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 PROBLEMS OF EMPIRE
 
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 PROBLEMS 
 OF EMPIRE 
 
 PAPERS AND ADDRESSES 
 BY THE HON. T. A. BRASSEY 
 
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 LONDON 
 ARTHUR L. HUMPHREYS, 187 PICCADILLY, W 
 
 1904
 
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 ■ '»'• '."^ V' i' "^ '
 
 PREFACE 
 
 By GEORGE R. PARKIN. 
 
 THE Imperial Federation League, founded in 
 1884 under the Presidency of that distinguished 
 Liberal Statesman, the late Mr. W. E. Forster, 
 carried on during the succeeding years a vigorous 
 propaganda of education on National questions both 
 
 § at home and in the great Colonies. In 1886 Mr. 
 
 S Forster was succeeded in the Presidency by Lord 
 Rosebery. During the years in which Lord Rosebery 
 
 5 guided the work of the League, and largely under his 
 
 ^ inspiration, a profound impression, pregnant with the 
 results of the greatest national consequence, was 
 unquestionably made on British opinion throughout 
 the world. It was my privilege during those years to 
 come closely in touch with popular feeling both in 
 Britain and in the Colonies, and I have always thought 
 that the gradual change from indifference to keen 
 interest, from an attitude of critical questioning to one 
 of accepted conviction in regard to the main principles 
 which the League put forward, furnishes one of the 
 most singular and encouraging instances in our history 
 of a decisive evolution of political opinion without the 
 aid of party conflict. Those years saw many of our 
 
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 41 ()r!24
 
 PREFACE 
 
 most important journals become ardent advocates of a 
 national ideal which they had at first looked upon with 
 distrust ; they saw prominent men, who had long held 
 aloof, gradually led to put themselves at the head of 
 a movement which was profoundly influencing the 
 national mind ; above all, they witnessed the formation 
 of a sound body of public opinion which accepted the 
 central idea that the continued unity of the Empire 
 is a question which rises far above most of the issues 
 which divide our party politics; and that the attain- 
 ment of a completer unity than at present exists ought 
 to be the supreme object of our national poUcy. 
 
 When the responsibilities of office compelled Lord 
 Rosebery (in 1892) to resign the direction of the 
 League, his place was fiUed by the late Mr. Edward 
 Stanhope, under whose Presidency the League was 
 dissolved. With the policy of dissolution 1 never 
 agreed. It gave offence to Members of the League in 
 Canada, was rejected by those of Australia, and only 
 made way for organizations on somewhat narrower lines 
 in England. In my judgment, the League might have 
 continued to furnish a middle ground upon which men 
 of all parties could study and discuss the problems of 
 Empire without the acrimony which usually attends 
 party debate. But in the absence of such an arena for 
 discussion, it was inevitable that sooner or later, under 
 our system of politics, some of these problems would 
 furnish watchwords for party fight. 
 
 That time has now apparently arrived. 
 
 The early advocates of Imperial Federation were 
 inclined to treat Protection and Free Trade as ques- 
 tions which might fairly be left open for solution in the 
 light of changing circumstances. Whether the principle 
 
 vi
 
 PREFACE 
 
 of Free Imports, which had so long controlled the policy 
 of the Motherland, or the Protectionist system, which 
 was manifestly gaining ground in the great Colonies, 
 would gain the ascendancy for the nation as a whole, 
 was still uncertain. But whether developed by Free 
 Trade or Protection, the vast and rapidly increasing 
 commerce of the Empire, demanded adequate security 
 from attack ; the interests of the different lands under 
 the flag claimed due representation ; the policy of the 
 Empire required coherent and consistent direction ; the 
 methods by which these great ends should be secured 
 must of necessity be sought for and established. 
 
 In seeking such methods, in striving to make the 
 British Empire an effective national unit among the 
 vast aggregations of force growing up around it, there 
 might well be room, I think, for studying dispas- 
 sionately even questions of Trade. 
 
 But the battle has now been joined on closer lines. 
 We are passing through a period of active transition. 
 The conditions of the world are changing ; the outlook 
 of national life becomes different every year ; in many 
 cases the principles which have seemed adequate for the 
 guidance of national conduct are questioned as they 
 have not been for half a century. We seem to be 
 upon the verge of a time when theoretical discussions, 
 which have long occupied the minds of earnest men, 
 must either be carried forward to practical conclusions 
 or must be abandoned as unpractical and useless. It is 
 inevitable that at such a period, in the midst of strongly 
 conflicting opinions, and a complex array of facts and 
 figures, individuals must make grave decisions in 
 reliance upon their own judgment. 
 
 The present volume illustrates the process by which 
 
 vii
 
 PREFACE 
 
 such decisions are made. The cause of National Unity 
 has had no more sincere, earnest, or strenuous advocate 
 than Mr. Brassey. To this great idea he has conse- 
 crated no small portion of his time and thought for 
 many years. The knowledge gained in wide travel 
 throughout the Empire has been laid under constant 
 contribution to this end. During the years in which 
 we have worked together, I have constantly admired 
 the way in which he subordinated his own interest and 
 his feeUngs as a Party politician to the broad principle 
 and purpose of a United Empire. 
 
 It is natural that a candidate for Parliamentary 
 honours in this country should wish the constituents 
 whose support he seeks, to have a full opportunity to 
 know the conclusions at which he has arrived on pubhc 
 questions, and the path along which his mind has 
 travelled in arriving at these conclusions. This is 
 especially true in a time of political upheaval, such as 
 that through which this country is now passing, when 
 new lines of cleavage have been introduced into public 
 life, and numbers of sincere thinkers on both sides of 
 pohtics have been compelled with anxious thought to 
 reconsider the ground of their party allegiance. These 
 essays and addresses mark the movement of a sincere 
 mind, earnestly seeking, under the varying phases of 
 political development, after truth in regard to the 
 conduct of national affairs. The author would himself 
 probably be the last to say that between his first 
 utterances upon the question and the last, there is 
 absolute fixedness and consistency of statement. Not 
 only do conditions change, but the range of vision 
 widens. Experience alone sometimes teaches the lines 
 of least resistance. Some of the speeches or articles 
 
 viii
 
 PREFACE 
 
 contained in this volume are valuable contributions to 
 the study of those national problems which we must 
 solve on our way to a really United Empire. Others 
 present a personal view of the present national outlook, 
 which deserves the careful consideration of voters, 
 anxious to exercise the franchise wisely on great public 
 issues. 
 
 On one of the most vexed and difficult problems 
 connected with the Federation of the Empire, Mr. 
 Brassey has taken the lead in laying down and advo- 
 cating a definite policy of reconstruction. It has 
 long been apparent that tlie Imperial Parliament, as at 
 present constituted, is unequal to the double task of 
 managing the affairs of a world-wide Empire while also 
 performing the minor functions which in Federated 
 States are assigned to the individual communities of the 
 Federation. The attempt to do this double work has 
 ended in an almost hopeless congestion of Parliamentary 
 business, which at once weakens general policy and 
 paralyses local improvement. Mr. Brassey has not 
 hesitated to point out that some devolution of local and 
 municipal legislation, on lines similar to what has been 
 carried out so successfully in Canada, must take place 
 within the United Kingdom before a place can be 
 found for Colonial representatives in a Parliament 
 competent to deal with the affairs of a world-wide 
 Empire. He has claimed that Federal Government 
 for the United Kingdom is not merely the best 
 corrective for partial and inadmissible Home Rule 
 demands, but is a necessary step in the process of 
 further national evolution. There is strong reason to 
 beheve that time will prove the truth of this contention. 
 
 It will be seen that in the great debate concerning 
 
 ix
 
 PREFACE 
 
 a fiscal policy for the nation at large which is now 
 engaging attention in this country, Mr. Brassey has 
 modified his Free Trade views. His earlier speeches* 
 indicate an anticipation that the circumstances of 
 national life might compel consideration of a change 
 of trade policy, though such a change might not be 
 to the advantage of the United Kingdom. He now 
 believes that such a change has become necessary, not 
 only on Imperial grounds, but also in the interests of 
 the United Kingdom. That the burden of defending 
 the Empire is becoming too heavy for the taxpayers 
 of the mother country alone is an argument constantly 
 used by Mr. Brassey in these pages. He has, after 
 many years of thought and study, arrived at the con- 
 clusion that it is only through some form of commercial 
 federation that the Colonies will be induced to relieve 
 the mother country of a share of the burdens which 
 are beginning to weigh heavily on her shoulders. 
 
 On the soundness of this conclusion I do not wish 
 to express an opinion. There are many others like 
 myself who still hold that, independently of the fiscal 
 questions which now chiefly occupy people's thoughts, 
 there are imperative reasons for welding the Empire 
 more closely together. Whatever be the result of the 
 present debate, those issues remain. 
 
 Meanwhile, I welcome this opportunity to record 
 my conviction, formed from much study of national 
 problems and close observation of public opinion at 
 home and abroad, that no political party can hope to 
 command the support of the Britisli people at large 
 which does not make a broad Imperial policy, based on 
 
 Of. pp. 16 and 38. 
 X
 
 PREFACE 
 
 the idea of an Empire always becoming more closely 
 knit together in all its parts, the very corner-stone of its 
 programme. Such a national poUcy should not be the 
 heritage of any single party in the state. But in my 
 opinion it is those leaders who grasp the idea most 
 firmly, who base their plans on its realisation, and who 
 place minor party considerations in their true relation 
 to this central issue of our national life, who will 
 ultimately win in the great struggle which is now 
 going on. 
 
 XI
 
 CONTENTS 
 
 I. IMPERIAL FEDERATION. 
 
 PAGE 
 
 (a) Imperial Government 3 
 
 Speech at Epsom, 1892. 
 
 (b) Great Britain as a Sea Power 20 
 
 From the Nineteenth Century, July 1893. 
 
 (c) Australia and Imperial Defence 37 
 
 Extracts from an Address delivered before the Imperial 
 Federation League of Victoria, at Melbourne, October 
 1896. 
 
 (d) The Irish Question 49 
 
 Extract from Address at Pokesdown, Boiu-nemiouth, 
 November 8th, 1898. 
 
 (e) Federal Government for the United Kingdom and 
 
 THE Empire . . , 52 
 
 From the Nineteenth Century, August 1901. 
 
 (f) Steps to Imperia,l Federation 72 
 
 A Paper read before the Royal Colonial Institute, No- 
 vember 11th, 1902. 
 
 (g) The Finance of Federal Government for the 
 
 United Kingdom 96 
 
 A Paper read before the Royal Statistical Society, 
 January 1903. 
 
 II. TARIFF REFORM. 
 
 (a) Is Free Trade the Right Policy for this Country 
 
 to-day (1898)? 127 
 
 (b) Sugar Bounties and the West Indies .... 131 
 
 Extract from a Speech at Christchurch, November 1898. 
 
 xiii
 
 CONTENTS. 
 
 TARIFF REFORM (continited). paob 
 
 Cc) Pbeferentiax Tariffs . . , . . . 134 
 
 A Letter to the Times, June 5th, 1903. 
 
 (d) Tariff Reform and the Cotton Industry . . . 143 
 A Letter to the Manchester Chiardian, July 25th, 1903. 
 
 (e; Tariff Reform and Agricttlture 147 
 
 Speech at Catsfield, July 28th, 1903. 
 
 (f) Canada 159 
 
 The Montreal Congress, August 1903. 
 The Canadian Manufacturers' Association, September 
 1903 (page 162). 
 
 (g) Canada and Preferential Trade 168 
 
 Speech at Rye, October 10th, 1903. 
 
 (h) The Need for Tariff Reform 180 
 
 Speech at Tunbridge Wells Farmers' Club, January 15th, 
 1904. 
 
 III. MISCELLANEOUS SUBJECTS. 
 
 (a) Studies in Australia in 1896 197 
 
 Paper read at the Royal Colonial Institute, February 1897 
 
 (b) The Egyptian Question 233 
 
 Speech at Boscombe, November 1898. 
 
 (c) The Situation in South Africa 243 
 
 Speech at Bournemouth, October 1899. 
 
 XIV
 
 I. 
 
 IMPERIAL FEDERATION. 
 
 B
 
 IMPERIAL GOVERNMENT. 
 
 Speech at Epsom, 1892. 
 It must be clear to every sensible man that the task inability of 
 
 J . -r • 1 -r. T . , Parliament to 
 
 imposed on our present Imperial Parliament is abso- cope with the 
 lutely beyond the capacity of a single assembly. The Empire! ^^^ 
 House of Commons attempts to deal with the internal 
 affairs of Ireland, Wales, Scotland, and England. 
 Judging by the time that Irish affairs now occupy in 
 Parliament, when there are so many other important 
 things to be considered, the regulation of the internal 
 affairs of Ireland alone is a sufficient task for any 
 representative body, and I am sure that most people in 
 this room will agree with me when I say that the 
 domestic government of some 30,000,000 of Englishmen, 
 a business which is now very much left on one side, 
 would give ample scope to the energies and talents of 
 any body of legislators, however energetic, and however 
 capable. The House of Commons, again, attempts to 
 supervise the Government of some 250,000,000 of the 
 human race in India. If that supervision is to be 
 effective, and, mind you, it ought to be effective, for we 
 have undertaken in India enormous responsibihties, far 
 more time must be given to Indian questions by people 
 who are far more intimately acquainted with them than 
 the average Member of the British House of Commons. 
 I need not now speak of the Administration of our 
 various Crown Colonies and Dependencies, or of the 
 
 3
 
 PROBLEMS OF EMPIRE. 
 
 regulation of the external relations of the great 
 self-governing Colonies ; I have said sufficient to show 
 that to no subject which comes before the British 
 House of Commons is it possible at present to giv^e 
 the amount of time and attention which that particular 
 subject demands. 
 The Imperial Let US examine how our present system of 
 
 Government . ^ o i -n • 
 
 as it affects— government aiiects the various parts ot the Empire, 
 and why it is unsatisfactory to each part indi^^[dually. 
 
 Ireland. Ireland suffers most under the present system : let us 
 
 therefore take the case of Ireland first. I don't intend to 
 enter at any length into the Irish question now, though 
 it still occupies first place in the Liberal programme, 
 because I have dealt with it very fully elsewhere. 
 What are we doing in Ireland ? We are persisting in 
 governing the country in direct opposition to the wishes 
 of the people as expressed through their representatives, 
 in refusing to recognise what is, in my opinion, the 
 first principle of Imperial Government, viz., the right 
 of each part of the Empire to manage its own local 
 affairs. Some people will tell us that Ireland is not, 
 and cannot be, a unit in herself, that she is only a 
 portion of the United Kingdom, and that Englishmen 
 and Irishmen can be governed under the same laws 
 and by the same body. That is an argument that has 
 been often put to me, but if it is a sound contention, 
 how comes it that measures are brought in to apply 
 to Ireland, which are not applied to England, how 
 comes it that measures are passed which apply to 
 England and AVales, and which do not apply to 
 Ireland? The truth is that Ireland is a country whose 
 conditions essentially differ from those of England 
 and demand special treatment. Let us recognise in 
 
 4
 
 IMPERIAL GOVERNMENT. 
 
 the case of Ireland, that Irishmen know how best to 
 manage their own local affairs, but, while keeping 
 before us the first principle in any future Home Rule 
 Bill, let not the other two principles of Imperial 
 Government be forgotten. Ireland must have a 
 Parliament of her own for the transaction of her own 
 special business, but, at the same time, she must 
 continue to take her proper share in the management 
 of Imperial affairs, she must continue to bear her 
 fair share of the cost of the Army and Navy, which 
 are to defend her as well as Scotland and England. 
 
 The Home Rule Bill of 1886 was, in some respects, a 
 retrogi-ade measure, in that it placed Ireland in a posi- 
 tion worse than that of a Crown Colony. No taxation 
 without representation is an old axiom of the British 
 Constitution. Under that Bill, Ireland was stiU to 
 bear her share of the cost of Imperial defence, but 
 she was to have no voice in the control of the 
 expenditure, she was to have no \ oice in the direction 
 of the foreign policy, which was to affect her as much 
 as England. Sir Charles Russell was one of the very 
 first to point this out, and in any future Home Rule 
 Bill we may rest perfectly assured that this defect will 
 be remedied. 
 
 Ireland, as I have said, is the most dissatisfied ScoUand and 
 with the way her affairs are managed by the present 
 Imperial Parliament, but in Scotland and Wales this 
 feeling of dissatisfaction is increasing too. The demand 
 for Home Rule is growing. Surely the Crofter ques- 
 tion, or any other purely Scotch question, will be 
 infinitely better dealt with in an assembly of Scotchmen, 
 intimately acquainted with the wants of their country, 
 than in an heterogeneous assembly of people, most of 
 
 5
 
 PROBLEMS OF EMPIRE. 
 
 whom take only an indirect interest in the subject. 
 The same may be said of Wales. 
 England. The consideration of how our system of Imperial 
 
 Government affects us Enghshmen is the most [im- 
 portant to all of you in this hall. At present we find 
 that a large proportion of the time of our representatives 
 in Parliament is taken up in dealing with Irish, Scotch^ 
 or Welsh business, with matters which only indirectly 
 concern ourselves. A^'^e, as Liberals, maintain that 
 purely Irish questions should be decided according to 
 the wishes of Irish people. As a Liberal, again, I have 
 pledged myself to vote on the question of disestablish- 
 ment in \¥ales, according to the clearly expressed views 
 of the Welsh people ; and I have given a similar pledge 
 with regard to disestablishment in Scotland, when 
 the opinion of Scotchmen on that question is equally 
 clearly expressed. But has it never struck you that 
 these Liberal principles we profess, might be applied 
 even nearer home. If the Irish have a right to manage 
 their own affairs, have not we Englishmen a right to 
 manage our own affairs ? Do we want Irishmen and 
 Scotchmen to help us to decide what form free education 
 is to take in our English elementary schools. Should 
 the question of the disestablishment of the Church in 
 England come up for decision, is that question to be 
 in great part decided by the votes of Irish Roman Catho- 
 lics, Scotch Presbyterians, and AVelsh Dissenters ? In 
 my opinion, emphatically No ! Questions which affect 
 England alone, should be decided according to the 
 v^iews of the English people. Therefore, I advocate 
 Home Rule for England as well as for Ireland, for 
 Scotland, and for Wales, and in doing so, I no more 
 than follow an accepted principle of the Liberal party ► 
 
 6
 
 IMPERIAL GOVERNMENT. 
 
 Let us turn to the ffreat self-ffoverninff colonies in The Seif- 
 
 -.y , • . . ,. . governing 
 
 North America, Austraha, and South Africa. Surely Colonies. 
 the issues on which the general election in Canada was 
 fought three months ago, the issue on which the general 
 election in New South Wales has just decided, the 
 visit of the young and able Premier of South Africa 
 to this country, should awaken the most serious atten- 
 tion to the relations between the mother country and 
 her Colonies. The issue in Canada was whether 
 there should or should not be unrestrained reciprocity 
 with the United States. The party led by Sir John 
 Macdonald maintained that complete reciprocity with 
 the United States meant ultimate absorption in the 
 United States. Though his opponents disclaimed any 
 intentional disloyalty to the mother country, the Cana- 
 dian people decided that Sir John IVIacdonald was right 
 in his contention. In New South A Vales the issue was 
 more direct. Sir Henry Parkes, the G.O.M. of Aus- 
 tralia, as he is often called, put forward the proposal for 
 Australian Federation, as a Federation under the Crown ; 
 Mr. Dibbs, the leader of the Opposition, went for Feder- 
 ation and Independence. Sir Henry Parkes has been 
 returned witli thirty-eight of his supporters ; Mr. Dibbs 
 has lost his seat and only nineteen of the opposition have 
 been elected. The results of these elections are satis- 
 factory ; but they do not remove the necessity for 
 seriously considering our position. 
 
 In each of these groups of Colonies there are re- 
 sponsible legislatures, which make what laws they please 
 for the internal government of their respective Colonies. 
 At the head of each it is true there is a Governor, who 
 acts as deputy of the Queen. The external affairs of 
 the great Colonies are in the hands of the Colonial 
 
 7
 
 PROBLEMS OP^ EMPIRE. 
 
 Office, subject to the more or less imperfect scrutiny of 
 Parliament. We all know that a Government office will 
 do almost anything to avoid inconvenient questions in the 
 House of Commons, and its action is largely governed 
 by the principle of 'let sleeping dogs lie.' The Colonial 
 Office is no exception to the rule. Colonists have no 
 constitutional way on ordinary occasions of making their 
 voices heard. If they make representations to the 
 Colonial Office, the Colonial Office will turn a deaf 
 ear until a powerful agitation is got up in the colony 
 interested, until an immense amount of ill-feeling and 
 disloyalty to the mother country is aroused, which 
 has sometimes culminated in the hauling down of the 
 national flag by an excited populace. There have 
 been instances of this in Australia, South Africa, and 
 North America, in the last few years, and in South 
 Africa and North America in the last year. By the 
 time the agitation reaches to the height of lowering 
 the national flag, the attention of Parliament and the 
 electors of this country have been aroused, and the 
 Colonial Office has been convinced that some action 
 must be taken. Many instances could be quoted to 
 show what I mean. One which I often quote, because 
 1 happened to be in Australia when the feeling on the 
 subject was at its height, is the way in which the Home 
 Government dealt with the annexation of New Guinea 
 and the transportation of French convicts to New 
 Caledonia, whence they escaped to the mainland of 
 Australia. The feelings aroused at that time in Queens- 
 land have rankled ever since, they have borne fruit on 
 more than one occasion, and it will be many a long year 
 before they completely die out. 
 i^nd*°""^ There is an excellent illustration of the way in 
 
 8
 
 IMPERIAL GOVERNMENT. 
 
 which our Empire is governed at present, which has 
 had a large place in the columns of the daily press and 
 which has, during the present session, occupied the 
 attention of both Houses of Parliament. I refer to the 
 case of Newfoundland. I do not intend to enter into tlie 
 history of this question. The position may be briefly 
 summarised thus : The French have undoubted Treaty 
 rights on a portion of the shores of Newfoundland which 
 have become absolutely intolerable owing to an expansion 
 of population, which was never dreamt of at the time 
 that Treaty was made, or even at the periods when it 
 has been since confirmed. The way in which these 
 Treaty rights have been enforced (the Newfound- 
 landers say, exceeded) by both French officers and 
 the officers of H.M. ships has produced the gravest 
 discontent in Newfoundland. More than a year ago 
 that discontent was very serious, but nothing was done. 
 During the winter the situation gi'ew still more gi'ave. 
 Mass meetings were held at St. John's and elsewhere to 
 protest against the action of the Home Government, 
 there was much talk of annexation to the United States, 
 accompanied by the hauling down of the national flag, 
 which is becoming only too common in cases of this 
 kind. At the beginning of this year, the House of As- 
 sembly began to pass unanimous resolutions on the 
 subject. The Colonial Office became convinced that 
 something must be done, and within the last few 
 weeks the Premier of Newfoundland has been heard 
 at the bar of one of the Houses of Parliament, and 
 some sort of temporary arrangement has been arrived 
 at. I am now dealing with the Newfoundland ques- 
 tion only as incidental to my main argument ; but, 
 if I may be allowed to digress, I would say that this 
 
 9
 
 PROBLEMS OF EMPIRE. 
 
 question, which has troubled English and French 
 statesmen for more than a century, can only be settled 
 satisfactorily to all parties concerned, on the basis of 
 the complete extinction of the French rights on the 
 shores of Newfoundland, which are almost valueless to 
 the French themselves : but, as I have said before, in- 
 tolerable to the Newfoundlanders. Sensible Frenchmen 
 take this view of the case ; we must be prepared to make 
 considerable concessions elsewhere, but it is worth mak- 
 ing a considerable sacrifice for the benefit of 200,000 of 
 our English-speaking fellow-countrymen. Now the his- 
 tory of Newfoundland during the past year is, as I have 
 said, only one instance of many that prove how unsat- 
 isfactory our present system is. We are brought to the 
 conclusion that the external relations of Colonies in- 
 habited by 11,000,000 of free self-governing English 
 subjects, nearly 10,000,000 of whom are Englishmen, 
 cannot be managed in a Government office, supervised 
 by an Assembly in which not one of the Colonies, 
 immediately interested, is represented. These relations 
 are too important to be dealt with in this way. They 
 must be dealt with by an Assembly where the Colonies 
 are represented. 
 India. India is a very important part of the British 
 
 Empire. We Enghshmen have undertaken to govern 
 in India a popuhition about ten times our own number, 
 a population which forms a very large part of the human 
 race. The responsibility is enormous, and yet how much 
 of the time of Parliament is given to the consideration 
 of Indian questions ? At most, one or two days, and 
 those at the fag end of a session, when half of the Mem- 
 bers have left. Parliament is practically absolute in 
 dealing with India, and considering the imperfect 
 
 10
 
 IMPERIAL GOVERNMENT. 
 
 knowledge and the insufficient opportunities of acquiring 
 knowledge of Indian questions possessed by most 
 Members of l*arliament, it is perhaps a matter of congratu- 
 lation that the Government of India is so largely left in 
 the hands of that noble body of civil servants, who do 
 now, as they ha^'e done for many years past, constitute 
 one of the finest services that the world has ever 
 known. 
 
 But there are questions gradually rising abo\'e Native share 
 the horizon or Indian politics, too important to be tration. 
 decided by any body of civil servants, however capable^ 
 and still less by an Assembly which has not the 
 leisure they demand. The most important of these 
 questions is how far the natives of India are to be ad- 
 mitted to a share in the government of their country. 
 If that question could be decided by applying the prin- 
 ciples of English politics to India, the solution would 
 be comparatively easy, but few people who have any 
 knowledge of Indian matters would dream of suggest- 
 ing such a solution. A movement has been in progress 
 for some years past to urge the claims of the natives 
 of India to representation in the government of their 
 country, and the demands of the supporters of this move- 
 ment have taken shape in the progi-amme of the so- 
 called Native Congress. It is to me clear that, as the 
 logical outcome of our system of education, gradual 
 concessions will have to be made to the demands of 
 the party represented by the Congress ; and the repre- 
 sentative principle may be partially introduced in the 
 constitution of provincial councils. But any attempt to 
 govern India now or in the near future, through the 
 medium of representative institutions, would, in my 
 opinion, be absolutely impracticable. Those people who 
 
 11
 
 PROBLEMS OF EMPIRE. 
 
 have profited most hitherto by our system of education 
 are drawn from the weakest races of India ; and if we 
 were to leave India to-morrow, those people who are 
 loudest in their demands for representative Government 
 would be the very first to go to the wall, overwhelmed 
 by the strong fighting races of the north and north-west. 
 The problem is full of difficulty, it demands the closest 
 attention and the deepest study, which, vmder the present 
 system of Imperial Government, it cannot have from 
 those who are ultimately responsible for the solution. 
 1 should look forward with grave apprehension to such 
 a question being decided in an Assembly where votes 
 are mainly governed by considerations of party pohtics 
 at home. Therefore, in my opinion, for the proper 
 Government of India, as well as for other parts of 
 the Empire, a body must be constituted in which 
 questions of great Imperial interest are decided by repre- 
 sentatives from all parts of the Empire. 
 Crown There is another group of British possessions which 
 
 are pecuharly under the government of the Colonial 
 Office, and which have often reason to be dissatisfied 
 with that Government — I mean the Crown Colonies, 
 the most important of which are the Straits Settlements, 
 Ceylon, the West Indian Islands, and Mauritius. In 
 nearly every Crown Colony, the wliite population bears 
 a very small proportion to the natives, and is composed 
 mainly of merchants, bankers, a few officials, and, in the 
 West Indies, of planters. If the Colony has a grievance 
 it is exceedingly difficult for it to bring its grievance 
 before the attention of Parliament, which alone has power 
 to remedy it. The Governor is absolute in his Council, 
 which invariably has a majority of official members, 
 and he can compel them to vote against their opinions 
 
 12
 
 IMPERIAL GOVERNMENT. 
 
 and in accordance with the instructions of the Colonial 
 Office on pain of dismissal from their offices. Agita- 
 tion, such as we have seen is so common in the self- 
 governing Colonies, would be too dangerous an example 
 for a handful of Europeans to set to a large native 
 population. The Colonial Office, therefore, can treat 
 the Colony almost as it pleases without fear of the 
 consequences. 
 
 Let me give one instance which will show you that Singapore, 
 the authority of the Colonial Office can be pushed 
 to an extent that you may never have reaUsed before. 
 It is a question affiscting the defences of the Colony 
 of Singapore. In 1885, as a result of I^ord Carnarvon's 
 Committee on the coahng stations, an arrangement was 
 arrived at by which the Colony of the Straits Settlements 
 was to undertake the works of the forts, while the Home 
 Government supplied the armament; 80,000/. was 
 cheerfully voted by the Colony for this purpose, and the 
 works were completed, as I saw with my own eyes, 
 long before the promised armament was ready. Early 
 last year the Secretary for State claimed the following 
 additional contributions : 
 
 (a) 29,000/. for loss on exchange. 
 
 (6) 60,000/. for five years for barracks. 
 
 (c) 100,000/. instead of 50,000/. for military con- 
 tribution. 
 When the matter came before the Council the elected 
 members protested against the vote of 100,000/., but 
 expressed willingness to agree to the two first demands. 
 The vote was carried by the votes of the official mem- 
 bers, and with regard to their votes the Governor 
 said in his dispatch to the Secretary of State, ' I found 
 myself unable to support all the claims which Her 
 
 13
 
 PROBLEMS OF EMPIRE. 
 
 Majesty's Government had made, and the same views 
 which I held were shared by every member of my 
 council. ISIy instructions, however, were perfectly 
 clear, and I had to require each member to vote 
 against his conviction, and in support of the claims 
 of Her Majesty's Government.' That is an instance 
 of the way in which our Crown Colonies may be 
 governed. 
 
 It is the interest of few Members of Parliament to 
 move in questions of this kind, because they know full 
 well that few of their constituents have any knowledge 
 of them or pay any heed to them. Therefore, in my 
 belief, our system of Imperial Government is as bad for 
 the Crown Colonies as it is for those other parts of the 
 Empire that we have been discussing. 
 
 We have seen that our system of Imperial Govern- 
 ment is unsatisfactory to our great self-governing 
 Colonies as well as to India and those parts of Greater 
 Britain which are not able to govern themselves; to 
 the former because they have no constitutional share in 
 that government, to the latter because their affiiirs are 
 managed without the knowledge and attention which 
 their importance demands. 
 An Imperial ]^ut is uot the Government of Greater Britain as 
 
 necel'^ry. Unsatisfactory to us English Liberals as the Government 
 of Great Britain and Ireland. We Englishmen do not 
 wish to shirk our Imperial responsibilities. We know 
 that it would be impossible for our teeming population 
 to exist in this small island if it were not for our great 
 possessions in every quarter of the globe ; if it were not 
 for our great over-sea commerce, which brings us the 
 raw materials for oiu- manufactures and the bread that 
 we eat. We wish to see Greater Britain well governed, 
 
 14
 
 IMPERIAL GOVERNMENT. 
 
 but we do not wish to have the time of our representa- 
 tives in Parhament occupied with the better government 
 of Greater Britain to the exclusion of questions which 
 intimately affect ourselves. Irish, Welsh, and Scotch 
 affairs on the one hand. Imperial affairs on the other, 
 will delay for many years those much-needed reforms 
 which form part of the programme of the gi-eat Liberal 
 Party (to which I am proud to belong) if our present 
 system is unchanged. I therefore advocate, in the 
 interest of England as well as of the British Empire, 
 that Imperial affairs should be handed over to a body 
 which from its constitution has the power, and from the 
 nature of its functions has the leisure to deal with 
 them. That body must be composed of representatives 
 from Ireland, Scotland, and Wales, fi'om Canada, 
 Australia, and South Africa, as well as from England. 
 We must be prepared to give up our exclusi^'e control 
 of foreign affairs and the Imperial army and navy to 
 this body, in which, for a time at any rate, we shall 
 have a preponderating influence. I have shown you 
 that this sacrifice is worth the making, but it can only 
 be made on one condition. 
 
 At the present time practically the whole cost of imperial 
 
 Defence 
 
 the army and navy (which not only defend our own bome by 
 coasts and our own commerce, but the shores of our BSain. 
 remotest dependencies) is borne by the taxpayers of this 
 country. It is the same with the cost of the diplomatic 
 and consular services of which the Colonies derive the 
 benefit as well as we ourselves. It probably has not 
 struck many of the taxpayers that they are paying for 
 defending people who are better able to pay than they 
 are themselves. This state of things cannot long con- 
 tinue ; at any rate, when the British taxpayer comes 
 
 15
 
 PROBLEMS OF EMPIRE. 
 
 to realise what an unfair arrangement it is to him. 
 To those who assert that the Colonies will never con- 
 tribute to the cost of Imperial defence, my answer is — 
 they have already begun to do so. Melbourne and 
 Sydney, which are secure bases for British commerce, 
 are amongst the best-defended ports in the Empire. 
 After the Colonial Conference of 1887 the Australian 
 Governments, with one exception, agreed to bear a 
 large proportion of the cost of a British squadron in 
 Australian waters : and while that squadron is avowedly 
 intended to protect, in the first instance, the shores of 
 Australia, it as certainly assists in protecting British 
 commerce in Australian waters. 
 Commercial Though a Commencement has been made in this 
 
 direction, it may well be doubted whether the Colonies 
 will undertake their fair share of the burden unless 
 we give them further advantages than a voice in the 
 control of Imperial questions. The self-governing 
 Colonies are nearly all rigidly protectionist, and it is 
 said that all that they hope for from a connection 
 with the mother country is the enjoyment of trade 
 advantages. I am a staunch believer in the economic 
 advantages of Free Trade to this country, even on the 
 present one-sided system ; but, in my opinion, it is well 
 worth considering whether we should not gain more 
 than we lose if, by entering into reciprocal trade 
 arrangements throughout the Empire, we induced the 
 Colonies to bear their fair share of the cost of Imperial 
 defence. In the present state of public opinion on 
 fiscal matters in this country such an arrangement may 
 be impracticable. It is a problem which will un- 
 doubtedly have to be faced sooner or later, if this 
 Empire of ours is to be kept together, and it is a 
 
 16
 
 IMPERIAL GOVERNMENT. 
 
 question on which the electors of this country will have 
 to make up their minds. 
 
 Lord Sahsbury told the deputation of the Imperial federation 
 
 •^ ^ *^ for Defence. 
 
 Federation League, introduced by Lord Brassey, that 
 it was due to an extravagant modesty on their part, 
 that they had no definite scheme to propose. He then 
 proceeded to state what appeared to him to be the 
 difficulties of the problem. Though I have endeavoured 
 to point out a practical remedy for some of the diffi- 
 culties of Imperial government in relation to local self- 
 government, for the difficulties indicated by Lord 
 Salisbury I have put forward no practical solution. 
 The Zollverein we have already put on one side. But 
 for a Kriegsverein, or union for the defence of the 
 Empire, we see our way to a practical step partly 
 suggested by the arrangement adopted at the last 
 Colonial Conference of 1887. At another Colonial 
 Conference the following proposals can be made : — 
 Delegates to be appointed by the legislatures of the 
 various self-governing parts of the Empire to an 
 assembly which shall have control of (a) foreign rela- 
 tions ; {b) India and the Crown Colonies; (c) Imperial 
 defence. Grants to be made by the legislatures of the 
 various self-governing countries for the purposes of 
 Imperial defence, over which the aforesaid Imperial 
 assembly will have absolute control. The amount of 
 representation and contribution to be determhied at the 
 conference, and the arrangements to be ratified by the 
 various legislatures. The arrangement to be subject 
 to revision at the end of ten years. 
 
