to a few of the Canadian imports. Carriages and vehicles of all kinds, total $1,430,364, less than 1 per cent., or $12,711, were entered under the preferential tariff. Furniture, total $489,306 ; under preferential tariff, $14,246. Agricultural implements, total over $3,000,000 ; under the preferential tariff, less than $20,000. These items indicate that when the goods are bulky the manufactui'ing must be done close at hand. Oil, raw and boiled, total imports, $407,101 ; under preferential tariff, $377,614. Opium, $249,888 and $239,534 respectively. Tapioca, $67,083 and $58,046. These indicate articles in which the trade is practically all done under the preferential tariff. The consumers are supplied at lower prices, and lower prices increase consumption ; beyond this it cannot well be said British trade is helped. Of coal, anthracite is duty fi^ee. 1,652,341 tons imported — all from the United States ; bituminous is subject to a duty of 53 cents a ton. 3,009,135 tons from the States paid this duty, and 37,827 from Great Britain paid two-thirds the rate. The Canadian Memorandum, respecting the preferential tariff, laid before the Colonial Conference, shows that between 1893 and 1897 there had been a marked decrease in the imports from Great Britain, and that between the latter year and 1901 there had been a marked increase. As the year 1897 saw the preferential system inaugurated the increase is confidently attributed to that. It may at once be said that the Canadian Memorandum entirely fails to recognise what was the controlling influence of Canadian commerce during the years in question. Here it is : 118 COMMERCE AND THE EMPIBE. Exports, in Millions of Dollars. 1893 1894 1895 189G 1897 1898 1899 1900 1901 119 118 114 121 138 104 159 192 190 This is the secret, and it is one of the most magnificent exhibitions of successful self-help to be found in commercial history. The "nineties" early developed financial trouble, which culminated in a grave crisis in 1893, the consequences of which continued to influence adversely British business with the Colonies for several years. By 1897, however, the expansion of Canadian imports became notable, and grew more mai'ked year by year. Canada became })rosperous again, and able to purchase more largely, as her increasing imports showed. Her pur- chases from France, Germany, Spain, Italy, Holland, Belgium, Switzer- land, all doubled ; it was not, therefore, so surprising that her purchases from the Motherland should increase by two-thirds as to be unexplain- able except by reference to this tariff preference. That this cause did have some influence may be admitted, but no one will venture to assert that had this preference been granted in 1893 it would have prevented the whole or even much of the decrease that took place. There is one thing to be remembered, especially in Canada : it is that the great quantities of Canadian produce which the United Kingdom is taking provides the money to pay for the commodities which she is purchasing from many countries in excess of what she sells to them. In 1902 Canada bought from foreign countries to the extent of 77 million dollars in excess of her sales to them, whilst the British Empire, mainly the United Kingdom, bought to the extent of 75 million dollars from Canada in excess of sales to her. These ti'ansactions do not end here : British purchases from Canada made possible the Canadian purchases from foreign countries, and foreign countries having thus increased their sales became in turn bigger buyers than otherwise they would have been from Great Britain and from one another. British purchases from Canada help British exports in a way Canadian preference never can. 119 CHAPTER XIX. PREFERENTIAL POSSIBILITIES I.V AUSTRALIA AND NEW ZEALAND, What would tariff preference in the Commonwealtii of Australia and in the Colony of New Zealand be likely to do for British trade 1 In one respect the position in these two parts of the Empire is much more favourable than in Canada ; both are surrounded by water, which separates them from all other countries and all other parts of the world. Great Britain, German}^, the United States are all far away ; the difference in the distance from any one of these countries and any of the other three, counts for little or nothing. It would ai)pear, then, that any preference granted to Great Britain would do effective work ; though, indeed, already Great Britain has the lion's share. There is, however, another aspect of the subject which cannot be overlooked, because it represents a controlling influence, this is the financial aspect. Australia and New Zealand have no revenue to play with, and Australia most certainly will not have for some years to come. The revenue collected in Canada from Customs and Excise duties is about ten millions sterling, including the several millions of increase during the last few years ; revenue in Australia and New Zealand on the Canadian basis according to population would be about eight millions or eight and a half millions, but the actual Customs and Excise collections reach between eleven and twelve millions. Take the reverse : if the Canadian customs and Excise realised relatively the same as the Australian and New Zealand, then, instead of paying ten, Canada would pay fourteen millions. If the revenue from intoxicants and narcotics be omitted from the figures, the difference would be lessened materially, but it would still remain true that the revenues collected from ordinary merchandise is greater in Australia and New Zealand than in Canada, and that every penny of the revenue is wanted. Every student of finance knows that after a certain level of taxation has been reached it becomes increasingly difficult to add to the burden, an increase which under that level was readily sanctioned and easily borne would, above that level, be sei'iously contested and borne with difficulty. Australia and New Zealand absolutely cannot make reductions in their tariffs to favour British goods, while maintaining their restrictive policy. The Canadian i-eturns of 1902 showed that, even with the greater volume of trade now being carried on, only 23 per cent, of Canadian imports were from the United Kingdom and 25 per cent, from the whole Empire; whilst in 1901 in Australasia no less than 1-20 C0M2IEECE AND THE EMVIHE. G-t per cent, of the total impoits were from the United KiugJom and 72 per cent, from the Avhole Empire. Whilst the British imports into Canada were 11 millions sterling, they were 36 millions into Australasia. To give a reduction on present duties in favour of British goods would evidently mean a good deal of money, even if the preierence wei'e much smaller than one-third. The only possible way would be to raise the duties so much that when the allowance was taken off the net figures payable on British goods would be the same as those now payable by all goods. Clearly this would not be a promising start. The area of operation is, of course, an important factor. What have other people the audacity to sell, and the Colonists the weakness to buy ? Imports in 1901. From From Total. British Empire. other countries. Million £. Million £. Million £. Australia .. .. 28-2 12-4 40-6 New Zealand .. 7 '8 2-0 9-8 Total .. .. 360 .. 14-4 .. 50-4 The problem is how to transfer the 14-4 millions. Considering hovv largely other countries buy goods from Australia and New Zealand which Great Britain cannot buy, the problem looks rather dirty, but the Juggernaut policy knows no scruples. Although Nature has most generously endowed the British Empire, some things have been specially reserved for other parts of the world, and it becomes clear that part of this trade cannot be tiansferred, for instance that in tobacco and cigars. Then the local Juggernaut has to be remembered ; he is quite a hot Free Trader when he wants to buy anything, he insif-ts on having his raw materials, his special machinery and special tools free of duty ; and certain things that he does not know how to produce or make he also likes to have on the free list, just a bit of jam to cover the pill. Then, it is not considered constitutional to tax any merchandise imported by a Government, and as the Australian railwa3's belong to the state governments all railway material, wherever from, escapes payment of duties. It is evident the area to work on is becoming smaller : — ami. £. Imports as shown . . . . . , , . 14 '4 Less: — * Free list. Raw materials, etc. 3*4 „ „ Government Imports I'O „ Dutiable. Tobacco, wine, etc. . . 3-0 7"4 Balance .. .. 7'0 * These deductions are approximate only, complete official returns not being available. Owing to the English workshops being full of orders, large supplies cf railway plant were imported from the United States and elsewhere in 1601. Free list includes kerosene oil, many raw materials, special machinery, all tools, explosives, etc. COMMEBCE AND THE EMPIRE. 121 It may be accepted as certain that at present the maximum of trade that could possibly be influenced does not at the very utmost exceed seven millions, and in this are included many specialties of manufacture which Great Britain cannot supply to advantage. But assuming that Australia and New Zealand are importing seven million pounds' worth of commodities from outside countries, which are commodities Great Britain is producing, how can the trade be transferred ? Any steps in this direction must, of course, be taken l>y Australia and New Zealand. At the Conference Mr. Seddon spoke of a prr- ferential allowance of one-tenth being made by New Zealand. The Premier of Australia has said no concession could be made on existing duties, but has spoken of the rates being raised against outside countries. Suppose, then, such duties were raised so that the British would have a one-tenth advantage, does anyone think for a moment that an advantage of one-tenth, averaging 2 per cent., would influence shipments to any appreciable extent ? As well try to fight a modern battleship with a popgun, as to capture this trade with 2 per cent, preference. A little re-arrangement of freight ; some export con- cessions by European railways ; a little cutting of profits and the 2 per cent, could be much more than made good. Then it may be said, " raise the duties against outside countries, so that a one -third preference, like the Canadian, may be given." Evidently, however, a third of a big duty is more than a third of a small duty. Here is a comparison of some of the duties. Comparison op ad valorem Duties. Canada. Australia. New Zealand. Per cent. Per cent. Per cent. Apparel . . 35 25 25 Cottons (printed) 35 5 10 Woollens 35 15 20 Machinery 25 12* 20 Iron (structural) 35 12| 20 Boots and shoes . . 