 Now, in placing the three principles of Imperial The 
 
 ' A o JT i A principles of 
 
 government before vou to-niffht, I have shown you imperial 
 
 , .. ,, 1 otiiij!^j. Government. 
 
 that it IS not only to the advantage of Ireland but to 
 
 17 c
 
 PROBLEMS OF EMPIRE. 
 
 the advantage of England that the first of these 
 principles — viz., the right of each self-governing part of 
 the Empire to manage its own local affairs, should be 
 adopted. I have shown you that it is not only to the 
 advantage of India and the Colonies, but to the 
 advantage of England as well, that matters of Imperial 
 interest should be managed by a body properly con- 
 stituted to deal with them. I have shown you that if 
 we do give up our exclusive control in these matters, the 
 Colonies must relieve us of that part of taxation which 
 we bear on their behalf. I have addressed myself 
 mainly to you as I^iberals who wish to see Parliament 
 free to devote its attention to English domestic 
 problems. I have been told that the British elector 
 cares for absolutely nothing that does not touch his 
 own immediate interests. It may be the case that the 
 British democracy is in ordinary times the most un- 
 patriotic of people ; but I am perfectly certain that 
 there is a deep latent feeling of patriotism which is 
 aroused when the occasion demands it. I am confident 
 that there are few Enghshmen who can read the 
 history of the building up of this Empire of ours 
 without a feeling of just pride. Does not the growth 
 of Canada and Australia, the work above all which we 
 have done in India, awaken the most serious considera- 
 tion as to the moral responsibilities of our race? We 
 have shown we have a genius for self-government, and 
 for the government of native races, which no other 
 nation has possessed ; we sliould not shirk the responsi- 
 bilities, to the whole as well as to the various parts. 
 We have an immense task to perform for the peace 
 and civilisation of mankind, if we only have the will to 
 undertake it. A united British Empire will represent 
 
 18
 
 IMPERIAL GOVERNMENT. 
 
 interests so varied that it will be sincerely desirous of 
 peace. On the other hand, it may in time become so 
 powerful that, as I^ord Rosebery has finely said, 
 without its consent no shot will be fired in anger 
 throughout the habitable globe.
 
 The cost of 
 the defence 
 of the British 
 Empire. 
 
 Lord 
 
 Hartington's 
 Commission 
 on Military 
 Expenditure. 
 
 GREAT BRITAIN AS A SEA 
 
 POWER. 
 
 From the ' Nineteenth Century,' July, 1893. 
 
 The gross cost to the British taxpayer of defending- 
 the British Empire amounted, for the year 1892-93, 
 to over 35^ miUions of pounds, 20j miUions of which 
 (in round numbers) were devoted to expenditure on the 
 Army, and 15 miUions to expenditure on the Navy. 
 The estimates for these two great services are passed 
 through ParHament year after year with some shght 
 criticism on points of detail. It is a cogent argument 
 in favour of the pohcy of such measures as the Naval 
 Defence Act that it compels Parliament from time to 
 time to consider broadly the requirements of the 
 country for the purposes of defence. On ordinary 
 occasions few of those who are responsible for granting 
 these enormous sums of money, fewer still among the 
 general body of taxpayers, have paused to consider 
 whether we are proceeding on the right principles in 
 allocating the expenditure. It is true that there is a 
 general feeling that for the 20 millions spent on the 
 Army, the most efficient part of which is in India, 
 and is paid for by the Indian taxpayer, the nation by 
 no means gets its money's worth. 
 
 Lord Hartington's commission, composed though 
 it was of able men, after conducting an exhaustive 
 inquiry into the whole subject, was able to suggest little 
 in the way of reform. Sir George Chesney, Mr. Arnold 
 
 20
 
 IMPERIAL DEFENCE. 
 
 Forster, and ' Vetus ' in the Times, could only point out 
 defects of administration. One writer who has gone to 
 the root of the matter has shown that, until the British 
 people and British statesmen make up their minds as to 
 the part they expect the Army to play in the defence of 
 the Empii-e, our military expenditure is likely to con- 
 tinue wasteful and misdirected. 
 
 There are three forms of attack which we must be Forms of 
 prepared to meet in the event of war with a first-class Empire. 
 European power : attacks on commerce, attacks on 
 colonies and dependencies, invasion. 
 
 In former wars in which we have been engaged our On 
 
 ., 1 no • ^ 1 , Ti • Commerce. 
 
 commerce, though suiiermg heavy losses, steadily in- 
 creased in volume. In any war of the future no one 
 can doubt that our commerce will be much exposed to 
 attack. The British Empire, according to Lloyd's 
 Register, possesses, at the present time, more than 
 half the total merchant tonnage of the world. Nearly 
 two-thirds of the tonnage of steamships, which are 
 generally considered to possess three times the carrying 
 efficiency of sailing-ships, are owned in the British 
 Empire. Turning from shipping to cargoes, the total 
 trade of the British Empire in 1890 amounted to nearly 
 1,200,000,000/., 750,000,000/. representing the share of 
 the United Kingdom alone. The trade of the United 
 Kingdom is of vital importance. One hundred years 
 ago England was nearly, if not quite, self-supporting. 
 To-day we are not provisioned for more than six weeks 
 or two months. 
 
 The young school of naval officers, led by Admiral The Jeune 
 Aube, has laid it down that the naval force of France 
 when employed for offensive purposes should be con- 
 centrated on the attack of British commerce. Admiral 
 
 21
 
 PROBLEMS OF EMPIRE. 
 
 de la Reveillere, in a recent article in the Marine 
 Francaise, observes : ' La Jeune Ecole se trompe 
 assurement sur la portee de ce genre de lutte quand 
 elle s'imagine, avec quelques torpilleurs dans la Manche 
 et quelques croiseurs tres rapides, condamner I'Angle- 
 terre a perir d'inanition ; mais ce n'en est point moins 
 le vrai moyen de combattre.' In adopting the ' guerre 
 de course ' as the be-all and end-all of their policy, the 
 naval strategists of the Jeune Ecole hardly pay suffi- 
 cient regard to the teachings of history. The v^rhole 
 maritime energies of the French Republic after the 
 battle of the 1st of June in 1794, and of the French 
 Empire after the battle of Trafalgar, were directed to 
 the subjugation of England through the destruction of 
 her commerce. The command of the sea was not 
 disputed. British fleets and British cruisers were, if 
 possible, to be avoided. The first principle of naval 
 warfare was sacrificed to an ulterior object. 
 Captain Captain Mahan, in his recent work, has conclusively 
 
 shown that, in thus acting, the French Government 
 singularly failed to attain the object which they had 
 in view. British commerce, indeed, suffered numerous 
 losses at the hands of French ships and French 
 privateers throughout the war, but its steady ebb 
 and flow was never seriously affected by these means. 
 The number of British merchant vessels captured 
 during the twenty-one years 1798-1814 amounted to 
 11,000 ; the average number of ships entering and 
 clearing tlie ports of Great Britain, exclusive of the 
 coasting trade, amounted annually to over 21,000. 
 From these and other considerations Captain Mahan 
 draws the conclusion ' that the direct loss to the nation 
 by the operation of hostile cruisers did not exceed 
 
 22 
 
 Mahan.
 
 IMPERIAL DEFENCE. 
 
 2j per cent, of the commerce of the Empire ; and that 
 this loss was partially made good by the prize ships 
 and merchandise taken by its own naval vessels and 
 privateers,' It should be further observed that the total 
 number of vessels belonging to the British Empire 
 rose from 16,875 in 1795 to 22,051 in 1805, and 23,708 
 in 1810. What was the result of the war to our oppo- 
 nent ? Before the Revolution, Admiral de la Reveillere 
 asserts that the commerce of France equalled that of 
 England. The revolutionary war had not been long in 
 progress before the French Directory was constrained 
 to admit (in 1799) that ' not a single merchant-ship is 
 on the sea carrying the French flag.' The history of 
 the great war established beyond contravention the 
 principle that no serious interruption to commerce is 
 possible by the naval forces of a power which has not 
 first obtained the command of the sea. It illustrates 
 the fallacy of the idea that England can be reduced to 
 scarcity while the relative strength of the two navies 
 remains as it is now. On this point Admiral de la 
 Reveillere is again worth quoting : ' S'imaginer que 
 nous pourrons suffisamment bloquer les cotes anglaises 
 pour reduire le pays a la famine .... est une idee qui 
 ne penetrera jamais dans une tete saine.' In any future 
 war in which the British Empire may become invohed, 
 British connnerce wiU undoubtedly suffer losses ; their 
 number and extent will depend on the strength and 
 efficiency of the British Navy; but it is only in the 
 case of that strength being allowed to fall to a point 
 which will leave the command of the sea in doubt that 
 British commerce can be seriously interrupted. In 
 such a case it is idle for British merchants to talk of 
 securing the safety of their trade under a neutral flag. 
 
 23
 
 PROBLEMS OF EMPIRE. 
 
 Attacks on 
 Colonies. 
 
 By land on 
 Canada and 
 India. 
 
 By sea. 
 
 No power with which we might be at war would 
 respect the neutral flag where ships were carrying food 
 supplies absolutely vital to the existence of the enemy. 
 Place the command of the sea in doubt, and the ruin of 
 British commerce and the British Empire is assured. 
 
 Of all the colonies and dependencies of the British 
 Empire, India and Canada alone are open to serious 
 attack by land. Though the navy is powerless to 
 prevent these two great British possessions from being 
 attacked, the power to defend them depends absolutely 
 on the command of the sea. In the event of war with 
 Russia we can place reinforcements to our army on 
 the north-west frontier of India far more easily, far 
 more cheaply, and probably more expeditiously than the 
 Russians can bring forward their invading forces. De- 
 prived of the power of reinforcing the army in 1 ndia by 
 sea, England's hold upon India is gone for ever. The 
 contingency of war with the United States no Enghsh- 
 man cares to contemplate. Should Canada be ever 
 again liable to invasion, our power of defending 
 Canadian soil depends, as in the case of India, on 
 the power of transporting British troops by sea. 
 Canada is defended from the attack of any other 
 power but the United States ; Australasia and South 
 Africa are secure from the attack of every power, by 
 the fact that they are of large extent and occupied by 
 a numerous and friendly population. An army of 
 50,000 men would be required to conquer and hold 
 either of these great colonies or dependencies. Such a 
 force cannot be transported across the ocean by sur- 
 prise. To make the attempt while the command of 
 the sea was in doubt would be madness. 
 
 Canada, Austraha, South Africa, and, we may add, 
 
 24
 
 IMPERIAL DEFENCE. 
 
 India are by many considered liable to serious attack by 
 hostile navies, which would assail their ports and prey 
 on the shipping on their coasts. Hahfax is the only 
 port in these Colonies which can possibly be considered 
 within the radius of action of fleets in European waters. 
 The ports of the Cape Colony, of India, of AustraUa 
 and New Zealand, possess an important element of 
 safety from attack in their distance from Europe. The 
 bases of the enemy in their neighbourhood are few. 
 The naval force maintained by foreign powers in the 
 Eastern seas, whether in the India Ocean, in the China 
 Sea, or the Pacific, is quite insignificant compared 
 with that maintained by the British Empire. It is 
 clear that no power could withdraw a fleet of iron- 
 clads for operations in distant seas without abandoning 
 to us the absolute command of European waters and 
 without setting free a proportionate number of British 
 battleships. i\ttacks on commerce by one or two 
 cruisers, keeping generally out of sight of the coasts, 
 are the most probable form which the operations of 
 an enemy would take on the coasts of India, Austraha, 
 or South Africa. Occasional raids on territory might 
 be made with the object of obtaining supphes ; but it 
 may be safely asserted that few captains of cruisers 
 would waste ammunition on bombardment with the 
 chance of faUing in with an enemy's cruiser before they 
 could return to their base to obtain a fresh supply. 
 Against attacks on commerce the best form of defence 
 is an active naval defence, by ships which are able to 
 pursue and fight the cruisers of the enemy wherever 
 they may be found. In accepting the localisation of 
 the vessels of the special Australian squadron in defer- 
 ence to the wish of the Colonies, we have acted on a 
 
 25
 
 PROBLEJMS OF EMPIRE. 
 
 principle unanimously condemned by students of naval 
 strategy and we ha\'e seriously hampered the utility of 
 such a squadron. The naval defence of Australasia and 
 Australasian commerce is amply provided for. A few 
 guns to deny the ports to the cruisers of the enemy 
 are all that is required on shore. Unfortunately at 
 INIelbourne large sums of money have been spent on 
 providing a defence sufficient to keep a fleet of 
 armour-clads at bay. In other words, Melbourne is 
 defended against an attack which it is inconceivable 
 could be made upon it under present conditions. 
 Attacks on Qur miuor possessions divide themselves into colonies 
 
 stations. and coaling stations. The former have no local de- 
 fences ; they depend for their immunity from attack 
 on the power of the British Navy. The latter have 
 been lately provided with modern defences in accord- 
 ance with the recommendations of Lord Carnarvon's 
 commission. Our most important coaUng stations are 
 on the routes to the East, on that via the Suez Canal, 
 Gibraltar, Malta, Aden, Ceylon, Singapore, Hongkong ; 
 on that via the Cape of Good Hope, Sierra Leone, 
 Ascension, St. Helena, Cape Town, Simon s Bay, and 
 Mauritius. In the West Indies we have Port Castries 
 (St. Lucia) and Port Royal (Jamaica) ; in the North 
 Atlantic we have Bermuda ; in the South Atlantic we 
 have tlie Falkland Islands — an important station as yet 
 undefended. Of all our coaling stations, Gibraltar and 
 Malta alone can be considered open to attack by a 
 powerful fleet, and against such an attack tliey must 
 be defended. The Straits of Gibraltar is by far the 
 most important strategic point in the British Empire. 
 Gibraltar is insecure and inconvenient in many respects 
 as a port, but for want of a better in the immediate 
 
 26
 
 IMPERIAL DEFENCE. 
 
 neighbourhood it is the base on which must vest that 
 Britisli fleet on which the main burden of the defence 
 of the Empire will fall. It must also be the base for 
 the cruisers protecting our trade with the East, whether 
 by the Cape of Good Hope or the Suez Canal, and 
 the trade with South America. While the strategic im- 
 portance of Gibraltar is absolute, that of Malta is only 
 relative. It is a convenient base for operations in the 
 Eastern Mediterranean, and for protecting the Medi- 
 terreanean trade. After Gibraltar the Cape of Good 
 Hope is the most important strategic point in the 
 British Empire. Some, indeed, would place it first. 
 As a base for cruisers protecting trade this may be 
 true ; but, while Gibraltar has very great importance 
 in this respect, as an indispensable base for our fleets 
 it is without a rival. The strategic importance of our 
 other coaling stations as protecting one or other of our 
 trade routes is sufficiently obvious. Of those the de- 
 fences of which have not yet been undertaken, it may 
 be observed that Esquimault is of little value except 
 for the deposits of coal at Nanaimo, and for the fact 
 that it secures the Pacific end of the great Canadian 
 line of communication against attack from any other 
 power but the United States. Esquimault is ill situated 
 for protecting British trade witli the AVest Coast of 
 America ; and Canadian trade with China and Japan, 
 though growing, is as yet of slight importance. It is 
 clearly a position which, if worth defending at all, 
 should be defended almost entirely at the cost of the 
 Colonial Government. The Falkland Islands are the 
 only base from which protection can be afforded by 
 our cruisers to the homeward-bound trade * from 
 
 * still largely carried in sailing vessels in 1893. 
 
 27
 
 PROBLEMS OF EMPIRE. 
 
 Security of 
 Coaling sta- 
 tions depen- 
 dent upon 
 command of 
 the sea. 
 
 Necessity for 
 Coaling sta- 
 tions imder 
 modern 
 conditions. 
 
 Australia and to the important trade with the West 
 Coast of America. 
 
 Most of our coahng stations proper are islands, and 
 Aden and Sierra Leone are practically cut off from the 
 rest of the world except by sea. Gibraltar is the single 
 exception, and it is only in the improbable contingency 
 of war with Spain that Gibraltar can be considered as 
 anything but an island. The power to hold our coaling 
 stations, therefore, depends absolutely on the possession 
 of the command of the sea. In the wars of the French 
 Revolution and Empire we were long, far too long, 
 before we bent our energies to the task ; but by 1812 
 the Colonies of France, of Holland, and Denmark had 
 fallen before the British arms. Issuing fi-om the Isle de 
 France and the French West Indies, French privateers 
 had done considerable harm to British commerce. They 
 were opposed with energy by our cruisers, but it is diffi- 
 cult to understand why the attempt was not made 
 earlier to capture these important hostile positions. 
 
 Bases for ships operating at a distance from the 
 mother country are far more necessary than before the 
 introduction of steam. Sailing-ships could, and did, 
 remain at sea for many months at a time. Their power 
 to remain at sea was only limited by the amount of 
 water that tliey carried. The period during which a 
 modern ship of war can remain at sea is determined 
 mainly by her coal endurance ; and, to a great extent, 
 by the necessity of effecting repairs in port to dehcate 
 machinery. The coal endurance of modern ships of 
 war is even more limited than official figures, so far as 
 any are available, lead us to suppose ; and when Lord 
 Salisbury placed the limit of the striking distance of a 
 ship of war at 2000 miles — viz., the distance at which 
 
 28
 
 IMPERIAL DEFENCE. 
 
 she could deliver a blow and return to her port — he cer- 
 tainly did not underestimate her powers. The country 
 which possesses the most numerous coaling stations and 
 the best situated as regards trade routes will have a 
 great advantage in a future war. In this respect the 
 British Empire is without a rival. 
 
 While a navy depends for its power of operating in l]^^^^ll^ 
 distant waters very largely on coaling stations, the 
 existence of the latter depends absolutely on the power 
 of the fleet to protect them. No local defence, whether 
 in fortifications or men, will preserve them to a power 
 which has lost the command of the sea. The history of 
 IMalta during the great war affords an admirable instance 
 of the interdependence of fleets and coaling stations, 
 though it must be admitted that the lesson to be drawn 
 is to some extent weakened by the need of modern 
 ships for coal. Many people consider that the possession 
 of Malta is indispensable to the maintenance of British 
 influence in the Mediterranean. How fiir this is true 
 may be judged from the fact that Nelson won the battle 
 of the Nile when Malta was in the hands of the French, 
 and that Malta fell into our hands, though not for some 
 time, as the direct consequence of that battle which 
 gave us the command of the Mediterranean. Captain 
 Mahan summarises the conclusions which should be 
 drawn in these words : — * Its fate, when in the hands 
 of France .... gives warning that the fleet depends 
 less upon Malta tliim Malta on the fleet.' If this be 
 true of Malta, it is still more true of other coaling 
 stations which do not lie in such proximity to the ports 
 of foreign countries. We have acted wisely in giving 
 to our coahng stations sufficient defence against one or 
 two hostile cruisers. More than this is not required, 
 
 29
 
 PROBLEMS OF EMPIRE. 
 
 Defence of 
 Coaling sta- 
 tions in 
 hands of 
 Array. 
 
 Defence 
 against 
 Invasion 
 at Home. 
 
 As long as our Navy is maintained at its proper strength, 
 and is efficiently officered and manned, it should not be 
 possible for a serious expedition to leave the enemy's 
 port without a British fleet being immediately in 
 pursuit. 
 
 The local defences of the coaling stations throughout 
 the Einpire are in the hands of the Army — a policy 
 which is not adopted by other nations. To this system 
 many object on the gi'ounds (1) that their defence more 
 properly belongs to the sphere of the Navy ; ( 2 ) that 
 the Navy possesses in our magnificent marine corps a 
 force which is far better adapted to the garrisoning of 
 isolated and distant coaling stations than a short-service 
 army. It is urged, and urged with force, that it must 
 be absolutely destructive to the efficiency of a regiment 
 to place three companies in garrison at Mauritius, one 
 company at St. Helena, and the remaining companies at 
 Cape Town — roughly 2000 miles away from either of 
 the detachments. The principal objections to a change 
 come from naval officers themselves, who consider 
 that, if responsible for the defence of coaling stations 
 or coasts, they would be tempted to keep their ships 
 in the neighbourhood of their ports, instead of pursu- 
 ing the enemy wherever he might be found, and making, 
 as we have done in past years, our frontier line 
 our enemy's coast. Though much money may be 
 wasted under our present system in providing defences, 
 whether forts or submarine mines, which the circum- 
 stances do not require, the naval objection to a change 
 of system must be admitted to be of great force. 
 
 If, for the protection of our commerce, our Colonies, 
 and coaling stations, we depend in great measure on the 
 Navy, still more do we do so for protection against 
 
 30
 
 IMPERIAL DEFENCE. 
 
 invasion. The ideas put forward by the author of 
 the Battle of Dorking, to a large extent, pre\^ail. 
 Our mihtary authorities have, in the last few years, 
 elaborated a system of defence for the metropolis ; 
 large sums of money have been lavished on forts, 
 intended to protect Chatham, Portsmouth, &;c., from 
 the attack of an invading army. It is surely better 
 to prevent an enemy from landing than to take 
 elaborate and costly measures to meet him after he has 
 landed. ' Aucune personne de bon sens ne songera a 
 nous voir assez maitres de la Manche pour operer un 
 debarquement et pour ravitailler une armee debarquee.' 
 So says Admiral de la Reveillere in the article already 
 quoted. In England it has been generally the practice 
 of late years to estimate the probabilities of invasion in 
 defiance of the lessons of our history. Two hundred 
 years ago Lord Torrington demonstrated the value of 
 the ' Fleet in being ' as an absolute protection against 
 invasion, as has been so well pointed out by Admiral 
 Colomb. For nearly two years Napoleon lay encamped 
 on the heights above Boulogne with over 130,000 of the 
 flower of his army, waiting for that opportunity which 
 never came ; and it must be remembered that Napoleon 
 had one chance of success which cannot occur again. 
 The boats and vessels in which the invading army was 
 to be embarked could be propelled by means of oars ; 
 the British ships which were to destroy them were 
 mainly dependent on the wind. In a calm it was possi- 
 ble for the Boulogne flotilla to have moved without the 
 British ships being able to reach them. Such a chance 
 of success is not possible in these days of steam. In 
 the fine passage with which he opens his account of 
 the history of these two years Captain JNIahan points 
 
 31
 
 PROBLEMS OF EMPIRE. 
 
 out how the British fleets, which by Lord St. Vincent's 
 strategy were continually maintained before Brest, 
 Rochefort, Ferrol, and Toulon, were the real obstacles 
 to the army of invasion. Our greatest naval victory 
 won by our greatest naval hero was merely an incident 
 in that well-planned campaign. The battle of Trafalgar 
 was not necessary to prevent England being invaded, 
 but it did render the prospect of invading England 
 hopeless. 
 Conditions in As it was tlicu, SO it will be again to-day. In the 
 
 ^V&r with 
 
 France. cvcut of War with France — and France is the only power 
 
 whose fleet gives her the least prospect of being able to 
 invade Great Britain — our protection against invasion 
 will not consist in forts on the English coast, however 
 well manned, and however well armed. By far the 
 finest portion of the French Navy is now in the 
 JNIediterranean. The force maintained in the ports on 
 the Atlantic and the Channel is comparatively insigni- 
 ficant. Our energies will be devoted to keeping the 
 Mediterrean squadron in port; and if, as many naval 
 authorities now hold, a blockade is no longer possible, 
 we must bar the passage into the ocean through the 
 Straits of Gibraltar. As in the day of Napoleon, so 
 now, we shall hold the interior position and be able to 
 combine our fleets at will. Our defence against invasion 
 will rest primarily with the Mediterranean fleet. If that 
 fleet is defeated in battle, and such a contingency has 
 to be contemplated, it will not be defeated without 
 inflicting serious damage on its opponents. To provide 
 against such a contingency the Navy must be of 
 sufficient strength in battleships to admit of a reserve 
 squadron being maintained, capable of meeting the 
 French Mediterranean fleet after it has been in conflict 
 
 32
 
 IMPERIAL DEFENCE. 
 
 with our own. ' No amount of foresight or calculation,' 
 Lord George Hamilton has said, ' can anticipate naval 
 combinations and naval movements ; therefore it seems 
 to me essential that, for the purpose of meeting such 
 unexpected blows, we should have a considerable 
 margin of reserve.' 
 
 There is one form of attack which does not fall French 
 under any of the three heads under which we have attack %on' 
 been considering the principles of Imperial defence. ^"^'^^ fl^^*^^. 
 The British naval manoeuvres of the last three years 
 have shown (1) that the Enghsh shores of the Channel 
 are well within the range of torpedo-boat attack from 
 the stations which have been recently established from 
 Dunkirk to Brest ; (2) that the mere menace of torpedo- 
 boat attack is sufficient to seriously retard the junction 
 of two powerful fleets. In view of our recent experi- 
 ence, it is probably true to say that the principal danger 
 we have to fear in the event of war with France is 
 an attack by torpedo-boats on our assembling fleets at 
 Plymouth, Portland, or Spithead — similar to that made 
 by Captain Barry's flotilla on Sir George Tryon's fleet 
 in Plymouth Sound in the manoeuvres of 1890. An 
 offensive defence, it was clearly shown by the man- 
 oeuvres of 1891, is the best way of meeting such an 
 attack. We must have numerous 'torpedo-boat des- 
 troyers,' fast enough to catch and powerful enough 
 to destroy the torpedo-boats of the enemy. We 
 may congratulate ourselves that a first step has akeady 
 been taken in this sound line of pohcy. More than 
 this is required by the circumstances of the case. The 
 anchorages at our Channel naval ports sorely need 
 additional protection, by means of breakwaters, "^ 
 
 * These have been constructed at Portland, &c. 
 
 33 D
 
 summarised. 
 
 PROBLEMS OF EMPIRE. 
 
 against an attack to which they are at present so much 
 exposed. 
 Principles of Xhe principles of imperial defence may be sum- 
 Defence marised by considering what our objective is to be in 
 time of war. Our first and principal object is obviously 
 to defeat the enemy's main fleet in battle or to com- 
 pletely checkmate its operations. An effective army, 
 powerful fortifications, superiority in cruisers, will not 
 compensate for a deficiency in the line of battle. 
 Battleships alone can give us that command of the sea 
 which is indispensable alike to the safety of our com- 
 merce, our colonies and dependencies, and the shores 
 of the United Kingdom. Our secondary object must 
 be to maintain a sufficient force of cruisers to deal 
 either with hostile cruisers designed to prey upon our 
 commerce, or with expeditions intended for the attack of 
 colonies, which might escape our principal fleets. It is a 
 sounder and cheaperpolicy to endeavour to deal with these 
 at the point of departure than to provide elaborate defences 
 to meet them on arrival at their destination. The 
 cruisers defend not only the point to be attacked, but 
 they also secure the integrity of the trade routes over 
 the ocean. Our third object should be to capture the 
 coahng stations and colonies of the enemy which are 
 indispensable to his depredations on our commerce. 
 This is an object, as has already been stated, to which 
 the attention of those responsible for directing the 
 forces of Great Britain, in the great war, were not 
 early enough directed. How many millions of pounds 
 would have been saved if we had earlier seized Mauritius, 
 Martinique, and Guadalupe ! In this connection Cap- 
 tain Mahan points out that, contrary to the general 
 principles of strategy, whether military or naval, for a 
 
 34
 
 IMPERIAL DEFENCE. 
 
 power which has command of the sea, dissemination 
 of force within reasonable hmits is advisable. Conve- 
 nient harbours for coaling, etc., in all parts of the world 
 are indispensable to attacks on a commerce so widely 
 distributed as that of the British Empire. Deprive the 
 enemy of these, and his attacks on commerce are to a 
 gi-eat extent rendered impossible ; but without some 
 dissemination of force such a policy cannot be car- 
 ried out. 
 
 INIr. Shaw Lefevre said in the House of Commons '^^^- Shaw 
 
 1 , r. ■» .■ Lefevre. 
 
 on the 7th of IMay, 1889 :— 
 
 ' France has greatly increased her empire, not only in 
 China and Tonquin, but in Africa, and has extended her 
 interests in other parts of the world ; and in the event 
 of a war with this country all these interests would be 
 jeopardised, and in a very short time France would be 
 cut off from her communication with all her outlying 
 dependencies in different parts of the world.' 
 
 When we hear that the French have occupied the 
 Kerguelen Islands, St. Paul and Amsterdam — which, by 
 the way, are marked as British possessions in most 
 Enghsh maps — or that the United States contemplates 
 the annexation of the Sandwich Islands, it should not 
 give us dissatisfaction. Such acquisitions only increase 
 the vulnerability of states whom we are practically 
 powerless to injure in their own territory. 
 
 In view of the military forces now maintained bv Limitations 
 Continental powers under a system of conscription, ex- ness'of"the ' 
 tended operations on the Continent are no longer '^''™^" 
 conceivable. The part which the British Army can play 
 in a war with a first-class power is only a secondary one, 
 except in the cases of war with Russia or the United 
 States. Though secondary, it is still important. The 
 
 35
 
 PROBLEMS OF EMPIRE. 
 
 Army has not only to defend our o^ai coaling stations : 
 it will have to co-operate with the Navy in the capture 
 of the Colonies and coaling stations of the enemy. The 
 capture of St. Pierre and Miquelon, of Diego Suarez or 
 New Caledonia, would not, perhaps, be great achieve- 
 ments for the British Army, but the conquest of Algeria 
 would test its powers to the utmost. With Algeria 
 hostile in time of war, the trade route up the Mediter- 
 ranean could never be absolutely secure, and it might be 
 advisable to abandon it altogether. For the Eastern 
 trade this would only mean serious inconvenience. For 
 the trade with the Mediterranean and Levant it would 
 mean absolute extinction for the time — and British 
 trade with the Mediterranean bears a large proportion 
 to the total trade of the country. 
 
 To those who have studied and grasped the principles 
 of warfare which are apphcable to a sea power hke 
 Great Britain — principles which we have to thank Cap- 
 tain Mahan for so clearly setting forth — the relative 
 proportions of naval and mihtary expenditure in the 
 British Empire appear strange indeed. If these pro- 
 portions were reversed, the British Empire would be 
 infinitely better defended than it is at present. For our 
 naval expenditure we obtain a Navy powerful indeed, 
 but by no means sufficient for our needs. For our 
 military expenditure we are able to provide the defences 
 and garrisons of our coaling stations, we have a Home 
 Army from which we hope to be able to reinforce the 
 Anny in India in case of need, but which is in any case 
 most costly, and insufficient in numbers to undertake 
 offensive defence. 
 
 36
 
 AUSTRALIA AND IMPERIAL 
 
 DEFENCE. 
 
 Extracts from an Address delivered before the Imperial 
 
 federation League of Victoria at Melbourne, 
 
 October, 1896.* 
 
 We are met to-niffht under the auspices of the Im- The imperial 
 
 T^^^flf* ration 
 
 perial Federation League of Victoria. The Imperial League 
 Federation League of the United Kingdom was dis- 
 solved two years ago. Many members of the League 
 in the United Kingdom, and, I suppose, a majority 
 of the members of the branches both in Canada and 
 here in Victoria disapproved of the dissolution. To 
 devise a scheme of political federation was outside 
 the scope of an irresponsible body of men however 
 representative. All the work that it was in the power 
 of the League to accomplish in the United King- 
 dom, at any rate, has been done. Mainly through 
 the efforts of the League a complete revolution of 
 popular sentiment has been effected. The idea of the 
 old Manchester School that the Colonies were a burden 
 on the mother country, and should be cut adrift at the 
 earliest possible opportunity, has completely died out. 
 With few insignificant exceptions, statesmen, politicians, 
 and pressmen of all shades of political opinion, are 
 now looking to the maintenance of the Union 
 
 * This address was to some extent a resume of the points given in 
 the article reprinted from the Nineteenth Century, 
 
 37 

 
 PROBLEMS OF EMPIRE. 
 
 under one flag of the various communities which make 
 up this Empire. Is not the sentnnent of unity stronger 
 in Canada, South Africa, and Australasia to-day than it 
 was ten years ago ? When we were threatened on one 
 side by the President of the United States, on the other 
 by the Emperor of Germany, had the unanimous reso- 
 lution of the Canadian House of Commons and the 
 message of the Austrahan Premiers no significance ? 
 From all that I have seen and heard in a recent journey 
 across Canada, and since I have been in AustraUa, I am 
 confident that the sentiment of loyalty is infinitely 
 stronger to-day than it was ten years ago. Nowhere is 
 it more apparent than here in the Colony of Victoria, a 
 fact which may be attributed in great measure to the 
 excellent teaching of geography and history in your State 
 schools, just as I believe the hostiUty to Britain, which 
 undoubtedly exists among large sections of the people 
 especially in the central and western states of America, 
 is largely due to the manner in which history is taught 
 in the public schools. 
 Commercial Bccausc wc cauuot look forward in the near future 
 
 to any form of political federation, it does not follow 
 that there are not other ways in which we may draw 
 closer the ties that bind us together. Some people be- 
 lieve that we can best secure the unity of our Empire 
 by strengthening our trade relations. This view is 
 largely held in Canada, especially by the party which 
 has just been defeated in the General Election. It is 
 also held to some extent in the United Kingdom by 
 those statesmen and others who have banded themselves 
 together into the British Empire Trade League, and 
 more recently into the British Empire League. The 
 idea of a Zollverein, or Customs Union, has apparently 
 
 38 
 
 Federation.
 
 IMPERIAL DEFENCE. 
 
 not found much favour in Australia. To discuss the 
 trade relations and the trade policies of the various 
 British dominions would take an address in itself. The 
 trade to be attracted by any change in our fiscal policy 
 is not the main volume which we possess already, but a 
 small fraction. The chief object to be gained is that 
 Austrahan, Canadian, and South African producers 
 would receive an advantage in the markets of the 
 mother country that would enable them to compete 
 even more successfully than at present with other pro- 
 ducers of food and raw material, whether in the 
 Argentine Republic or the United States, and that 
 this would increase the attractiveness of British Colonies 
 as a field for British settlement and the employment 
 of British capital. Though a Liberal and though a Free 
 Trader I might be prepared under certain circumstances 
 to vote in favour of a Customs Union, but there is no 
 indication at present that the people of the United 
 Ivingdom are prepared to revolutionise the fiscal policy, 
 under which the progress of the last sixty years has 
 been achieved. 
 