25 30 22i It will be observed that in apparel and in woollen cloth the Canadian one-third is 11 1 per cent., whilst one-tliird in Australia would be only 5 and in New Zealand 6| per cent. As already shown, taking everything together the Canadian preference averages 9 per cent., because the duties average nearly 28, and it may be taken as certain that a preference of one-third in Australia and New Zealand would not average more than between 5 and 6 per cent. Would 6 per cent, turn the current of the trade 1 No, it certainly would not. By economies, by combinations^ etc., in the majority of cases the difference could be met. To make a preference of one-third equal in value to the Canadian, it would, of course, be needful to raise the average of the Australian and New Zealand duties to the same level as the Canadian, which would be an advance of about half : a duty now 20 per cent, wovild 122 COMMEECE AND THE EMPIBE. become 30, and the one-third off to British goods would leave 20 payable as now. That, however, would be equal to a preference of one-half, or 50 per cent, of the amount of the duties now existing, so that it will be seen a change of a most radical kind would be needed to secure a preference equal in amount to the one given by Canada, which, it has to be remembered, is by no means a success. But supposing such a radical change made, there is no doubt it would inriuence a considerable part of this trade of 7 millions, though certainly far from the whole, for where the duties are much below the average at present, as for instance machinery 12^^ per cent., an increase to 18| per cent, would only penalise the outsider by 6 per cent., which in many cases could easily be met — especially if, as is quite possible, the countries affected agreed to give a bounty to countervail the rebate to British competitors. A man can grasp a bar of iron or a piece of wood, but not a handful of quick-silver ; commerce is like the quicksilver. But supposing the deed done, the victory won, what then 1 Aus- tralasia would still want to sell to the other countries the many million pounds' worth of wool and other pastoral products, wliich she produces in excess of what G reat Britain can buy. She would wish to be paid, and might rest content if Gi-eat Britain paid her. But Great Britain would not want to give Australasia ten million pounds' worth of manufactured goods for nothing, and, then, it would happen that Great Britain herself, instead of Australasia, would have to accept the goods which these other countries would give in payment ! 123 CHAPTER XX. THE SOUTH AFRICAN PREFERENTIAL TARIFF. South Africa is to be warmly congratulated on the establishment of its Customs Union, not only because of the immediate advantage but also because of the removal of prospective grounds of dispute in the future. It is to be sincerely hoped that this Customs Union is but the forerunner of a lasting South African federation ; a heavy responsibility will rest on any section of South Africa which, after the close of the two years or at any later period, uses the power that is given to bi^eak away. If the Customs Union were ever destroyed it might be many a long year before it could be replaced, or a real federation brought within the reasonable distance it now seems to occupy. It is to be regretted, however, that the Union is marred by the adoption of the Penalty and Preference system ; but so utterly ashamed do the supporters of this system appear to be that they have not dared to adopt it except in the most meagre degree. Perhaps they thought that if the shadow of the system were once thrown over South Africa, that the substance of it, the real thing itself, might gradually be introduced. In the first place, the list of duties remove"d from the operation of the preference is very much larger than the Canadian, and, in fact, includes every specific duty. There are a few ad valorem duties of 25 per cent., but they are unimportant. The main classes are duties of 10 and 2 1 per cent. Of the former, British goods have preference to the extent of one-fourth, and of the latter, to the extent of the whole. That is, the South African preference on British goods — the penalty on other goods — is 2i per cent. Everyone must know that this allowance will not affect the volume of trade from other countries in any appre- ciable degree. To accept a principle in name and then deny it in practice is, indeed, to " damn it with faint praise." To secure this contemptible result it was not worth while subjecting South Africa to the adverse comments of Europe. If anyone needed convincing of the unwisdom of what has been done they can want nothing more than the fact that when the question of adopting the Customs Convention was before the Legislative Council of Cape Colony, an amendment rejecting the principle of preference to British goods, and making changes in a protective direction, was only defeated by the casting vote of the President. Considering the disturbed state of South Africa, racial difficulties, and other matters, surely nothing should have been introduced likely to cause heart-burning, and prepare the way for futui-e strife. 124 C[l AFTER XXI. THE BLACK FLAG OF PROHIBITION. The object sought by the securing of a preference for Britisli goods in tlie Colonies is stated to be the transference to Great Britain of business now done by other countries. If it is right to attain this object, then tlie means have to be made effective. It must be evident to every thinking man that — in Canada, at any rate — with regard to quite a number of commodities, success cannot be attained until the black flag of absolute prohilution has been hoisted. In the Colonies generally the duties would have to be raised to such a height that it would no longer be possible for Germany, France, and other countries to send their steamers as they now do. Then — well, let anyone think out for himself the possibilities. Not one of the Colonies, however, is prepared to go to the extremes needed to destroy the trade of other countries. If this is so — and it is — why not at once confess that the whole thing is a blunder 1 125 CHAPTER XXIL BRITISH OPEN PORTS AND FOREIGN COUNTRIES. The beneficent part which the British system of free commerce has played in the development of the world at large during the past half century must not be forgotten. The historian who gives the world a faithful history of the nineteenth century will have to record how great a part has been played by the nation which had the sense to see that commerce was a thing to be welcomed, not to be driven away. The power of a great open market has brought industry, and the prosperity that follows in the wake of industry, to many parts of the world, and there is not a nation, big or little, that during the past fifty years has not increased in wealth because of the open ports of the United Kingdom. The world's great customer has been, and is, the United Kingdom. Strange to say there are people who apply the statistical measuring stick to the figures of population, wealth, etc., and comparing the results in various countries, are quite ready to declare that countries grow in prosperity under a restrictive system quite as fast, or faster, than countries under a free system, and that, therefore, the free system has nothing to recommend it. In truth, this comparison of the statistics of free trade and restrictionist countries, which is so frequently being made, has in it an element of absurdity. Take the United States and the United Kingdom. There is, probably, not one American living under the Stars and Stripes who would not readily admit that his country had reaped very great benefits from the free admission into British ports which it has possessed for its surplus produce ; and, on the other hand, it is impossible to conceive of any American arguing that the United Kingdom was helped in any way towards prosperity by the action of the United States' tarifi". There can be no disputing the truth of these propositions. What then follows ? It is as clear as any deduction in logic can be (1) that the United States owes part of its great prosperity to British policy, and (2) that the United Kingdom would have been more prosperous had American policy not checked its commerce. Consequently it must, of necessity, be admitted that the fiscal policies of the two countries cannot be judged by their respective statistics. The United Kingdom has been assisting to build up American industiy, and hence, even in American statistics, there is testimony to the stimulating power of British Free Trade policy. So far as British policy has benefited the world at large, the benefits of that policy are to be reckoned j^lu^ the benefits outside Great Britain. The investment of British capital in new lands has been the means 126 COMMERCE AND THE EMPIBE. of building up new communities whose Avants mean additional commerce to the world at large, and the shipping of other countries to-day finds a scope for employment which could not have been found but for British enterprise, capital, and policy. There is no doubt of the important part which has been played by the United Kingdom in the world's general development during the past fifty years, it is a part of which the whole Empire may well be proud. Is the Empire now, in the twentieth century, to play a less noble part 1 Is she to cast aside the great policy which has done so much to promote the welfare of the world ; so much to increase the happiness of millions "? It is reasonable for Britons all the world over to ask themselves whether in being " mistress of the seas " there is not involved some moral obligation to sustain the principle of freedom of commerce. It would be a mean sort of thing for this Empire of ours, embracing, as it does, so much of the world's best and most productive lands, to enter upon a purely selfish dog-in-the-manger policy. After making the Empire so valuable to the rest of the world, to seriously alter British commercial policy would cause world-wide trouble. There seems some- thing of the ludicrous in the idea of tampering with the policy of the *' open door " at home and fighting for it abroad. The faith of the United Kingdom in freedom's cause is still a living force, and it will shine all the brighter for a little friction. When the saving grace of common sense has swept a few cobwebs away it will be clearer than ever that a prosperous outer world is a good thing for the Empire. 127 CHAPTER XXIII. COMING DEVELOPMENTS AND CHANGES. Two and two will always be four, and a great pi-inciple which has its foundations in the eternal laws of justice will stand for ever. The world's conditions, however, are changing constantly even from year to yeai*, and nothing brings about such important changes as the growth of the population of a country. As a country grows, its position relatively to other countries changes, and the position of its internal industries, relatively to one another, also changes. But in all the change, in all the ebb and flow of human affairs, two and two still make four, and eternal principles abate not a jot of their strength and truth. The world's greatest factor is population. When the nineteenth century dawned, 5,800 years had passed since the ci'eation of the world. In the course of the 58 centuries the population of Europe grew to a total of 175 millions. Now notice what the growth has been in one single century : — Population of Europe. In the year 1800 175,000,000 „ 1830 223,000,000 „ 1860 291,000,000 „ 1880 330,000,000 „ 1890 350,000,000 „ 1897 380,000,000 „ 1903 (say) 400,000,000 During the same yeai's well over thirty millions of people left Europe for other parts of the world, but only as interesting evidence of the actual increase is this fact mentioned. Europe to-day has 400 millions of people as compared with only 175 millions when the nineteenth century dawned; this is the great, the dominating factor of the life of Europe. It smashes into atoms all the foolish talk about countries being " self contained." The truth is that the individual interests of each one of the great family of nations were never so inter- laced with the interests of the others as they are to-day. Pray throw to the wind all ideas about being " self-contained," they are antagon- istic to the great plans of Nature. 'Tis no good fighting Nature, she is just a little too strong for Man, even if he be honoured by Laving his name spelt with a capital. Various nations in Europe are " self-contained " adherents, and yet all the big ones except Russia are dependent on the outside world for a portion of the grain they eat. 128 COMMEBCE AXD THE EMPIBE. COUITTRIES ON THE CONTINENT OF EuROPE WITH CONSUMPTION IN ExCESS OF PPvODUCTION. ^\^leat shortage. lilill. Bushels. All grain shortage. Mill. BusheU Germany . . Franco GO 3G . 