 It is far more possible and of infinitely greater Federation 
 
 1 1 1 T 1 11 -i 1 i» for Defence. 
 
 nnportance that we should be more closely united tor 
 the purposes of defence. Before we can come to any 
 conclusion as^ to the part which each member of the 
 British dominions ought to play in the defence of the 
 whole, we must understand the general principles on 
 which the defence of the Empire rests. It is for this 
 reason that I propose to devote the main portion of this 
 address to the consideration of these principles. 
 
 The main principle which I wish to lay down at l^^^ °^'^ 
 the outset is that the defence of the Empire rests command of 
 absolutely on our power to retain the command of the 
 
 39
 
 PROBLEMS OF EMPIRE. 
 
 sea — in other words, on sea power. I do not wish to 
 minimise the functions which the Army will have to 
 perform in case of war, but I do wish to insist very 
 strongly that no army which it is conceivable we could 
 raise and maintain would compensate for inferior naval 
 strength. 
 
 To those who had grasped the principles of warfare 
 which are applicable to a sea power like Britain, it 
 appeared that if the relative proportions of naval and 
 military expenditure which existed in 1892-3 were re- 
 versed, the Empire would be better defended. The pro- 
 portions of naval and mihtary expenditure though not 
 reversed have been entirely altered in the last few years. 
 The Navy Estimates for 1896-7 amount to 22,800,000/. 
 gross, or 21,800,000/. net. The Army Estimates amount 
 to 20,900,000/. gross, 18,000,000/. net. It is impossible to 
 deny that the British Empire is better defended to-day 
 than it was two years ago. In 1894 there were 46 
 battleships built and building for Britain as against 51 
 for France and Russia. In 1896 there are 55 battle- 
 ships built or building for Great Britain against 50 for 
 France and Russia. In first-class battleships we had, 
 in 1894, 19 built and 3 building as against 15 built 
 and 12 building for France and Russia. In 1896 we 
 have 12 building and 22 completed as against 14 
 building and 15 completed for France and Russia. 
 We owe the change that has taken place to the fact 
 that the principles of Imperial Defence are becoming 
 better understood. The deepest gratitude of every 
 Englishman is due to Captain Mahan of the United 
 States Navy for so clearly setting forth those principles 
 in his two admirable books. 
 
 I will endeavour to illustrate the assertion that the 
 
 40
 
 IMPERIAL DEFENCE. 
 
 defence of the Empire rests on sea power by con- ^°''JJj?.°^ 
 sidering the forms of attack which we may have to 
 meet in case of war with a first-class European power, 
 or combination of European powers. We shall have 
 to meet attacks on commerce, attacks on colonies 
 and dependencies, and, possibly, invasion. 
 
 #4^ ^ 41. 4£. 
 
 TV* TT TP "Jr 
 
 The United States, it is true, were the first to lay Attacks on 
 down the type of fast and lightly armed cruiser, repre- 
 sented by the Columbia and Minneapolis, which have 
 a trial speed of close on twenty-three knots. They 
 are classed as commerce-destroyers in the American 
 Navy List, and are commonly called in America 'Pirates.' 
 France has followed suit by laying down this year two 
 cruisers of the same class, the Guichen and Chateau 
 Renault. We can only judge whether the policy 
 indicated by the construction of such ships is likely 
 to be successful in the future by the experience of the 
 past. In the years 1756-60 — that is during the Seven 
 Years' War — 2500 British merchant ships were captured ; 
 and in the year 1761, 800 out of the estimated total 
 of 8000 British merchant ships, or 10 per cent., were 
 captured by the cruisers or privateers of the enemy. 
 Campbell, in his Lives of the Admirals, says, ' The 
 trade of England increased gradually every year, and 
 such a scene of national prosperity while waging a 
 long, costly, and bloody war was never before shown 
 by any people in the world.' In commenting on the 
 results of the war of 1778, Captain Mahan says, 
 ' Especially is commerce-destroying misleading when 
 the nation against whom it is to be directed possesses, 
 as Great Britain did, and does, the two requisites of a 
 
 41
 
 PROBLEMS OF EMPIRE. 
 
 Position of 
 British 
 merchant 
 shipping in 
 1896. 
 
 strong sea power — a widespread, healthy commerce 
 and a powerful Navy. Only by military command of 
 the sea, by prolonged control of the strategic centres 
 of commerce, can such an attack be fatal. Such con- 
 trol can only be wrung from a powerful na^y by fighting 
 it and overcoming it.' It will be noted that though 
 the number of British merchant ships had more than 
 doubled between the first and last of the two wars 
 that we have been considering, the estimated captures 
 were reduced from 10 to 2^ per cent. 
 
 The British merchant navy holds a higher position 
 to-day than it has ever done before relatively to tlie 
 merchant navies of other countries. The aggregate 
 merchant tonnage of the British Empire amounts to 
 10,512,272 tons, made up as follows : — 
 
 The United Kingdom 
 
 v^anaQa ... ... ... 
 
 .^\.us Lraiasia . • . ... ... 
 
 British India 
 
 Other British Possessions . . . 
 
 Total British Possessions 
 
 Total British Empire 
 
 8,956,181 
 
 1)51,210 
 
 359,614 
 
 65,140 
 
 180,127 
 
 1,556,091 
 
 10,512,272 
 
 The aggregate tonnage of the merchant navies of all 
 other countries amounts to 8,449,000 ; or, if we include 
 vessels employed on lakes and rivers in the United 
 States, to 10,305,000. Taking steamships alone, which 
 are generally considered to possess three times the 
 carrying efficiency of sailing ships, 6,377,000 tons are 
 under the British, 3,624,000 tons are under foreign 
 
 42
 
 IMPERIAL DEFENCE. 
 
 flags ; or, including vessels employed on the lakes and 
 rivers of the United States 5,332,000 tons. The British 
 Empire, therefore, possesses at the present time more 
 than half the total merchant tonnage of the world, and 
 nearly two-thirds of the tonnage of steamships. In any 
 future war in which we may become involved, British 
 commerce will undoubtedly suffer losses. Their number 
 and extent will depend on the efficiency of the British 
 Navy. Judging from the experience of previous wars, 
 the losses will almost certainly be more numerous, but 
 they should represent a less percentage of the whole. 
 
 Canada and India alone of British possessions are Attacks on 
 
 -r» • • 1 o< A p • Colonies. 
 
 open to serious attack by land. British South Africa 
 has a long land frontier, but no first-class power could 
 contemplate a serious attack except with troops trans- 
 ported over sea. The defence of Austraha depends Australia. 
 absolutely on the command of the sea, and this being 
 the case, the localisation of the vessels of the special 
 Austrahan Squadron in deference to the wish of the 
 Colonies is a grave mistake. I will endeavour to 
 give an illustration to bring this home to the minds 
 of every one in this hall. You know that during 
 the past fortnight British and Russian fleets have 
 been watching one another through the Dardanelles. 
 If the British Government had followed the advice 
 of Mr. Gladstone, there is little doubt that we 
 should have been at war with Russia, and possibly 
 with France as well, at this moment. The naval force, 
 maintained by foreign powers in waters in the neigh- 
 bourhood of Australia, whether in the Pacific or Indian 
 Ocean, is absolutely insignificant compared to our own. 
 In China the Russian and French squadrons are equal, 
 if not slightly superior, to the British squadron. They 
 
 43
 
 PROBLEMS OF EMPIRE. 
 
 can oppose one battleship and five armoured cruisers to 
 one battleship three armoured cruisers and a fii'st-class 
 protected cruiser. If the British China Squadron were 
 to be defeated in battle, the command of the sea 
 between Cape Horn and the Suez Canal would be 
 temporarily lost. British commerce would be inter- 
 rupted, and Australia would be liable to invasion by 
 Russian troops from ^^ladivostok, or French troops 
 from Saigon. The squadron now in Australian waters 
 would be powerless to prevent it. I have no hesitation 
 in saying that if the British China Squadron were 
 immediately reinforced on the outbreak of war by 
 the flagships here and in the Pacific, it would have a 
 reasonable prospect of defeating, or of at any rate 
 holding in check, the combined squadrons of France 
 and Russia. There would most probably be a great 
 popular outcry against any such action on the part of 
 the Admiralty, but it is absolutely certain that the 
 Orlando and Warspite would do more to defend the 
 coasts of Canada and Australia in Chinese waters than 
 they could ever do if they remained in Canadian or 
 Australian waters. Against small raiding expeditions, 
 accompanied by troops which are not likely to, but 
 still might, escape our cruisers, you in Australia must 
 be prepared to defend yourselves by maintaining a 
 military force, not necessarily numerous, but certainly 
 efficient, and capable of taking the field against disci- 
 plined troops. 
 
 # 
 
 * 
 
 * 
 
 * 
 
 # 
 
 Responsi- 
 bihty of 
 Colonies in 
 Imperial 
 Defence. 
 
 Is our present standard of strength sufficient ? Our 
 very greatness, the splendid growth of our self-governing 
 Colonies under free institutions, the talent we have 
 
 44
 
 IMPERIAL DEFENCE. 
 
 shown for the government of native races in Egypt and 
 India, make us the most unpopular Power in the world. 
 Hitherto the burden of defending this great Empire has 
 fallen almost exclusively on the inhabitants of the 
 mother country. During the past two years we have 
 added over 7,000,000/. to our Navy Estimates alone, 
 irrespective of 14,000,000/. provided in the Naval Works 
 Acts. In many of the Colonies, certainly in the Austra- 
 lasian Colonies, expenditure on defence has been cut 
 down, and the tendency seems toward still further 
 reduction. You have been passing through a period of 
 severe depression. We in the old country have had a 
 revival in material prosperity. The addition to the 
 naval expenditure has hardly been felt, certainly not by 
 the general body of taxpayers. We have been able to 
 hold our own well up till now against our probable 
 enemies, but should those enemies become more 
 numerous at a time when commerce and industry are 
 not so prosperous as they are now, the British taxpayer 
 may find the burden almost too heavy for his shoulders 
 alone. Speaking as a representative of British working 
 men, and putting it to you as purely an abstract 
 question, is it just that we who live in the old country 
 should contribute twenty times what you do to the 
 common defence ? Is it right that the sons and the 
 brothers of British workmen should uphold the British 
 flag in every corner of the world, while, if I am to judge 
 from what I sometimes read in Australian newspapers, 
 it is considered unreasonable to expect an Australian to 
 serve anywhere except in defence of Austraha ? Though 
 I am a member of the Imperial Defence Committee ; 
 though I believe that it is well that we should turn 
 these questions over in our minds, I certainly deprecate 
 
 45
 
 PROBLEMS OF EMPIRE. 
 
 Federal 
 Government 
 the future 
 Constitution 
 of the 
 Empire. 
 
 the tone sometimes adopted by members of the com- 
 mittee in discussing this question. Beheve me, English- 
 men as a body recognise that Australians as well as 
 Canadians have done much for the defence of the 
 Empire in the past. We do not forget that INIelbourne 
 and Sydney have been well defended at Colonial expense. 
 We do not forget the presence of the Xew South AVales 
 contingent in the Soudan, a great object-lesson to 
 European nations of the unity of sentiment which 
 animates all who live under the Union Jack. A contri- 
 bution of 135,000/. a year does not loom very large in 
 Navy Estimates which amount to 22,000,000/., but it 
 is valuable as the recognition of a principle and as an 
 earnest of what our Colonies may some day be prepared 
 to do. We shall not repeat the mistakes of the past. 
 AVe do not and we have no right to expect that you 
 will make any serious money contribution to the defence 
 of the Empire until we are prepared to give you a con- 
 stitutional voice in the control of that expenditure. 
 That is impossible under our present Constitution. 
 
 I^ooking to the future many people will be disposed 
 to agree with Lord Rosebery that ' in a full measure of 
 devolution subject always to Imperial control lies tlie 
 secret of the future working of this Empire.' No nation 
 has ever attempted to deal with such multifarious 
 questions as we attempt to deal with in the House of 
 Commons. It will be some years yet before we in the 
 old country are able to draw the line between matters 
 which are of Imperial, and matters which are of local, 
 concern, as they do in Germany and in the United 
 States. A delay of one or even two generations will 
 give an opportunity for the population and resources of 
 the Colonies to develop, and will place you in a position 
 
 4G
 
 IMPERIAL DEFENCE. 
 
 to enter into a political federation with the mother 
 country on fairly equal terms. In the period of growth 
 of her Colonies, it is clearly the duty of the mother 
 country to undertake the main burden of defence ; but 
 when you no longer require such a large proportion 
 of your resources for the development of your territory, 
 it is not unreasonable to expect that Colonial taxpayers 
 will be prepared to stand shoulder to shoulder with 
 the British taxpayer in bearing the common burdens, 
 and that Colonial statesmen will be ready to take their 
 place side by side with British statesmen in a Parlia- 
 ment or Council in which all parts of the British Empire 
 shall be represented. 
 
 ^leantime your task in the common defence is to see Local 
 
 *' 1 T» T n detences in 
 
 that the forts which make Sydney and JMelbourne two Australia. 
 of the most strongly defended ports in the Empire, and 
 which protect Thursday Island and King George's 
 Sound, are kept properly armed and efficiently manned. 
 If the Colonies wish to spend money on local naval 
 defences for their ports, keep the force which is to man 
 them efficient and contented. The Cerberus would 
 probably act as a greater deterrent to hostile cruisers 
 than the forts at the Heads. JVIore important than either 
 your forts or your ships are your military forces. You 
 do not want a large force. What you have let it be 
 efficient, properly equipped, and capable of taking the 
 field against disciplined troops, A small but efficient 
 military force in these Colonies would not only render 
 you secure against any possible attack that might be 
 made on your territory, but would also render valuable 
 assistance in time of war by capturing the naval bases of 
 the enemy in neighbouring seas. In time of peace 
 popular opinion is often impatient of mihtary expendi- 
 
 47
 
 PROBLEMS OF EMPIRE. 
 
 ture, and that is no doubt especially the case in these 
 Colonies, which have always been far removed from the 
 strife of battle. Bear in mind the words of a distin- 
 guished President of the United States, ' A defenceless 
 position and a distinguished love of peace are the surest 
 invitations to war.' 
 
 I have had unrivalled opportunities of seeing the 
 British Empire. Let me say in conclusion that it is the 
 highest ambition of my life to help to bind the Colonies 
 and the mother country more closely together, and 
 whatever may be my pohtical career, I can undertake 
 that my best energies will be devoted to that object. 
 This is no more than could be expected from the son 
 of your Governor, who, at a time of life when many 
 men are looking to rest from their labours, left his home 
 and his children, who were settled round him, to serve 
 his Queen and his country for the sake of the cause 
 which we both have so much at heart. 
 
 48
 
 THE IRISH QUESTION. 
 
 Extract from Address at Pokesdown, Bournemouth, 
 
 November 8th, 1898. 
 
 Ireland is undoubtedly more contented, and one 
 might almost say more prosperous, than she was ten 
 years ago. The fact that the Lord Mayor of Dublin 
 for the first time for many years recently met the Lord 
 Lieutenant in his civic robes is not without significance. 
 To whatever cause the change may be due, whether to 
 the operation of the Land Purchase Acts, in connection 
 with which Mr. Gladstone played so prominent a part, 
 whether to the community of feehng that was aroused 
 between landlords, tenants, and labourers by the publi- 
 cation of the Report of the Financial Relations 
 Commission, or whether to the splendid work which 
 Mr. Horace Plunkett has been doing in the cause of 
 agricultural co-operation in Ireland — a work which has 
 already brought increased prosperity to many districts — 
 a change has taken place, and we should be gi-ateful for 
 it. But that would not, in my judgment, constitute a 
 reason why the Liberal party should abandon its effort 
 to secure for Irishmen the right to manage their own 
 local affairs in their own way. When, in August last, 
 I expressed the opinion that no Prime INIinister would, 
 within the next ten years, introduce a Home Rule Bill 
 
 49 E
 
 PROBLEMS OF EMPIRE. 
 
 for Ireland, I did so on other grounds. They were 
 these, and I place them in order of their importance. 
 
 I. — The passing of the Local Government Act 
 during last session. This Act gives the Irish people 
 a power in local government which they have never 
 previously possessed. Before proceeding further in 
 the same direction, time must be given to see how 
 the Act works. It is to be hoped that it will have 
 the effect of training up a class of men able to 
 serve their country honourably and efficiently in a 
 larger sphere. The character of the Irish repre- 
 sentation is often condemned by those who forget 
 that Irishmen have been largely excluded from the 
 management even of local affairs, and have there- 
 fore not had the same opportunities of training as 
 are open to us Englishmen. 
 
 II. — The dissensions amongst the Irish Members. 
 
 III. — The absolute repudiation by the Irish 
 Leaders of alliance with any English party. 
 
 My opinions on the Home Rule question are the 
 same as they were when I first became a Candidate for 
 ParUament, now over eight years ago. I condemned 
 then, as I would condemn now, the exclusion of Irish- 
 men from a voice in the control of Imperial questions. 
 That was my objection to the Home Rule Bill of 1886. 
 I condemned then, as I would condemn now, the provision 
 giving Irishmen a voice in the decision of purely English 
 questions, while leaving them free to manage their own 
 affairs independently of us. That was my objection to 
 the Home Rule Bill of 1893, as sent up to and as 
 rejected by the House of Lords. No satisfactory solu- 
 tion of the Home Rule question has yet been put before 
 
 50
 
 IMPERIAL UNITY. 
 
 the country, and t believe now, as I have always 
 believed, that no solution will be found, except in 
 connection with an even greater question, with which 
 statesmen will be face to face before the twentieth 
 century has run a quarter of its course, viz., the relations 
 between the mother country and her Colonies. The 
 feehng is growing, not only at home but in the Colonies, 
 that it is unjust that the taxpayers of the mother country 
 should practically bear the whole burden of the defence 
 of the Empire. It is true that the Colonies have done 
 something in regard to local defence, and that they have in 
 some cases voluntarily come forward and offered to con- 
 tribute to the general defence. But in their present 
 stage of development they are not able to contribute 
 substantially ; and it is certain that they would not do 
 so unless they had a voice in the control of the expendi- 
 ture. When the Colonies are ready to bear their share 
 of Imperial burdens, the Home Rule question may be 
 satisfactorily solved. 
 
 51
 
 FEDERAL GOVERNMENT FOR 
 
 THE UNITED KINGDOM 
 
 AND THE EMPIRE. 
 
 Reprinted from 'Nineteenth Century,' August, 1901. 
 
 Definition of FEDERAL government implies local autonomy or 
 GoveTnment. Home Rulc in the several States comprising the 
 Federation. In this country Home Rule has been 
 generally discussed with special reference to Ireland, 
 but in the present article it is proposed to show that the 
 adoption of a Federal form of government is becoming 
 absolutely necessary both for the United Kingdom and 
 the Empire.* 
 
 First, what was meant by Home Rule ? It has 
 suited the Conservative party to describe the Home 
 Ruler as a ' separatist ' ; but Home Rule, as understood 
 by British Liberals, most assuredly did not imply 
 separation either from Great Britain or from the Empire. 
 It meant the right of Ireland to manage her own 
 domestic affairs in her own way ; but it did not mean, 
 as has been sometimes thought, the grant of the same 
 
 * During 1900 and the two following yccars a very large number 
 of meetings were addressed by Mr. Brassey and others in support 
 of the policy suggested in this paper. The subject was twice 
 brought before the General Committee of the National Liberal 
 Federation. 
 
 52
 
 FEDERAL GOVERNMENT. 
 
 powers of self-government as those conferred with such 
 beneficial results on the great self-governing Colonies. 
 Owing to her geographical position, if for no other 
 reason, it would be impossible to place Ireland in the 
 position of a self-governing Colony such as New Zealand. 
 There are certain matters which always will be of com- 
 mon interest to the several countries of the United 
 Kingdom, and which do not concern the people of 
 Canada, AustraUa, or South Africa. The relations of 
 the Irish Parliament to the Parliament of the United 
 Kingdom (which is also at present the Imperial 
 Parliament) would therefore be similar to the rela- 
 tions of the Provincial Parliaments to the Dominion 
 Parliament of Canada, and to those of the Parha- 
 ments of Victoria, New South Wales, and other 
 Austrahan Colonies to the newly created Common- 
 wealth Parhament. 
 
 Two attempts have been made to devise a satis- Home Rule 
 
 ^ proposals. 
 
 factory measure of Home Rule for Ireland. Both have 
 failed. In the Home Rule Bill of 1886, it was proposed 
 to give Ireland the right to manage her own domestic 
 affairs, but no provision was made for giving to Irish 
 representatives a voice in the direction of Imperial poUcy, 
 or of the affairs of the United Kingdom. By the omis- 
 sion of any such provision one of the fundamental 
 principles of the British Constitution, ' There shall be 
 no taxation without representation,' would have been 
 violated had the BiU become law. Ireland would have 
 been taxed for Imperial purposes, but would have had 
 no voice in the control of the money which she con- 
 tributed. Before the election of 1892, Mr. Gladstone 
 stated that in any future Home Rule Bill steps would 
 be taken to remedy this objection, and the Home Rule 
 
 53
 
 PROBLEMS OF EMPIRE. 
 
 Bill as introduced into Parliament in 1893 contained 
 what was known as the ' in-and-out ' plan, by which 
 Irish representatives were to vote on Imperial questions, 
 but were to be excluded from taking part in the decision 
 of purely British questions. During the passage of the 
 Bill through the House of Commons this plan was 
 shown to be utterly unworkable. In the form in which 
 it was finally sent up to the House of I^ords, the Irish 
 members were retained for all purposes. The objection 
 to this solution of the difficulty is obvious. The in- 
 habitants of Great Britain were denied the right that 
 I liberals were advocating for Irishmen — viz., the 
 right to manage their own affairs in their own way. 
 Irish representatives, on the other hand, would liave had 
 the power of interfering in matters which only affected 
 Great Britain. This objection was fatal to the Bill 
 from the British point of view, and alone would have 
 justified the House of Lords in rejecting it. The histoiy 
 of the two attempts of the Liberal party to deal with 
 Home Rule justifies the contention, which the present 
 writer has maintained ever since he became a candidate for 
 Parliament, eleven years ago, that it is impossible to 
 devise a satisfactory measure of Home Rule for 
 Ireland alone. The Home Rule question must be 
 approached from the broader standpoint of JVIr. Red- 
 mond's remarkable speech in the House of Commons on 
 the 11th of June. 
 Relations Under a scheme of Federal Government, which 
 
 imperkiand implies the establishment of local legislatures in Eng- 
 Governraents l^nd, Scotland, and Wales, as well as in Ireland, the 
 difficulties which have been pointed out in devising a 
 satisfactory measure of Home Rule for Ireland only 
 disappear. These local legislatures would deal with 
 
 54>
 
 FEDERAL GOVERNMENT. 
 
 the special interests of each countiy, leaving to the 
 existing Parliament (probably with some reduction in 
 the number of members) the management of questions 
 which are of common interest to the whole of the 
 United Kingdom, and all Imperial business, until the 
 time arrives for establishing a true Imperial ParHament, 
 with Colonial representation. This is the poUcy which 
 I and others have been urging by every means in our 
 power should be adopted by the Liberal party to-day 
 as the main plank in its platform, and as a remedy 
 for one of the chief features in the poHtical situation, 
 the congestion of business in Parliament. We claim 
 no originality for the idea. A resolution in favour of 
 'Home Rule all round,' as it is commonly called, 
 was carried in the House of Commons in 1895, 
 on the motion of JMr. Dalziel, seconded by ^Ir. 
 Augustine BiiTell. During the election of 1895 the 
 question was very largely discussed, more especially 
 in Scotland. 
 
 On all hands the increasing difficulty of carrying on Congestion 
 the business of the country in the House of Commons PariSment' 
 is lamented. During the present session it has only r?meS°'^^ 
 been possible to carry it on at all by the most drastic 
 use of the closure ; and the use of this engine of parUa- 
 mentary government is becoming an abuse when it is 
 applied to a vote of 17,000,000/. of pubhc money, after 
 an evening's discussion. Sir Henry Fowler, speaking 
 at the City Liberal Club a few weeks ago, drew a most 
 gloomy picture of the existing condition of things, and 
 suggested as a remedy an autumn session, to be devoted 
 to the reform of parliamentary procedure. Mv. T. W. 
 Russell takes a no less gloomy view of the case. ' The 
 sooner,' he says, 'that the people of this country are 
 
 55
 
 PROBLEMS OF EMPIRE. 
 
 face to face with a real and living issue — i.e., the 
 preservation of parliamentary government — the better 
 it will be for all concerned.' Mr. Russell's remedy is the 
 extension of the principle of Grand Committees ; and 
 the burden of his song, as of that of Sir Henry Fowler, 
 is that at all costs the dignity of the House of Com- 
 mons must be preserved. Either remedy might be of 
 value if the congestion of business could be attributed 
 to the obstruction of the Irish party, the fractiousness 
 of the Opposition, or the multiplication of questions. 
 The real reason hes deeper than this, and was well 
 put by Sir Henry Campbell-Bannerman in his address 
 to the electors of the Stirling Burghs, issued in July, 
 1895. 'The excessive burden of work,' he said, 'now 
 imposed upon Parhament can only be relieved by a 
 large system of devolution. It is for this reason, as 
 well as from a sense of right and justice to the nation- 
 aUties concerned, that I regard as urgently necessary 
 the creation for the three kingdoms of subordinate 
 legislative assembUes deahng with the distinctive affairs 
 of each.' 
 Responsibiii- The Housc of Commous is the responsible guardian 
 
 British *^^ of the interests of the greatest Empire the world has 
 Parliament. ^^^^, ^^^^ j^ j^^^ ^^ ^j^.^j ^^,j^|-j questions affecting the 
 
 United Kingdom as a whole ; and it also legislates for 
 the special interests of the several countries of the 
 United Kingdom. The diversity of business is ex- 
 traordinary, the quantity enormous ; and it is not to 
 be wondered at that the House of Commons is un- 
 equal to the task now imposed on it. In no other 
 country of the civilised world is such a task attempted. 
 The conclusion is inevitable, that parhamentary govern- 
 ment is breaking down because the needs of the 
 
 5G
 
 FEDERAL GOVERNMENT. 
 
 Empire, of the United Kingdom as a whole, and of its 
 several parts, have outgrown the existing means for 
 deaUng with them. The remedy lies in the recognition 
 of the distinction between the different classes of 
 business which we either attempt to deal with, often 
 very ineffectually, or do not attempt to deal with at 
 all, in the House of Commons, and of the necessity 
 of allocating what may here be roughly described as 
 Imperial business and domestic business to different 
 lecfislative assemblies. 
 
 To take another point of view — the waste of time Local 
 
 '- I'll knowledge 
 
 and power under our present system, which compels required for 
 questions of special regard to one part of the United le^siation. 
 Kingdom or the other to be dealt with in the over- 
 worked Imperial Parliament. Much of the legislation 
 passed by the House of Commons is of special appli- 
 cation to England, Scotland, or Ireland. We have a 
 recent conspicuous instance in the passing of one Local 
 Government Act for England and "V^^ales, another in 
 a different year for Scotland, and another in a different 
 year again for Ireland. The proportion of statutes 
 which have a special application to one country of the 
 United Kingdom or the other is tending to increase. 
 Excluding from consideration all statutes which apply 
 to India and the Colonies, but including amongst the 
 special statutes those general statutes which have clauses 
 of special application, the proportion of general statutes 
 may be taken roughly as follows : In 1837-46 at two 
 to one; in 1861-70 at six to five; in 1891-1900 at 
 three to five. A more careful examination of the 
 statutes themselves might somewhat alter these figures, 
 but, in any case, the great and increasing waste of time 
 under a system which allows each country of the 
 
 57
 
 PROBLEMS OF EMPIRE. 
 
 Special 
 knowledge 
 for Imperial 
 affairs. 
 
 United Kingdom to meddle in the private affairs of 
 the others is apparent. That Irishmen and EngUsh- 
 men should be supposed to legislate on the Scotch 
 Crofter question, of which they cannot have the 
 necessary special knowledge, is absurd. That such a 
 question, for instance, as the Disestablishment of the 
 Church in England should be decided partly by the 
 votes of Irish Roman Catholics, Scotch Presbyterians, 
 or Welsh Dissenters, is totally opposed to the right 
 of self-government on which the Empire has been built 
 up, and which the Liberal party has long advocated with 
 reference to Ireland. 
 
 What has been said with regard to the special 
 knowledge required for the proper conduct of the 
 business of each country of the United Kingdom applies 
 with even greater force if we take a wider survey. Lord 
 Rosebery, in his rectorial address at Glasgow, lamented 
 the want of men of first-class capacity in various walks 
 of hfe. But, as far as politics are concerned, the field is 
 becoming too vast for the capacity of the ordinary 
 politician. Imperial business and domestic business each 
 require special training, special study, and special apti- 
 tudes. The training of the School Board, the County 
 Council, or the Trade Union may be admirable for one 
 who seeks to take part in domestic legislation ; but 
 something more is required from the member of a 
 Parliament which deals with the great questions of 
 Imperial and Colonial policy. To those who have 
 travelled much in the Empire, the assurance with 
 which some men speak on the Imperial and Colonial 
 questions, of which they have no special knowledge, 
 is amazing. Nowhere is this more conspicuous than 
 in the treatment of the great (juestion of the 
 
 58
 
 FEDERAL GOVERNMENT. 
 
 moment — the war in South Africa and its conduct. 
 The business of the country will be much better 
 carried on when it is speciahsed, when Imperial ' 
 questions are treated in one assembly and domestic 
 business in others by those specially quaUfied to deal 
 with them. 
 
 There are many Liberals who think that it should The position 
 
 •^ ,■..-, oi the Upper 
 
 be the first object of the Liberal party to abolish or House, 
 restrict the veto of the Upper Chamber. From the 
 rejection of the Home Rule Bill in 1893 to the election 
 of 1895 a strenuous attempt was made to get up an 
 agitation against the House of Lords. That attempt 
 signally failed, and it failed because the people of this 
 country beheved that the House of Lords was justified 
 in rejecting the Home Rule Bill. The Bill involved 
 an important change in the Constitution, and a modifi- 
 cation (which has already been aUuded to) of vital 
 consequence to the people of Great Britain was in- 
 troduced during its passage through the House of 
 Commons. The main object of the existence of a 
 Second Chamber is to compel the submission to the 
 opinion of the people of any measure involving a 
 change in the Constitution under which they Uve. If 
 this be admitted it may be asserted that it was the 
 duty of any Second Chamber, however constituted, to 
 have rejected the Home Rule BiU of 1893. But 
 though a good case can be made out for the House of 
 Lords for its action in this matter, all Liberals are 
 agreed that an Upper House, which is practically com- 
 posed of the members of only one of the political 
 parties in the State, is a bad revising chamber for 
 social and domestic legislation. Under a scheme of 
 Federal government such legislation would for the most 
 
 59
 
 PROBLEMS OF EMPIRE. 
 
 Imperial 
 issues often 
 overshadow 
 domestic 
 questions. 
 
 part be dealt with in the legislatures of the several 
 countries of the United Kingdom, and would be re- 
 moved altogether from the control of the House of 
 Lords. 
 
 There is another important argument in favour of 
 the separation of domestic business and Imperial 
 business, on which a few words must be said. Under 
 present conditions, when an appeal is made to the 
 country, Imperial questions and domestic questions are 
 submitted to the electors in a confused issue. Of recent 
 years, Imperial questions have held the larger share of 
 the attention of the electorate. At the election of 
 1900 every domestic issue was subordinated to the one 
 Imperial question — the war in South Africa. The 
 result was a crushing defeat of the Liberal party. But 
 from the fact that London, which is represented in the 
 Imperial Parliament by an overwhelming majority of 
 Conservatives, has recently returned a ProgTcssive 
 majority to the London Council, it is not unreasonable 
 to infer that the country would have desired Liberals to 
 manage its domestic business while it believed that its 
 Imperial and foreign interests were safer in the hands 
 of the Conservatives. At some future election the 
 converse of what happened last year might take place. 
 Some question of domestic policy might be to the fi'ont, 
 and the party might be returned to power on that issue 
 which perhaps in the opinion of the electorate was the 
 less qualified to carry on the government of the Empire. 
 Then, again, the impotent condition of the Liberal party 
 to-day is due in the main to a division of opinion on 
 Imperial policy, On this rock it may possibly be rent 
 in twain. And yet, as to the necessity for those 
 domestic reforms which have figured in the Liberal 
 
 60
 
 FEDERAL GOVERNMENT. 
 
 programme for so many years, Liberals are agreed, 
 and to secure the passing of those reforms all sections 
 of the Liberal party might work together. Thus from 
 a party no less than from a national point of view it 
 is desirable that domestic questions and Imperial ques- 
 tions should no longer be submitted to the electorate 
 in the same confused issue. 
 
 To turn to objections which may be urged against Objections 
 the policy here advocated. There is no doubt that if against 
 Scotland demanded Home Rule there would be little j^egi'sMurL 
 objection from the average Englishman to meeting her 
 wishes. If there was an effective demand in England 
 for a local legislature to deal with English affairs the 
 demand would be gi-anted to - morrow. But with 
 Ireland the case is different. Tlie present attitude of 
 the Irish party, their openly avowed hostility to this 
 country, especially as regards the war in South Africa, 
 and the fear that the grant of powers of self-govern- 
 ment would only lead to disorder, make many Liberals 
 doubtful of the expediency of raising the question of 
 Home Rule. But whether we like it or not the 
 question must be faced. The Irish party is again a 
 united and vigorous Parliamentary force, determined 
 to use every means to compel attention to the Irish 
 demand. No Liberal can contemplate with equanimity 
 the possibility of governing Ireland indefinitely in oppo- 
 sition to the wishes of the majority of the Irish people. 
 
 In the utter selfishness of our treatment of Ireland Ireland's 
 in the past ; in the fact that while the reign of Queen under a^ 
 Victoria and the era of free trade have been a period pJJ^^ '^'^^^^ 
 of industrial and commercial prosperity for Great 
 Britain, the population of Ireland, under the same free 
 trade pohcy which has been so beneficial to us, has 
 
 61 
 
 icy.
 
 PROBLEMS OF EMPIRE. 
 
 Irish Local 
 Government. 
 
 Irish Land 
 Purchase. 
 
 diminished by one-half, much excuse may be found for 
 the sympathy which Irishmen have expressed with the 
 enemies of this country, and for the attitude adopted 
 at the time of the Queen's death. If the position of the 
 two countries had been reversed, it is certain that the 
 feehngs of Enghshmen towards Ireland to-day would be 
 not one whit less bitter than those of Irishmen are to us. 
 Owing to the operation of the Land Purchase Acts, the 
 admirable work done by Mr. Horace Plunkett for the 
 organization of the Irish agi'icultural industry and the 
 community of interest between all classes of Irishmen 
 brought out by the Financial Relations Commission, 
 Ireland is in a better position to manage her own 
 affairs than she was ten years ago. 
 
 The Act of 1898 placed the power of local govern- 
 ment for the first time in the hands of the people. It 
 was a first step in the direction of self-government. 
 The new local bodies are a valuable training-gi'ound 
 for the men who may later feel called upon to serve 
 their country in a wider field. On the whole, the 
 experiment must be admitted to have worked well. 
 Its success will be a fact which will form one of the 
 most powerful arguments for granting to the Irish 
 people that larger power of self-government which they 
 demand. 
 