140 35 Italy 30 30 Spain Portugal Sweden and Norway Denmark . . 14 5 10 5 15 5 10 15 Holland . . 22 30 Belgium 12 65 Switzerland 16 20 Greece 3 5 The "whole of the figures respecting food which are quoted are taken from Mulhall, and refer to the position about seven years ago. That writer, referring to Germany, said : " the weight of grain produced is far short of the requirement of the Empire. The deficit of grain increases rapidly with the growth of population, the weight imported having more than doubled in ten years." Belgium may be said to depend on imported gi'ain for six months iu the year, and on foreign meat and butter for two months. Sweden had a large surplus down to 1882, exporting 300,000 tons, but at present she has a yearly deficit of 200,000 tons covered by importation. Denmark dovm to 1884 used to export about 200,000 tons of grain, but so large is now the consumption in the fattening of cattle that there is a constant importation of grain, net imports showing an average exceeding 400,000 tons. Switzerland. — The country hardly raises food for one-third of its population. The annual weight of wheat carried from one country to another (avei'age 1891-5) was 9^ million tons, to which adding maize, oats, etc., the total international grain trade will be found to exceed 1 3 million tons. Coming down close to the present the following figures are taken from " Beerbohm's " returns : — ^ET IJIPORTd Or VV HEAT AND FlOUR INTO EUEOPE. 1901. 1902. Qrs. Qrs. United Kingdom . . 23,143,000 24,930,000 Germany 9,480,000 8,935,000 Belgium 5,215,000 5,560,000 Holland . . 2,315,000 2,400,000 Italy 4,750,0(J() 4,900,000 Spain 690,000 325,000 Sweden 835,000 875,000 France 725,000 1,000,000 Switzerland and Greece . 2,725,000 2,750,000 Sundries 1,250,000 750,000 Total . 51,153,000 52,425,000 COMMEECE AND THE EMPIRE. 129 Of these imports about one-fourth were from Russia and other countries in the far east of Europe, and about three-fourths were brought from outside Europe. Everyone knows that the United Kingdom is a very large importer of wheat, but few people are aAvare of the extent to which other European countries have also to import ; have become less " self-contained." Taking the aggregate of the two years it will be found that the United Kingdom imported 48 million quarters, and the other importing countries of Europe together 5oh million quarters. It is not needful to go into details with regard to other food products, but speaking generally, Europe is drawing on the outside world for food more and more every year, and the one country on the Continent which is drawing on the outside world the most of all is the country whose increase of exports has been to all a noteworthy matter, and to some a cause for alarm. It is no mere coincidence ; there is an intimate connection between these enlarged imports of food together with the enlarged imports of raw materials and the enlarged exports of manufactured and other goods which have attracted so much notice. It is needful now to prepare for a further and a much greater development of commerce on the part of Europe. If in one centuiy 175 became 400 million people, then it might be said in another century 400 will become 900 million. Any such assumption may be put aside at once ; in no direction is prediction more often falsified than in that of population. It is, however, certain that the 400 million people ai'e at present continuing to increase, and will continue for sometime at any rate to increase with a rapidity varying in the different countries. What does this mean as regards food supply and general external commerce 1 An insight into the probable future will be best secured by looking back- wards. During the past century the wants of the growing population were for a time supplied by increased internal production ; but the limit of production — ^at least, of profitable production — seems to have been reached some few years ago, with the result that for every million increase in the population the percentage of imported food that was required grew greater and greater. If, then, the population of Europe increased at the rate of two millions a year for the next twenty years it might mean that by the end of that time Europe would be importing far more than one hundred million sterling of food products more than she is to-day. Of course, more raw materials also would be needed, and for all this extra food and raw materials payment would be made by enlarged exports. If, too, the well-being of the people of the continental countries of Europe approached neai-er to the English level, that alone would mean a vast increase of the consumption of food products. In this inevitable growth, of the commerce of European countries there is nothing for the United Kingdom to regret or to fear, nor is there any cause for the United Kingdom to lessen its faith in the great principle of free commerce. The United Kingdom cannot feed itself, much less can it feed Europe ; and it will not be so absurd as to grumble because Europe pays, as she must, for her imported food with exported merchandise. It is probable that the development of commerce that will take place during the twentieth century will surpass all present J 13U GOMMEBCE AND THE EMPIBE. expectations — that is always supposing INIan will accept what Nature offers. By commerce, of course, is meant that portion of trade which ci'osses political boundaries, which passes from one country to another. In the "self-contained" days which are gone probably for ever, certainly for as long as civilisation endures, trade of this sort was little known, and to-day, though the vastness of commerce is talked about, it is seldom recognised what a small proportion of the world's entire trade yet comes under that heading. In 1897 Mulhall put the world's inter- national grain trade at 1 2 million tons, and estimated this as about 5 per cent, of the grain crops of the world, adding that it thus became evident that 95 per cent, of the entire quantity is consumed in the country of production. A fact like this shows that, after all, commerce is probably but in its infancy. It will not requii'e by any means an unusual increase of population, in the counti-ies now importing, for this 5 per cent, of the world's crops to grow to 20 per cent., and a four-fold increase in grain would probably mean a four-fold increase in all commerce. But what a development for the world this would be ! What " hostages to fortune " country after country would be giving, and what a good time the prophets of evil would have ; fancy their having four times as much commerce to groan at as they have to-day ! In this expansion of commerce, a development which the past half century, especially the past quarter century has brought more and more to the front, would become very marked, that is the increasing number of miles over which, on the average, merchandise is carried. Fifty years ago the United Kingdom obtained three-fourths of her imported grain from Europe, principally from the nearest countries. To-day she obtains only a small quantity from Europe, and tliat from the farthest off countries, and the great bulk of her imports — say 95 per cent. — from distant countries. This is one of the main causes of the growth of British shipping ; instead of bringing half to one million tons of grain from near countries, five million tons have to be brought from distant countries. This is the sort of development that has been, and is going on with ever accelerating speed. " Self-contained," indeed, when, as never before, east and west, north and south, continent and continent, hemisphere and hemisphere, are working together and needing each one the other. There are people who are ever ready to accept as permanent that which in fact may be only a temporary or passing condition. This frame of mind has been much in evidence recently. The United States and Germany have made great strides of late in all the important elements of national life. The result has been that the statistical measuring stick has been greatly used of recent years. It is said : " thei'e has been this growth in twenty-live years, and consequently, in another twenty-five years the position will be so-and-so." It would be wiser if, before these predictions were made public^ they were tested by the experi- ence of other countries that had passed through similar times. A move- ment may be a " spurt" or a " boom/' but neither a " spurt" nor a " boom " ought to be accepted as a permanent condition, or as a measure of future progress. Yet this is what is done only too often. Some people, too, anticipate that one country will monopolise the commerce of the world, though in the very nature of things such an event cannot possibly COMMERCE AND THE EMPIBE. 131 occur. Home trade is always the first consideration ; foreign trade- commerce — is secondary. A country does not export what it can consume, it exports the surplus— if any — after the home consumption has been provided for. Some of the best years the United Kingdom ever had were years when her exports were smaller than usual because of a home trade greater than us\ial. It is when home trade is slack that efforts are made to give increased activity to foreign trade, or in the matter of crops when harvests have been unusually bountiful These, of course, are fluctuating conditions, and the work of commerce is to meet and adjust these fluctuations. Commerce is Natures "clearing house.' The coming years will undoubtedly be marked not only by great development, but great changes. In the United States much depends on the growth of the population. If it be lai'ge, even moderately large, much of the food products now exported may be consumed at home, compelling Europe, including the United Kingdom, to go further afield for supplies. The possible food production in the United States is, of course, far beyond anything yet reached ; it is a matter of relative cost. That the United States will, on the other hand, sell abroad larger quantities of manufactured goods seems to be one of the proba- bilities, if not certainties, of the future. The entry of Japan into the commerce of the world may be but the beginning of big things in the "Far East." The emigration movement of this century will probably be very extensive and have important results, though it may be expected that before long there will be a gradual lessening of the emigration stream towards the United States. The tendency to the building up of cities may be expected to continue; in about half a century the cities of over 50,000 people in Europe and the United States doubled in number-, rising to between three and four hundred, and representing a widespread and very important expansion of manufacturing. Big and weighty problems lie ahead ; the veil of the future liides porten- tous changes. The following among other factors will influence the progress of every country : — Taxation. — The percentage of taxation to earnings is of far more importance than generally imagined. Taxation is a great enemy of accumulation. Five per cent, in one country against 10 to 15 in another will, in a few years, have a very visible result. The public expenditure of to-day is to be regarded with horror. Capital — The export of capital on loan has been a new and impor- tant feature specially, and almost wholly, of British commerce. It has introduced new, novel, and rather uncertain conditions iiato commerce generally. The international movements of capital seem certain to be larger than ever, and point to increased disturbance of the ordinary relation between exports and imports. The United States are likely to invest a good deal of money in new countries before long. Science. — The triumphs of science in pi'omoting cheap production and cheap transit are certainly not yet ended. Food Constimptiou.