 The agitation for compulsory land purchase is a 
 factor in the situation which cannot be neglected. The 
 agitation has developed a community of interest between 
 bitter political opponents, even greater than that pro- 
 duced by the Financial Relations Commission, and any 
 movement which has this effect is all for the benefit of 
 Ireland. The fear that an Irish Parliament would deal 
 unjustly with Irish landlords is without doubt at the 
 
 62
 
 FEDERAL GOVERNMENT. 
 
 bottom of much of the objection to Home Rule, and 
 this objection can only be removed by dealing with 
 the remainder of the Irish landlords by land purchase. 
 The exact cost of such a measure has not yet been de- 
 termined. Mr. T. W. Russell has placed the cost at 
 120,000,000/. The payments under the existing Land 
 Purchase Acts have been, as a rule, punctually met, 
 and this constitutes a reasonable ground for believing 
 that the principal and interest would be as punctually 
 repaid under a larger scheme. The compulsory prin- 
 ciple for which Mr. Russell contends is open to grave 
 objection, but to get rid once for all of the Irish land 
 question, to remove one of the chief objections, if not 
 the main objection, to the grant of self-government to 
 Ireland, and to make of Irishmen loyal and contented 
 citizens of the British Empire, would be worth the 
 addition of 120,000,000/. to the National Debt, and 
 would certainly justify the risk of advancing such a 
 sum under a land purchase scheme. 
 
 Another objection that may be urged against the 
 revival of Home Rule at the present time is that neither 
 in Scotland, Wales, nor England does opinion stand 
 where it did six years ago. The election of last year 
 was fought on other issues. With some exceptions the 
 question did not figure prominently in election ad- 
 dresses. Many candidates ignored it altogether. Hence 
 the assertion in some quarters that Home Rule is dead. 
 While it is most unlikely that Mr. Gladstone's pro- 
 posals for dealing with Ireland alone will ever be 
 revived, the Duke of Devonshire and Mr. Chamberlain 
 made it very clear to the Nonconformist Unionist 
 Association that in their opinion Home Rule was not 
 dead, but dormant. Of Scotland and Wales this is 
 
 63
 
 PROBLEMS OF EMPIRE. 
 
 probably true. As regards England the case is dif- 
 ferent. The seat of government is in London. In 
 the House of Commons England has such a prepon- 
 derating voice that the necessity for a separate legis- 
 lature to deal with his business does not come home to 
 an Enghshman with the same force as to a Scotchman, 
 an Irishman, or a Welshman. Though there is already 
 a considerable body of opinion in favour of devolution 
 of business from the House of Commons in some shape 
 or other, it is undoubtedly in England that most edu- 
 cational work must be done before there can be a 
 prospect of carrying a measure of Federal government 
 for the United Kingdom. The ' predominant partner ' 
 must be induced to contemplate devolution as applied 
 to himself, and to realise that if he wishes proper at- 
 tention given to the housing question, the problem of 
 the aged poor, temperance, the condition of British in- 
 dustry, the depopulation of the agricultural districts, 
 he must have a Parliament free to devote its whole 
 Federation ^^"^^ *^ English busincss. That this is not a difficult 
 League- task is the experience of those who have addressed 
 meetings in all parts of the country during the past 
 six months on the necessity of devolution. 
 
 We have hitherto been considering the poUcy of 
 Federal government with special reference to the United 
 Kingdom ; but a survey of the subject would be in- 
 complete unless it was also considered in its relation 
 to the constitutional structure of the Empire. Nearly 
 twenty years ago the Imperial Federation League was 
 formed, under the presidency of the late Mr. W. E. 
 Forster, with the object of bringing home to the public 
 mind the fact that the constitutional arrangements 
 under which the Empire was then governed, and is still 
 
 64
 
 FEDERAL GOVERNMENT. 
 
 governed, could not be permanent if the Empire was 
 to remain united. It urged that the resources of the 
 whole Empire ought to be combined for the common 
 defence, and that all those parts which bore their share 
 of Imperial burdens must have a voice in the control of 
 Imperial expenditure and Imperial policy. At the time 
 when the Imperial Federation League was formed this 
 idea of a common citizenship and of common responsi- 
 bihties was but imperfectly realised, either in the mother 
 country or in the Colonies; and though the League 
 never took up Lord Salisbury's challenge, and was wise 
 enough to abstain from formulating any scheme of 
 Federal government, yet the work which it carried on 
 after Mr. Forster's death under the presidency of Lord 
 Rosebery, and, on his taking office in 1892, under the 
 presidency of the late Mr. Edward Stanhope, had 
 the effect of dispelling the doctrine of the JNIan- 
 chester School, that the Colonies were a burden to 
 the mother country, and would cut themselves adrift 
 as soon as they wxre able to stand by themselves. 
 Statesmen such as the Duke of Devonshire and Mr. 
 Chamberlain, who took no part in the pioneer work 
 of the Federation League, have been recently amongst 
 the foremost champions of the idea of Imperial unity, 
 which, thanks to the Jubilee celebrations, the central- 
 ising influence of the JMonarchy, and, above all, to 
 the spontaneous assistance rendered by the Colonies 
 in the South African War, has indehbly impressed 
 itself in the minds of the people of this country. 
 
 In the Colonies the growth of the sentiment of The feeling 
 Imperial unity has been no less remarkable. Fourteen nie?onSl°-' 
 years ago, when I fii-st visited Australia, there was P^"«i^'"ity. 
 great irritation in all the Australasian Colonies, but A^^^raUa. 
 
 65 F
 
 PROBLEMS OF EMPIRE. 
 
 more especially in Queensland, at the treatment by 
 the Home Government of the New Guinea question, 
 the New Hebrides question, and the transportation of 
 French convicts to New Caledonia. There was un- 
 doubtedly a large body of Australians at that time, 
 especially amongst the younger men, who looked 
 forward to the creation of an Australian nation inde- 
 pendent of the mother country. Nine years later that 
 feeling had passed away, and opinion was practically 
 unanimous that the true line of Australian national 
 development was consistent with her remaining an 
 integral portion of the British Empire. But even in 
 189G there was some grumbhng at the small contribu- 
 tion made to the cost of the AustraUan squadron, 
 and no one could then have ventured to predict the 
 sacrifices that would be made in men and money within 
 four years' time to assist the mother country in her 
 time of stress and trouble, not only in South Africa, 
 but in China. 
 Canada. In Canada, in the period between the death of Sir 
 
 .lohn Macdonald and the defeat of the Conservative 
 party in the election of 1896, there was a considerable 
 and perhaps a gi'owing body of opinion that looked to 
 annexation to the United States as the future destiny 
 of Canada, and as offering the best hope for her in- 
 dustrial development and the prosperity of her people. 
 During that election the Conservatives endeavoured to 
 represent that annexation would be the consequence of 
 the victory of the Liberal party. But Sir Wilfrid 
 Laurier was able to make his position perfectly clear, 
 and the result was a great victory for the liberals. 
 It is impossible to deny that during Sir Wilfrid 
 Lauriers premiership the relations between Canada 
 
 66
 
 FEDERAL GOA^ERNMENT. 
 
 and the mother country have become closer. As in 
 Austraha so in Canada, pubhc opinion is to-day unani- 
 mous that the highest aspirations of the Canadian people 
 can be realised within and not without the British Empire. 
 
 In South Africa the tendency of opinion was until South Africa, 
 recently in the same direction. Mr. Hofmeyr, the head 
 of the Afrikander Bond, was a leading figure at the 
 first Colonial Conference of 1887, and it was he who 
 brought forward the proposal that the whole Empire 
 should contribute to the maintenance of the Navy 
 by imposing a differential duty of 5 per cent, against 
 non- Imperial goods. At the second Colonial Con- 
 ference held at Ottawa in 1893, ^Ir. Hofmeyr again 
 attended as one of the representatives of the Cape 
 Colony, and it is unlikely that he would have done 
 so unless he had represented the feeling of the majority 
 of the Dutch inhabitants, not only of Cape Colony, 
 but of South Africa. But the clouds were looming on 
 the horizon which have burst in the present war. The 
 ideal of a Dutch South African Republic, the realisa- 
 tion of which was only possible through our mistakes, 
 has been destroyed by force, and it remains to be seen 
 whether the Dutch will become reconciled to the 
 liberty which every Colonist enjoys under the British 
 flag. In the present state of South Africa it is difficult 
 to gauge the trend of public opinion. The most preva- 
 lent feeling amongst British and Dutch ahke is probably 
 one of dependence on the Imperial Government ; and 
 the best hope for the future lies in the estabUshment of 
 a Federal Government in South Africa on similar lines 
 to those of the Dominion Government of Canada and 
 the Commonwealth Government of Australia. But for 
 the Jameson raid it is not improbable that the federa- 
 
 67
 
 PROBLEMS OF EMPIRE. 
 
 tion of South Africa would have akeady been an 
 accomphshed fact. 
 Federal Exccpt in South Africa the sentiment of Imperial 
 
 |?J^ngfdea* Unity has been growing. The assistance given from 
 Canada, Australia, and New Zealand in this war is the 
 proof, if any is needed, that all parts of the Empire 
 have come to reahse the duties and the responsibiUties 
 of their common citizenship. This assistance has been 
 given in spite of the fact that no Federal government, 
 no Federal organization for the purposes of defence, was 
 yet in existence. But the time must come ere long 
 when it will be necessary to organize the resources of 
 the whole Empire for the common defence, and to 
 establish a Federal government. Until the present war 
 the burden of defending the Empire has fallen almost 
 wholly on the shoulders of the mother country. 
 While the Colonies were in their infancy it was only 
 natural that this should be so ; but the Colonies are 
 now growing from youth to manhood. Their popula- 
 tion and resources are year by year increasing relatively 
 to those of the mother country. The population of 
 Canada exceeds that of Scotland, the population of 
 Australia is roughly equal to that of Ireland ; while 
 the white population of South Africa will ere long not 
 be incomparable to that of \\^ales. This means that, in 
 a properly constituted Imperial Parliament, Canada, 
 Australia, and South Afiica would carry as much 
 weight as Scotland, Ireland, or Wales, and the con- 
 trol which they would be able to exercise on Imperial 
 policy would not be inconsiderable. This control we 
 must give them when they are prepared to bear their 
 share of the maintenance of the naval and military 
 forces of the Empire. The growth of the ordinary 
 
 68
 
 FEDERAL GOVERNMENT. 
 
 expenditure on the Navy and Army has been very 
 heavy. We have been passing through a period of 
 gi-eat commercial prosperity, so that until the im- 
 position of the extra taxation necessitated by the war 
 the burden has been little felt. But it is unreasonable 
 to expect that this prosperity will continue, and when 
 the depression comes we in the mother country shall 
 begin to realise that the cost of defending the 
 Empire is becoming too heavy for the people of these 
 little islands alone. We shall have to appeal to our 
 Colonies to help us to maintain that command of the 
 sea which is being seriously threatened by the ship- 
 building activity in Germany, Russia, and the United 
 States, and which is absolutely vital to our national 
 existence. 
 
 But we cannot expect the help of our Colonies SirWUMd 
 without giving something in return. Sir ^^^ilfrid declaration. 
 Laurier, in the Dominion House of Commons on the 
 14th of March, 1900, said, ' If our future military con- 
 tribution were to be considered compulsory — a condition 
 which does not exist — I would say to Great Britain, 
 " If you want us to help, you must call us to your 
 Councils.'^' This demand can only be met by the 
 establishment of an Imperial Parliament in which 
 every part of the Empire which bears its fair share 
 of Imperial burdens will be represented. But though 
 events are tending rapidly in this direction, neither in 
 the mother country nor in the Colonies are we ripe 
 for so great a constitutional change at this moment, 
 and any attempt to rush the Colonies, and to take 
 undue advantage of the feeling evoked by the danger 
 to our Empire in South Africa, would be a grave 
 blunder. ]\Ir. Seddon's proposal to form an Imperial 
 
 69
 
 PROBLEMS OF EMPIRE. 
 
 Reserve in Australasia, the fact that, as the Times 
 Toronto correspondent tells us, the British Budget 
 is looked upon by Canadians not so much as a 
 warning as a suggestion of duty, are indications 
 of Colonial opinion which will bear fruit in due 
 course. 
 
 We in the mother country have hardly begun to 
 appreciate the broad distinction between Imperial busi- 
 ness and domestic business, and still less to contemplate 
 the possibility of classifying into three divisions the 
 business which we have been always accustomed to see 
 dealt with in the House of Commons. To the Colonial 
 mind, or to the mind of one who has travelled much in 
 the Colonies, such distinctions are easy. Every Cana- 
 dian has lived for thirty years past (as every Australian 
 will live henceforward) under three Parliaments — the 
 Provincial Parliament, the Dominion Parliament, and 
 the Imperial Parliament, in the last of which at present 
 he is not represented. When we have seen that it is 
 possible to distinguish clearly the class of business to 
 be handed over to a Scotch, Irish, Welsh, or English 
 legislature by the existing Parliament, and not till then, 
 shall we be able to grasp what is meant by Imperial 
 Federation. 
 
 70
 
 FEDERAL GOVERNMENT. 
 
 From the subjoined diagram the steps necessary to complete the 
 constitutional structure of the Empire will be more clearly understood. 
 
 IMPERIAL PARLIAMENT. 
 
 United 
 kingdom 
 Parlia- 
 ment 
 
 Dom 
 
 Parliar 
 
 Can 
 
 inion 
 nent of 
 ada 
 
 Common- 
 wealth 
 Parliament 
 Australia 
 
 Federal 
 
 Parliament 
 
 of South 
 
 Africa 
 
 a 
 • • • o • 
 
 
 • 
 
 
 
 • > • • 
 
 • • • • 
 
 1 
 
 ■ . i-' 
 
 
 •S 2 
 
 
 
 o 
 
 HI 
 
 -j W O 
 
 a 
 
 r^ C3 -^ r2 ••"1 tS 
 
 2 o ^ S .-s t^ 
 
 ^ p O 0) =3 ;h o 
 
 o 
 Is 
 
 ':3 i=! 
 
 .2 
 
 I— H 
 
 C3 
 
 Cj 
 
 C3 
 
 r— I 
 
 o 
 
 I— I 
 
 o 
 O 
 
 c5 
 
 
 g o .^ -^ <! a g 
 
 S 32 i-i cJ ,-1 53 R 
 
 0) C8 
 
 > 
 
 03 
 
 c3 
 
 rt 2 
 
 =5 s 
 
 i-cJ ^ 
 
 es 
 
 3 
 O 
 
 c3 
 
 
 OPh ^ <q h::; 
 
 CD 
 
 O) o 
 
 rrt O 
 
 O) o 
 
 Note 1.— The United Kingdom Parliament is at present the Imperial 
 Parliament, and as suggested in this article, and in the resolution which has 
 been carried by a considerable number of Liberal Associations, will remain 
 the Imperial Parliament till the Colonies are ready to bear their share of 
 common burdens. 
 
 Note 2. — The establishment of local legislatures in the several countries of 
 the United Kingdom, and of a Federal Government in South Africa, are, I 
 believe, necessary precedents to the establishment of a true Imperial 
 Parliament. 
 
 Note 3.— India and the Crown Colonies would be represented in the 
 Imperial Parliament by nominated representatives. 
 
 Note 4. — Whether Wales has a separate legislature or is treated as part 
 of England is a question of detail, the settlement of which should depend 
 on the wishes of the Welsh people. 
 
 71
 
 STEPS TO IMPERIAL 
 FEDERATION. 
 
 Imperial 
 Federation 
 not a party 
 question. 
 
 A Paper read before the Royal Colonial Institute, 
 November 11th, 1902. 
 
 ' Before calling upon JNlr. Brassey,' the Chairman, 
 Sir Frederick Crichton Young, said, ' I should like to 
 quote fi'om the utterances of two of our most pro- 
 minent Cabinet Ministers on the subject of Imperial 
 Federation. In his striking and masterful address in 
 opening the Colonial Conference in the month of 
 June last, JNIr. Chamberlain used these remarkable 
 words: — " I may be considered perhaps to be a dreamer, 
 or too enthusiastic, but I do not hesitate to say that in 
 my opinion the political federation of the Empire is 
 within the limits of possibility." Still more striking if 
 possible are the remarks of the Prime Minister in his 
 speech last night at the Guildhall, in the course of 
 which he said, " After all, I suppose most of us cherish, 
 I will not say the dream — most of us clierish the hope, 
 that if not in our time yet at no distant date, there will 
 be not merely the legal and sentimental ties joining us 
 to our great dependencies, but that something in the 
 nature of a Constitutional Union may be discovered 
 which will enable us to conduct together affairs of 
 common interest.'" 
 
 3Ir. Brassey then read the following paper : — 
 In the last Paper of last session, Mr. Archibald 
 Colquhoun dealt with Imperial Federation in its relation 
 
 72
 
 STEPS TO IMPERIAL FEDERATION. 
 
 to defence, to trade, and to representation. This Paper 
 will be devoted mainly to Federation in its political or 
 constitutional aspect. Questions of party politics are 
 excluded, and rightly excluded, from the purview of 
 the Royal Colonial Institute. But Imperial Federation 
 — the problem of Imperial Unity — is not a party question. 
 It represents an idea which appeals to men of all poli- 
 tical parties and to men who belong to none. It is a 
 question which is high above the level of ordinary party 
 politics, and which can only be treated, as it ought to be 
 treated in a gathering such as this, far removed from 
 party strife. 
 
 It is over thirty years since our Chairman of to-niMit The 
 
 Mancncstcr 
 
 first advocated Imperial Federation. At that time, and School 
 indeed for several years later, the ideas of the Man- 
 chester School were still prevalent. The Manchester 
 School held that the Colonies were a burden to the 
 mother country, and that the sooner they cut them- 
 selves adrift and became independent the better for the 
 mother country and the better for themselves. The 
 Colonial Institute was founded in 1868 to combat these 
 views. The Imperial Federation League, formed in 
 1884, on the initiative of the late Mr. W. E. Forster, 
 carried the work begun by the Colonial Institute a step 
 further. The objects and views of the League were 
 thus defined : — 
 
 1. To secure by Federation the permanent unity of Objects of the 
 
 •' r ■J Imperial 
 
 the Empire. Federation 
 
 2. That no scheme of Federation should interfere " 
 with the existing rights of local Parliaments as regards 
 local affairs. 
 
 3. That any scheme of Federation should combine on 
 an equitable basis the resources of the Empire for the 
 
 73
 
 PROBLEMS OF EMPIRE. 
 
 Lord 
 
 Rosebery on 
 Imperial 
 Federation. 
 
 Growth of 
 
 the idea of 
 Imperial 
 Unity in 
 England. 
 
 In Australia. 
 
 maintenance of common interests, and adequately pro- 
 vide for an organized defence of common rights, 
 
 Lord Rosebery was the second President of the 
 I^eague, and to him and Mr. G. R. Parkin is mainly 
 due the growth of the idea of Imperial Unity during 
 the eighties and early nineties. ' Imperial Federation,' 
 Lord Rosebery once said, ' is a cause for which any man 
 might be content to live ; it is a cause for which, if needs 
 be, any one might be content to die.' Those words (I 
 trust I may be pardoned for this personal allusion) 
 profoundly influenced my life. 
 
 Of the tangible results of the League's work the 
 most important was the Colonial Conference of 1887, 
 which it was instrumental in bringing about through a 
 deputation to the Prime Minister. The League was 
 challenged over and over again to produce a scheme for 
 carrying out the objects it had in view ; but this was felt 
 to be outside its functions. Its work was in the main 
 educational, and by the results it amply justified its exist- 
 ence. It produced a complete change in public opinion 
 as to the future relations of the various communities of 
 which the Empire is composed, not only in the mother 
 country, but in the Colonies. The tone of the public 
 press was revolutionised. A profound eifect was pro- 
 duced on the attitude of public men. Statesmen, such 
 as the Duke of Devonshire, Mr. Chamberlain, Mr. 
 Asquith, and Sir Edward Grey, had no part in the work 
 of the Imperial Federation League. To-day they are 
 the most prominent advocates of Imperial Unity. 
 
 Of the change of public opinion in the Colonies I 
 can speak from personal experience. When I first 
 visited Austraha, fifteen years ago (in 1887), it was an 
 open question whether Australia would remain an 
 
 74
 
 STEPS TO IMPERIAL FEDERATION. 
 
 integral portion of the British Empire or not. It is true 
 that, thanks mainly to the large-hearted patriotism of 
 ^Ir. Dalley, an Australian contingent had been dis- 
 patched to the Soudan ; but the feeling of loyalty to 
 the Empire, of which the contingent was the evidence, 
 was severely shaken by the way in which the Home 
 Government had treated questions of paramount interest 
 to Australia — the New Guinea question, the New 
 Hebrides question, and the transportation of French 
 convicts to New Caledonia. Many in this room will 
 remember that the annexation of the south-east part of 
 New Guinea by the Queensland Government was dis- 
 allowed by the authorities at home ; that the Germans 
 then annexed the north-east portion of the territory 
 which Queensland had claimed, and that thereupon the 
 Colonial Office, stultifying its own previous action, 
 annexed the remainder. It is not remarkable that at 
 the time of which I speak there was great dissatisfaction 
 with the method in which Australian interests were 
 handled by the Imperial Government. Young Austra- 
 lians were undoubtedly then looking to Australia 
 becoming an independent Empire in the Southern Seas. 
 In 1896 I was in Australia again, on a visit to my 
 father, then Governor of the Colony of Victoria. 
 Young Australia, as represented by the Australian 
 Natives Association, which in 1887 had been for separa- 
 tion, was in 1896 devotedly loyal. The idea that 
 AustraHa was to become an independent Empire had 
 given place to the universal conviction that Australia 
 could better secure the well-being of her people, and 
 could better work out her destinies under the British 
 Flag. But even in 1896, there was considerable 
 grumbling at the small contribution made by the Aus- 
 
 75
 
 PROBLEMS OF EMPIRE. 
 
 tralian Colonies to the maintenance of the Austrahan 
 Squadron, and the man would have been rash indeed 
 who ventured to predict that that within three short 
 years Australia would put forth the exertions she has 
 made to assist the mother country in her time of stress 
 and trial. 
 Effect of the To tracc in similar detail the growth of the feeling 
 
 Africa. ^""''^ of loyalty to the Imperial connection in the other Colonies 
 would take too long. Canadians and New Zealanders, 
 as well as xVustralians and Afrikanders, played their 
 part in the struggle for British ideas of liberty in South 
 Africa. In the Square at Pretoria, when it was occu- 
 pied by Lord Roberts' army, there stood a pediment 
 designed to receive a statue of Mr. Kruger. Some 
 favoured the idea that on it should be erected a statue 
 of our beloved Queen Victoria. Others, and they were 
 in the majority, advocated that the statue of Mr. 
 Kruger should be erected as originally intended by its 
 donor, and that the pediment should bear the inscription, 
 ' To the Federator of the British Empire.' The South 
 African War has not federated the British Empire, but 
 it does represent the realisation of the idea of Imperial 
 unity, and it has convinced the British peoples, as 
 nothing else coidd have done, that on Imperial Feder- 
 tion in some shape or other depends the future well- 
 being, nay, even the very existence of the Empire. 
 
 Before dealing with Federation in its constitutional 
 aspect, a few words must be said from the points of 
 view of trade and of defence. 
 Commercial Commercial Federation, on the basis of free trade 
 
 Federation. • i . i -n • • , , ■ /» .i !_• 
 
 Within the Empire, is at present out oi the question, 
 because the greater part of the revenue of the Colonies 
 is raised from customs duties, and it would be impossible 
 
 76
 
 STEPS TO IMPERIAL FEDERATION. 
 
 for them to make good a large deficiency of revenue 
 under this head from other sources. It has been 
 recognised as impracticable by the recent Colonial 
 Conference. Commercial Federation, on the basis of 
 preferential trade within the Empire, stands on a different 
 footing. Canada already gives to the mother country 
 a preference of 33j per cent, over those countries which 
 are protectionist. Other Colonies are prepared to follow 
 Canada's example. Is it to the advantage of the people 
 of the mother country to give to the Colonies in return 
 a preference in the home market ? 
 
 The free trade position cannot be defended by argu- J°^^^'"^^gjjj 
 ments applicable to the conditions of fifty years ago. in Germany 
 The conditions of the problem have changed, mainly united 
 through the enormous decrease in the cost of transport. 
 It must be defended in the light of recent experience 
 and present-day facts. In a memorandum recently 
 issued by the Board of Trade (Cd. 1199, 1902) com- 
 parative statistics are given of the commerce of the 
 United Kingdom, Germany, and the United States. 
 Taking five years' averages — a fairer basis of comparison 
 than the trade of single years — the exports increased as 
 follows : — 
 
 United Kingdom 
 Germany ... 
 United States 
 
 Average 
 
 1880-1884 
 
 234 
 156 
 166 
 
 Average 
 1895-1899 
 
 249 
 192 
 237 
 
 Increase per 
 annum 
 
 6-4 
 231 
 42-8 
 
 During the last years of this period Germany and 
 the United States have become increasingly pro- 
 
 77
 
 PROBLEMS OF EMPIRE. 
 
 American 
 Trusts and 
 Shipping 
 Combines. 
 
 Great Britain 
 dependent on 
 foreign food 
 stuffs. 
 
 tectionist, and the rate of their industrial develop- 
 ment has increased. The exports of Germany rose 
 from 166,000,000/. in 1895 to 222,000,000/. in 1900; 
 those of the United States from 165,000,000 in 1895 
 to 286,000,000 in 1900 ; those of the United Kingdom 
 from 226,000,000 in 1895 to 283,000,000 in 1900, the 
 increase in the latter case being largely accounted for 
 by the greater value of the coal exported. 
 
 The huge aggregations of capital under single control 
 in the American Trust Companies, and the acquisition 
 of some of our most important lines of steamers by the 
 Atlantic Shipping Combine, are a reasonable ground 
 for alarm as to the future of British industry. The 
 American manufacturer has the advantage of an enor- 
 mous home market. Ov^ang to high protective duties 
 he is able to make a large profit on goods sold in the 
 home market, and then in order to spread his general 
 charges, he can sell his surplus abroad at a price not 
 perhaps below the cost of manufacture, but below the 
 cost of production if the goods sold abroad were 
 debited with their due proportion of general charges. 
 Against competition of this character it will become 
 increasingly difficult for British industry to hold its 
 own. 
 
 To turn to another point of view, viz., the extent 
 to which we depend on foreign countries for our food 
 supplies. The fact that this country is provisioned for 
 little more than six weeks would undoubtedly consti- 
 tute a serious danger in case of war. The recognition 
 of this fact led to an agitation a few years ago for the 
 establishment of national granaries. It is idle to make 
 preparation to meet invasion unless our food supply is 
 assured. Invasion can only be possible if we lose 
 
 78
 
 STEPS TO BIPERIAI. FEDERATION. 
 
 command of the sea ; and if the command of the sea 
 were lost our enemies could compel us to submit by 
 starvation to whatever terms they might dictate. 
 Three-quarters of our wheat imports come at present 
 from foreign countries. In 1901 our total imports 
 of wheat amounted to 70,000,000 cwt., of which 
 Russia supphed, in round figures, 2,500,000, the 
 United States 40,500,000, Argentma 8,000,000, and 
 British possessions nearly 17,000,000 cwi:. In the 
 event of war with the United States the command of 
 the sea would not ensure the maintenance of our 
 food supply. War with the United States is a con- 
 tingency which no EngHshman cares to contemplate. 
 But it is well to point out that, under present 
 conditions, we are absolutely at her mercy. The 
 Government would only have to prohibit the export 
 of corn stuffs to the United Kingdom to compel us 
 to submit. Canada alone is said to be capable of 
 producing all the wheat required to feed the people 
 of the United Kingdom. Australasia sent us in 
 1901 more wheat than Canada, and, as Sir Edmund 
 Barton said in his speech to the Tunbridge Wells 
 Farmers' Club, it is also a first-rate butcher's shop. 
 Preferential duties, which would ensure the Empire 
 becoming self-supporting as regards its food supply, 
 have many attractions, not the least of which is that 
 they would have a tendency to check the decHne in 
 the agricultural population of Great Britain and 
 Ireland. 
 
 On the other hand it is asserted that British in- The inci- 
 dence or a 
 
 dustry will be able to hold its own by mcreased differential 
 efficiency on the part of British merchants, manu- 
 facturers, and workmen. The next five years will, I 
 
 79
 
 PROBLEMS OF EMPIRE. 
 
 Imperial 
 Defence. 
 
 Colonial 
 contributions 
 
 believe, prove to be the most critical in the history of 
 British industry, and will settle the question one way 
 or the other. It must also be borne in mind that a 
 Commercial Federation which did not impose a tax 
 on Russian and American wheat for the benefit of the 
 Canadian wheat-gi*ower, and a duty on other agricul- 
 tural produce for the benefit of the Australian and New 
 Zealander, would be of little value to the Colonies. 
 Taxes on food supplies and raw materials are open to 
 the gravest objection. The Colonial Conference has 
 gone as far as it is possible to go at the present stage 
 in the direction of Commercial Federation. The most 
 extreme Free Trader can have no objection to the 
 Colonies reducing their tariffs on imports from the 
 mother country when they exact no pledge in 
 return. 
 
 To turn to Defence. In the history of the Imperial 
 Federation movement, nothing is more remarkable than 
 the continuity of the idea that the most practicable step 
 in the direction of Federation lies in a combination for 
 defence. To deal with the question of Federation from 
 this point of view would require a paper in itself. I 
 ha\'e always held that the Colonies, in their present 
 stage of development, cannot give substantial monetary 
 assistance towards the general defence of the Empire, 
 or, in other words, that no contribution which they can 
 at present afford would substantially lessen the burden 
 which the Navy and Army estimates impose on the 
 British taxpayer. 
 
 At the recent Colonial Conference the following 
 annual contributions to naval defence were sug- 
 gested : — 
 
 80
 
 STEPS TO IMPERIAL FEDERATION. 
 Australia 200.000 
 
 New Zealand 
 Cape Colony 
 Natal 
 Newfoundland 
 
 40.000 
 
 50.000 
 
 3.5.000 
 
 3.000 
 
 £328.000 
 
 Even assuminor that Canada acn-eed to contribute 
 in the same proportion a.>> Australia, the total contri- 
 butions of the Colonies to the naval defence of the 
 Empire would scarcely exc-eed 500.000/. Such a sum 
 does not loom ven,- large in estimates which amount to 
 over 30.000.000/. 
 
 On the other hand, the Colonies mis^ht assist u>. Coi^aiaJ 
 and assist us ver\- materially, with men. For example. R^^erve. 
 in spite of large increase^ to the pr' :. nent force, the 
 -7 of the Na\y. including reserves, is quite 
 msuthcient for our countn." s requirements : and there 
 are many indications that a further increa.se in the fleet 
 ^vill be necr— :.yv. In 1896. when visitino: Canada and 
 Australia. I made an especial >tudy of the possibility 
 of drawing on the Colonies for the Naval Reser^'e. In 
 the tishing and seafaring population of Canada and 
 Newtbundland and in the merchant seamen of Australia 
 there was clearly an abundance of good niateriaL In 
 1897 and in the following years I advocated by ever}- 
 means in my power that this material should be utilised. 
 Two years ago a small experiment was made in this 
 direction in Ne^nomidland. The result appears to have 
 been satisfactory', and it is gratifSTng to know that at 
 the Colonial Conference it has been detinitely decided 
 
 81 G
 
 PROBLEMS OF E^IPIRE. 
 
 to establish branches of the Naval Resene in Aus- 
 tralasia, as well as in Newfoundland. 
 Local It is, however, not only in this direction that the 
 
 Colonies can assist in the matter of naval defence. 
 Melbourne and Sydney have been made two of the 
 most strongly -defended ports of the Empire, and 
 Albany and Thursday Island have been protected 
 from the raider, mainly at Colonial expense. The 
 forts that defend them are manned by Colonial troops. 
 Is it too much to ask Canada to follow the example of 
 Australia, and make herself responsible for manning the 
 defences of Halifax and Esquimault ? Bases such as 
 these — and with them must be included Durban and 
 the Cape — which are rendered secure not so much by 
 their forts and guns as by the fact that they have a 
 large population behind them ready to resist the in- 
 vader, are a valuable element of sea power, and a 
 Colonial contribution to the defence of the Empire 
 which must not be lost sight of. 
 Naval De- On the Navy we depend for the defence of our 
 
 National ties, shorcs from iuvasion, for the protection of our com- 
 merce, and for the security of our trade routes. The 
 part which the British Army can play in war with any 
 first-class power except Russia and the United States 
 is only a secondary one, but it is still important. It is 
 our chief weapon of offence. AVith the assistance of 
 the Navy, it must lend its energies to the captm'e of 
 the Colonies and coaling stations of the enemy, more 
 indispensable now than before the introduction of steam 
 to the success of their depredations on our commerce. 
 For a war such as that which we have recently waged 
 in South Africa, the Colonies have shown that they 
 can provide material of unequalled quality. Mounted 
 
 82
 
 STEPS TO IMPERIAL FEDERATION. 
 
 infantry are probably destined to play an important 
 role in other fields. Would it not be possible to raise 
 regiments of mounted inftmtry in Canada, in Australia, 
 and in South Africa, one of the battalions of which 
 would form the depot in its own Colony whilst the 
 other was serving in India or some other part of the 
 Empire ? Nothing could have a greater effect on the 
 widening of the Colonial conception of Imperial re- 
 sponsibihty in matters of defence than the fact that 
 there were Canadians, Australians, and South Africans 
 serving in peace time, as they have done so nobly in 
 time of war, side by side with Englishmen, Irishmen, 
 and Scotchmen in all corners of the world. Such a 
 step as that suggested may be in advance of Colonial 
 opinion at the present time, but the Colonies can 
 certainly, by keeping the military forces — which are 
 now, and must remain, under their own control — 
 efficient and properly equipped, render great assistance 
 in the direction already indicated. 
 
 To turn to the constitutional aspects of Imperial Constitu- 
 
 1T J .. •'- tional aspects 
 
 ' ederation. of impenai 
 
 ' If I am asked, said Mr. W. E. Forster, in 1885, ^^^^«'^^**°"- 
 *' How can the mother country be kept united with 
 her Colonies?" I reply, " By an organization for com- 
 mon defence and a joint foreign poHcy." And again, to 
 the question, " Why not leave matters alone ?" I reply, 
 " Self-government will end in separation if there be no 
 such organization.'" Exaggerated hopes were enter- 
 tained in certain quarters as to the possibilities of the 
 Conference of Colonial Premiers during the past sum- 
 mer. Such hopes were pre-doomed to disappointment. 
 As pointed out over and over again by Sir Edmund 
 Barton during his stay in this country, ' It is only 
 
 83
 
 PROBLEMS OF EMPIRE. 
 
 Decisions 
 of the 
 CoroDation 
 ColoDial 
 Conference. 
 
 Imperial 
 Unity 
 dependent 
 upon two 
 principles. 
 
 Growth of 
 expenditure 
 for Imperial 
 Defence. 
 
 possible to advance so far as public opinion coincided 
 in various parts of the Empire, and so far as it was 
 compatible with self-government. If more was at- 
 tempted the Empire would suffer loss.' The decisions 
 of the Coronation Colonial Conference are a most 
 important advance in the direction indicated by Mr. 
 Forster. It decided — subject, of course, to ratification 
 by the various Parliaments concerned — (1) that the 
 Colonies should take upon themselves a larger share 
 of the burden of naval defence, and (2) that periodical 
 conferences of Premiers should be held, at intervals of 
 not more than four years, to discuss questions of com- 
 mon interest. The Conference admitted the principle 
 of Imperial Federation. These decisions are of great 
 import for the future ; but they only represent the first 
 and tentative stage in the desired direction. 
 
 Ever since I had the privilege of visiting our great 
 Colonies and dependencies, I have been convinced that 
 the permanent unity of the Empire rests on two great 
 principles of Imperial Government: — (1) The right of 
 each part of the Empire which bears its fair share of 
 Imperial burdens to a voice in the control of Imperial 
 expenditure and the direction of Imperial poUcy. (2) 
 The right of each part of the Empire to manage its own 
 local affairs in its own way. The time will come ere 
 long when these principles must be apphed to the 
 government of the Empire, for the simple reason that 
 the burden of defence is becoming too heavy for the 
 mother country to bear without the help of her children 
 
 beyond the seas. 
 
 In 1892-3 the cost to tlie British taxpayer of Im- 
 perial defence amounted to some 3.5,000,000/. In 
 1902-3 our naval and military expenditure, quite apart 
 
 84
 
 STEPS TO IMPERIAL FEDERATION. 
 
 from the special expenditure on the wars in South Africa 
 and China, had risen to over 60,000,000/. All our 
 expenditure for purposes of defence does not appear in 
 the Annual Estimates. Under the Naval Works Act 
 of 1902 no less than 27,000,000/. is to be expended on 
 the construction of docks and naval barracks, and the 
 protection of naval ports at Gibraltar, Devonport, Dover, 
 Hong Kong, Simon's Bay, and Bermuda. Expenditure 
 on defence is more likely to increase than to diminish. 
 Owing to the large additions being made by (Germany, 
 Russia, and the United States to their navies, increased 
 exertion on our part will be necessary if we are to retain 
 the command of the sea. We have been passing 
 through a period of great commercial prosperity, so that, 
 until the imposition of the extra taxation necessitated 
 by the war in South Africa, the increase in our national 
 expenditure has been little felt. Prosperity cannot 
 continue for ever. Trade moves in ever-recurring cycles 
 of prosperity and depression, and when the depression 
 comes, as it must come ere long, we in the mother 
 country shall begin to feel that the burden of defending 
 the Empire is becoming too heavy for tlie taxpayers of 
 these islands alone. When Colonies are in their in- 
 fancy it is the duty of the mother country to charge 
 herself with their defence, but our Colonies are now 
 rapidly growing from youth to manhood. Their popu- 
 lation and their resources are year by year increasing 
 relatively to those of the mother country (a temporary 
 exception must be made in case of Australia, which has 
 been suffering from a drought of unprecedented severity 
 and duration). It is not, I think, unreasonable to expect 
 that before many years have past the Colonial taxpayer 
 w^ill be both able and willing to stand shoulder to 
 
 85
 
 PROBLEMS OF EMPIRE. 
 
 Colonial 
 Representa- 
 tion : 
 
 constitutional 
 diflBculties. 
 
 Modification 
 of 
 
 Constitution 
 necessary. 
 
 Preliminary 
 
 steps. 
 
 shoulder with the taxpayer of the mother country. 
 The conditions on which that help will be given were 
 tersely put by Sir A\^ilfrid Laurier in the Dominion 
 House of Commons on March 14, 1900. ' If our future 
 military contribution were ever to be considered com- 
 pulsory — a condition which does not exist — I would say 
 to Great Britain : If you want us to help, you must call 
 us to your Councils.' This demand can only be met 
 by giving to every part of our Empire which bears its 
 fair share of Imperial burdens a constitutional voice in 
 the control of Imperial policy. 
 
 How is this to be done ? It has been suggested 
 that Colonial representatives might be added to the 
 Privy Council, to the House of Lords, or to the House 
 of Commons. None of these suggestions offer a satis- 
 factory solution of the difficulty. The Privy Council 
 and the House of Lords do not control national expen- 
 diture. The House of Lords would hardly be a congenial 
 atmosphere for the representative of a democratic 
 community. The House of Commons does not deal 
 solely with Imperial questions, ^^'^hat is to be the 
 position of the Colonial representative in the House of 
 Commons when, for instance, an English Education Bill 
 is under discussion. 
 
 It is, I believe, impossible, under our present 
 constitutional arrangements, to provide for Colonial 
 representatives taking part in the direct control of 
 Imperial policy. Imperial Federation, therefore, implies 
 a modification of the constitution for which public 
 opinion is certainly not yet prepared, either in the 
 Colonics or the mother country, 
 
 Australia has just established her Commonwealth 
 Constitution. It is impossible to suppose that Aus- 
 
 8G
 
 STEPS TO IMPERIAL FEDERATION. 
 
 tralian statesmen will be prepared to make another great 
 constitutional experiment until they have satisfactorily 
 overcome the difficulties inseparable from the working 
 of new constitutions, with which the Federal Parliament 
 is confronted. In South Africa the efforts of statesmen 
 and people must for some time be devoted to repairing 
 the damages wrought by the long struggle now happily 
 brought to a conclusion. Responsible government 
 must be built up, not only in the Transvaal and Orange 
 River Colonies, but in Rhodesia; and the Federal 
 Government for South Africa, to which many South 
 African statesmen were looking long before the recent 
 troubles, must be estabhshed before South Africans will 
 be in a position to discuss any proposal for Imperial 
 Federation. While every Canadian for the past thirty- 
 five years, and every Austrahan for the last two years, 
 has lived under three Parliaments, each dealing with a 
 distinct class of business, we, in the mother country, 
 have been accustomed to the whole of our business, 
 Imperial and domestic, being transacted in the Parlia- 
 ment which sits at Westminster. Our Empire has 
 grown up and expanded under the a?gis of that 
 Parliament. The Government of Scotland, and the 
 Government of Ireland, have been centralised in its 
 hands. The population of the country has multiplied, 
 and with the growth of population have come increasing 
 demands for legislative and administrative action. Not 
 until the British people recognise the impossibility of 
 transacting the business of the Empire and of these 
 islands with less machinery than 300 years ago, not 
 until they appreciate that a distinction can be drawn 
 between Imperial and domestic questions, will they be able 
 to understand what is meant by Imperial Federation. 
 
 87
 
 Arguments 
 for. 
 
 PROBLEMS OF EMPIRE. 
 
 The United While Australians are getting their Commonwealth 
 
 musi adSpt Constitution into working order, while Afrikanders are 
 Gotemment. laying the foundations of Federal Government for South 
 Africa, we, in the mother country, have our part to 
 play in the evolution of a more perfect system of 
 Imperial Government. The estahlishmeiit of Federal 
 Government in the United Kingdom is an essential 
 preliminary to Imperial Federation. 
 
 Such a proposal involves a great change in our 
 constitution, and it must be justified by very strong 
 arguments. First and foremost of these is the fact that 
 power is rapidly passing from Parliament to the Cabinet, 
 and to the great Departments of State, owing to the 
 overwhelming pressure of business in the House of 
 Commons. This pressure arises partly from the gi'owing 
 prominence of Imperial questions which, though not 
 receiving adequate attention themselves, have absorbed 
 the energies of Parliament and the Government to such 
 an extent as to throw questions of domestic and social 
 reform into the backgi-ound, partly from the competitive 
 claims of England, Wales, Scotland, and Ireland, to 
 secure a portion of the time of Parliament for the con- 
 sideration of their special interests. 
 
 Let me give tAvo illustrations of the way in which 
 our Imperial business is at present conducted : — 
 India. (1) The Imperial Parliament is responsible for the 
 
 government in India of three hundred millions of 
 people, nearly a fifth of the human race. That is an 
 enormous responsibility. And what is the amount of 
 time devoted by l*arliament to the consideration of 
 Indian questions ? At most one or two days at the fag 
 end of a session. 
 
 (2) The control of national expenditure is amongst 
 
 88
 
 STEPS TO IMPERIAL FEDERATION. 
 
 the most important, if not the most important, of the 
 functions of the representatives of the people in Parlia- 
 ment. I have already alluded to the recent growth in 
 annual expenditure. The growth in expenditure has 
 not been confined to the Department of the Navy. 
 It has affected every Department to a greater or 
 lesser extent. During the past seven years the annual 
 ordinary expenditure of the country has increased by 
 no less a sum than 35,000,000/. sterling. Some of this 
 increased expenditure could, I believe, have been avoided 
 had Parliament exercised its powers of control. But 
 control cannot be effectively exercised when 67,000,000/. 
 of public money are voted in three hours, or at the rate 
 of some 22,000,000/. an hour, practically without dis- 
 cussion. This was actually done on August 9th of last 
 year. No stronger instance could be given than this 
 of the impossibility of carrying on the business of the 
 Empire under present conditions. 
 
 As reeards domestic business, it is impossible to Domestic 
 
 11 1 • n 1 • n ^ !• legislation 
 
 deny that the absorption oi the tnne oi Parliament neglected for 
 on Imperial matters has tended to throw into the back- q^J'stions. 
 ground such questions as education, housing, temperance, 
 the relations between capital and labour, the problem of 
 the aged poor, the decline of our agricultural popula- 
 tion, the decline of the number of British seamen in 
 British ships — questions which affect the people of this 
 country in their homes. This constitutes the solid basis 
 of such anti- Imperialist feeling as exists in the country. 
 The Little Englander attributes to what is vaguely 
 called Imperialism what is really due to the congestion 
 of business in Parliament. It is a feehng which is too 
 widely held to be ignored by us who are Imperialists 
 — and every member of the Colonial Institute is an 
 
 89
 
 PROBLEMS OF EMPIRE. 
 
 Want of 
 knowledge of 
 Imperial 
 Questions. 
 
 Confused 
 issues. 
 
 Imperialist — and it is our business to remove the 
 basis on which it rests, and to reconcile the spirit 
 of democracy with the ideal of ' United Empire.' 
 
 There are two other evils incidental to our present 
 system of Imperial GoA-ernment, to which allusion 
 must be made : — 
 
 1. Imperial business and domestic business each 
 require special training, special study, and special SLjyti- 
 tudes. The training of the School Board, the County 
 Council, or the Trade Union may be admirable for one 
 who seeks to take part in domestic legislation ; but 
 something more is required from the Member of a 
 Parliament which deals with the great questions of 
 Imperial and Colonial policy. To those who have 
 travelled mucli in the Empire, the assurance with 
 which some men speak on Imperial and Colonial ques- 
 tions, of which they have no special knowledge, is 
 amazing. Nowhere has this been more conspicuous than in 
 the treatment of the war in South Africa and its conduct. 
 
 2. Under present conditions, when an appeal is 
 made to the country. Imperial questions and domestic 
 questions are submitted to the electors in a confused 
 issue. At the election of 1900 every domestic issue 
 was subordinated to the one Imperial question — the war 
 in South Africa. At some future election the converse 
 of wliat happened in 1900 might take place. Some 
 question of domestic policy might be to the front, and 
 the party might be returned to power on that issue, which 
 perhaps, in the opinion of the electorate, was the less 
 quahfied to carry on the government of the Empire. 
 That is a danger to which Mr. Cliamberlain alluded in 
 a recent speech at Birmingham ; and it is in my belief 
 a very real danger to the P^impire. 
 
 90
 
 STEPS TO IMPERIAL FEDERATION. 
 
 I^et me illustrate what I mean. The Boers went The Boers' 
 
 hop6S. 
 
 to war trusting in two things : ( 1 ) foreign intervention ; 
 
 (2) the possibility of a change of government and a re- 
 versal of policy, such as took place in 1880. Had an 
 Imperial Parliament been in existence in 1899, the 
 people of this countiy would have had accurate infor- 
 mation fi'om the representatives of Natal or of the 
 Cape Colony as to the situation in South Africa, and 
 there would have been none of that ignorance and 
 misunderstanding which have been so fruitful a cause 
 of evil in our relations with South Africa. It is my 
 firm conviction that, had the Boers known that 
 they had to deal with a United Empire, and that 
 there was no chance of a reversal of Imperial policy, 
 the war in South Africa would never have taken 
 place. 
 
 Such then are the evils of our present system of Complexity 
 government, and these are the reasons which are con- mentary 
 vincing men of all political parties that parliamentary 
 government has broken down. Parliamentary govern- 
 ment has broken down, because we are attempting to 
 deal, in one single assembly, with three distinct classes 
 of business : ( 1 ) the business of the greatest Empire 
 the world has ever seen; (2) questions affecting the 
 United Kingdom as a whole, such as those which in 
 Canada are dealt with by the Dominion Parliament 
 and in Australia by the Commonwealth Parliament ; 
 
 (3) the special needs of England, Wales, Ireland, and 
 Scotland, which in Canada would be dealt with by the 
 Provincial Parliaments of Ontario, Quebec, &c. ; in Aus- 
 tralia by the Colonial Parliaments of New South Wales, 
 Victoria, &c. No other country has ever attempted to 
 carry on its business with such inadequate machinery. 
 
 91 
 
 business.
 
 PROBLEMS OF EMPIRE. 
 
 Remedies 
 suggested. 
 
 The Irish 
 Question. 
 
 It is not attempted in Germany, in the United States, 
 or in Switzerland. 
 
 Two alternative remedies are suggested by the 
 experience of other countries. An Imperial Parlia- 
 ment, representative of the whole Empire, might be 
 established, the existing Parliament confining itself to 
 questions which affect the United Kingdom as a 
 whole, and to the special interests of England, Wales, 
 Scotland, and Ireland. This remedy involves the 
 degi'adation of our ancient and historic Parliament to 
 an entirely subordinate position, and, for the reasons 
 already given, it is a policy for the adoption of which 
 neither the Colonies nor the mother country are yet 
 prepared. 
 
 The alternative is for Parliament to hand over to 
 subordinate legislative authorities what may be termed 
 domestic questions, while retaining in its own hands all 
 Imperial business, as well as all matters of common 
 interest to the whole of the United Kingdom. It 
 implies the creation of legislatures in England, Ireland, 
 and Scotland (probably also in Wales), each having 
 power to deal with their own internal affairs. The 
 establishment of a federal form of government in the 
 United Kingdom somewhat similar to that of Canada 
 has, I believe, become urgently necessary. I advocate 
 it, not only for the sake of Ireland or Scotland, but, 
 to use Mr. Redmond's words, for the sake of England, 
 for the sake of the English I'arliament, and for the 
 sake of the British Empire. 
 
 Not the least of the advantages of the establish- 
 ment of P'ederal Government in the United Kingdom 
 is that it affords a solution of the constitutional diffi- 
 culties in granting self-government to Ireland alone. I 
 
 92
 
 STEPS TO IMPERIAL FEDERATION. 
 
 certainly do not propose to discuss that thorny Irish 
 question, which is a perennial source of weakness to 
 the Empire, and which can only be satisfactorily settled 
 with the assistance of all political parties in the State ; 
 but it is necessary for the proper understanding of our 
 subject to refer to the constitutional objections to Mr. 
 Gladstone's Home Rule proposals. The Home Rule 
 Bill of 1886 excluded Irish representation altogether 
 from the Imperial Parhament. In other words, Ireland 
 was to be taxed for Imperial purposes, without having 
 any voice in the control of the expenditure. If it had 
 become law it would have violated one of the funda- 
 mental principles of the British constitution — 'there 
 shall be no taxation without representation.' In the 
 second Home Rule Bill the ' in-and-out ' plan was pro- 
 posed ; but during the passage of the Bill through the 
 House of Commons this method was shown to be so 
 impracticable that it was decided to allow Irish members 
 to sit in the Imperial Parliament for all purposes. The 
 objections to this course were fatal from the English 
 point of view, because it would liave permitted Irishmen, 
 while free to settle their own local affairs in their oMii 
 way, to interfere in purely British questions. 
 
 The modern Home Rule movement, which dates ^^^'"■^K*'", 
 
 berlain s ad- 
 
 from 1870, and which is associated with the name of vocacyof 
 Mr. Butt, was directed to securing for an Irish Parlia- Government 
 ment, ' under a federal arrangement, the right of legis- 
 lating for and regulating all matters relating to the 
 internal affairs of Ireland.' Mr. Chamberlain, in the 
 debate on the first reading of the Home Rule Bill of 
 1886, used the following remarkable words : ' I shall 
 look for the solution in the direction of the principle of 
 federation .... It appears to me that the advantage 
 
 93
 
 PROBLEMS OF EMPIRE. 
 
 of a system of federation is that Ireland might, under it, 
 reaUy remain an integral part of the Empire. The 
 action of such a scheme is centripetal and not centri- 
 fugal, and it is in the direction of federation that the 
 democratic movement has been most advanced in the 
 present century.' On the second reading of the Bill 
 Mr. Chamberlain suggested, as an alternative Home 
 Rule policy, ' the pi^esent constitution of Canada, not, in 
 the relations between Canada and this country ' (to 
 which Mr. Gladstone and others had referred) — 'those 
 are the wrong lines, and lines against which I protest, 
 and which mean separation — but in the relations inter se 
 of the provinces of Canada and the Dominion Parliament. 
 Those are the relations which I, for one, am perfectly 
 prepared to establish to-morrow between this country 
 and Ireland.' 
 
 History has proved that Mr. Chamberlain was right 
 when, in 1886, he pointed to Federation as the true 
 solution of the Irish question. 
 
 To sum up. The Coronation Colonial Conference 
 has taken us as far as it is possible to go at the moment 
 in the direction of Imperial Federation. All honour to 
 the statesmen whose labours have carried us so far. 
 The burden of the Empire is becoming too heavy for 
 the mother country to bear alone. I admit that the 
 Colonies are not yet in a position to tax themselves to 
 the same extent as we are able to do for the common 
 defence ; and until they are in this position the question 
 of providing for direct control by Colonial representa- 
 tives of Imperial policy does not arise. 
 
 An Imperial Parliament, in which every part of the 
 Empire will be represented, either by elected or nomi- 
 nated representatives, is the ultimate goal which we 
 
 94
 
 STEPS TO IMPERIAL FEDERATION. 
 
 must ever keep before us. The ideal constitutional 
 structure for the Empire is illustrated in the diagram 
 on p. 71. The steps necessary to complete the fabric 
 are shown in italics. Whether it is possible to devise a 
 satisfactory method of dealing with the business of the 
 United Kingdom and the Empire in the same legisla- 
 ture, or whether the business of the United Kingdom 
 should be earned on in a Parliament corresponding to 
 the Commonwealth Parliament of Australia and the 
 Dominion Parliament of Canada, and Imperial business 
 in a Parliament distinct from any existing body, is a 
 question which for the present may remain an open 
 one. In the immediate future the Canadian, the Aus- 
 tralian, the South African, and the Briton has each his 
 own work to do in creating or strengthening the four 
 great federations on which Imperial Federation will 
 some day be built. 
 
 95
 
 THE FINANCE OF FEDERAL 
 
 GOVERNMENT FOR THE 
 
 UNITED KINGDOM. 
 
 Congestion 
 of Parlia- 
 mentary 
 business and 
 remedies. 
 
 A Paper read before the Royal Statistical Society^ 
 
 January, 1903. 
 
 The great and increasing difficulty of carrying on 
 the business of a vast Empire, the affairs of the United 
 Kingdom as a whole, and the domestic concerns of 
 England, Wales, Ireland, and Scotland, with our 
 present Constitutional machinery, is generally admitted. 
 The congestion of business in the House of Commons 
 has become so serious as to threaten a breakdown in 
 parliamentary government. Two remedies present 
 themselves. On the one hand, Parliament might be 
 reheved of the Imperial business by the estabhshment 
 of an Imperial Parliament, with Colonial representatives, 
 to deal with all Imperial business. For this remedy 
 pubhc opinion is not yet ripe, either in the mother 
 country or the Colonies. The Colonies are not yet 
 prepared to tax themselves for the maintenance of the 
 Navy and Army, and until they are prepared to bear 
 their fair share of Imperial burdens they have no right to 
 a voice in the control of Imperial policy. On the other 
 hand, it is possible for Parhament, while retaining in its 
 own hands Imperial business, as well as all matters 
 
 96
 
 FEDERAL FINANCE. 
 
 affecting the United Kingdom as a whole, to hand 
 over to subordinate legislatures in England, Scotland, 
 Ireland, and possibly in Wales, the power to deal with 
 the internal affairs of each country. This imphes the 
 establishment of a federal form of government in the 
 United Kingdom, somewhat similar to that which exists 
 in Canada. It would be out of place to give the argu- 
 ments for and against this great reform in our Consti- 
 tution in this paper, which is based on the assumption 
 that such a reform has become a necessity. 
 
 The main difficulty in devising a workable scheme Financial 
 
 ^ . ^. . difficulties. 
 
 of federal government for the United Kingdom is that 
 of adjusting the financial relations between the Imperial 
 Government and the subordinate national legislatures. 
 It has been asserted that Imperial cannot be separated 
 from national finance, and that the problem is so 
 complex as to be insoluble. Problems which have 
 been solved in other countries, such as Germany and 
 the United States, and under the British fiag in 
 Australia and Canada, cannot, however, be admitted 
 to be beyond the capacity of British statesmen. It is, 
 at any rate, well that in a society of experts such as 
 this, they should be ventilated and discussed ; and it is 
 as a humble contribution to the discussion that I venture 
 to offer this paper. Though the principal suggestion is 
 my own, most of its conclusions are the result of much 
 discussion with others. 
 
 In order to appreciate the conditions of the problem, Conditions of 
 it is necessary to study the ' The Return of Revenue 
 and Expenditure '* (England, Scotland, and Ireland) 
 annually issued under the authority of Parliament. 
 
 * The figures for 1900-01 have been used in this paper as more 
 nearly approaching to the normal than the figures of 1901-02. 
 
 97 H
 
 PROBLEMS OF EMPIRE. 
 
 
 England. 
 
 Scotland. 
 
 Ireland. 
 
 Revenue as contributed 
 
 113,244,000 
 22,559,000 
 
 14,919,000 
 3,227,000 
 
 £ 
 9,505,000 
 
 5,919,000 
 
 Expenditure on civil adminis- " 
 tration (excluding chai'ges 
 on Consolidated Fund, cost 
 of collection of customs, y 
 half cost collection inland 
 revenue,* and Post Office 
 expenditure 
 
 Balances available for Imperial ) 
 expenditure, including Post > 
 Office \ 
 
 90,685,000 
 
 11,692,000 3,586,000 
 
 * If a proportion of the inland revenue (e.(/., income tax and estate duties) 
 is reserved to the Imperial authority, the cost of collection of this revenue 
 should be an Imperial charge. This has been roughly estimated at half the 
 total cost of collection of the inland revenue. 
 
 The first fact brought out by this return is that the 
 expenditure for Imperial purposes (including the 
 expenditure on Post Office services as Imperial, for 
 reasons which will appear later) represents about three- 
 fourths, and the national expenditure only one-fourth of 
 the total expenditure. 
 
 The second fact to which it is necessary to call 
 especial attention is, that the different countries of the 
 United Kingdom at present demand for their civil 
 administration very different proportions of the revenue 
 which they contribute to the Exchequer, and conse- 
 quently their contributions to the Imperial expenditure 
 are not proportionate to their revenues. The expendi- 
 ture on civil administration in Ireland is nearly double 
 that of Scotland, the excess in Ireland being mainly 
 under the head of law charges and police, f 
 
 Thus, while England contributes 80 per cent, and 
 
 t Cf. Table IV. in Appendix. The Royal Irish Constabulary in 
 1900-01 cost 1,341,000^., and the Dublin Metropolitan Police 93,000Z. If 
 the police force in Ireland were on the same scale relatively to popula- 
 tion as that in England, it should cost about half the above sum. 
 
 98
 
 Imperial 
 revenue. 
 
 FEDERAL FINANCE. 
 
 Scotland 78*4 per cent, Ireland only contributes 
 37*8 per cent, of her revenue to Imperial purposes. 
 From this fact it results that it is impossible to adjust 
 the financial relations between the Imperial and 
 national authorities on a general plan applicable to each 
 countiy alike. 
 
 Thirdly, it must be noted that Imperial expenditure 
 exceeds the proceeds of either direct or indirect taxation, 
 so that it cannot be defrayed out of either taken alone. 
 
 Having stated the principal difficulties of the 
 problem before us, it becomes necessary to determine 
 the conditions of a satisfactory solution. 
 
 1. The Imperial revenue must be elastic, and there- Sources of 
 fore ought to be draxvn from sources capable of pro- 
 ducing a considerable and immediate increase. — If the 
 Empire becomes involved in war, if a large increase in 
 shipbuilding for the Navy is required owing to the 
 activity in foreign navies, the Chancellor of the Ex- 
 chequer has immediately to raise funds. The income 
 tax is the first tax he resorts to. It is essentially his 
 reserve to meet demands such as those described. It 
 clearly cannot be handed over to the national authori- 
 ties ; and the same remark applies in a somewhat lesser 
 degree to customs and excise. 
 
 2. It is desirable that the revenues of both the 
 Imperial and national authorities shoidd be raised from 
 direct as well as indirect taxes, so that neither may be felt 
 to press unduly on any class of the community. — There 
 are four principal heads of taxation : — Customs, excise, 
 estate duties, and income tax. The two latter fall 
 almost entirely on the well-to-do-classes, the former on 
 the whole community. If the Imperial authority were 
 to depend altogether on the revenue fi'om customs and 
 
 99
 
 PROBLEMS OF EMPIRE. 
 
 excise, and the national authority on that from estate 
 duties and income tax, or vice versa — in other words, if 
 the whole burden of one or other category of expendi- 
 ture fell on a limited class of taxpayers, and the masses 
 of the people who possess the voting power were 
 unaffected by it — there would be no efficient check on 
 extravagant expenditure for Imperial or national purposes. 
 Imperial 3^ jf ^g desirable that the Impeiial authority should 
 
 reyenues. . ^ f^ ^ 
 
 have under its own control sufficient revenues to meet the 
 Tmpe?ial expenditure. — If the Imperial authority had to 
 call on the national authorities to contribute to Imperial 
 funds in the event of war or for any other reason, there 
 would obviously be grave danger of conflict between 
 the Imperial and national authorities. The war for 
 which the increased expenditure was required might be 
 unpopular in one of the countries of the United Kingdom 
 (a recent instance of this"^ will occur to every one here 
 present); that country might and probably would refuse 
 to make the contribution required by the Imperial 
 authority. How in this case is the contribution to be 
 collected ? To collect revenue at the point of the 
 bayonet is an impossibility. It is therefore necessary 
 that a scheme for adjusting the financial relations 
 between the Imperial and national authorities should 
 provide the former with sufficient sources of revenue 
 to meet Imperial expenditure under all circumstances. 
 Grants may have to be made from Imperial funds to 
 meet national expenditure. Indeed, such a grant will 
 certainly have to be made in some form or other, at 
 any rate for a period, in the case of Ireland. 
 Irish finance. 4. It is neccssari) to treat Ireland on exceptional 
 lines. — This necessity does not only arise from the 
 
 * The attitude of Irish representatives on the South African War. 
 
 100
 
 FEDERAL FINANCE. 
 
 greater cost of civil government in Ireland, but from 
 the fact that Ireland is a poorer country than England 
 and Scotland. The reports submitted by various 
 sections and individual members of the Royal Com- 
 mission on the Financial Relations between Great 
 Britain and Ireland, are unanimous on the point that 
 Ireland contributes to the general revenue a sum largely 
 in excess of the proportion which she would contribute 
 were that contribution based on her relative taxable 
 capacity. Mr. Childers places this excess at 2^ millions 
 per annum. 
 
 Two other considerations of great importance must 
 be noted. The commercial and fiscal policy of the 
 United Kingdom has been guided mainly by the 
 interests of Great Britain ; and while there has been 
 during the last sixty years an enormous increase in the 
 material well-being of the people of Great Britain, the 
 population of Ireland has diminished to nearly one-half, 
 largely owing to the heavy decline in the value of agri- 
 cultural produce, and the consequent restriction of the 
 demand for agricultural employment. Mr. Childers 
 summed up the grounds for the claim of Ireland to 
 special treatment as follows : — 
 
 ' Ireland being a countiy mainly inhabited by agri- 
 
 * cultural producers, could support its present population 
 ' upon the corn and meat produced there without having 
 
 * recourse, under ordinary circumstances, to a foreign 
 
 * supply of these articles, and could, at the same time, 
 
 * export a surplus of these foodstuffs. The population of 
 
 * Ireland consumes a rather large amount, in proportion 
 
 * to its wealth, of spirits, tea, and tobacco. This being 
 
 * so, it does not appear that a fiscal system which raises 
 *no revenue from foreign foodstuffs, but does raise a 
 
 101
 
 Local 
 
 Taxation 
 
 Account 
 
 PROBLEMS OF EMPIRE. 
 
 * large revenue from spirits, tea, and tobacco, is advan- 
 ' tageous to the population of Ireland, although it may 
 ' be advantageous to the population of the United 
 ' Kingdom looked at as a whole. It may even perhaps 
 ' be said that just as Ireland suffered in the last century 
 ' from the protective and exclusive commercial policy of 
 ' Great Britain, so she has been at a disadvantage in 
 ' this century from the adoption of an almost unqualified 
 ' free-trade policy for the United Kingdom.' 
 
 Secondly, the extension to Ireland of the income- 
 tax, and the equalisation of the spirit duties during 
 the period 1853-60, imposed an increased burden on the 
 Irish taxpayer amounting to nearly two millions a year. 
 
 5. It is desirable that the Local Taxation Account 
 should disappear altogether from the accounts of the 
 Imperial Exchequer, and that the National Legislatures 
 should deal in future with all grants in aid of Local 
 Taxation. — The local taxation revenue is derived from 
 customs, excise duty, and estate duty. The amounts 
 contributed under each head in 1900-01 are as follows : — 
 
 
 England. 
 
 Scotland. 
 
 Ireland. 
 
 Total. 
 
 Customs 
 
 £ 
 183,000 
 
 £ 
 19,000 
 
 £ 
 16,000 
 
 £ 
 
 218,000 
 
 
 
 Excise — 
 
 Spirits 
 
 Beer 
 
 624,000 
 
 399,000 
 
 3,516,000 
 
 187,000 
 
 20,000 
 
 370,000 
 
 106,000 
 31,000 
 
 917,000 
 450,000 
 
 Licences 
 
 3,886,000 
 
 
 
 Total excise.,. 
 
 4,539,000 
 
 577,000 
 
 137,000 
 
 5,253,000 
 
 J'Jstate duties 
 
 3,550,200 
 
 474,000 
 
 141,000 
 
 4,237,000* 
 
 
 
 Including 72,000^ from Imperial sources. 
 
 In addition to the above, there are payments from 
 the Exchequer revenue to local taxation accounts of 
 
 102
 
 FEDERAL FINANCE. 
 
 98,900/. in the case of Scotland, and 1,054,000/. in the 
 case of Ireland. 
 
 Local Taxation has been the subject of inquiry by 
 a Royal Commission, which issued its final Report in 
 1901. It appears unnecessary for our present purpose 
 to enter at length into the history of the grants in aid 
 of local taxation ; but the following facts and conclu- 
 sions, summarised from the report of Sir George Murray 
 and Sir Edward Hamilton, must be noted. In 1888 
 nearly the whole of the licence duties and a proportion 
 of the probate duty were assigned under Mr. Goschen's 
 proposals to the local taxation account — the object of 
 the latter being to secure a contribution fi'om personalty 
 to local finance. In 1890 the beer and spirit surtaxes 
 imposed in that year were assigned to the councils of 
 counties and county boroughs, to be apphed by them 
 to technical instruction. On this Sir George JMurray 
 and Sir Edward Hamilton remark, ' There seems to be 
 no reason why these surtaxes should be so assigned, 
 any more than any other fraction of the public revenue, 
 since they are in no way local, and have nothing to do 
 with technical education, or any other service locally ad- 
 ministered. ' The Finance Act of 1 894 imposed a uniform 
 system of death duties on realty and personalty alike, 
 and the contribution in aid of local rates can no longer 
 be identified as a contribution by personalty. It has 
 become simply a gi'ant out of the general revenue of 
 the country. In 1896 a portion of the estate duty on 
 personalty was assigned to provide the relief given to 
 agricultural land under the Agricultural Rates Act. 
 In Acts subsequently passed for Scotland and Ireland, 
 the assistance to the ratepayers has been pro\'ided by 
 a direct charge on the consolidated fund, because the 
 
 103
 
 PROBLEMS OF EMPIRE. 
 
 proceeds of the estate duty on personalty in Ireland 
 were insufficient for the purpose in view. The result 
 is that there is one arrangement in force in England, 
 and another in Scotland and Ireland. The present 
 system of assigned revenues therefore confuses the 
 public accounts, which consequently do not show the 
 expenditure for which the State has made itself re- 
 sponsible, and also the local accounts, making it difficult 
 to ascertain the relief afforded to the ratepayers by the 
 Exchequer. 
 Local For the above reasons we may conclude that there 
 
 A^ou^t is no advantage in continuing the present system of 
 assigned revenues, under which the surtaxes on beer 
 and spirits, the licence duties, and a proportion of 
 the estate duties, are earmarked for the local taxation 
 account, and that the grants now given from these 
 sources in aid of local taxation can be as well or 
 better met by a contribution from general revenue. 
 If this be the case, it follows that such grants can be 
 made from the revenues handed over to the national 
 authorities just as well as from Imperial funds, and 
 that there will be no necessity, under a scheme of 
 Federal Government, for complicating Imperial finance 
 with a local taxation account. It has been necessary to 
 make this point clear, so that we may not be prevented 
 from dealing with customs, excise, and estate duties, 
 as seems best, when we come to suggesting an adjust- 
 ment of the financial relations between the Imperial and 
 local authorities. 
 Customs and G. The coJitrol of Cmtoins and Ejccisc Duties on 
 Beer and Spirits must be reserved to the Imperial 
 Parliament. — Customs duties appear clearly to belong 
 tp the province of the Imperial authority ; though it 
 
 104 
 
 Excise.
 
 FEDERAL FINANCE. 
 
 has been suggested (notably in the report of Lords 
 Farrer and Welby and Mr. Currie on the Financial 
 Relations between Great Britain and Ireland) that 
 Ireland should be given control of all sources of taxation. 
 Excise, including beer and spirits duties, ought prima 
 fade to be in the hands of the national authorities. 
 On the other hand, excise duties are closely related 
 to customs duties, and if the national authorities were 
 given power to deal with the excise duties as they 
 pleased, and the several authorities imposed (as they 
 probably would impose) duties at different rates in the 
 several countries, it would necessitate the erection of 
 customs barriers between England, Scotland, and Ire- 
 land. The inconvenience would hardly be tolerated in 
 the present state of opinion. The fixing of the 
 rate, not only of customs duties but of the excise 
 duties on beer and spirits, must therefore remain under 
 Imperial control. 
 