- — During the last thirty years the " per head " consumption by the people of the United Kingdom of some leading food products has increased greatly: meat, 20 per cent. ; butter, 60 percent.- 132 COMMERCE AND TEE EMPIRE. cheese, 20 per cent., and so on. As the well-being of the people of Europe is gradually rising, a gradually enlarging importation of food prodvicts seems to be assured apart from the demands of a larger population. Education. — The people who are the best educated will have great advantages. A well-trained people is essential to keep a country abreast of the times. Sobriety. — It is to be feared that there are several countries whose people could " give points " to those of the United Kingdom in this matter. The Birth-rate. — It is impossible to over-estimate the serious impor- tance of this factor, especially taken in combination with the due observation of sanitary laws for the preservation of life. In France the birth-rate just balances the death-rate, and France, well-to-do as she is, remains stationary. Germany, with a birth-rate much higher than the death-rate, increases fast. Naturally, therefore, French commerce does not grow, German does. That last sentence needs qualifying. The same cause that indicates and compels a growing commerce in Germany, indicates and compels a lessening commerce in the United States. Germany has gone ahead of her food supplies, and must obtain more and more from abroad as her population grows. The United States is producing food in excess of her consuming power, and consequently exports food ; but just as con- sumption approaches production, so must exportation lessen. Both countries would be going ahead all the time, though in one commerce would be increasing, and in the other decreasing. A country must be judged by the aggregate of its home and foreign trade — its general well- being — and not by its mere home trade alone or its foreign trade alone. After having gone through the most wonderful half-century the world ever knew, after developments have taken place that could not have been foreseen, it is wise to "go slow " in predictions about the future. Mighty forces are at work ; others are slowly forming, and in many directions it will be " the unexpected " that will happen. But in and through all changes Natui'e will always be wiser than Man, and Man will be wise just in proportion as he obeys the laws of Nature, and in that obedience freedom of commerce is involved and secured. 133 CHAPTER XXIV. THE UNITED STATES. The political results of a system of penalties and preferences on British relations with the United States is a matter for thought. Gi'eat Britain and the United States have come closer together during recent years, but as far as seven years ago, in 1896, in discussing the subject of commercial relations, the author of this work penned the following : " Let us consider what is proposed so far as it would affect British relations and British business with the United States. Everyone w^ho knows Australia will bear witness to the existence of the most kindly feelings towards the States, and the desire that the relations now existing should become more, and not less friendly. This kindly feeling which exists in Australia undoubtedly exists throughout the Empire. Can we promote that friendship and goodwill by subjecting American goods to a penalty throughout every section of the Empire? Are we to look upon the commodities which America can supply as things to be rejected 1 "To-day there exists a determination throughout the British Empire to take no step calculated to wound the United States — a desire to look forward to the time when the Anglo-Saxon race shall be as one people, whatever their political divisions may be. That the scheme now put forwaixl would compel us to treat the United States and their more than sixty million people as commercial enemies is alone sufficient to condemn the scheme in the eyes of every generous member of a British community." That was in 1896. Everything that has occurred since has tended to strengthen the sentiments then expressed. The Americans readily admit the right of the British to alter their trade policy, they could not well do otherwise ; but looking at the gigantic purchases which are now made by Britain year by year from the United States, it is clear enough that no change that affected, for the worse, business in which tens of thousands of American producers were concerned could be made without annoyance and irritation to those producers ; that annoyance and irritation would mean, necessarily, a weakening of the kindly feelings now existing. The union of the Anglo-Saxon race means too much for the race itself, too much for humanity at large^ for it to be lightly endangered. The United States constitute a very useful " bogey." It is so easy to say, " See what has been done in the past, and think what is likely to be done in the future." One writer has suggested that the great feature of the coming years would be a struggle for supremacy between Great 134 COMMEBCE AND THE EMFIBE. Britain and Germany, which might end by the United States swallowing both of them. All this excited talk about commercial " supremacy " among nations is as idle and contemptible as the foolish hankering after social supremacy among a set of fashionable women. It is equally as stupid for a country to lose its head as for a woman to lose hers in pursuit of what is meant by " supremacy." All the world, the British portion specially, can afford to watch with satisfaction the growth of the United States ; be thankful that so great a liberty-loving power has arisen, and hopeful that nothing will occur to prevent or mar the splendid future that is promised by the development of the present. Each country should strive to develop to its utmost and to its best, and expect every other country to do the same. Probably the import and export returns of the United States have led to nearly as many mistakes as have the British. In the former country exports have grown rapidly and shown a great excess ; in the latter the movement is in the reverse direction. The United States movement is irregular ; the British movement is regular. Compare the returns for the past twelve years : — Excess of Impoets in Great Britain and Excess or Exports in the United States. Great Britain. United States. Excess of Excess of Excess of Imports. Imports. Exports. Million £. Million £. Million £. 1891 . . 126-3 1891-1892 42-2 1892 . . 132-2 1892-1893 .. 3-9 .. 1893 . . 127-5 1893-1894 . . . . 49-4 1894 .. 134-6 1894-1895 15-7 1895 . . 130-9 1895-1896 . . . . 21-4 1896 . . 145-4 1896-1897 59-6 1897 . . 156-8 1897-1898 , 128-2 1898 . . 176-5 1898-1899 . . . , . 110-2 1899 .. 155-5 1899-1900 . . . , . 113-2 1900 . . 168-7 1900-1901 . 137-2 1901 .. 1741 1901-1902 . 99-4 1902 .. 179-0 1902-1903 . 82-0 Great Britain is a creditor nation, and also a ship-owning nation ; she might almost be spoken of as specially t/ie creditor and the shipowning nation, hence there is a fairly constant increase in the excess of imports, as the factors named work out tlieir natural results. The excess of exports in the United States is irregular ; the position is a changing one : the United States are emerging from the position of a debtor nation, probably they will gradually become a creditor nation. They are already so wealthy that this position would come about rapidly were it not for the almost limitless opportunities for internal development and investment. If the enormous excess of the exports of the last ten years represented debt cancellation pure and simple there would probably be no debt left. But in real truth a very large sum yeai'ly is paid by the United States to discharge liabilities which ought to be considered but seldom are, so that the oiet excess that can be applied to COMMERCE AND THE EMPIBE. 135 the payment of debt is smaller than it appears to be. These payments may be divieled into three divisions. First, freight on goods imported by sea, so far as the shipping belongs to other countries ; second, passenger fares across the Atlantic and elsewhere ; and third, expendi- ture of Americans abroad. The probability is that the aggregate under these three heads comes to a much larger sum than has ever yet been anticipated. It was recently stated that American visitors spend nearly £6,000,000 a year in Paris. If this is correct, the expenditure in London, in Gi'eat Britain generally, and in those other countries which the possession of wealth enables Americans to visit, will reach a big sum. In the absence of data for forming a close estimate the writer suggests that the aggregate, under the three divisions named, cannot be less than thirty millions sterling, and is probably a great deal more. But, whatever the exact sum, it is large enough to alter very materially the bald figures now available to the public. It is the net not the g7'oss excess of export that is important. The United States cannot become a creditor nation without in the first instance making loans or purchasing stock in other markets. Such operations would require an excess of exports, therefox'e it is fairly certain that for some years to come the balance between the United States imports and exports will be on the same side as at present. The tendency, however, will be towards the change indicated. The one thing to be specially borne in mind is that the increasing wealth of the United States indicates the certainty of a radical change in American commerce. The States cannot continue to export to the extent they have been doing without becoming much larger impoi'ters. Some people see in the United States a huge trading concern that can sell without buying, and have quite frightened themselves on the subject. The truth is that, perhaps more than any other nation, the United States is " self-contained," they are not driven by necessity to import either food or manufactures, except so far as specialities are concerned. The necessity of exchange is the first condition of extensive commerce. Those, therefore, who look on the States as the world's octopus are making a mistake. The aim of commerce is to provide that which is in short supply. Europe has a short supplv of food : commerce provides the deficiency, and disposes of the goods given in exchange. Hence Europe has a great, and will have a greater, commerce. After all, commerce is but the complement of the home trade : what the home trade supplies commerce is not called on to provide. Full home supplies are not favourable to that branch of enterprise specially called commerce, or external trade. The contraction of the excess of exports that has marked the past three years bears out the contentions here advanced. It will be inter- esting to note the developments that will take place when the internal trade of the States becomes less active. The States have not yet settled down to final conditions. When the full volume of immigration is reduced to a little trickling stream, and the growth of population is limited to the natural increase, which has long shown a diminishing ratio, then, what may be called final conditions will begin to develop. The United States are a great nation, and will be a greater, but it ia 13G COMMERCE AND THE EMPIBE. foolish to imagine that American greatness implies European or British smallness. The United States are the largest exporters, that is tlie largest vet exporters, European exports, perhaps British especially, consist largely of imported raw material. A million pounds' worth of imported wool may be exported as three million pounds' worth of woollens. The value produced or added in the country is alone what the country gains — its oiet export. The commodities exported by tlie States contain a very fractional amount of imjiorts — so that American net exports are far ahead of the :'icf exports of even Great Britain. 137 CHAPTER XXV. " QUIET FACTS.' A WRITER in the National Eevieio * mentions two sets of figures which he says are " really vital." The first set deals with tlie slow growth of British exports, a subject elsewhere exhaustively considered by the present writer. The second set deals with what is styled "the encroachments of foreign nations in those Colonial markets which exist owing to British energy and heroism." After figures are quoted for 1884-, 1889, and 1894, it is said that for later years the returns for New vSouth Wales may be taken as typical specimens. The following table is then given : — Value of Imports into New South Wales in Millions of £. 1895 189G 1897 1898 1899 1900 1901 From British Empire From foreign countries . 14-4 . 1-6 17-4 3-2 18-0 3-7 21-1 3-4 21-3 4-3 22-4 51 21-5 5-4 On these figures the following comment is made : — This table shows that the process of ousting Great Britain from her o^vn markets, as recorded in the earlier table, is still going on merrily. Comparing 1895 with 1901 in this last table, we find that the ratio of foreign to Imjicrial trade has grown, roughly, from 11 to 25 per cent, in the short period of seven years. Now these are the sort of " quiet facts," as Carlyle would say, to which our opponents must give their minds. This is said with the air of one who has uttered the unanswerable last word. "Quiet facts" are appealed to. Very well. In 1891 the imports from foreign countries into New South Wales amounted to 2-9 millions and in 1892 to 2-1 millions. In 1892 the shadow of the coming great bank crisis was already upon the land, and the foreign imports decreased. The storm broke in 1893 ; it was, in one sense, anything but a "quiet fact," and its influence was still strong in 1895, the first year given in the table. Whilst between 1895 and 1901 the foreign imports showed an increase of 3"8 millions, between 1891 and 1901 the increase was only 2 '5 millions. Another "qxiiet fact" is that the federal tarifl' was introduced in October, 1901, and during the Avhole of 1900 and part of 1901 the expectation of extra duties led to increased imports. It is true that by the end of the •" nineties " Australia was enjoying a recovery from the financial crisis and that much of the increased imports wei'e due to this cause, but the expected ♦ Mr. J. Saxon Mills, July, 1903. 138 COMMERCE AND TEE EMFIBE. inci'oasing tariff and duties had a great deal to do with it. The figures for 1895 were not only less than ordinary, but those for 1901 were inflated, and these arc the years chosen on which to base an argument to stagger op]ionents. It may be worth while pointing out that in 1902 Australia suffered from an appalling drought, and it was thought better to import two millions pounds' worth of wheat and flour from other countries rather than allow the people to die of hunger. But what a fine opening for some orator on a British platform, who, seeing only the figures, two millions sterling, and knowing nothing about the truth behind them, talks about "quiet facts" and "encroachments of foreign nations in those Colonial markets which exist owing to British energy and heroism." But there is a serious, a very serious, aspect to be looked at in utterances such as that now quoted ; that is the blow that is aimed at the independent powers of a self-governing community like Australia. Look at the words about foreigners "ousting Great Britain from her own markets," and again the reference to the markets " which exist owing to British energy and heroism." "What does this sort of thing point to 1 It points to a desire for a revival of " the good old times " when British Colonies were ruled with an iron hand, and in the interests — or the supposed interests, rather — of the people of the British Isles. The position that exists to-day between, say, France and her Colonies is brought to mind by this suggestion of outside ownership of markets such as those of Austi^alia. Many a time has the author of this book proudly boasted of the powers a free Motherland has given to her free children. Thus, in 1900, a reference to the Colonists of New Caledonia was concluded in these words : — It is impossible for Australians not to sympathise with these French Colonists. France keeps an iron grip on her Colonies — allows them to buy from no one but herself, except under penalty. How different the action of Free Trade England, whicli allows her self-governing Colonies even to shut out English goods [ It will be well to let shackles alone, once let Great Britain apply shackles to one section of trade, the evil practice would soon be applied to others also. There is danger in the suggestions that are afloat — danger of affecting the fine spirit that now influences each section of the Empire towards all other sections. 139 CHAPTER XXVI THE HOPES OP COBDBN VERSUS THE PEARS OF ADAM SMITH. It is easy to sneei* at the failure of the hopes of a warm-hearted enthusiast, and to forget that it is entliusiasm — born of insight into great truths and love of humanity — that leads the way in the move- ments towards a nobler public life. Cobden expressed the opinion that other countries would follow the United Kingdom in giving freedom to commerce. They did not ; hence the cheap sneers bestowed on Cobden himself, and on his woi'k and policy. There stand on record, however, the views of Adam Smith, the great author of the " Wealth of Nations," and the founder of the science of Political Economy. It is worth while comparing what he said as to the probability of true principles being adopted, with the oft-quoted utterance of Cobden. The cool-headed Adam Smith said : — To expect the freedom of trade would ever be entirely restored in Great Britain is as absurd as to expect that an Oceana or Utopia sliould ever be established in it. The warm-hearted Cobden said : — I believe that if you abolish the Corn Law honestly and accept Free Trade in its simplicity there vAW not be a tariff in Europe tliat mW not be changed in less than five j'ears after your example. It will be seen that Adam Smith, knowing the power of selfishness, and how hard it is to shake off the grasp of monopoly, did not think Free Trade could ever be secni-ed for Great Britain. Yet time proved that he was wrong. Adam Smith was wrong; Cobden was wrong. The one had not remembered the poAver of enthusiasm ; the other had not remembered the power of self-interest. Most certainly, freedom having been secured, it should be jealously guarded, since if lost again the work of regaining it might prove too hard. 140 CHAPTER XXVII. TARIFF JINGOISM. To all those who pray for "peace in our time" and who associate with the name and fame of Great Britain a policy and a procedure that tend to promote international harmony, there is cause for irritation and shame in the public utterances and writings of many of the promoters of schemes for a customs union or the imposition of ditFerential duties. There are men who never fail in courtesy and dignity in private life, who, in political life and especially in regard to other countries, lose all self-restraint, and forget alike courtesy and dignity. Why should this be 1 And why should a man be allowed to use language of an irritating and oflensive nature to, or of any country, without being made to feel that he has done something unworthy of his own country, and harmful to liis own position as a citizen 1 It must count as a strong argument against the schemes mentioned that their promoters so often adopt the style of the jingo. The aggressive, domineering man is not tolerated in society, where he can do only the minimum of harm ; and he ought not to be tolerated in international politics where he can do the maximum of harm. He is a public danger. As an example of the sort of thing to which exception is and should be taken, reference may be made to a paper entitled " The British Empire of To-day and To-morrow " by Sir Howard Vincent,* in which the author advises Great Britain to " be Misti-ess of the Land as well as now Mistress of the Sea." A remark like this is, of course, offensive to other countries in proportion to the position held in public life by the man who utters it. But surel)'^ the humblest man in the ranks of public life must know that threats of putting other countries into a position of inferiority is not the way to win good-will. Courtesy costs but little ; it is the oil of civilisation, the lubricant that makes the machinery of life work smoothly. The more massive the machinery that is being w'orked the greater the need for smooth working. But courtesy, without genuine good-will at the back of it, is a poor thing. A shortage of good-will towards the people of other countries may naturally be expected from those whose mission in life, a})parently, is to create the belief that the less the British people have to do with other people the better. Happily the majority of the British people are quite sure of the very reverse of this, and have nothing on their minds which makes it necessary for them to modify those feelings of * British Empire Series, Vol. v., p. 148. COMMEBCE AND THE EMPIRE. 141 international good-will which seem so natural and proper. Probably there never was a time when it was more desirable than at present that all the world should know without doubt that the United Kingdom does not associate British commercial prosperity with an unfriendly policy towards other countries ; that she Avill continue to fight the restrictive system with her system of open ports, knowing well that though other countries benefit thereby, she herself reaps benefits that otherwise she Avould lose. 142 CHAPTER XXVIII, THE POLITICAL AARON's ROD. In these clays when the pressure of public life is very seA'ere ; when the British Parliament has constantly to deal with questions of the highest and most absorbing interest, it is impossible to view without alarm the consequences of the reintroduction into British politics of tariff questions. When once Parliament begins to discuss, to consider in detail, the position, the progress, the prospects, the requests, of each individual section of its trading community it embarks on a task of which there is no seeing the end. Men and influences are brought into the lobbies which ought at all hazards to be kept out. The element of personal gain introduces a feverishness into political life which consumes its strength, time, and usefulness. How often have despotic monarchs rushed their countries into war to stifle a rising demand for reform ; if you cannot get a foreign war, you can get nothing else that will so easily, and for so long, postpone social and jiolitical legislation as a tarift' tight. These ai'e not idle words, the records of most of the State Parliaments of Australia bear evidence to their truth, as do already the records of the Parliament of the Commonwealth. There is no finality about a restrictive tarifl". In 1886 Victoria adopted this policy, its ad valorem duties were 10 per cent. (It is remarkaljle how the restrictionist plays at modesty in the early stages of his career !) Advance after advance was made till the 10 per cent, reached 40 per cent. The last stage was the worst of all. In 1892 a tarifi" enquiry commission was appointed ; it sat for many weary months ; issued a voluminous report, requiring a small life-time to read, and finally, in 1895, a revised tariff" was introduced into the Victorian Parliament. The discussion which ensued occupied nearly 3,000 columns in the Victorian Hansard. In New South Wales for abovit fifteen years the fiscal question was the controlling factor of public life. Oh ! the weariness of that long sustained conflict ! And now the same question is the controlling factor of the public life of the whole Commonwealth. One General Election has been fought on it, another is looming in the near future, and after the first election, the construction of the tarift' led to a conflict extending over eleven months in the House of Repre- sentatives and the Senate. Like Aaron's rod the tarifi" swallowed everything that came in its way. But no better illustration of the congestion of public aff'airs that inevitably accompanies a great tariS" fight is needed than that supplied by Germany, the details of which must be much better known in the United Kingdom than they ai'e COMMERCE AND THE EMPIRE. 