 7. The Post Office should remain under Imperial Post Office. 
 control. — There is obviously great convenience in 
 retaining the administration of the Post Office in the 
 
 hands of the central authority. Nearly the whole of 
 the profit of the department is made in England. In 
 Scotland the profit is but small; in Ireland the Post 
 Office is worked at a loss.* Though there might be 
 some desire on the part of the national authorities to 
 take over the Post Office administration on account of 
 the patronage involved, it is here assumed that the 
 Post Office will remain under Imperial control. 
 
 8. Certain items of revenue which are peculiaiiiJ AppropUite 
 
 . / 7 • items of 
 
 suitable for manas-ement by the national authorities revenue for 
 
 ^ ^ ^ National 
 
 manaii;ement. 
 
 * In 1900-01 revenue 903,000^., expenditure 1,061,000^. 
 
 105
 
 PROBLEMS OF EMPIRE. 
 
 should he allocated to them. — These include licences 
 and railway duty, land tax and inhabited house duty, 
 and miscellaneous revenue, from which the revenue in 
 1900-01 was as follows :— 
 
 England. 
 
 Licences j 3,550,000 
 
 Railway duty 315,000 
 
 Land tax and house duty ! 2,321,000 
 
 Miscellaneous duty ! 792,000 
 
 Scotland. 
 
 Ireland. 
 
 £ 
 
 £ 
 
 371,000 
 
 211,000 
 
 24,000 
 
 — 
 
 146,000 
 
 
 82,000 
 
 116,000 
 
 Of the total revenue, amounting to 4,136,000/., 
 derived from licence duties, no less than 3,886,000/. is 
 local taxation re\'enue. On Mr. Goschen's original 
 proposal to hand over to the local authorities the col- 
 lection and variation of the licence duties, the Royal 
 Commission remarks : ' It cannot be doubted that in 
 the case of such licences as the dog and establishment 
 licences, the collection of the duties by the local 
 authority would add considerably to their yield.' 
 AVhether the licence duties should be collected by the 
 national or local authorities is a question which need 
 not concern us here. It is, at any rate, clear that they 
 should not form part of the Imperial revenues. The 
 land tax and inhabited house duty appear to belong 
 more properly to the department of national than 
 Imperial finance. The fact that in Ireland no such 
 taxes at present exist, gives considerable scope to the 
 national authority for raising additional revenue, should 
 such be required. The total miscellaneous revenue in 
 1900-01 was 2,237,000/., of which 1,247,000/. was 
 derived from Imperial sources, and the balance from 
 the respective countries to the amount given above. 
 
 100
 
 FEDERAL FINANCE. 
 
 AVith the possible exception of the revenue derived 
 from the Bank of England (178,000/.) the miscellaneous 
 revenues should clearly be handed over to the national 
 authorities. The revenue from Crown lands amounts 
 to 465,000/., of which 408,000/. is derived from Eng- 
 land, 24,000/. from Scotland, and 33,000/. from Ireland. 
 On the whole it appears desirable to hand over the 
 Crown lands to the national authority. 
 
 We are now in a position to discuss alternative Aiternatire 
 proposals for adjusting the financial relations between 
 the national and Imperial authorities. It is possible 
 to proceed on one of two main principles. Under the 
 first, the quota which each country is to contribute to 
 Imperial expenditure would be fixed, the national 
 authorities taking the whole balance of the revenue 
 after their quota is paid into the Imperial exchequer. 
 Under the second, each country would be given sufficient 
 revenue to meet its estimated expenditure on civil 
 government, together with such powers of taxation as 
 would enable the national authority to meet any increase 
 in such expenditure, the Imperial authority retaining in 
 its own hands for Imperial purposes all revenues not 
 handed over to the national authority, as well as the 
 power to impose fresh taxation. 
 
 If the first principle were followed, the quota to 
 be borne by each country would have to be fixed by 
 Royal Commission. 
 
 If the second principle were adopted, the expen- 
 diture on civil government in the respective countries 
 being ascertained, the national authorities would be 
 given sufficient revenue to meet their expenditure. 
 Excluding civil government expenditure charged on 
 the consohdated fund (over three-fourths of which 
 
 .107
 
 PROBLEMS OF EMPIRE. 
 
 represents expenditure on courts of justice), Post Office 
 expenditure, cost of collection of customs, which would 
 in any case remain an Imperial charge, and half the 
 cost of collection of inland revenue, some items of 
 which would be allocated to the Imperial and others 
 to the national authorities, the national expenditure 
 (or local expenditure, as it is called in the returns) in 
 1900-01 was as follows : — 
 
 
 England. 
 
 Scotland. Ireland. 
 
 National expendiUire (Part III. 1 
 Return) ( 
 
 34,769,000 
 
 £ 
 4,961,000 
 
 £ 
 7,306,000 
 
 Deduct — 
 
 Post Office exDenditure 
 
 10,457,000 
 663,000 
 768,000 
 322,000 
 
 1,352,000 
 
 97,000 
 
 147,000 
 
 138,000 
 
 1,061,000 
 
 Oollftction customs 
 
 63,000 
 
 Half collection inland revenue 
 Charges on consolidated fund 
 
 91,000 
 172,000 
 
 
 12,210,000 
 
 1,734,000 1 1,387,000 
 
 1 — 
 
 Expenditure on civil govern- 
 ment 
 
 22,559,000 
 
 3,227,000 
 
 5,919,000 
 
 
 
 Taxing power 
 of the 
 National 
 authority. 
 
 Of the above expenditure, 12,500,000/. is devoted 
 to education, and nearly 11,000,000/. represents grants 
 in aid of local taxation. 
 
 Provided that the national authorities are given at 
 the outset sufficient revenues to meet the above ex- 
 penditure, and adequate powers of taxation to enable 
 them to meet any possible increase, a plan based on 
 this principle appears to be as fair to them as that of 
 fixing the quota which they are to contribute to Imperial 
 expenditure. Moreover, a plan based on this principle 
 has great advantages: (1) it is simple and easily 
 inteUigible ; (2) it obviates the necessity for periodical 
 inquiry as to taxable capacity ; (3) it adjusts the finan- 
 cial relations on a basis which has a reasonable prospect 
 
 108
 
 FEDERAL FINANCE. 
 
 of being permanent; (4) it gives the national authorities 
 a sense of financial responsibiUty, and would tend to 
 check extravagant expenditure, a point of the utmost 
 importance ; (5) it is fair to the Imperial authority, and 
 would enable surplus revenue from sources reserved to 
 the Imperial authority to be used for the reduction of 
 the national debt. Under a plan based on the first 
 principle, the quota to be contributed by each country 
 being fixed, the whole of the surplus due to an expand- 
 ing revenue would go to the national authority, who 
 would use it for its own purposes. 
 
 The following plan is based on the first principle ; — 
 
 The quota of Imperial expenditure to be borne by (i) A National 
 
 1 j.j.jiij/T'j.. -Ti •• • contribution 
 
 each country to be nxed (subject to periodical revision in to imperial 
 accordance with predetermined principles). The excep- ""^^^""^s- 
 tions to the powers of the national legislatures in finance 
 should include only customs, excise (excluding licences 
 and railway duty), and postal rates ; all powers over 
 these sources of revenue should be reserved by the 
 Imperial Parliament to itself. Excepting the reserva- 
 tion of licences and railway duty to the national legisla- 
 ture, the Imperial Parliament would also have full and 
 unfettered power to impose whatever other taxes might 
 be necessary to meet its expenditure, provision being 
 made for the adjustment of balances between the 
 Imperial Exchequer and the several nationalities, in 
 accordance with the quota due from each of the latter. 
 And beyond this reservation (but not within it) the 
 national legislatures would also have full power to 
 impose any taxes required to meet their several expen- 
 ditures. Thus there would presumably be a concurrent 
 use of income tax, estate duty, and stamp duties by 
 the Imperial and national authorities. 
 
 101)
 
 PROBLEMS OF EMPIRE. 
 
 Its The advantages of this plan are claimed to be that 
 
 anddisa^van- while it leaves the Imperial Parliament entu-ely un- 
 tages. fettered as to means of raising its revenue, it imposes 
 
 on the national legislatures only such restraints as are 
 involved in the common fiscal and trade policy of the 
 United Kingdom. Its disadvantages are (1) that the 
 elasticity of the Imperial revenues would be impaired, 
 and (2) that the concurrent use of the same taxes by 
 the national and Imperial authorities would lead to 
 comphcation of accounts and difficulties in collection. 
 
 As regards the first objection, it is practically certain 
 that the national authorities would resort to the use of 
 income tax and estate duty. Assuming that both the 
 Imperial authority and the national authorities levied 
 an income tax, the income tax would be fully 
 utilised in time of peace, and there would be little, if 
 any, reserve to meet the emergencies of war. 
 
 As regards the second objection, it must be admitted 
 that under the Constitution of the Australian Common- 
 wealth concurrent powers of taxation are granted to 
 both the Commonwealth and State Parliaments. The 
 collection and control of customs and excise are vested 
 in the Commonwealth Parliament, but the States retain 
 the power to impose customs and excise duties until 
 the imposition of uniform duties by the Commonwealth. 
 For ten years after the establishment of the Common- 
 wealth not more than one-fourth of the net revenue 
 from customs and excise may be applied by the Com- 
 monwealth to its own expenditure. The conditions in 
 the United Kingdom and Australia are utterly dis- 
 similar. In Australia the major part of the expenditure 
 is state or local, and there was no pre-existing Com- 
 monwealth debt charge. In the United Kingdom, 
 
 110
 
 FEDERAL FINANCE. 
 
 which has to bear practically the whole burden of 
 defending the Empire, three-fourths of the expenditure 
 are Imperial, and only one-fourth is local or national. 
 A plan which may be workable in Australia may be 
 totally inapplicable to the United Kingdom. The 
 objections to this plan, and to the principle on which 
 it is based, may be summarised as follows : — 
 
 1. An elaborate inquiry must be held periodically 
 to fix the quota to be contributed by each country to 
 Imperial expenditure. Such inquiry would lead to 
 friction and to constant agitation on the part of the 
 different countries that their quota should be reduced. 
 
 2. No sufficient financial responsibility would be 
 imposed on the national authorities for meeting their 
 new expenditure. 
 
 3. A budget surplus would belong to the national 
 authorities and not to the Imperial authority, and 
 therefore could not be utilised for the reduction of the 
 national debt. 
 
 4. To allow to the national authorities the con- 
 current use of income tax would impair the elasticity 
 of the Imperial revenues, and would fetter the action 
 of the Imperial Chancellor of the Exchequer in meeting 
 a national emergency. 
 
 5. The concurrent use of the same taxes would 
 lead to difficulties of collection and confusion of 
 accounts. 
 
 These objections are, in my judgment, fatal to the 
 plan and to the principle on which it is based. 
 
 Let us now see whether it is possible to devise a (2) National 
 plan based on the principle of providing the national beaUocated 
 authorities with sufficient revenue to meet the national °^" °"*''^^ * 
 (including local) expenditure. 
 
 Ill
 
 PROBLEMS OF EMPIRE. 
 
 The minor branches of revenue, viz., Hcences, railway 
 duty, land tax, inhabited house duty, and miscellaneous 
 revenue, would produce only a small proportion of the 
 sum required in each case. What other branches of 
 revenue can be handed over to the national authorities ? 
 Customs and income tax must, for the reasons already 
 given, clearly remain in Imperial hands, and whatever 
 may be done with the revenue derived from the beer 
 and spirit duties, the rates of duty must be fixed and 
 the duties collected by the Imperial authority. Excise 
 duties on beer and spirits constitute, with the exception 
 of customs, by far the largest item of the revenue 
 contributed by Ireland. Customs and excise duties on 
 beer and spirits together account for over six milUons 
 out of a total revenue of 9j miUons. Estate duties 
 seem on the whole more suitable for Imperial manage- 
 ment than for national control ; and if the revenue from 
 estate duties were handed over to the national authori- 
 ties, there would be a surplus in the case of England, 
 and a deficiency in the case of Scotland and Ireland. 
 This deficiency would have to be made good by grants 
 from the Imperial Exchequer. The claim of Ireland 
 to special treatment, for the reasons given earlier in 
 this paper, might render it desirable to hand over the 
 estate duties in Ireland to the Irish National Authority. 
 Stamps, on the other hand, appear better suited for 
 national control than any of the other items of revenue 
 we have been considering. If the revenue from stamps, 
 in addition to the minor branches of revenue already 
 mentioned, were handed over to the national authorities, 
 the position would be as follows : — 
 
 112
 
 FEDERAL FINANCE. 
 
 
 England. 
 
 Scotland. 
 
 Ireland. 
 
 Licences 
 
 £ 
 
 3,550,000 
 
 315,000 
 
 2,321,000 
 
 6,939,000 
 
 792,000 
 
 408,000 
 
 £ 
 375,000 
 
 24,000 
 146,000 
 623,000 
 
 82,000 
 
 24,000 
 
 £ 
 211,000 
 
 Railway duty 
 
 Land tax and house duty 
 
 
 Stamps 
 
 290,000 
 116,000 
 
 Miscellaneous revenue 
 
 Crown lands 
 
 33,000 
 
 
 
 14,325,000 
 
 1,274,000 
 
 650,000 
 
 Expenditiu-e on civil administra- 
 tion 
 
 22,559,000 
 
 3,227,000 
 
 5.919.000 
 
 
 
 Deficiency 
 
 8,234,000 
 
 1,953,000 
 
 5,269,000 
 
 
 This deficiency could be made good by grants from Objections to 
 the Imperial exchequer, and this is the course which Sd'efcyby 
 commends itself to some of those who have studied the"impSSi 
 the subject with me. The objections to it are that the Exciiequer. 
 proportion of the revenues of the national authorities 
 which would be allocated to them, or under their own 
 control, would be insufficient to give that sense of 
 financial responsibility which it is so desirable that 
 they should possess. This objection applies with especial 
 force to the case of Ireland, in which only one-eighth of 
 the national revenue would be allocated to the national 
 authority. ' Grants of money,' say Lord Farrer, Lord 
 Welby, and Mr. Currie in the report already quoted, 
 ' made by Parliament are more likely to impoverish 
 ' than enrich the community which receives them, 
 'tending as they do to weaken the spirit of indepen- 
 ' dence and self-reliance.' To this weighty opinion I 
 attach the utmost importance. The system of grants 
 from the Imperial revenue in aid of local taxation cer- 
 tainly does not tend to economy in local expenditure. 
 A plan based on large grants from the Imperial exchequer 
 to the national authorities would have a similar effect 
 
 113 I
 
 PROBLEMS OF EMPIRE. 
 
 A modifica- 
 tion of plan 2 
 the best 
 solution. 
 
 on national expenditure. There is a further objection 
 that the cordial co-operation of the national authorities 
 would not be secured if the whole of the proceeds of 
 excise were paid into the Imperial exchequer. Illicit 
 distilling and frauds on the revenue would become rife, 
 unless the national authority had a direct interest in 
 seeing that the police forces under their control gave 
 effective assistance to the Imperial revenue officers in 
 the collection of the beer and spirit duties. 
 
 These objections appear of such weight that I venture 
 to submit the following plan : — The national authorities 
 to be given the minor branches of revenue, stamp 
 duties, licences, &c., together with the power of imposing 
 new taxes {e.g., additional stamp duties, licence duties, 
 taxes on advertisements and amusements). The Imperial 
 authority to reserve to itself the revenue from customs, 
 income tax, and estate duties, except in the case of 
 Ireland. The revenue from estates duties in Ireland to 
 be handed over to the Irish national authority. The 
 revenue from the excise duties on beer and spirits to 
 be treated as follows : In Ireland the whole, in Scotland 
 one-half, and in England one-third to be handed over to 
 the national authorities, the rates of duty being fixed, 
 and the duties collected by the Imperial authority. The 
 Imperial authority, of course, to have the power of 
 imposing new taxes. 
 
 The revenue from the beer and spirit duties in 
 1900-01 was thus distributed (true contribution) : — 
 
 
 England. 
 
 Scotland. 
 
 Ireland. 
 
 Spirits 
 
 £ 
 13,704,000 
 12,361,000 
 
 £ 
 4,096,000 
 614,000 
 
 £ 
 2,324,000 
 
 Beer 
 
 966,000 
 
 
 
 
 26,065,000 
 
 4,710,000 
 
 3,290,009 
 
 114
 
 FEDERAL FINANCE. 
 
 One-third of the beer and spirit duties in England Operation of 
 = 8,688,000/., one-half in Scotland = 2,355,000/. The plT'^"^ 
 financial result of this plan is therefore as follows : — 
 
 
 England. 
 
 Scotland. 
 
 Ireland. 
 
 Revenue handed over to \ 
 
 national authoi'ities J 
 
 Estate duties 
 
 £ 
 14,325,000 
 
 8,688,000 
 
 £ 
 1,274,000 
 
 2,355,090 
 
 £ 
 650,000 
 874,000 
 3,290,000 
 
 Add beer and spirits duties, \ 
 proportions handed over... J 
 
 Expenditure on civil ad- \ 
 ministration J 
 
 23,013,000 
 22,519,000 
 
 3,629,000 
 3,227,000 
 
 4,814,000 
 5,919,000 
 
 
 Surplus. 
 494,000 
 
 Surplus 
 402,000 
 
 Deficiency. 
 1,105,000 
 
 The deficiency shown in the above table in the case How the de- 
 of Ireland might be met by assistance from Imperial the cafe ^of 
 funds for a fixed period of, say, ten years. Such assist- b?met™^^*^ 
 ance might be given by the Imperial authority retaining 
 the control of and bearing the whole of the charges for 
 the Royal Irish Constabulary and the Dubhn police, 
 but handing over to the national authority any saving 
 from the gradual replacement of the semi - mihtary 
 police by less costly forces under the control of local 
 authorities ; or, if the control of the constabulary be 
 surrendered by the Imperial Parliament, by a grant 
 equivalent to the present cost of maintenance (viz., 
 about 1,400,000/). Ireland would be started with a 
 surplus of 300,000/., which should be increased at the 
 end of the period to 1,000,000/. by savings on the police 
 force alone. Large savings may be anticipated under 
 other heads of civil government expenditure, which in 
 Ireland is admittedly excessive. AU savings would be 
 under the control of the national authority, and could 
 
 115
 
 PROBLEMS OF EMPIRE. 
 
 be utilised for the purpose of developing the resources 
 of the country. 
 Its For this plan the following advantages may be 
 
 advantages. •, • j 
 
 claimed : — 
 
 1. The national authorities would be provided with 
 sufficient revenue to meet their national expenditure, 
 and they would not depend (with the exception of the 
 grant suggested for a specific purpose to Ireland) on 
 doles or grants-in-aid from the Imperial exchequer, 
 which are open to the gravest objection. 
 
 2. The revenue permanently allocated to Ireland 
 should suffice not only to meet the cost of civil govern- 
 ment when Ireland is governed with the consent of its 
 inhabitants, but to yield a handsome surplus. If Ireland 
 is governed for the same cost as Scotland, this surplus 
 should amount to Ij millions per annum, which could 
 be used either for remitting taxation or on works of 
 public improvement. 
 
 3. The Imperial revenue would be elastic, for the 
 Imperial authority, though parting to some extent with 
 the revenue from excise, would retain in its own hands 
 income tax as well as estate duties (except in the case of 
 Ireland), and customs. Income tax is by far the most 
 elastic branch of the revenue, and is that Avhich in the 
 case of an increase or decrease of the tax rate gives the 
 most definite and calculable and immediate result. It 
 is this which makes it so important as a tax to meet 
 Imperial emergencies. 
 
 4. The Imperial revenue as well as the national 
 revenues would be raised from direct and indirect 
 taxes. 
 
 5. The Imperial authority would reserve to itself 
 sufficient sources of revenue to meet Imperial expen- 
 
 116
 
 FEDERAL FINANCE. 
 
 diture, and would not have to rely on contributions 
 from the exchequers of the several countries. 
 
 6. There would be little difficulty in collecting the 
 beer and spirit duties, and in preventing frauds on the 
 revenue, and these duties would be willingly paid if the 
 whole or a considerable proportion were earmarked for 
 national purposes and paid into the national exchequer. 
 
 7. It imposes on the national authorities the financial 
 responsibility of meeting their expenditure to the 
 extent that if their expenditure increases, they must 
 raise funds to meet the increase ; and if economies are 
 made, they can reap the benefit of those economies. 
 
 The strongest objection which has been urged The main 
 
 n J c3 objection, 
 
 against the scheme, and it has been urged by one whose 
 opinion is entitled to the greatest respect, is that the 
 hands of the Chancellor of the Exchequer would be 
 tied if he wished to change the rates of the beer and 
 spirit duties. For every additional pound he wished 
 to raise for Imperial needs, he would be obliged to raise 
 a further sum of, say, one pound, which would have to 
 be handed over to the national exchequers, although 
 they might not need it. If, on the other hand, he 
 wished to reduce the duties, he would be debarred from 
 doing so by the consideration that the national autho- 
 rities would be suddenly deprived by his action of 
 revenue on which they were counting. These objections 
 might be overcome in the following way. If the Chan- 
 cellor of the Exchequer wished to increase the duties, 
 it could be provided* that the additional yield of a 
 
 * Cf. financial scheme of Home Rule Bill, 1893, adopted in Com- 
 mittee of the House of Commons, clause 6 : ' That if any special war 
 tax should be imposed, the whole of the proceeds collected in or con- 
 tributed by Ireland should go to the Imperial Exchequer.' 
 
 117
 
 PROBLEMS OF EMPIRE. 
 
 duty, declared by Parliament to be a war or emergency 
 tax, should go to the Imperial exchequer. If, on the 
 other hand, he wished to reduce the rates of duty, 
 grants could be made from Imperial funds to the 
 national authorities to an amount equivalent to the 
 loss of revenue they had suffered owing to the reduc- 
 tion of the rates of duty. It may be admitted that the 
 treatment of excise proposed would have a tendency to 
 render this important branch of revenue non-elastic, and 
 yet the advantages of the plan may be held to outweigh 
 this disadvantage. 
 
 The problem of adjusting the financial relations 
 between the Imperial and national authorities is one 
 which presents many difficulties, from the peculiar 
 features of the case. Every solution is open to objec- 
 tions. I believe, from the study I and others have 
 given to the subject, that the plan suggested in this 
 paper is open to fewer objections than any other. 
 
 118
 
 FEDERAL FINANCE. 
 
 APPENDIX. 
 
 Extracts from Parliamentary Return 90, dated 8th July^ 1901, 
 ' Revenue and Expenditi/re {England, Scotland, and Irelandy 
 
 Table I. 
 Part I. Rcvemie, 1900-01. 1. Revenue {Net Receipts). 
 
 [OOO's omitted.] 
 
 
 As Contributed. 
 
 
 From 
 Imperial 
 Sources. 
 
 By 
 
 England. 
 
 By 
 
 Scotland. 
 
 By 
 
 Ireland. 
 
 Totel. 
 
 Customs — 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 Exchequer revenue 
 
 — 
 
 20,915, 
 
 2,588, 
 
 2,798, 
 
 26,271, 
 
 Local taxation revenue . . . 
 
 — 
 
 183, 
 
 19, 
 
 16, 
 
 218, 
 
 Excise — 
 
 
 
 
 
 
 Exchequer revenue 
 
 — 
 
 25,391, 
 
 4,532, 
 
 3, .364, 
 
 33,287, 
 
 Local taxation revenue... 
 
 — 
 
 4,539, 
 
 577, 
 
 137, 
 
 5,253, 
 
 Estate, &c., duties — 
 
 
 
 
 
 
 Exchequer revenue 
 
 143, 
 
 10,417, 
 
 1,191, 
 
 732, 
 
 12,483, 
 
 Local taxation revenue... 
 
 72, 
 
 3,550, 
 
 474, 
 
 141, 
 
 4,2.37, 
 
 Stamps 
 
 35, 
 
 6,939, 
 
 623, 
 
 290, 
 
 7,887, 
 
 Land tax \ 
 
 House duty ... ... J 
 
 — 
 
 2,331, 
 
 146, 
 
 — 
 
 2,467, 
 
 Income tax 
 
 358, 
 
 23,212, 
 
 3,016, 
 
 975, 
 
 27,561, 
 
 Total revenue from taxes 
 
 60S, 
 
 97,467, 
 
 1.8,136, 
 
 8,453, 
 
 119,664, 
 
 Post office 
 
 
 11,722, 
 
 1,326, 
 
 729, 
 
 13,777, 
 
 Telegraphs 
 
 — 
 
 2,855, 
 
 .351, 
 
 174, 
 
 3,380, 
 
 Crown lands... 
 
 — 
 
 408, 
 
 24, 
 
 33, 
 
 465, 
 
 Interest on Suez Canal \ 
 shares, &c. ... J 
 
 830, 
 
 — 
 
 — 
 
 
 830, 
 
 Miscellaneous 
 
 1,247, 
 
 792, 
 
 82, 
 
 116, 
 
 2,237, 
 
 Total non-tax revenue ... 
 
 2,077, 
 
 15,777, 
 
 1,783, 
 
 1.052, 20,689, 
 
 Aggregate revenue 
 
 2,685, 
 
 113,244, 
 
 14,919, 
 
 9,505, 140,353, 
 
 Percent 
 
 1-91 
 
 80-69 
 
 10-63 
 
 6-77 
 
 10-000 
 
 (a) For the Exchequer 
 
 (b) For the local taxation \ 
 
 accounts ... j 
 
 2,613, 
 
 104,972, 
 
 13,849, 
 
 9,211, 
 
 130,645, 
 
 72, 
 
 8,272, 
 
 1,070, 
 
 294, 
 
 9,708, 
 
 119
 
 PROBLEMS OF EMPIRE. 
 
 ^ Table II. 
 
 Part II. — Expendikire, 1900-01. {Exchequer Issues.) 
 
 [OOO's omitted.] 
 
 
 On 
 
 On 
 
 On 
 
 On 
 
 Tnt^l 
 
 
 Imperial 
 
 English 
 
 Scottish 
 
 Irish 
 
 
 
 Services. 
 
 Services. ; 
 
 Services. 
 
 Services. 
 
 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 1. Chargeable against ex- 
 
 
 
 
 1 
 
 
 chequer revenue — 
 
 
 
 
 , 
 
 National debt charges... 
 
 19,836, 
 
 — 
 
 — 
 
 — 1 19,836, 
 
 Naval and military 
 
 
 I 
 
 
 ! 
 
 
 charges — 
 
 
 
 
 
 
 (a) Army 
 
 91,925, 
 
 — 
 
 — 
 
 — 
 
 91,925, 
 
 (b) Navy 
 
 29,520, 
 
 — 1 
 
 — 
 
 — 29,520, 
 
 Civil government 
 
 
 
 
 
 charges — 
 
 
 
 
 
 
 (a) On consolidated) 
 fund J 
 
 723, 
 
 322, 
 
 138, 
 
 171, 
 
 1,354, 
 
 (ft) Voted 
 
 3,690, 
 
 13,481, 
 
 1,955, 
 
 4,374, 
 
 23,500, 
 
 Total civil govern-) 
 ment charges . . . / 
 
 4.418, 
 
 13,803, 
 
 2,093, 
 
 4,545, 
 
 24,8.54, 
 
 Collection of taxes 
 
 
 
 2,199, 
 
 391, 
 
 244, 
 
 2,834, 
 
 Post Office services 
 
 601, 
 
 10,457, 
 
 1,352, 
 
 1,061, 
 
 13,471, 
 
 Payments of local taxa-\ 
 tion account ... ...J 
 
 • — 
 
 — 
 
 98, 
 
 1,054, 
 
 1,152, 
 
 Total chargeable^ 
 against exchequer - 
 revenue 
 
 146,295, 
 
 26,459, 
 
 3,934, 
 
 6,904, 183,592, 
 
 
 ». 
 
 
 
 
 
 
 37,297, 
 
 
 
 2. Met out of local taxa- 
 
 
 
 
 
 
 tion revenue — 
 
 
 
 
 
 
 Miscellaneous local\ 
 charges J 
 
 _ 
 
 8,310, 
 
 1,027, 
 
 402, 
 
 9,739 
 
 
 
 
 
 
 Grand total ... 
 
 146,295, 
 
 34,769, 
 
 4,961, 
 
 7,306, 
 
 J 
 
 193,331, 
 
 
 
 
 47,036, 
 
 
 
 Per cent., England, Scot-) 
 land and Ireland ...J 
 
 
 73-92 
 
 10-55 
 
 15-53 
 
 100-00 
 
 
 
 
 
 
 Per cent., total 
 
 75-67 
 
 17-98 
 
 2-57 
 
 3-78 
 
 100-00 
 
 120
 
 FEDERAL FINANCE. 
 
 Table III. 
 Civil Government Charges, 1900-01. Details of Class III. 
 
 * 
 
 Imperial. 
 
 English. 
 
 Scotch. 
 
 Irish. 
 
 Total. 
 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 Law charges ... 
 
 — 
 
 63,000 
 
 — 
 
 
 
 63,000 
 
 Miscellaneous legal) 
 expenses ... .,./ 
 
 13,000 
 
 34,500 
 
 — 
 
 500 
 
 48,000 
 
 Supreme court of judi-\ 
 cature J 
 
 
 i"^ 4 y~» ^~i y^ /^ 
 
 
 
 
 — 
 
 318,000 
 
 — 
 
 — 
 
 318,000 
 
 Land registry 
 
 — 
 
 29,000 
 
 — 
 
 
 
 29,000 
 
 County courts 
 
 — 
 
 20,000 
 
 — 
 
 
 
 20,000 
 
 Police (England and\ 
 Wales / 
 
 — 
 
 51,000 
 
 — 
 
 — 
 
 51,000 
 
 Prisons (England andl 
 the Colonies ...J 
 
 3,000 
 
 605,000 
 
 — 
 
 — 
 
 608,000 
 
 Reformatory and in-) 
 
 
 
 
 
 
 dustrial schools l 
 
 — 
 
 193,000 
 
 61,000 
 
 
 
 254,000 
 
 (Great Britain) ...J 
 
 
 
 
 
 
 Broadmoor criminal) 
 lunatic asylum ...J 
 
 
 
 
 
 
 ■~~ 
 
 41,000 
 
 
 
 — 
 
 41,000 
 
 Scotland. 
 
 
 
 
 
 
 Law charges and) 
 courts of law ...J 
 
 
 
 
 
 
 — 
 
 
 
 76,000 
 
 — 
 
 76,000 
 
 Registry house, Edin-\ 
 biu-gh ... ... J 
 
 
 
 
 
 
 — 
 
 
 
 42,000 
 
 — 
 
 42,000 
 
 Crofters commission... 
 
 — 
 
 
 
 5,000 
 
 ^~" 
 
 5,000 
 
 Prisons 
 
 — 
 
 
 
 84,000 
 
 
 84,000 
 
 Ireland. 
 
 
 
 
 
 
 Law charges and crim- \ 
 inal prosecutions ... J 
 
 
 
 
 
 
 ^^ 
 
 •^~* 
 
 
 
 64,000 
 
 64,000 
 
 Superior court of judi-) 
 cature and other - 
 legal departments. . . . 
 
 
 
 
 
 
 — 
 
 — 
 
 
 
 106,000 
 
 106,000 
 
 
 
 
 
 
 Land commission 
 
 — 
 
 — 
 
 
 
 128,000 
 
 128,000 
 
 County court officers.) 
 &c 1 
 
 
 
 
 
 
 — 
 
 — 
 
 
 
 106,000 
 
 106,000 
 
 Dviblin metropolitan) 
 police (including [ 
 police comts) ...J 
 
 
 
 
 93,000 
 
 93,000 
 
 
 
 
 
 
 Constabulary 
 
 — 
 
 — 
 
 
 
 1,341,000 
 
 1,341,000 
 
 Prisons 
 
 
 
 
 
 
 
 115,000 
 
 115,000 
 
 Reformatory and in-) 
 dustrial sch ool s ... J 
 
 
 
 
 
 
 — 
 
 — 
 
 
 
 108,000 
 
 108,000 
 
 Dundrum criminal) 
 lunatic asylum ...J 
 
 
 
 
 
 
 1 
 
 ~ 
 
 " 
 
 6,000 
 
 6,000 
 
 Total of Class III. 
 
 16,000 
 
 1,354,500 
 
 ' 268,000 
 
 2,067,500 
 
 3,706,000 
 
 » 
 
 121
 
 PROBLEJNIS OF EMPIRE. 
 
 Table IV. 
 
 Civil Government Charges, 1900-01. 
 
 
 Imperial. English. | 
 
 Scottish. 
 
 Irish. j Total. 
 
 
 £ £ 
 
 £ i 
 
 £ ' £ 
 
 Class I. Palaces &\ 
 public buildings J 
 
 192,500 1,265,000 
 
 143,500 ' 
 
 1 
 
 409,000 : 2 010,000 
 
 Class II. Publicj 
 offices ... J 
 
 1,002,000 
 
 886,000 
 
 137,000 
 
 334,000 i 2,359,000 
 
 1 
 
 Class III. Lawl 
 charges & police) 
 
 16,000 
 
 1,354,500 
 
 268,000 
 
 2,067,500 ; 3,706,000 
 
 Class IV. Education 
 
 43,000 
 
 9,696,500 
 
 1,383,000 
 
 1,413,500 .12,536,000 
 
 ,, V. Diplomatic^ 
 and colonial ser- J- 
 
 2,084,000 
 
 _ 
 
 
 
 1 
 
 1 
 
 2,084,000 
 
 vices ... J 
 
 
 
 
 
 
 Class VI. Pensions 
 
 242,500 
 
 270,000 
 
 22,500 
 
 99,000 
 
 634,000 
 
 „ VII. MiscelO 
 laneous ... J 
 
 110,000 
 
 9,000 
 
 1,000 
 
 51,000 
 
 171,00f) 
 
 Total civil govern- ^ 
 ment charges J- 
 voted ... J 
 
 3,690,000 
 
 13,481,000 
 
 1,955,000 
 
 4,374,000 
 
 23,500,000 
 
 Customs 
 
 _ 
 
 663,000 
 
 97,000 
 
 63,000 
 
 823,000 
 
 Inland revenue ... 
 
 — 
 
 1,536,000 
 
 294,000 
 
 1 
 
 181,000 2,011,000 
 
 Total collection of \ 
 taxes ... J 
 
 — 2,199,000 
 
 391,000 
 
 244,000 2,834,000 
 
 Post Office 
 
 — 
 
 7,288,000 
 
 930,000 
 
 745,000 8,963,000 
 
 Telegraph service.. 
 