143 ill Australia. Heaven forbid tliat the British Parliament, " the mother of Parliaments," should ever find its time spent, its energies frittered away, its ambitions debased, its prestige destroyed, by interminable controversies about the prices and the production of the food that is eaten, the clothes that are worn, and the things that are used. 144 CHAPTER XXIX. A CUSTOMS DUTY — WHEN IS IT PROTECTIVE 1 Free Traders themselves sometimes Crause confusion in the fiscal con- troversy. They at times carelessly assume that if a given commodity stands on a tariff with, say, 50 per cent. Customs duty thereon, that the consumers of that commodity ])ay 50 per cent, increased cost on all they consume. This is not always necessarily so. Whether it is paid or not is governed by certain conditions. The restrictionists, on the other hand, are seldom willing to admit that such a duty costs the public anything. If the commodity is only obtainable by importation, the duty, the whole of it, must be paid on the entire consumption. That is a simple revenue duty. The people decide what rate the duty shall be ; tlie people pay the amount, and the people, through their public Treasui'y, spend the money for public purposes. If the commodity is produced in the country itself in such abund- ance that a large surplus must be exported, that sui"plus must be sold at the world's price, and the price obtained for the surplus governs the price of the home consumption of the commodity, consequently the consumer pays nothing for duty, even though a rate be on the tariff. The duty is inoperative, dead. In neither of these conditions can there be any protection. This — protection — arises when a community is being supplied from within and also from without. Then, by imposing a Customs duty on the imported, and a lower excise duty or none at all on the local production, the local producer is protected and the importer i-estricted. Presuming the local and the imported article to be identical in quality, or sold by fixed market standards, then, quality for quality, the two articles sell at the same price — that is, the whole of the amount of the duty is added in each case. That on the imported goes to the public Treasury ; that on the locally produced to the producer, and the amount that is so received by the latter is his " protection." It follows, of course, that a duty may operate protectively in one country, and not in another. Also that it may in the same country operate protectively one year and not in another year. No better commodity than wheat can be taken for an illustration. This stands on the United States' tariff at 25 cents a bushel, or 8s. 4d. a quarter ; but no revenue is collected, and no protection is obtained by the producer. As everyone knows the United States have a big wheat surplus, and their duty is consequently inoperative. But put the same COMMEBCE AND TSE EMPIBE. 145 duty on in Great Britain, and wlieat will rise 8s, 4d. per quarter whether it be imported or British grown. When the quality or special characteristics of a commodity which is imported is different from that which is locally produced, the protection to the local producer may be very nominal. Thus, wine is subject to a duty of 6s. a gallon on importation into Australia, but the duty is practically a revenue duty. By making the imported wine very dear, the consumption is reduced, so that the sale of Australian in Australia is increased, and the quantity to be exported is lessened, but it is doubtful if the value of Australian is increased in the least degree. Good Australian wine can be bought for shillings a gallon less than the mere duty payable on imported. The truth is that, practically, imported and Australian wines are almost as much different com modities as articles of metal and of cloth. The distinction may be due entirely to the taste or fancy of the consumer, but it exists. The fact that Australia exports wine, and also imports wine, shows that the two are, practically, different commodities. In a new country, in skilled industries, it is scarcely to be expected that a manufactured article will approach so near perfection as in an old country. An imported machine costing landed £20, with duty £5, may readily sell at £25, whilst a local maker of a similar but less perfect machine may only be able to sell his at £20. But for the duty the better imported machine could be sold for £20, in which case the inferior local one could not be sold except at a lower price, and the protection the local man enjoys is clearly the difference between this lower price — the real value — and the higher price actually obtained. In the United Kingdom duties on food products, like wheat, meat, butter, would necessarily be protective, whilst in, say, Canada they would be entirely inoperative. With regard to, say, textile fabrics the position is reversed ; in Canada they are protective — except perhaps as regards specialties of manufacture. The line of demarcation between revenue and protective duties is more distinct in regard to natural products than in regard to manufactured articles. Speaking generally food products and raw materials could be protected in the United Kingdom, but not manufactured goods ; the position being reversed in regard to these commodities in the Colonies. It is to be noted that a duty which is naturally inoperative may by combination be made operative. A well-known instance of this being the case of copper in the United States. In that country this article is produced in excess of the consumption, but the mine owners being few in number easily combined, so that they sold their product at the world's price p/iut the increase in quantity has been greater still. In many directions in recent years a trade judged by the value, which is given, has shown a falling oft'; when, judged by the quantity, perhaps not given, an increase exists. A fall in the cost of raw materials may mean that both capital and labour have reaped a I'icher harvest, though the gross return be less. Savings Banks deposits. — These tigures should be avoided, vmless they are taken as one element merely of a calculation of wealth. People will take money out when they can do better with it in some enterprise; people will put money in when times are dull. In Australia, in the '' nineties," when the Bank crisis occurred, depositors removed several millions fi'om the ordinary banks and deposited them in the Savings Banks. The amounts that may be deposited, the intei'est rates, etc., so vaiy that other elements of obscurity arise. Statistics as affected by Politics. — Changes in the area, size of a country, naturally afiect its statistics. For instance, the German Empire has only been in existence since 1871, and it was not till 1888 that the important ports of Hamburg and Bremen A^ere brought into the Customs Union. German statistics since 1888 are, therefore, swollen by trade previously excluded. At the same time, whilst commerce is thus being increased in the aggregate, it may, by the same cause, be decreased "per head." Inflated vahoes. — These should be watched. In a country with a tariff helping many of its industries, the product of those industries is naturally inflated in value as compared with the product of similar industries not inside any ring fence. A sudden increase of the alleged wealth of a community may fairly be looked at suspiciously — a too rapid rise Avill be followed by a fall. Statistics are approximate only. — It is wise to remember that in a large proportion the statistics of all countries are approximate only — very good as estimates in most countries, but bad even as estimates in others. Those statistics where the greatest accui'acy exists are naturally those of revenue or under the influence of revenue ; thus the consumption of articles subject to duty can generally be known to a fx'action. The years selected.-— It is often ])Ossible by selecting certain years, to obtain results the reverse of those that Avould be obtained by selecting other years. As a general rule, therefore, the longer the period the better ; but at all times care must be taken to point out any special causes of inflation or depression that existed at any given date. The whole is greater than its part. — This might be accepted as the golden axiom for those who desire to study — to know — the position of the United Kingdom or of any other country. The banker, the mer- chant, the shopkeeper — anyone, in fact, who desires to know how he 168 COMMEBCE AND TEE EMPIBE. stands — prepares a balance-sheet ; he finds out the " whole " position ; he is not content with knowlege of a part of it. Trade in this commodity or in that commodity may fall, show reduced profits, but if the balance-sheet, the sum total of the whole, is on the right side, specially if largely so, the result is considered satisfactory. The simple methods that are applied to an ordinary business establishment should be applied to that aggregation of all businesses and interests — the Nation. If the partners in the Nation — the people — are spending moi^e money, both in the aggregate and individually, than they ever did, and at the same time possess greater stores of wealth than ever before, things are not going down hill. Relative pror/res-s. — Ordinar}' common-sense methods are required in judging of the relative progress of counti'ies. If two countries, each having great natural resources, have, to the square mile, one of them 500 and the other 20 people, the movement of population will certainly be to the latter rather than to the former country. If the extreme development of which countries are equal be represented by the general number of 100, and four countries be developed respectively equal to 60, 70, 80, 90, it is obvious that the country which is the most back- ward, the one standing at 60, can relatively progress the most, and yet the advance in no way i-eflects on the one already at 90 any more than the position of the scholar is to be reflected on because the dunce takes to leaiiiing and makes progress therein. A quart measure will hold more than a pint measure. If there be a pint of liquid ah^eady in each, then one will be full but the other will have room for more. Judge relative pi-ogress by natural laws. Restrictionist countries. — In looking at the statistics of a country considered to be restrictionist, it should be remembered that there is not one country in the world that is absolutely restrictionist. For instance, Germany and France each have millions of sheep and produce a good deal of wool, yet in each countr}^ foi'eign wool is admitted free. Every restrictionist country leaves a proportion of its industries open to the competition of the world, and, looking at these countries one after another, it will be found that the efforts that are made to keep commodities out vary in degree and in direction — in the I'ates and in the articles. 