 — 
 
 3,104,000 
 
 381,000 
 
 252,000 : 3,737,000 
 
 Packet ,, 
 
 601,000 
 
 65,000 
 
 41,000 
 
 64.000 771,000 
 
 Total Post Office) 
 services ... J 
 
 601,000 
 
 10,457,000 
 
 1,352,000 
 
 1,061,000 13,471,000 
 
 Total revenue de-" 
 partments 
 
 - 601,000 
 
 12,656,000 
 
 i 1,743,000 
 
 ! 1,305,000 ! 16, 305, 000 
 
 1 
 
 ! 
 
 122
 
 FEDERAL FINANCE. 
 
 Table V. 
 
 Contribtdion to Imperial Services. 
 
 This table shows the balances of revenue contributed by 
 England, Scotland, and Ireland, respectively, which are available 
 for Imperial expenditure after the local expenditures of those 
 divisions of the United Kingdom has been met, according to the 
 fiffiu-es shown in Parts I. and II. of this return. 
 
 [OOO's omitted.] 
 
 Year 1900-01. 
 
 Total revenue) 
 
 as contributed J 
 
 Local expen-\ 
 
 diture ...J 
 
 Balance avail-1 
 able for Iin- 
 perialexpen- 
 diture 
 
 England. 
 
 £ 
 113,224, 
 
 34,769, 
 
 78,475, 
 
 Per 
 
 Cent. 
 
 82 26 
 73-92 
 
 86-58 
 
 Scotland. 
 
 £ 
 14,919, 
 
 4,961, 
 
 9,958, 
 
 Per 
 Cent. 
 
 10-84 
 10-55 
 
 10-99 
 
 Ireland. 
 
 £ 
 9,505, 
 
 7,306, 
 
 2,199, 
 
 Per 
 
 Cent. 
 
 
 6-90 
 15-53 
 
 Total. 
 
 £ 
 137,668, 
 
 47,036, 
 
 2-43 
 
 90,632, 
 
 Per 
 Cent. 
 
 100 
 100 
 
 100 
 
 It should be borne in mind that in the last quarter of 
 1900-01, as in the last quarter of 1899-1900, abnormal clearances 
 of certain dutiable articles were effected in anticipation of increased 
 taxation. The result was that in these years the amount paid in 
 duty in respect of some articles, did not correspond with the con- 
 sumption of those articles, nor consequently with the contribution 
 of consmners to taxation. The amounts estimated to have been 
 paid in anticipation in 1900-01 were 2,500,000/. under customs 
 duties, and 1,050,000/. under excise duties. 
 
 123
 
 II. 
 
 TARIFF REFORM.
 
 IS FREE TRADE THE RIGHT 
 
 POLICY FOR THIS 
 
 COUNTRY TO-DAY ? 
 
 The Jollowing Memorandum was written in 1898 /or 
 the consideration oj a distinguished Statesman. 
 
 While admitting that Free Trade, as conceived by 
 Cobden, is in theory perfectly sound, I believe there 
 are grave reasons for doubting whether it is the right 
 policy to-day, from an Imperial point of view, or even 
 from that of the United Kingdom. 
 
 1. The reduction in the population of Ireland from Free Trade 
 over eight millions in 1851 to under 4f millions in ^ffect^^ 
 1891 seems to show that Free Trade has not been Ireland. 
 beneficial to Ireland. The trade policy of Great Britain 
 
 was governed by her own selfish interests, and without 
 regard to those of Ireland in past centuries. Has it 
 not been the same in the century now drawing to its 
 close ? 
 
 2. The shifting of population from agricultural to Decline in 
 urban districts has been due partly to the opening up of agricultural 
 virgin soils all over the world, partly to the cheapening pop^^^tion. 
 of the means of communication, but also in large 
 measure to Free Trade. The decline in the agi-icul- 
 
 tural population must entail in time a decline in the 
 strength of the race ; for it is from the agricultural 
 
 127
 
 PROBLEMS OF EMPIRE. 
 
 Food supply 
 in case of 
 war. 
 
 Race 
 
 degeneracy. 
 
 British 
 industry. 
 
 population that the best fighting material is dra^Ti and 
 the urban population recruited. Mr. C. Booth tell us 
 that in three generations a family in London becomes 
 extinct. 
 
 3. The danger to which our food supply would be 
 exposed in case of war has produced a considerable 
 agitation for the estabUshment of national granaries. 
 The enormous cost involved, the fact that the State 
 would beome a buyer and seller on a large scale, and 
 would be prevented by pubhc opinion from selling at 
 a profit, and often compelled to sell at a loss, are fatal 
 objections to the proposal. Our food supplies on the 
 high seas can, and must be, protected by a powerful 
 Navy. But is it not certain that Russia would, in the 
 event of war with us, knowing how vital her corn is 
 to our existence, lay an embargo on the export of 
 corn ? A Government hke that of Russia would 
 disregard the suffering entailed on the unfortunate 
 grower. Similar action might be taken by the Govern- 
 ment of the United States, though war with the 
 United States is a contingency no EngUshman cares 
 to contemplate. We would certainly face war with 
 greater equanimity if a larger proportion of our food 
 supply were produced under the British Flag. 
 
 4. The steady increase in our imports, which repre- 
 sent the earnings of British ships and the interest on 
 British investments abroad, the large annual savings of 
 capital show that every year a larger proportion of our 
 people are living on accumulated wealth, a fact which 
 surely must tend to a decline in the strength of the 
 
 race. 
 
 5. The decline or absence of gi'owth in our export 
 trade is no doubt due partly to the inefficiency of 
 
 128
 
 TARIFF REFORM. 
 
 British merchants, as described in the Consular reports, 
 partly to labour disputes, partly to the declii\e in the 
 relative efficiency of the British manufacturer and the 
 British workman. That we are being beaten, even in 
 our own markets, by goods produced in highly pro- 
 tected countries, goods in which we have long held 
 a pre-eminent position, at any rate shows that Free 
 Trade is not essential to cheapness of production. 
 The recent advance of the United States is owing 
 undoubtedly to a gi'eat extent to her natural resources, 
 but even more to the energy of her people, which has 
 certainly not been hampered by Protection, as Free 
 Traders would argue it ought to have been. On the 
 other hand, I no more think that the industrial progress 
 of the United States can be advanced as a positive 
 argument for Protection than that the greater relative 
 progress of Free Trade New South Wales, as compared 
 with Protectionist Victoria in the last few years, can 
 be urged as an argument in favour of Free Trade. The 
 progress of New South Wales has been due to her 
 gi'cater natural resources and the superiority of the 
 administration of some of her public departments, 
 notably her railways under JNIr. Eddy. The general 
 conclusion seems to be that the growth of British com- 
 merce, the enormous progress in material prosperity 
 during the fifty years from 1840-1890, are not so much 
 due to the adoption of Free Trade as is generally as- 
 serted, and that the greater relative growth of the trade 
 of other industrial nations in the last decade has cer- 
 tainly not been hindered by Protection. 
 
 6. Finally we come to the Imperial point of view, imperial 
 which in many ways is the most important of all. Our 
 Colonies have grown rapidly during the present century, 
 
 129 K
 
 PROBLEMS OF EMPIRE. 
 
 though the rate of growth is getting slower ; but what 
 would their growth be in the next century if their pro- 
 ductions were given an advantage in British markets ? 
 The flow of emigration would be diverted from the 
 United States and the Argentine Republic to Canada, 
 to Australia, or South Africa ; and in the great struggle 
 which is to come in the not far distant future we shall 
 need all the strength we can muster under the British 
 flag. In a period when trade is less prosperous than it 
 is now, a period which will probably commence about 
 the time that the next Government comes into office, 
 a demand is certain to be made for a reduction in the 
 expenditure on the Navy and Army. The burden of 
 defending our great Empire will in fact become too heavy 
 to be borne by the taxpayers of these smaU islands alone. 
 As our Colonies increase in wealth and importance, and 
 when they do not need so large a proportion of their 
 resources for the development of their territory, they 
 must bear their fair share of the burden. How is this 
 to come about ? 
 Mr. Nearly twelve years ago I spent a long day at the 
 
 JIop™s?K ^ Cape with Mr. Hofmeyr, then just back from the first 
 Colonial Conference, where he had advocated his now 
 nearly forgotten proposal, that every part of the Empire, 
 preserving its existing tariff' against Imperial goods, 
 should over and above that, impose a differential duty 
 of five per cent, against non- Imperial goods, the proceeds 
 of this duty to be devoted to the maintenance of the 
 Imperial Navy. Mr. Hofmeyr's proposal seems to me 
 to contain the germs of the policy which is needful for 
 the Empire to-day, viz., I'referential Trade within the 
 Empire. 
 
 130
 
 SUGAR BOUNTIES AND 
 THE WEST INDIES. 
 
 Extract from a Speech at Christchurch, November, 1898. 
 
 The present evils in the West Indies are not solely \vhat the 
 due to the late hurricane, but to causes of deeper root. sugar°has 
 Owing to the competition of bounty-fed Continental wTstVndils^ 
 sugar, the islands have been declining in prosperity 
 for some time. The Royal Commission reported 
 last year that the sugar industry was threatened by 
 such reduction in the immediate future ' as may not 
 in some of the Colonies differ from extinction.' The 
 result has been that whereas formerly three-fourths 
 of the exports were the products of the sugar-cane, 
 there is now want of employment, reduction in the 
 rate of wages and in the standard of living, and con- 
 sequent inability to meet expenditure. JMany of our 
 West Indian possessions, as, for instance, British Guiana, 
 St. Vincent, Barbadoes, and Dominica — the conditions 
 of which are described in the Report — are entirely 
 dependent on the sugar industry, and the price of sugar 
 has fallen to less than half of what it was in 1882. 
 
 The remedies proposed by the Royal Commission CountervaU- 
 are peasant proprietorship and the encouragement of '°^ 
 minor industries, better communication, and the in- 
 crease of the fruit trade, besides grants of money to 
 the various islands. Whilst there may be some 
 
 131
 
 PROBLEMS OF EMPIRE. 
 
 justification under the special circumstances for the 
 gi-ants recommended by the Royal Commission, I am 
 strenuously opposed to dealing out doles of Imperial 
 money, because such a poHcy is an inadequate 
 remedy, and because it ^\dll tend to sap the energies 
 and self-dependence of the people and the govern- 
 ment of the Colonies concerned. The question before 
 us is, Are British subjects to be ruined by artificial 
 competition ? Attempts have been made and failed 
 to secure the abolition of bounties ; the only remain- 
 ing course is for the British Government to impose 
 countervailing duties on bounty - fed sugar. The 
 British people have made great sacrifices in order to 
 abohsh slavery; they would do the same again for a 
 great object. The sacrifice involved in the present case 
 
 is small. 
 British moral j£ ^^y ^^q impositiou of a duty to checkmate the 
 
 responsibility j r i • p • 
 
 for the West pohcy of Fraucc and Germany the price ot sugar is 
 i^opie. raised to the extent of 2/. a ton, it would mean 
 
 less than a farthing a pound to the consumer, but a 
 great deal to the West Indian producer. If that 
 sacrifice is too great, it might be met with a lessened 
 duty on tea. Already the Canadian people have realised 
 the injustice done to the West Indies by bounty-fed 
 Continental sugar, and have taken action to counteract 
 it. Allow me to quote from a letter just received 
 from a well-known Canadian. ' We have,' he writes, 
 ' succeeded in getting our Government to give the 
 West Indies a preference in our market. We had free 
 sugar before; now we are paying hard cash to help 
 the Empire.' The British people must remember that 
 they have great responsibilities in regard to the West 
 Indies. The negro population was brought to those 
 
 132
 
 SUGAR BOUNTIES. 
 
 islands as slaves under the authority of the British 
 Government ; we are morally responsible that those 
 people do not starve. The present distress in the 
 West Indies is due, at any rate in part, to foreign 
 protective duties and bounties, of which the people 
 of the United Kingdom have been reaping the 
 benefit, to the loss of their West Indian fellow- 
 subjects. 
 
 133
 
 PREFERENTIAL TARIFFS. 
 
 A Letter to the ' Times,'' June 5th, 1903. 
 
 Sir, — The policy recently outlined by Mr. Balfour 
 and ^Ir. Chamberlain will, I trust, receive the serious 
 and unprejudiced consideration of the people of this 
 country. That it should be made the subject of party 
 controversy, that it should be discussed on political 
 platforms without regard to recent experience or present- 
 day facts, and that the truth should be obscured by 
 misrepresentation and exaggeration, as has been the 
 case with the corn duty, would be deplorable. The 
 decision which the people will be presently called 
 upon to take is of vital moment to their own future, 
 the future of the Empire, and the future of the 
 world. 
 Customs Commercial federation on the basis of free trade 
 
 chiefrevenue withiu the Empire is out of the question in the immediate 
 of the future for the obvious reason that most of our Colonies 
 
 Colonies. 
 
 raise the greater part of their revenues from customs 
 duties, that British goods form a large proportion of 
 their imports, and that it would take time for the 
 Colonial Governments to substitute other sources of 
 revenue which they now derive from duties on British 
 goods. Sixteen years ago at the first Colonial Con- 
 ference, Mr. Hofmeyr proposed that every part of the 
 Empire, whatever its tariff might be on Imperial goods, 
 
 134
 
 PREFERENTIAL TARIFFS. 
 
 should impose a differential duty on non- Imperial goods, 
 the proceeds of this duty to be devoted to the main- 
 tenance of the Imperial navy. Commercial federation 
 on the basis of preferential trade within the Empire, as 
 suggested by JNIr. Hofmeyr in 1887, is the only form 
 which Mr. Chamberlain's policy can take at the present 
 moment. 
 
 In a paper read before the Colonial Institute in 
 November last, I pointed out that a commercial federa- 
 tion which did not impose a duty on foreign foodstuffs 
 for the benefit of the Canadian wheat-grower, or the 
 Australian meat-producer, would be of little value to 
 our Colonies. INIr. Chamberlain has frankly acknow- 
 ledged that preferential trade means a tax on food. 
 The question therefore which the British people have to 
 ask themselves is whether there are any reasons which 
 make it worth their while to submit to a tax on the 
 necessaries of life with a possibility of a rise in price. 
 Excluding the political arguments in favour of com- 
 mercial federation, which have been dealt with by JVIr. 
 Chamberlain and Sir Robert Giffen, the following appear 
 to be worthy of their consideration. 
 
 1. The burden of defending the Empire is becoming Jf^P°"f'^u 
 too heavy for the taxpayers of these islands alone. The Coioniai 
 estate duties from which a large part of our revenue is towards 
 now derived, press very hardly on a particular class. Defencl 
 Many families, by their imposition, have been taxed out 
 of their homes. An income tax of nearly five per cent, 
 on the profits of commerce and industry is a great 
 handicap to British trade. The duties on tea and sugar, 
 which are as much necessaries of life for the people as 
 wheaten bread was sixty years ago, are heavy. The 
 rate of excise duties on beer and spirits has probably 
 
 135
 
 PROBLEMS OF EMPIRE. 
 
 reached the Umit beyond which they cannot be increased 
 with advantage to the revenue. The late Chancellor of 
 the Exchequer has told us that new sources of income 
 must be found. Expenditure on Imperial purposes is 
 growing rapidly ; while for the solution of social 
 problems fresh demands are being constantly made 
 on the public purse. While Colonies are in their 
 infancy their whole resources are needed for their 
 internal development, and it is the duty of the mother 
 country to charge herself with their defence. But our 
 Colonies have now become important self-governing 
 communities, and it appears only reasonable that the 
 Colonial taxpayer should stand shoulder to shoulder 
 with the taxpayer of the mother country, and assume 
 his share of the responsibility for the common defence 
 of the Empire. The more I have studied this question 
 — and from the time when I first discussed it with Mr. 
 Hofmeyr at the Cape in 1887, I think I may claim, with- 
 out giving offence, that few people have had greater 
 opportunities for studying it in all parts of the Empire 
 than myself — the more have I become convinced that the 
 only possible method of securing an adequate contribu- 
 tion to the defence of the Empire from its Colonies 
 and dependencies is through some form of commercial 
 federation. 
 Food supply. 2. Closely connected with the defence of the Empire 
 is the question of our food supply in time of war, to 
 inquire into which a Royal Commission has recently 
 been appointed. In 190] our total imports of wheat, 
 wheat-meal, and flour, were equivalent to 101,000,000 
 cwt. of wheat, while we grew 28,500,000 cwt. 
 in the United Kingdom. Of the quantity imported, 
 the United States sent us no less than 06,800,000 cwt., 
 
 136
 
 PREFERENTIAL TARIFFS. 
 
 while 19,500,000 cwt. came from British possessions. 
 We are thus dependent on the United States for one- 
 half of the wheat we require for home consumption. 
 A powerful Na\y may give us command of the sea, but 
 in the event of war with the United States, the com- 
 mand of the sea would not ensure the maintenance of 
 our food supply. The United States Government by 
 prohibiting the export of wheat to the United Kingdom 
 — and such a prohibition, if the American people were 
 with their Government in the cause of dispute, would 
 assuredly be effective — could compel us to submit to 
 whatever terms it chose to dictate. Though a war 
 between the two great branches of the English-speaking 
 race is year by year becoming a more remote contingency, 
 and though leading men on both sides of the Atlantic 
 are looking forward to a time when the relations of the 
 two peoples will become closer than they are now, it 
 cannot be forgotten that at the present time we are 
 absolutely at the mercy of the United States, because 
 the quantity of wheat we draw from her is so large that 
 it could not be made good at once from any other 
 source. Such a position is not satisfactory for a great 
 Empire. Since the failure of the Colonial Conference 
 to adopt any arrangement as regards preferential trade, 
 some of the strongest Imperialists in Canada have urged 
 the refusal of any Canadian contribution to Imperial 
 defence (Canada alone of the Colonies has done nothing) 
 until the British people put their food supply on a 
 secure basis. They say, and they say with some justice, 
 ' It is idle for us to contribute to the maintenance of 
 the Imperial Navy when Britain would be forced to 
 make peace within a few weeks of the outbreak of war 
 from fear of star^'ation.' To render our food supply in 
 
 137
 
 PROBLEMS OF EMPIRE. 
 
 time of war reasonably secure, to enable the British 
 people to enter into an alliance with the American 
 people on equal terms, it is essential that we should 
 not be dependent for our food on any foreign country to 
 such an extent as to render it impossible to make good 
 from other sources the supplies which we draw from 
 that country. 
 
 From this point of view the larger the amount of 
 foodstuffs we can produce under the British flag, 
 and preferably in the United Kingdom, the greater 
 the equanimity with which we can face the possibility 
 of war. 
 The vital 3. ' In the dechne of agriculture,' said Bismarck, 
 
 impo nee ^ ^ ^^^ ^^^ greatest danger to our permanence as a race.' 
 p5J)SS Conservatives naturally wish to prevent the policy 
 outlined by Mr. Chamberlain from being represented 
 as protection to a particular industry. But it is on the 
 agricultural industry that the strength of the nation to 
 a great extent depends ; for it is from the agricultural 
 population that the best fighting material, whether for 
 the Army or Navy, is drawn, and that the urban popu- 
 lation is recruited. The ftill in the value of agricultural 
 produce, the large conversions of arable land into pas- 
 ture, the throwing of land out of cultivation, and the 
 consequent diminution in the demand for agricultural 
 labour have driven workmen from the country into the 
 towns in search of employment, competing with the 
 labour already there, and aggravating all the difficulties 
 of the housing problem with which the social reformer 
 is endeavouring to grapple. There is only too much 
 reason for believing that the decline in the agricultural 
 population and the yearly increasing proportion of 
 children bred and brought up under the unhealthy 
 
 138
 
 PREFERENTIAL TARIFFS. 
 
 conditions of town life is having its effect on the stamina 
 of the race. Although the standard for the Army has 
 been reduced to that of a well-grown girl of 16, in 
 Manchester in 1899, 8000 out of 11,000 men who pre- 
 sented themselves for service had to be rejected as 
 physically unfit, while for the three years 1899, 1900, 
 1901, the percentage fit for service was only 28 per cent. 
 Recent census statistics show that the increase of the 
 population has been checked, while the average family 
 in London is said in three generations to become 
 extinct. 
 
 If the race in the mother country is physically 
 degenerating and becoming unable to reproduce itself, 
 the decline in the agricultural population has become 
 a most serious national question ; and I believe that 
 JNIr. Chamberlain's policy ought to be considered, and 
 that the people of this country will be prepared to 
 consider it from this as well as from other points of 
 view. I say this because, whenever I have alluded to 
 the subject at the immense number of Liberal meetings 
 which I have addressed in the last three years in the 
 great centres of population in England and Scotland, 
 its importance has been appreciated by my audiences, 
 which have been mainly composed of working men. 
 
 4. The future of British manufacturing industries is Unsatisfac- 
 
 • 1 1 1 i^ j_ j_i J. to*"y position 
 
 as important as that oi agriculture ; and the tact that of England's 
 during the last ten years of the 19th century the ^^^"^ 
 imports into the United Kingdom increased by 
 over 100 millions sterling per annum, whereas the 
 exports of British produce, apart from the increased 
 value of coal, remained practically stationary, does not 
 indicate a satisfactory condition. That the British 
 manufacturer is being beaten, even in the home market, 
 
 139
 
 PROBLEMS OF EMPIRE. 
 
 by goods produced in highly protected countries, is 
 attributed to the superior efficiency of the workshop 
 management and the labour of his competitors ; but it 
 is also a proof that free trade is not essential to 
 cheapness of production. Even were the management 
 and the labour as efficient in British workshops as it is 
 represented to be in the United States, it is doubtful 
 whether the British manufacturer can hold his own. 
 The American manufacturer (and the same remark 
 applies to a lesser extent to the German manufacturer) 
 possesses an enormous home market protected by duties 
 well-nigh prohibitive, and through the formation of 
 Trust companies, with their huge aggi-egations of capital 
 under single control, is able to make an enormous profit 
 on goods sold in the home market. In order to spread 
 the general charges of his business and thus increase 
 the profits on the goods sold at home, he sells his sur- 
 plus abroad at a price, not perhaps below the cost of 
 manufacture, but below the cost of production if the 
 goods sold abroad were debited with their full propor- 
 tion of general charges. I beheve that it will become 
 increasingly difficult for the British manufacturer to 
 hold his own under present conditions, and that JNIr. 
 Balfour's warning in the House of Commons was amply 
 justified by the circumstances. 
 Ireland. 5. Lastly, Mr. Chamberlain's proposals ought to be 
 
 considered from the point of view of Ireland. During 
 the seventeenth and eighteenth centuries the fiscal 
 policy of the United Kingdom was regulated solely in 
 the interests of the people of Great Britain. Irish 
 industries were crushed by restrictive enactments im- 
 posed by the British Parliament in the interest of the 
 British manufacturer, while Irishmen were excluded 
 
 140
 
 PREFERENTIAL TARIFFS. 
 
 from trading with the Colonies in the interest of the 
 British merchant. When Lord North and Mr. Pitt 
 endeavoured to remove the restrictions under which 
 Irish industry and Irish commerce laboured, they were 
 met by a tremendous outcry from Lancashire and 
 some of the principal commercial centres of Great 
 Britain, an outcry which is characterised by the eminent 
 historian, Mr. Lecky, as an ' ebullition of intense com- 
 mercial selfishness.' If we bear in mind that, while 
 during the era of free trade there has been an enormous 
 increase in the commercial prosperity and the material 
 well-being of the people of Great Britain, the popula- 
 tion of Ireland diminished to nearly one-half, it is difficult 
 to avoid the conclusion that the British fiscal poHcy of 
 the nineteenth century has been as selfish and as detri- 
 mental to Ireland as was the policy of the centuries 
 which preceded it. On this point the opinion of Mr. 
 Childers, a Liberal statesman and Chairman of the 
 Royal Commission on the Financial Relations between 
 Great Britain and Ireland at the time of his death, is 
 entitled to the greatest respect. In clause 91 of his 
 draft report he says : — 
 
 ' Ireland, being a country mainly inhabited by 
 agricultural producers, could support its present popu- 
 lation upon the corn and meat produced there without 
 having recourse, under ordinary circumstances, to a 
 foreign supply of those articles, and could at the same 
 time export a surplus of these foodstuffs. The popu- 
 lation of Ireland consumes a rather large amount, in 
 proportion to its wealth, of spirits, tea, and tobacco. 
 This being so, it does not appear that a fiscal system 
 which raises no revenue from foreign foodstuffs, but 
 does raise a rather large revenue from spirits, tea, and 
 
 141
 
 PROBLEMS OF EMPIRE. 
 
 tobacco, is advantageous to the population of Ireland, 
 although it may be advantageous to the population of 
 the United Kingdom, looked at as a whole. It may even, 
 perhaps, be said that just as Ireland suffered in the last 
 century from the protective and exclusive commercial 
 policy of Great Britain, so she has been at a disadvan- 
 tage in this century from the adoption of an almost 
 unqualified free-trade policy for the United Kingdom.' 
 
 The above, Sir, are some of the reasons why I 
 believe our fiscal policy should be reconsidered. The 
 principles of free trade, as conceived and as enunciated 
 by Cobden, may be admitted to be sound ; but blind 
 adherence to a travesty of those principles without re- 
 gard to altered conditions may imperil, not only the 
 unity of the Empire, but our very existence as a nation. 
 Mr. Chamberlain is entitled to the respect of even his 
 political opponents for his courage in raising the 
 question, and both he and INIr. Balfour appear to me 
 to deserve the thanks of every Englishman for the 
 manner in which they have placed it before the country. 
 
 Your obedient Servant, 
 
 T. A. Brassey. 
 
 142
 
 TARIFF REFORM AND 
 THE COTTON INDUSTRY. 
 
 A Lettei' to the ' Manchester Guardian,' 
 July 25th, 1903. 
 
 Sir, — I ask your permission to make a few obser- 
 vations on the resolution passed yesterday at the Joint 
 Conference of the Cotton Employers' Parliamentary 
 Association and the United Textile Factory Operatives' 
 Association. The Conference was ' convinced that the 
 great cotton industry of the United Kingdom owes its 
 pre-eminence to and can only be maintained by the 
 pohcy of Free Trade,' and pledged itself ' to oppose 
 any proposals which, by imposing taxes on food or raw 
 materials, and so raising the cost of production and 
 living, will cripple it in its severe struggle to uphold its 
 position in foreign markets.' 
 
 The present depression in the cotton trade, and the Depression 
 
 ^ ^ , . in the cotton 
 
 fact that the mills have had to work short tniie, is trade, 
 mainly due to a shortage in the supply of raw cotton, 
 to some extent perhaps to speculation. It has been 
 foreseen for some time that the development of the 
 cotton manufacturing industry in the immediate neigh- 
 bourhood of the cotton plantations of the Southern 
 States of the Union, where an unlimited supply of 
 black labour is available, might produce the conditions 
 
 143
 
 PROBLEMS OF EMPIRE. 
 
 with which we are now face to face. If American 
 cotton mills gradually absorb, as I believe they will, the 
 whole of the cotton produced in the United States, the 
 British cotton trade may be ruined by the loss of the 
 main source of supply of its raw material. 
 
 The considerations which I have set forth above 
 lead, I submit, to the conclusion that a fixed adherence 
 to our existing fiscal policy may be attended with the 
 most disastrous results to the cotton trade. They have, 
 at any rate, had a powerful influence in convincing me 
 that the policy outlined by Mr. Chamberlain deserves 
 the most serious consideration, and that the Tariff 
 Reform League, inaugurated yesterday for the develop- 
 ment and defence of the industrial interests of the 
 British Empire, is deserving of support. 
 Cotton grow- Thosc who bear in mind a particular passage in Mr. 
 
 ing within the ^, i , • , u • 4-U XT c r^ 
 
 Empire Chambcrlam s speech m the House or Commons on 
 
 stimulated. ^^^Y 28th and ignore another which follows are not 
 justified in assuming that a tax on raw materials is a 
 part of INIr. Chamberlain's policy. A tax on rav/ 
 materials which would cripple any industry is totally 
 opposed to its spirit. The cotton trade has nothing 
 to fear on these grounds. On the other hand, it is of 
 vital importance to the future of the industry to ensure 
 an adequate supply of raw cotton. Tentative steps have 
 already been taken to develop new sources of supply in 
 West iVfrica. But much more vigorous action is required 
 to meet the necessities of the case. Cotton can be grown 
 in other parts of Africa, in India, in the West Indies, 
 and in Northern Austraha, and the whole of our supplies 
 of raw cotton might in time be drawn from within the 
 Empire. A bounty on cotton grown in the British 
 Empire and imported into the United Kingdom would 
 
 144
 
 THE COTTON INDUSTRY. 
 
 further this object. All bounties are open to grave 
 objection, but a bounty such as I suggest could be 
 justified on the ground that the cotton industry- 
 accounts for over one-fourth of our export trade, 
 that it gives employment to a large proportion of 
 our population, and that its continued existence is 
 of importance not only to Lancashire, but to the 
 nation. 
 
 But the cotton trade is not the only industry of Dependence 
 national importance, and cotton is not the only article Britain on 
 for which we are too dependent on the United States, stuff?" ^°^ 
 The decline in agriculture and in our agricultural popu- 
 lation is at least as important from the national point 
 of view, while the extent to which we draw our food 
 supplies from the United States constitutes a national 
 danger. Import duties on corn and other agricultural 
 produce, with a substantial preference in favour of the 
 Colonies, would tend to benefit the British agriculturist, 
 and to make the Empire self-supporting as regards its 
 food supply ; while, judging from the history of prices 
 during the past century, it is quite possible that the 
 imposition of moderate duties might not lead to a rise 
 in the price of food. 
 
 The industrial progress of Germany and the Consumer 
 United States during the last ten years at any rate producer. 
 shows that protective tariffs are no hindrance to 
 cheapness of production. For the past sixty years 
 the fiscal policy of this country has been governed 
 by the interests of the consumer. No other important 
 country has followed our example. It is therefore pos- 
 sible that our existing policy may be wrong, and that a 
 fiscal policy which would pay some regard to the in- 
 terests of the producer while not ignoring those of the 
 
 145 L
 
 PROBLEMS OF EMPIRE. 
 
 consumer may be worthy of adoption. In any scheme 
 of tariff reform the cotton industry is entitled to full 
 consideration, but those engaged in it must remember 
 that there are other industries of great, if not of equal, 
 national importance. 
 
 I am, &c., 
 
 T. A. Brassey. 
 July 22nd. 
 
 146
 
 TARIFF REFORM AND 
 AGRICULTURE. 
 
 Speech at Catsfield, July 2Sth, 1903. 
 
 I PROPOSE to make a few observations on two subjects 
 which are of considerable importance to all those 
 engaged in agriculture. First, as regards agricultural 
 co-operation, I would like to take this opportunity of 
 saying to you, many of whom were present at the 
 meeting held in Battle last February, when INIr. Lea- 
 cock, who is here, came down and gave an address, 
 that the committee that was appointed on that occasion 
 did not see their way to make any practical recommen- 
 dations. The committee consisted entirely of large 
 farmers, most of whom were deriving, as individuals, 
 much of the benefit that would accrue from the whole- 
 sale purchase of foodstuffs, manures, or implements. 
 
 Perhaps the most remarkable incident in our pro- Agricultural 
 ceedings was the fact that one of our members pre- 
 sented, for our consideration, the report of another 
 society carrying on business in another county, of which 
 he himself was a member, and from which, he asserted, 
 he derived considerable benefit. This gentleman was 
 opposed to the starting of an Agricultural Supply 
 Society in Sussex, but yet he was a member of a society 
 in another county, doing exactly the same sort of work 
 which I hoped would have resulted from the establish- 
 
 147
 
 PROBLEMS OF EMPIRE. 
 
 ment of a similar society in East Sussex. The 
 matter will not be allowed to rest where it stands 
 at present. 
 
 The County Councils are now permitted by a minute 
 of the Board of Education to make a grant for the 
 purpose of giving instruction in the principles and 
 practice of agricultural co-operation. The Agricultural 
 Organization Society, to the chairmanship of the com- 
 mittee of which I have recently been elected, has 
 received a donation of 100/. to be devoted to this 
 purpose in Sussex. We have asked the Education 
 Committee of the County Council to supplement this 
 donation by a grant of an equivalent amount, and I 
 hope that those of you who are County Councillors, and 
 those of you who are not, will bring pressure to bear 
 to secure this grant. No harm can be done by educa- 
 tion on this question. 
 
 Meanwhile, I am glad to be able to report to you 
 that the movement is making good progress in other 
 parts of the country, the most noteworthy societies 
 formed during the last few months being the Midland 
 Counties Agricultural Supply Association, which was 
 the outcome of the indignation aroused by the hard- 
 ships imposed on the farming class by a ring of 
 implement makers, and the Farnham Farmers and 
 Hopgrowers' Association. I attended the inaugural 
 meeting of the latter. The original members repre- 
 sented, I was told, a capital of about 200,000/., and 
 these gentlemen proposed in the first instance to buy 
 the kulm for drying their hops by the train-load. 
 Presently they possibly may undertake to deal with 
 their products. Object-lessons on the value of agri- 
 cultural organization are thus accumulating. We are 
 
 148
 
 PREFERENTIAL TRADE. 
 
 slow to move in Sussex, but for that reason, perhaps, 
 we move more surely. 
 
 To turn to Tariff Reform, which is of even greater Tariff 
 
 Reform. 
 
 pubhc interest at the present time. 1 have taken 
 an interest in this question for many years, ever 
 since I had an opportunity of discussing at Cape 
 Town with JMr. Hofmeyr, the head of the Afrikander 
 Bond, the proposals which he had just put before the 
 first Colonial Conference of 1887. It is idle to deny 
 that the reform proposed by Mr. Chamberlain involves 
 a departure from Free Trade principles, from those 
 principles which have governed our fiscal policy for 
 many years past. But I have asked myself for 
 some years whether all of these rest on a really solid 
 basis. 
 
 The enormous growth of the export trade of Cheapness of 
 Germany and the United States since their adoption of and of food 
 a highly protectionist policy, compared with the com- dependent on 
 parative stagnation of our own, make one doubt the Free Trade. 
 truth of the Free Trade theory, that cheapness of 
 production is dependent on a free trade. Certainly 
 these two countries produce as cheaply as we can. 
 Again, any one who has studied the prices of wheat 
 during the nineteenth century, must admit that the 
 history of those prices tends to disprove another 
 great theory of the free traders, namely, that cheap 
 food depends on free trade. The price of wheat 
 touched as high or higher prices in the twenty-five 
 years after the introduction of free trade, and fluctua- 
 tions in price were as gi'eat in those twenty-five years 
 as they were in the twenty-five years before the intro- 
 duction of Free Trade. I have in my hand a letter 
 from a gentleman, not known, perhaps, to many of you, 
 
 149
 
 PROBLEMS OF EMPIRE. 
 