159 CHAPTER XXXIV. TAVO COLONIAL SYSTEMS. 1. Do as you like. 2. Do as you are told. The first is great Britain's system with her Colonies ; the second is the system of other countries with their Colonies. The freedom which British Colonies enjoy is probably without parallel in the world's history. Not only can Canada, Australia, and South Africa fix each its own taxation, but each has the power to use the system of taxation against the hand that bestowed the power. Each has so used it. But the sense of the trust reposed, of the generosity displayed by the Motherland, has brought to her a rich harvest in the love and faith of her children, and it is entirely reasonable to suppose that they will ultimately take sides \>ith her in upholding the flag of free commerce. It may be remarked, however, that raising a discussion as to the desii'ability of Great Britain herself hauling down the flag does not tend in that direction. 160 CHAPTER XXXY. BRITISH COUNTRIES — OLD AND NEW. It is quite time that a change was made in the term which is used to designate the relation in which a countiy like Australia or Canada stands to Great Britain. British statistics are made up : " For the several Colonial and other Possessions of the United Kingdom." From this it will be seen that Australia and Canada are described, not only as "Colonies," but also as " Possessions " of the United Kingdom. In each of the-e words there is a certain element of denial of political equality. A century ago the position was veiy different ; to-day such terms are cleai'ly outgrown, and the sooner the better they are replaced by something that would be more accurate. " The United Kingdom and other countries of the British Empire " would cover and include every portion of the Empire ; possibly " and Possessions " would need to be inserted after " Countries." Perhaps the word *' Empire " might be objected to, but there seems no other word so suitable. 161 CHAPTER XXXVI. CRUMBS OF CONTROVERSY. £1,000,000,000. — The taxation schemes, now being recommended to the British Empire, would probably cost the people 30 millions a year. This would be equal to the interest at 3 per cent, of new debts reaching 1,000,000,000 pounds. Pauperism. — Beware of the spi^-it of pauperism. It eats away the self-reliance of a people. The cost of feeding the poor of a country is nothing compared to the cost of favours to special classes. Norivay. — No country in the world, not even Great Britain, approaches Norway in the extent of her shipping in proportion to population, Noi-wegian shipping equals about 700,000 tons per million of the 2| million people, or three times the relative British proportion. The result is seen in the excess of imports. The Norwegian excess is relatively much larger even than that of Great Britain. " Power of negotiation." — What opportunities for self-delusion lie in pretty phrases. " Power of negotiation " sounds very nice ; but the Slough of Despond to which it leads is very nasty. For any Parliament to have power to attempt the balancing of this against that, one com- modity against another commodity, whilst wayward Nature directs the seasons, increasing the supply here, decreasing it thei'e, would surely lead to strange situations and at times to disastrous i-esults. " Power of negotiation " with hornets' nests and with sleeping dogs may result in many a nasty sting and many an ugly bite. Drought. — Whilst some people in Great Britain were talking about the Colonies supplying all the food of the Empire, drought destro3'ed the 1902-3 Australian harvest. Australia herself, instead of shipping wheat, had to import millions of bushels. Betvreen 1891 and the close of 1902 the two States of New South Wales and Queensland, through bad seasons, lost the almost incredible number of 47,000,000 sheep, besides the natural increase. Before fixing up the exact details of the sources of supply for Britain's food, some arrangement ought to be made with Nature to prevent things of this sort happening again. Egypt. — Under a system of Penalties and Preferences, it would be interesting to know where Egypt would come in. Canada. — Lord Strathcona, in a paper on "British America" in the Empire Series, said : — " Our greatest needs at the present time are more people and more capital to develop the great resources with which Canada is endowed." The noble lord was right. It is a pity that he should have since lessened the force of his statement by advocating 162 COMMERCE AND THE EMPIBE. preferentialism. People and capital are idealities ; preferentialism is a shadow. India. — A few years ago an import duty of 5 per cent, was imposed in India on imported cottons. Manchester men asked for the imposition of a countervailing Excise on Indian cottons, and the request — a very proper one — Avas granted. What now ? Is India in any direction to be taxed for the benefit of British industry 1 The growth of other countries. — "It has been justly remarked by the Marquis Garnier . , . that no inconsiderable portion of the increased power and wealth of England may be traced to the growing opulence of Russia" (McCulloch, p. 1,387). This was written many years ago. The lesson is obvious, and is as useful in the twentieth century as it was early in the nineteenth. Landowners in Great Britain. — The people who would gain the most in Great Britain by a i-eturn to a policy of restriction of imports, are the landowners. All honour to noblemen who are guided by considerations of the welfare of their country, and who ignore thoughts of personal gain. Noblemen should always be noble men. 163 INDEX. A(/r, Melbourne, on free trade, 3 Aggregation of interests, Great in- fluence of, 6-18 American Colonies, British treat- ment of, 53-55 American industry assisted by British free trade, 125 Argentine shipping tonnage entered and cleared, 47 Australia : Battle of commercial policy in, 1, 2 ; union of the states, 1; fomiatdon of first ministry, 1 ; victory of free traders in House of Eepresen- tatives, 2; probable date of next election in, 2; effect of talk about preferential trade on, 2; newspapers on Preferen- tial movement in Britain, 3 ; its free trade press, 4; free traders returned for New South Wales and Western Australia, 4 ; benefit of aggregation in, 10; effect of rapid increase of expenditure, 11 ; tariffs in 1855, 17 ; trade with Great Britain from 1888 to 1891, 25; effect of gold discoveries in, 27 ; table of British exports and loans to, 29; trade with France and Germany, 39; and ship- ping trade, 45; imports of British and Irish produce in periods of five years, 81, 82 ; new debts, 81 ; population in 1871 and 1901, 84; position of wool trade in, 94; tallow ex- ports from, 96; Preferential possibilities in, 119 ; imports in 1901, 120 ; comparison of ad valorem duties, 121 ; wheat and flour imported during drought of 1902, 138; fiscal question controlling factor in, 142; im- ports and exports per head in 1901, 156 Australian Chambers of Manu- factures, Pesolution passed at conference of, 114 Australian federation convention of 1891, Telegram on records of, 114 Austria, Tariff in 1841, 12 Bancroft, American historian, on British treatment of American colonies, 53 Barton, Sir Edmund, forms first ministry in Australia, 1; and Colonial conference, 103, 104 Belgium, Tariffs in 1841, 1850, 12; shipping tonnage owned by, 43 ; shipping entered and cleared, 44, 47 Birthrate, Importance of, 132 Black flag of prohibition, 124 Britain (see Great Britain) British Colonies, Tariff's in 1855, 17 British commerce. Growth of, 27 ; relative extent of, 75-79 British Empire: View of import and export returns, 38-41; im- ports and exports of, 40; lack of proper trade returns in, 41 ; shi^Dping entered and cleared, 44, 46; coasting trade of, 49; probable cost of taxation schemes recommended to, 161 British exports, 24-37 British free trade assists American indxistries, 125 British open ports and foreign countries, 125 British shipping, 42, 43-; entered and cleared, 44 ; no direct at- tack on, 46; compared with other countries, 48 Caillard, Sir A'^incent, ou our foreign trade, 24 164 IXDEX. Canada, Ap^egation of colouies iu, 10; tariff ni 1855, 17; table of British exports and loans to, 30; in 1850 and 1901, 65; census of 1871, 66; influ- ence of British fiscal policy and capital on, 66 ; imports and exports for 1868-1870, 66; im- ports and exports for 1871-1875, 1876-1880, 67 ; imports and ex- ports for 1881-1885, 68; im- ports au^ exports for 1886-1890, 1891-1895, 69; imports and ex- ports for 1896-1900, 1901, 1902, 70 ; ex23ort of cheese, butter, bacon, eggs, and cattle for 1901-2, 71; exports to British Empire and other countries, 72 ; her dependence on Great Britain, 72; population in 1871 and 1901, 84 ; course of cheese trade in, 95; Lord Strathcona on needs of, 161 ; list of British and foreign imports for 1897 and 1901, 108 ; exaggerated value put uiDou the tariff pre- ference in, 109-112; her tariff preference, 115-118; imports for consumption, 115, 116; comparison of ad valorem duties, 121 Canadian memorandum. Quotation from, 107 Cape of Good Hope, Tariff in 1855, 17 ; table of British exports and loans to, 30 Capital, Effect of export of, 131 Carnegie's, Mr. Andrew, " Trium- phant Democracy," Quotation from, 7 Ceylon tea imports into United Kingdom for 1881 and 1902, 96 Chamberlain, Mr. Joseph, at the Colonial Conference, 45, 49, 105, 106 Charlton, Mr. John, on preferential trade, 112 Cheese trade in Canada. Course of, 95 Chili, Shipping tonnage entered and cleared, 47 China, Shipping tonnage entered and cleared, 47; tea imports into United Kingdom for 1881 and 1902, 96 Coasting trade of United Kingdom for 1900-1902, 48 Cobden versus Adam Smith, 139 Colbert, the restrictionist, 10 Colmer's, Mr., prize essay on com- mercial federation. Error in, 57; quotation from, 52, 59 Colonial conference and shipping trade. 45; of 1902, 103-111; statistics laid before, of 1894, 152 Colonial products and preferential treatment, 94-102 Colonial systems. Two, 159 Colonial trade, Eelative value of, 80 Colonies: Tariffs in 1855, 17; table of British exports and loans to, 29, 30; self-governing, and Great Britain, 52-74; their position as regards preferential tariffs, 102; alarmed at trading with India, 111 " Coming reaction, Tlie," 4 Commerce, Four things that have increased volume of, 21 ; growth of British, 27 ; relative extent of British, 75-79; and Finance, 86-89; future expansion of, 130 Conference, Colonial {see Colonial conference) Conference of Australian Chambers of Manufactures, Resolution passed at, 114 Consumption in excess of produc- tion. Countries in Eurojje with, 128 Corn Laws of no advantage to Colonies, 58 Cotton, Eaw, imported into United Kingdom, 1881-1900, 36 Countries in Europe with consump- tion in excess of production, 128 Customs duty, when protective, 144-146 Customs statistics useless as balance-sheets, 25 Customs Union, South African, 123 Definitions of terms used in book, 5 Denmark, Tariff in 1842, 13; ship- ping tonnage entered and cleared, 47 Dunravens, Lord, error, concerning wheat duty iu France in 1882, 147 East India Company, Preferences granted to, 59 Education, Advantages of, 132 Egypt, a crumb of controversy, 161 Electricity, Effect of, on freedom of trade, 19 Emigration, Future, 131 Empire, British {see British Empire) Europe, Growth of population of, 127 ; countries with consump- tion in excess of production, INDEX. 165 128 ; net import-s of wheat and flour into, 128; future growth of, 129 Expenditure, General rapid in- crease in, 11 Exports and loans to Australia, Table of British, 29 Exports, British, 24-37; their con- nection with loans, 27-31 ; to the United States, 1881-1889, 34 ; to Japan, 1881-1890, 34 ; to British possessions and foreign countries, in 1881-1890, 1891- 1900, 35 ; briskness in home trade affects, 37; empire view of, 38-41 ; variation in com- pilation of statistics of, 155 Fielding, Mr., Canadian Minister of Finance, on reduction of Cana- dian duties, 147 Finance and commerce. 8G-89 Flour, net imports into Europe, 128 Food, Large increase in consump- tion of, 127-132 Foreign countries and British open ports, 125 France, Benefit of aggiTgation in, 10; its trade with Australia, 39 ; shipping tonnage owned by, 43 ; shipping entered and cleared, 44, 47 ; tariffs in 1664, 1836, 1850, 13 Free Trade, Aiistralian feeling con- cerning, 1-4 ; definition of, 5 ; effect of internal, on United Kingdom, 7 Freights, Table of fifty-seven years', 20 Germany, Effect of segregation and aggregation on, 7-10; tariffs in 1842, 1853, 14; its trade with Australia, 39; shipping ton- nage owned by, 43 ; shijjping entered and cleared, 44, 47 Giffen, Sir Robert, on British ex- ports, 24 Great Britain, Effect of internal free trade on, 7 ; census of 1901 shows improvement in condition of people, 22; in 1851, 22; less emigration from, 23; exports and imports affected by move- ments of British capital, 24; four years' trade with Ai;stral- asia, 25 ; imports and exports of, 40; shipping tonnage owned by, 43 ; shipping entered and cleared, 44 ; no direct attack on shipping of, 46; shipping ton- nage compared with other coun- tries, 48; coasting trade for 1900-1902, 48 ; re-exports in, 50 ; and the self-governing colonies, 52-74; fall in value of land in, 74; 'its commerce compared with other countries, 75-79 ; present corn trade and that of fifty years ago, 130; large in- crease in food consumption, 131 ; its exports and imports compared with those of United States, 134; beneficial results of sugar bounties on, 150; its landowners greatest gainers luider restrictive tariffs, 162 Guyot, M. Yves, on protection pro- ducing persecution, 102 Hanseatic League, 8 Hatheway, Mr. W. F,, on attitude of British statesmen towards Canada, 113 Hides and skins exports from India, 96 High Tariff, Objectionable term, 5 Holland, Tariffs in 1843, 1854, 14; shipping tonnage entered and cleared, 47 Hong-kong, Trade with, 41 Hudson's Bay Company, Preferences granted to, 59 " Imperial Federation," Exposure of error in, 148 ImjDorts, Empire view of, 38-41 ; variation in compilation of statistics of, 155 India, and Crown Colonies, Table of British exports and loans to, 30; exports of 1900, 38; hides and skins exports fi-oni, 96 ; tea exports to United Kingdom for 1881 and 1902, 96; necessity of retaining her freedom to trade. 111; dearer sugar inflicts injury on, 151; is she to be taxed for benefit of British in- dustry? 162 Inflated values. Necessity to watch, 157 Investments, their connection with exports, 27-31 Ireland, Early eighteenth century commercial code of, 55 Italy, Aggregation in, 10; tariffs in middle of last century, 14; shipping tonnage entered and cleared, 47 166 INDEX. James I.'s statute against mono- polies, 7 Japan, British exports to, 1881- 1890, 34 ; shipping tonnage en- tered and cleared, 47 Jingoism, Tariff, 140 Kingston, Mr., Minister for Aus- tralian trade and customs, on a self-contained Australia, 104 Land, Fall in value in British, 74 Landowners, British, greatest gainers under restrictive tariffs, 162 Laurier, Sir Wilfrid, on Canadian wheat trade, 100 Loans and their connection with exports, 27-31 Low, A. Maurice, on pi-eferential tariffs, 101 Lowles's, Mr., visit to Sydney, 2 Low Tariff an objectionable term, 5 Lumber trade before era of free trade, 57 Lyne, Sir William, on preferential trade, 114 Macgregor's " Commercial Tariffs," Quotations from, 9, 12, 13, 14, 15, 16, 19, 54 McCulloch's '■ Dictionary of Com- merce," Quotations from, 7, 9, 54, 57 Meat, Importation prohibited from 1823 to 1842, 59 Melbourne Age on free trade, 3, 4 Mexico, shipping tonnage entered and cleared, 47 Mills's, Mr. J. Saxon, vital figures, 137 Monopolies, Statute of James I. against, 7 Mulhall quoted, 20, 75, 128, 148 Natal, Tariff in 1855, 17 Navigation laws, Mr. Cham.berlain on repeal of, 49 New Brunswick, Tariff in 1855, 17 Newdegate's " Tariffs," Quotations from, 12, 14, 16, 17 Newfoundland, Tariff in 1855, 17 New South Wales : its policy of free- dom of trade, 1, 4; tariff in 1855, 17; table of exports and loans to, 29 ; exports of wool of 1881 compared with 1901, 39; imports of British and Irish ap- parel, 82; value of British and foreign imports into, 137 ; fiscal question in, 142 New Zealand, Effect of rapid in- crease of expenditure in, 11 ; its tariff in 1855, 17; table of British exports and loans to, 30 ; in the 'sixties and "eighties, 60; imports and ex- ports from 1881 to 1901, 61; exports of frozen meat from 1881 to 1901, 62; exports of butter, cheese, etc., from 1881 to 1901, 63; hands employed in manufactories and works in 1886, 1891, 1896, and 1901, 64; imports for five years, 65 ; effect of fiscal policy of Great Britain on, 65 ; imports per inhabitant for 1858-1900, 81 ; population in 1871 and 1901, 84; preferential possibilities in, 119; imports in 1901, 120 ; comparison of ad valorem duties, 121 Norway, Tariffs in 1843, 1854, 16; shirt oing tonnage entered and cleared, 47 ; shipping of, 161 Nova Scotia Tariff in 1855, 17 Onslow, Earl of, and freights to South Africa, 46 P. and 0. Company, Increase in receipts of, 43 Parkin, Dr., on Great Britain and self-governing colonies, 47 ; exposure of error in his " Im- perial Federation," 147, 148 Paupers of 1851 and 1901, 22 Penalised trade better term than preferential trade, 5 " Per head " statistics. Use and abuse of, 156 Population of Europe, Growth of, 127 ; how returns should be shown, 156 Portugal, Tariff in middle of last century, 16 ; shipping tonnage entered and cleared, 47 " Power of Negotiation " delusive phrase, 161 Preferential tariffs. Discords in, 90-93 ; mean less consumption, 73 ; Canadians' exaggerated value of, 109, 112; Canada's, 115-118; possibilities of, in Australia and New Zealand, 119-122 ; South African, 123 Preferential trade misleading term, INDEX. 167 Preferential treatment and colonial products, 94-102 Prince Edward Island, Tariil in 1855, 17 Prohibition, Black flag of, 124 Protection, misleading term, 5; natural and man-made, 20; produces mania of persecution, 102 ; and customs duty, 144-146 Protectionist Association of Vic- toria, Resolution passed by, 114 Queensland, Table of British ex- ports and loans to, 29 Railways, Table of fifty-seven years' tonnage borne by, 20 Re-exports in Great Britain, 50; in 1902, 97 Reid, Right Hon. G. H., and free trade leadership, 2 Restriction better term than pro- tection, 5 (see Protection) Ross, Hon. Geo. W., on Canadian trade with Great Britain, 52 Russia, Tariffs in 1843, 14; tariffs in 1851, 15 ; shipping tonnage entered and cleared, 47 Savings Bank deposits, deceptive figures of, 157 Schooling, Mr. J. Holt, on British exports, 33, 34, 36 Science, Effect of, on freedom of trade, 19 Seddon, Mr., on failure of Britain to execute orders, 37 ; on reduc- tion of colonial tariffs, 106, 107 ; his memorandum on imports, 110 Segregation a death principle, 6 Self-governing colonies and Great Britain, 52-74 " Seven Colonies," Extract from, 89 Shijjping, Table of fifty-seven years' tonnage borne by, 20 ; British, 42 ; owned by foreign countries, 43 ; entered and cleared, 44, 46 ; tonnage and clearage in foreign countries, 47 ; British compared with foreign, 48 ; British, de- veloped by corn trade with far- off countries, 130 ; of Norway, 161 Smith, Adam, vrsus Cobden, 139 South African preferential tariff, 123 ; Earl of Onslow on high freights to, 46 South Australia, Table of British exports and loans to, 29 Spain, Tariff in 1841, 16; shipping tonnage entered and cleared, 47 "Statistical Abstract,'!^ Shipping- figures taken from, 43, 47 Statistics, Use and abuse of, 155-158 Steam, Effect of, on freedom of trade, 19 Strathcona, Lord, on needs of Canada, 101 Sugar : its industry before era of free trade, 56; effect of taxation on prices of, 149 ; Great Britain's savings under bounty system, 150; injury inflicted on India by dearer, 151 Sweden, Tariffs in 1844, 15; tariffs in 1842, 1854, 16 ; shipping ton- nage entered and cleared, 47 Sydney, Mr. Lowles's visit to, 2 Tallow imports and exports, 96 Tariffs, of Austria in 1841, 12; of Belgium in 1841, 1850, 12; of Denmark in 1842, 13 ; of France in 1664, 1836, 1850, 13 ; of Ger- many in 1842, 1853, 14 ; of Hol- land in 1843, 1854, 14 ; of Italy in middle of last century, 14 ; of Russia in 1843, 1851, 14, 15; of Sweden in 1844, 1854, 15, 16; of Norway in 1843, 1854, 16; of Spain in 1841, 16; of Portu- gal in middle of last century, 17; of United States in middle of last century, 17 ; of British colonies in 1855, 17 ; discords in preferential, 90-93; jingoism, 140 ; no finality about restric- tive, 142 : who pays for, 147- 149 ; landowners greatest gainers under, 162 Tasmania, Table of British exports and loans to, 29 Taxation, Effect of, upon a com- munity, 99; enemy of accumu- lation, 131 ; who pays for, 147- 149; probable cost of schemes recommended to British Em- pire, 161 Tea imports for 1881 and 1902, 96 Timber industry before era of free trade, 57 Tin imports and exports, 97 Tui'ner, Sir George, on- probable result of Australian tariff, 104 ; on 3nanufacture and consump- tion of Australian goods, 105 United Empire Trade League, 152- 154 168 INDEX. United Kiugdoin, population in 1871 and 1901, 84; imports of meat, wheat, and flour for 1902, 92 {sec also Great Britain) United States, Eifect of aggregation on, 7; tariff in middle of last century, 17; shipping tonnage owned by, 43 ; shipping entered and cleared, 44, 47; British re- luctance to wound feelings of, 133 ; its exports and imports compared with those of Great Britain, 134; future export trade of, 135 ; largest net ex- porters, 136 Uruguay, Shipping tonnage entered and cleared, 47 Victoria, Stronghold of restrictive tariff, 1; tariff in 1855, 17; growth during the 'fifties, 29; table of exports and loans to, 29; wool exports of 1901 compared with 1881, 39; finan- cial crash of 1893, 73 ; develops dairying industry, 73 ; produce bought by Great Britain, 73 ; imports per inhabitant for 1850- 1900, 80; table of imports of British and Irish apparel, 82 ; resolution passed by its protec- tionist association, 114; growth of ad valorem duties in, 142 Vincent's, Sir Howard, tariff jingo- ism, 140 Wealth and commerce, British, 22 West India Islands before era of free trade, 56 Western Australia, Free - traders predominant in, 4; tariff in 1855, 17; table of exports and loans to, 29; imports per in- habitant for 1880-1900, 81 Wheat, cleared for consumption in 1831-1844, 58; probable result of a preferential duty on, 100; increase in the empire's growth of, 101 ; net imports into Europe, 128 Wool, Ex^Dorts of New South Wales of 1901 compared with 1881, 39; exports of Victoria of 1901 com- pared with 1881, 39; trade in Australia, 94 World's comraei'ce, 75-79 Zollverein, German, Benefits de- rived from, 9 Pbistkd dt Casbkll & Company, Limited, La Bbllk Sautase, Lomdos, E.C. 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