 Grounds for 
 Mr. Cham- 
 berlain's 
 action. 
 
 but well known in the co-operative world, who has 
 taken all his life a gi-eat part in promoting the welfare 
 of his fellow-countrymen, and no apology is needed for 
 reading a few extracts from his letter.* The fall in 
 prices, which hit all those interested in land so heavily, 
 landlords, farmers, and labourers alike, did not take place 
 till thirty years after the introduction of Free Trade, 
 and was mainly due to the cheapening of the cost of 
 transportation, which brought the virgin lands of new 
 countries into close proximity to the markets near at 
 home. I therefore assert that neither cheapness of pro- 
 duction nor cheap food are absolutely, and perhaps not 
 even mainly, dependent on free trade. 
 
 Now, Mr. Chamberlain's reform of our fiscal policy 
 is put forward for three main reasons. One of those is 
 of especial interest to you, but the others are not. 
 Still, it is worth while that I should mention them 
 here. The first is retaliation. The immediate cause 
 of Mr. Chamberlain's action, I take it, was the 
 treatment of Canada by Germany. In 1897, Canada 
 gave a preference to the goods of the mother country, 
 as well as of those colonies and foreign countries which 
 admitted Canadian goods free, or practically free. 
 Germany, in consequence, excluded Canada from the 
 most favoured nation treatment. I will read to 
 you what I^ord Lansdowne says on this point in a 
 dispatch published in the Parhamentary papers just 
 issued. ' Tliat action,' says Lord Lansdowne, ' has in- 
 contestably had the effect of bringing about the loss 
 by Canada of the relatively advantageous position which 
 she occupied prior to 1897, a loss which she has sus- 
 tained not because she had imposed upon German 
 
 * Cf. page 157. 
 
 150
 
 PREFERENTIAL TRADE. 
 
 imports custom duties exceeding those to which they 
 were previously subject, nor because she had treated 
 Germany differently from other foreign countries with 
 whom she had commercial relations, but because Canada 
 had refused to extend to Germany a special concession 
 made by her to the mother country, in pursuance of a 
 policy deliberately adopted for the purpose of pro- 
 moting the national trade of the British Empire.' 
 
 Canada replied to Germany's action by imposing 
 a special penalty on German goods. The German 
 Government, in their dispatch of June 29th, announced : 
 ' That if other British self-governing Colonies should 
 follow the example of Canada, and accord national 
 treatment to British imports, the German Government 
 might find themselves compelled to refuse not only to 
 those Colonies, but to Great Britain herself, the treat- 
 ment which, in view of the liberal terms upon which 
 German imports are admitted to this country, we are 
 entitled to expect upon the most ordinary grounds of 
 reciprocity.' I think, gentlemen, you will agi-ee with 
 what I understand to be the general opinion of the 
 country, that the threatened action of Germany with 
 reference to Canada, and the threatened action of 
 Germany with respect to ourselves, constitute amply 
 sufficient grounds to justify a departure from our 
 existing fiscal policy. 
 
 The next ground on which the reform in our fiscal Development 
 
 ,., ••Ill Pi°^ American 
 
 policy deserves attention is the development oi the and German 
 American trusts and the German trade combinations. 
 These trusts and trade combinations, owing to the high 
 protective duties, are enabled to make a large profit on 
 the goods they sell in the home market, and then, in 
 order to spread the general charges on their business, 
 
 151
 
 PROBLEMS OF EMPIRE. 
 
 they sell their surplus abroad at or below the cost of 
 production. In the debate in the House of Lords, 
 Lord Lansdowne quoted figures showing that a German 
 trade combination sold its production in the home 
 market at 120 marks a ton, and sold its surplus abroad 
 at 85 marks a ton. Against competition of this 
 character, which is justly described as unfair competi- 
 tion, I hold the opinion, rightly or \\Tongly, that it is 
 well-nigh impossible, at any rate it is exceedingly 
 difficult, for British industry to hold its own on a pure 
 free trade basis. 
 Preferential Now wc comc to the third ffrouud on which reform 
 
 trade within . n i t 
 
 Empire. m our fiscal policy is urged, to promote preferential 
 trade within the Empire. In a paper read before the 
 Colonial Institute, in November of last year, when I 
 had not the remotest idea that this question would soon 
 become one of practical politics, I showed what is in 
 fact obvious, that a commercial federation which did 
 not impose a tax on Russian and American wheat for 
 the benefit of the Canadian wheat-grower, and on meat 
 for the benefit of the Australian and New Zealander, 
 would have been of little value to the Colonies. INIr. 
 Chamberlain, in his celebrated speech in the House of 
 Commons on May 29th, frankly acknowledged that 
 preference must be given either on food or on raw 
 materials, or on both. He then went on to say that ' so 
 far as I can see it will not be necessary to impose any tax 
 on raw materials.' A tax on raw material, which would 
 cripple any British industry, is totally opposed to the 
 spirit of INlr. Chamberlain's policy, and if it was ever con- 
 templated by him, as it was by me, then I can confidently 
 assert that it is not contemplated by him any longer. 
 What is Mr. Chamberlain's policy ? It is to impose a 
 
 152
 
 PREFERENTIAL TRADE. 
 
 moderate tax on foreign foodstuffs imported into this 
 country, with a preference in favour of the Colonies. 
 That makes a present to his opponents of the splendid 
 election cry, ' The dear loaf.' To those who suspect Mr. 
 Chamberlain of ulterior motives of some kind or other 
 in having raised this question, I reply no statesman 
 would make his opponents a present of such a splendid 
 election cry unless he was prepared to hazard his own 
 political position for what he believed to be the true 
 policy in the best interests of his country. There is no 
 one who has been in the past a more vigorous opponent 
 of Mr. Chamberlain than I have been, but I would like 
 to give him the credit due to him for the courageous 
 position he has taken up on this question. Mr. 
 Chamberlain has gone into no details, he has submitted 
 no plan, but is wisely awaiting the results of the inquiry 
 and discussion which is now so vigorously proceeding 
 in various parts of the country. 
 
 I will venture to make three suggestions or obser- ^^JJ^g^*-^ 
 vations as to what I believe the character of the duties 
 imposed should be. The tax on foodstuffs must not be 
 confined to corn. If only corn is taxed, you will only 
 benefit one class of British farmer, and you will not 
 give any preference worth having to the Australian or 
 New Zealander. As in the corn duty now abolished, 
 the tax on flour should be higher than the tax on corn, 
 otherwise you will not restore the milling business to 
 this country, and you will not have a supply of cheap 
 offal. Thirdly, the agi'icultural produce of the Colonies 
 should not be admitted free, as has been so frequently 
 assumed in the course of this discussion. All agricul- 
 tural produce should be taxed, with a preference in 
 favour of those Colonies who give a preference to the 
 
 153
 
 PROBLEMS OF EMPIRE. 
 
 goods of the mother country in their markets. If 
 Colonial produce is admitted free you would not in the 
 long run benefit British agriculture, and you would 
 have nothing in hand with which to negotiate with the 
 Colonies for the lowering of their duties against British 
 produce. 
 Cost of It is naturally the object of Mr. Chamberlain's 
 
 living. *' "^ 
 
 opponents to concentrate public attention on the pro- 
 posal to tax foodstuffs, and they freely assert that his 
 policy will result in raising the cost of living. Mr. 
 Chamberlain has declared in the most express terms 
 that the cost of living will not be increased for the 
 people of this country unless the people themselves wish 
 it. He is prepared to do one of two things : to use the 
 revenue derived from the duties imposed on corn and 
 meat or other agricultural produce to reduce the duties 
 to even a greater extent on tea, sugar, coffee, and so 
 forth. If this is done, the cost of living will not be 
 increased. Or, if the people so prefer it, he is willing 
 to utilise the money derived from these additional duties 
 for the purpose of providing old age pensions. Mr. 
 Chamberlain is constantly misrepresented. I ask you 
 to bear in mind exactly what JNIr. Chamberlain has 
 said, and to examine his proposals carefully for your- 
 selves. I repeat now what I said at Battle during 
 the recent election. I look upon tea and sugar as 
 being as much necessaries of life as wheateii bread was 
 sixty years ago, and if we are to raise any revenue from 
 indirect taxation, as I beUeve we must, it is better 
 to raise it upon an article we can produce in this 
 country rather than on things we cannot. In the 
 former case we, at any rate, derive an indirect benefit 
 from the encouragement of an important industry 
 
 154
 
 DECLINE OF AGRICULTURE. 
 
 and the additional employment afforded to British 
 workmen. 
 
 The decision which the British people have to take importance 
 on this question is a most momentous one for the ° ^ 
 future of the Empire. I would not support this pro- 
 posal on Imperial grounds alone, though I beUeve 
 unless we do we shall lose Canada, and by-and-by 
 our other Colonies as well. It is we in this country 
 who have to run the risk of the adoption of this policy, 
 and I agree with the Duke of Devonshire that it 
 must be judged mainly from the point of view of the 
 people of this country. From our point of view there 
 are three things to be considered. I have already 
 spoken of one, the danger to British industry from the 
 development of the American trusts and the German 
 trade combination. 
 
 Another consideration which has had a most Food supply. 
 powerful influence in bringing me to my present 
 opinion is the danger to which we are exposed in 
 depending to such a large extent on the United States 
 for our supply of food. I believe that it is true to 
 say, as I have said on other occasions, that we are 
 absolutely at the mercy of the United States as regards 
 our food supply, and that is a position which no great 
 Empire ought ever to be in. 
 
 To turn to the question which most concerns you — Decline of 
 the decline of British agriculture. What has that meant ""^"^ ^^' 
 in East Sussex during the years which I can remember ? 
 It has meant, as regards the landowners, that many 
 properties have been sold and others let. Few persons 
 depending entirely on the land are living in the homes 
 they resided in when 1 was a boy. JNIany farmers 
 have lost their capital in the struggle against the bad 
 
 155
 
 PROBLEMS OF EMPIRE. 
 
 times we have had. It means that few farmers are 
 occupying the same farms they were occupying in my 
 young days. And what has it meant as regards the 
 labourer ? The labouring classes are probably in a better 
 position to-day than ever they were, but how many 
 labourers have had to leave Sussex in the last thirty 
 years in search of employment ? I remember, it is not 
 so many years ago — about fifteen — that the lake at 
 Normanhurst was made by my father, chiefly to give 
 employment to the men who were out of work. When 
 you are thinking of the condition of the labourer to-day, 
 remember that many a lad has had to leave this 
 neighbourhood to earn a livelihood elsewhere. The 
 decline of our agricultural population is not merely 
 a question of local interest. It is one of the most 
 serious national importance, because the increasing 
 proportion of children which year by year are brought 
 up under the unhealthy conditions of town life is be- 
 ginning to have its effect on the physique of the people 
 and the stamina of the race. One of the greatest, if 
 not the greatest, statesmen of last century said : ' I 
 look upon the decline in agriculture as the greatest 
 danger to our permanence as a race.' It is in my 
 humble judgment one of the strongest arguments in 
 favour of the policy outlined by JNIr. Chamberlain that 
 it will tend to stop this decline, and for this, if for no 
 other reason, I think you will agree with me. I beg to 
 give you the health of ' The Tenant Farmers of East 
 Sussex.' 
 
 156
 
 WHEAT PRICES. 
 
 The letter referred to on page 150 was reprinted in 
 the Times of July 30th :— 
 
 ' 35 Upper Addison Gardens^ Kensington^ W. 
 'July9Ast, 1903. 
 
 ' Dear Mr. Brassey, 
 
 ' I was very glad to see your name appended in to- 
 day's Times to the letter headed " Liberals and Fiscal Policy," in 
 which, having called myself all my life a Liberal and something 
 more, I entirely concur. 
 
 ' When quite a young man I was a member of the Anti-Corn- 
 Law League. I knew several of its leaders, and remained on 
 friendly terms during all his life with John Bright. 
 
 'But I separated from the League on the question of the 
 equalisation of the sugar duties, which, having stayed twice (for 
 seven months each time) in the West Indies, I knew to be abso- 
 lutely cruel to our sugar-producing Colonies. In fact, it is only 
 now, after half a century, that they are recovering from the blow. 
 
 ' I own I was startled by Mr. Chamberlain's throwing out the 
 idea of an impost on corn. But, on looking at the table in 
 Whitaker's Almanack of the " Average Prices of Wheat," &:c., a 
 quarter (which unfortunately does not come below 1865), I have 
 been surprised to find that while the average of the seventeen years 
 since 1845 shows a reduction of rather more than %s. a bushel 
 compared with the seventeen years before, there has been nothing 
 of the stability of price which was looked forward to by us Corn- 
 Law repealers, the figures of the post-repeal years frequently rising 
 above those of the pre-repeal years, and vice versa. 
 
 'Thus the highest post-repeal prices, 74.9. 8^. (1850) and 
 72*. Sd. (1854), are actually higher than the one price in the 
 seventeen years which exceeds 70*., 70.?. Sd. for 1839 being the 
 lowest for this period ; whilst the lowest post-repeal price, 38*. Qd. 
 in 1851, is not much lower than the pre-repeal lowest, 39*. 4J. in 
 1835. (Note that whilst the 70."?. 8f/. of 1839 was the only instance 
 in the pre-repeal gToup of a rise above 70.9., the post-repeal one has 
 two such instances.) I find myself thus compelled to admit, much 
 against my will, that as respects stability of price, the repeal of the 
 Corn Laws has, so far as I can judge, quite baffled my expecta- 
 
 157
 
 PROBLEMS OF EMPIRE. 
 
 tions. It is, of course, possible that, had I access to figui'es of" 
 later date than 1862, the result might be modified. 
 
 ' But it seems to me quite possible that, even as respects bread- 
 stuffs, the result of imposing a slight duty on foreign imports, 
 with free admission to colonials, might be slighter than Mr. 
 Chamberlain himself expects, and after the lapse of a few years 
 become imperceptible. 
 
 ' Very faithfully yours, 
 
 'J. M. LUDLOW.^ 
 
 Mr. Brassey adds the following note : — ' Between 1865 and 
 1880 the price of British wheat fluctuated considerably. In 1865 
 it was 41*. lOd. ; in 1867, 64*. 5d. ; in 1870, 46.?. Ud. ; in 1873, 
 58*. 8d. ; in 1875, 45*. 2fZ. ; in 1877, 56*. 9d. ; in 1880, 44*. 4>d. 
 Diu"ing the next ten years it fell gradually to 29*. dd. in 1889. 
 During the last twelve years it has fluctuated from 37*. in 1891 to 
 22*. 10(Z. in 1894, 34*. in 1898, and 25*. 8d. in 1899.' 
 
 158
 
 CANADA. 
 
 In August, 1903, Mr. Brassey attended, as a Delegate of the 
 London Chamber, the great Congress of Chambers of Commerce of 
 the Empire at Montreal, over which Lord Brassey presided. The 
 first resolution, which was unanimously passed with great enthu- 
 siasm, after it had been modified to meet the objections of the 
 French Canadian Delegates, ran as follows : — 
 
 'That this Congress hereby affirms the principle that it is 
 the duty of the self-governing Colonies to participate in the cost of 
 defence of the Empire, but the Colonies claim the privilege of 
 keeping their own initiative as to the nature and mode of help 
 which they may agree to offer."' 
 
 The interest of the Congress was mainly concentrated on the 
 question of Preferential Trade within the Empire. After two 
 days' discussion, the following resolution was unanimously agreed 
 to:— 
 
 ' It is resolved that in the opinion of this Congress the bonds of 
 the British Empire will be materially strengthened, and a union of 
 the various parts of His Majesty's Dominions greatly consolidated, 
 by the adoption of a commercial policy based upon the principle of 
 mutual benefit, whereby each component part of the Empire would 
 receive a substantial advantage in trade as the result of its national 
 relationship, due consideration being given to the fiscal and indus- 
 trial needs of the component parts of the Empire. 
 
 ' That this Congi'ess urges upon His Majesty's Government the 
 appointment by them of a special Commission, composed of repre- 
 sentatives of Great Britain and her Colonies and India, to consider 
 the possibility of thus increasing and strengthening the trade 
 relations between the different parts of the Empire, and the trading 
 facilities within the Empire and with foreign countries.' 
 
 159
 
 PROBLEMS OF EMPIRE. 
 
 At the close of the debate, Mr. Brassey made the following 
 speech : — 
 
 At Fifth Congress of Chamhers of Commerce of the 
 Empire, Montreal, August 1903. 
 
 , My Lords and Gentlemen, — 
 
 I am exceedingly obliged for the kind permission 
 you have accorded me to make a few remarks before 
 the close of this important debate. I felt bound to 
 refuse to second this resolution on behalf of the London 
 Chamber out of regard for my father, with whom un- 
 fortunately I do not see eye to eye on the question now 
 before the Congress. I regret that I had to do so the 
 more now that the discussion is coming to a close, 
 because I am as strong as any Canadian in the con- 
 viction that some reform in the fiscal policy of the 
 United Kingdom is necessary ; and, in the second place, 
 because I feel that some of the most important argu- 
 ments which might be adduced in favour of a change 
 of policy have barely been alluded to, and others have 
 not even been touched upon in the course of the dis- 
 cussion. I will pass over the decline of the agricultural 
 population in the mother country, and the effect that 
 this is having upon the physique and stamina of the 
 race. I will pass over all that is meant by the fact that 
 during the last ten years of the nineteenth century the 
 balance of imports over exports in the United Kingdom 
 has practically doubled ; but I would ask to say a 
 word with regard to Ireland. During the seventeenth 
 and eighteenth centuries, the fiscal policy of the United 
 Kingdom was mainly governed by the interests of the 
 people of Great Britain. During the era of Free Trade, 
 
 160
 
 THE MONTREAL CONGRESS. 
 
 while there was an immense advance in the commercial 
 prosperity of Great Britain until the last years of the 
 century, the population of Ireland diminished to one- 
 half. Mr. Childers, a great Liberal statesman, and 
 Chairman of the Financial Relations Commission at 
 the time of his death, was of the opinion that how- 
 ever beneficial the policy of Free Trade might liave 
 been to the people of Great Britain, it was not so as 
 regards Ireland. I believe that when we are consider- 
 ing this great question, we ought not to forget the 
 people of Ireland. 
 
 To turn to the resolution and the amendment. I 
 sincerely trust that a solution will be found which will 
 enable this resolution to be carried unanimously. It is 
 possible that some of the English delegates may feel 
 that by assenting to the resolution they may be strain- 
 ing the letter of their instructions. I would ask them 
 to consider whether they will be straining their spirit. 
 In my judgment the situation has been profoundly 
 modified from that existing at the time when we 
 received our instructions, by the resolution passed on 
 Monday last. That resolution recognised the duty of 
 the Colonies to participate in the defence of the Empire. 
 But let me observe in parenthesis that we advocates 
 of Imperial Federation in the mother country do not 
 expect any substantial contribution from the Colonies 
 until we are prepared to give them a voice in the 
 control of Imperial expenditure and Imperial policy. 
 That resolution was adopted unanimously through a con- 
 siderable sacrifice of opinion on the part of some of our 
 Colonial colleagues. Are we Enghsh delegates to make 
 no sacrifice in return ? If we refuse to give any con- 
 sideration to that policy which our Colonial colleagues 
 
 161 M
 
 PROBLEMS OF EMPIRE. 
 
 have so much at heart, this Congress will end in failure ; 
 if, on the other hand, a solution can be found agreeable 
 both to the supporters of the resolution and of the 
 amendment, this CongTess will end as it began, with a 
 most important step in the direction of Imperial unity, 
 a desire for which has been so common a feature in our 
 discussions, and a cause to which some of us, at any 
 rate, have devoted and intend to devote the best 
 energies of our Uves. 
 
 The following addi-ess was given at the reception to the 
 Canadian Manufacturers' Association in the Parliament Buildings 
 at Toronto on September 16th, 1903 : — 
 
 I hope that the members of the Canadian Manu- 
 facturers' Association will not judge me too harshly 
 if I discuss the Imperial Trade question from the British 
 rather than the Canadian standpoint, and that I may be 
 allowed to make a few preliminaiy remarks on the 
 subject of Imperial Federation. 
 Imperial It is sixtccu ycars ago since I first became associated 
 
 with Dr. Parkin, in the advocacy of Imperial Federa- 
 tion, After travelling through the length and breadth 
 of the British Empire, I came to the conclusion that 
 the Empire could only remain united by the recognition 
 of two principles — first, that every part of the Empire 
 has a right to manage its own internal affairs ; and, 
 second, that each part has the right to a voice in the 
 control of Imperial expenditure and Imperial policy, 
 subject to the condition that it bears its fair share of 
 Imperial burdens. 
 
 For some years I have thought that the burden of 
 defending the Empire was becoming too heavy for the 
 taxpayers of tlie mother country alone. Russia, Ger- 
 
 162 
 
 Federation.
 
 CA^^ADIAN MANUFACTURERS. 
 
 many, France, and the United States — rival nations — 
 have all been bending their efforts to build up their 
 naval strength. England must keep pace with them 
 or lose the command of the sea. To provide funds for 
 the increase of the Navy, additional taxation has been 
 imposed. The estate duties, for instance, imposed by 
 Sir William Harcourt, press very heavily on a par- 
 ticular class. JNIany people have been taxed out of 
 their homes. The maintenance of the British Navy is 
 of the greatest importance to Canada ; for if the com- 
 mand of the sea be lost she could not, in time of war, 
 send her 125,000,000 dollars' worth of exports to the 
 mother country. Is it not fair, then, that she should 
 contribute to its support ? We in the mother country 
 do not expect Canada, however, to contribute to the 
 support of the Navy till she is given a voice in the 
 control of Imperial affairs. To provide for Colonial 
 representation under our present constitutional arrange- 
 ments is very difficult, if not impossible. AVhile every 
 Canadian is subject to three Legislatures — the Provin- 
 cial Parliament, the Dominion Parliament, and the 
 Imperial Parhament, in which at present he is not 
 represented, we in the old country have only one 
 Parliament to deal with the business of the Empire, 
 questions affecting the United Kingdom as a whole — 
 such as would be dealt with in Canada by the Dominion 
 Parliament — and the special interests of England, Wales, 
 Scotland, and Ireland, which here would be under the 
 control of your Provincial Parliaments. It is admitted 
 on all hands that Parliamentary government is breaking 
 down beneath the load. Our task, therefore, is to rid 
 the Imperial Parliament of all local business by the 
 establishment of subordinate legislatures in the several 
 
 163
 
 Reform. 
 
 PROBLEMS OF EIMPIRE. 
 
 countries of the United Kingdom, and when that is 
 done, the way will be clear for Colonial representation. 
 Other parts of the Empire, too, have each their par- 
 ticular task to perform before they will be in a position 
 to consider any practical proposal for Imperial Federa- 
 tion. Austraha has to get her Federal Constitution 
 into working order, and South Africa has to federate 
 her own Provinces. Meanwhile you Canadians, who 
 already possess a Federal Constitution such as I desire 
 to see established in the United Kingdom, can devote 
 your efforts to building up your own country. 
 Tariff To tuHi to the qucstiou in which we are more im- 
 
 mediately interested, the policy put before the country 
 by Mr. Chamberlain. This question may be regarded 
 from two aspects. In the first place, there is the stand- 
 point of retaliation — or, in other words, the necessity of 
 preventing Great Britain from becoming the dumping- 
 ground for American and German manufactures. I do 
 not think there will be much dispute as to the necessity 
 of taking steps to meet this evil. Second, there is the 
 question of preferential trade within the Empire, and 
 here I get on more difficult ground. 
 
 It would, of course, be idle to discuss any scheme 
 for an Imperial preferential tariff unless the people of 
 the old country are prepared to put a tax on foreign 
 wheat and meat, for the benefit of Canadian and 
 Australian producers. Mr. Chamberlain's policy aims 
 to do this, and at the same time not to increase the cost 
 of living to the people. He proposes to substitute for 
 taxes on commodities which the old country cannot 
 produce — such as tea, coffee, &c. — taxes on wheat and 
 other agricultural products which she can herself raise. 
 The result, he believes, will be an equal amount of 
 
 164
 
 CANADIAN MANUFACTURERS. 
 
 re\'enue without increasing the burden on the consumer. 
 One effect of Mr. Chamberlain's pohcy will be to divert 
 the stream of emigi'ation into the Colonies from the 
 United States or the Argentine Republic. What, Mr. 
 Ross, would have been the population of Canada to- 
 day if that policy had been inaugurated twenty years 
 ago ? 
 
 Mr. Ross : Twenty millions. 
 
 Mr. Brassey : Yes, sir, I believe you are right. Will 
 not your population increase much faster in the next 
 ten years if this policy is adopted than if it is not ? 
 
 I come now to the thorny part of my subject. If 
 this policy is to be carried through, we who are advo- 
 cating it at home will have to give a good answer to 
 those who will ask us : What are the Colonies going to 
 give in return for the benefits they receive from the 
 imposition of the tax on food-stuffs ? Two answers can 
 be given. The first is contained in a resolution, intro- 
 duced by Mr. George E. Drummond at the Congress 
 of Chambers of Commerce at IMontreal, to the effect 
 that it was the duty of the Colonies to participate in 
 the defence of the Empire. I ask those Canadians who 
 are clamouring for us to send you our capital and the 
 best of our workpeople for the development of Canadian 
 industries to remember that, if the Colonial and British 
 taxpayers stood shoulder to shoulder, sharing the burdens 
 of Imperial defence, it would not matter, from an 
 Imperial point of view, where a cotton mill existed, 
 whether in Toronto or Manchester. But as long as 
 nearly the whole burden fiills on the profits of the 
 British mill, it is not to the interest of the British tax- 
 payer that the mill in JNIanchester should be closed by 
 the estabhshment of the mill in Toronto. For the 
 
 165
 
 PROBLEMS OF EMPIRE. 
 
 reason already given we cannot now expect the Colonies 
 to make any substantial direct contribution in money 
 to the defence of the Empire. 
 The The second answer to the question is that the 
 
 Canadian r^ ^ • -, • nf^ • 
 
 Preference. Colomcs are prepared to give an etiective preierence 
 in their own markets to the products of the mother 
 country. To-night your Premier, Mr. Ross, spoke of 
 the desire that the sentiment in favour of the ' JNIade 
 in Canada ' policy should prevail, and that it should 
 be your ambition to supply the wants of the Canadian 
 market. Here is where the difficulty lies. 
 
 Now, if this is the desire of the Canadian manufac- 
 turers, and the Canadian Government should wish to 
 cany out that desire at the expense of the manufacturer 
 in the mother country, then, in my opinion, there is no 
 basis for a policy of preferential trade within the Empire. 
 The justification for a tax on food-stuffs is that the 
 Colonies will take a larger proportion than they do now 
 of British products. You import at present from the 
 United States and other countries 18,000,000/. worth 
 of goods. 18,000,000/. is not a very large amount in a 
 total export trade of 350,000,000/. Unless the mother 
 country is able to secure a large portion of the trade 
 you now carry on with foreign countries, as well as 
 supply to a considerable extent the needs of the great 
 population which is bound to be created by the adoption 
 of an Imperial preference, there is really no solid answer 
 to the question, ' What will the Colonies do in return ? ' 
 This view and the view of the Canadian manufac- 
 turers may appear to be diametrically opposed. I 
 believe, however, that a solution will be arrived at as a 
 result of mutual concessions and the free interchange of 
 opinions. Nothing has struck me more forcibly in 
 
 166
 
 CANADIAN MANUFACTURERS. 
 
 my tour through Canada than the friendly feeling 
 towards the mother country. Sentiment, however, is 
 not everything. A large number of people are pouring 
 into the North-west who are not of British origin. 
 They are satisfied with Canadian institutions, but there 
 is no reason why they should be loyal to the British 
 connection. It is vital to the future unity of the 
 Empire that these farmers should realise that there is 
 a material benefit from living under the British flag, 
 and this is only to be brought about by such a policy 
 as Mr. Chamberlain's. 
 
 My remarks may not meet with the approval of 
 many here, but I offer them for your serious considera- 
 tion. I beUeve that the unity of the Empire will be 
 preserved, and Mr. Chamberlain's policy can be carried 
 out by a free and honest exchange of opinion between 
 the mother country and the Colonies. No one who has 
 travelled as I have through Canada this fall can go 
 home with any other conviction than that the prospects 
 of Canadian development are sufficient to afford room 
 for both the Canadian and British manufacturers. 
 
 167
 
 CANADA ^ PREFERENTIAL 
 
 TRADE. 
 
 Rye, October 10th, 1903. 
 
 Recent In coming before such a gathering as this, a gather- 
 
 Liberal ing representing a party to which I have hitherto 
 
 ^' been pohtically opposed, you will, I trust, permit me to 
 
 say a few words more or less of a personal character, 
 explaining the reason why I find it necessary to change 
 my political allegiance. 
 
 My political faith was inspired by Lord Rosebery. 
 Having had unrivalled opportunities of seeing the 
 various parts of the British Empire, I set out on my 
 pohtical career with the determination to do what 
 in me lay to promote the unity of that great empire. 
 Lord Rosebery 's speeches in the eighties did much 
 to prepare the way for the work which Mr. Chamber- 
 lain has been able to do in the nineties. Ever since the 
 retirement of Mr. Gladstone, whose leadership was un- 
 questioned, the Liberal Party has been torn by divisions. 
 One section, that led by Sir Wilham Harcourt, by 
 Mr. Morley, and later by Sir Henry Campbell- 
 Bannerman, has always been looking to the past. 
 They have been repelled by the growth of the Empire, 
 dismayed at the growth of our Imperial responsibilities, 
 and attributed the neglect of social and domestic reform 
 to what is described by that somewhat vague word, 
 
 1G8
 
 PREFERENTIAL TRADE. 
 
 ' Imperialism.' I think those of you who know me 
 are aware that my sympathies were not with that 
 section of the party. The divisions to which I have 
 alluded came to a head during the South African War. 
 I went through South Africa in the two months before 
 the war broke out — August and September, 1899 — 
 and can tell you of my own knowledge that the 
 Boers went to war trusting in two things : first, in 
 foreign intervention, and, secondly, in a change of 
 Government in this country. The British Navy made 
 foreign intervention impossible. But there is not 
 the remotest doubt that the Boers were induced to 
 prolong the struggle by speeches dehvered in this 
 country by Sir Henry Campbell-Bannerman and his 
 friends. Even if the question of Tariff Reform had 
 never been raised, I could never have forgiven Sir 
 Henry Campbell-Bannerman for his ' ^lethods of bar- 
 barism.' Our worst enemies were not the Boers in the 
 field, but they were the men, the members of the 
 Liberal Party in this country, who were making 
 speeches such as those to which I have alluded. Lord 
 Rosebery, Sir Edward Grey, Mr. Asquith, and others 
 of the Liberal Party, did their best to counteract the 
 pernicious influence exercised by Sir Henry Campbell- 
 Bannerman and those who thought with him. I 
 endeavoured to do my little part as a member of the 
 Committee of the National I^iberal Federation; and 
 I may perhaps be pardoned for mentioning the grounds 
 on which I resigned my seat on the Committee of 
 the Federation last year, I took that step because, 
 in the first place, I beheved the resolution on the war 
 which was going to be put at the annual gathering 
 of the Federation would have an injurious effect on 
 
 169
 
 PROBLEMS OF EMPIRE. 
 
 the prospects of peace, which were never brighter than 
 at that moment ; secondly, because I was convinced 
 that to make Home Rule for Ireland alone one of 
 the chief planks of the party platform was to renew 
 an attempt which the experience of 1893 had proved 
 to be futile, and a fatal mistake from a party point 
 of view. 
 Mr. Cham- We now comc to INIr. Chamberlain's speech of 
 
 Speech on ^^^y 15th. What was the attitude of the Liberal 
 Ss/^*^' leader when the question was first raised in the 
 country ? Lord Rosebery, speaking at Burnley, used 
 the following words : — ' We could not hastily reject 
 without mature consideration any plan, offered on 
 high authority and based on large experience, for 
 really cementing and uniting the British Empire. 
 Their Chamber of Commerce would have to con- 
 sider that matter. Apart from the blast of party 
 passion or personal prejudice, it would have to be 
 considered whether there was any practical scheme 
 possible for having a reciprocal tariff with the 
 Colonies which would have the effect that was ex- 
 pected, and which would be workable. It would have 
 to be considered whether the people of this country 
 could be brought to agi'ee to a system which would 
 satisfy the British dependencies.' That was the proper 
 attitude of mind with which to regard the great question 
 put before the country by Mr. Chamberlain, but it did 
 not commend itself to party managers. The tempta- 
 tion to make political capital out of that question was 
 irresistible to a party so divided and so impotent as the 
 I^iberal Party had been for many years. Lord Rose- 
 bery 's two principal lieutenants, Sir Edward Grey and 
 JNIr. Asquith, were already uncompromisingly com- 
 
 170
 
 PREFERENTIAL TRADE. 
 
 mitted to Free Trade. Lord Rosebery was not strong 
 enough to resist the influence brought to bear on 
 him, and to my eternal regret, two days after the 
 speech at Burnley, appeared that letter in which Lord 
 Rosebery absolutely dissociated himself from Mr. 
 Chamberlain's policy. I have been a Liberal Imperialist 
 all my life up till now. But Liberal Imperialism, as I 
 understand it, is dead. The Liberal Party, by placing 
 their party before the country, is now united. If they 
 persist in their present course, and if their present 
 course is successful, it will end, in my judgment, in 
 the dismemberment, sooner or later, of the British 
 Empire. Holding that conviction, I have made up 
 my mind that it is time for me to change my political 
 allegiance. I might have been a more successful poli- 
 tician if I had been willing to subordinate my country 
 to my party. I have always placed my country before 
 my party, and I can assure you that now I have 
 changed my political allegiance, it will always be in 
 the future as it has been in the past. 
 
 To turn to the great question of the moment, the Tariff 
 reforms in our Fiscal policy put before the country by 
 Mr. Chamberlain and Mr. Balfour. I freely admit 
 that the principles of Free Trade as enunciated by 
 ]Mr. Cobden are perfectly sound. I admit that those 
 principles are as sound to-day as they were sixty years 
 ago when emmciated by Cobden. But let us remember, 
 as the Duke of Devonshire pointed out in the House 
 of Lords, we have not got Free Trade, and we never 
 have had Free Trade. The policy under which we 
 have been living for sixty years is one of Free Imports. 
 I am prepared to admit that a policy of free imports 
 was sound for this country at the time it was intro- 
 
 171
 
 PROBLEMS OF EMPIRE. 
 
 duced, and for many years afterwards. But I do not 
 believe it is a sound policy for this country to-day. 
 The conditions have absolutely changed, and the reason 
 that has had more influence, perhaps, than any other 
 in making me change my opinion is the enormous 
 industrial progress during the last twenty, and more 
 especially during the last ten years, of France, Germany, 
 and the United States since they adopted a more highly 
 Protectionist policy, as compared with the relative 
 stagnation in our own case. 
 Policy of the Mr. Balfour asks for power to deal with the 
 
 hostile tariffs at present imposed upon the products of 
 this country by foreign countries. That, possibly, is 
 as far as this country was prepared to go at the 
 beginning of last week. But since the speech de- 
 livered by My. Chamberlain at Glasgow on Tuesday 
 last, followed by that which he delivered at Greenock, 
 T am not at all sure that the country is not pre- 
 pared to go a little further. I am in favour of 
 JNIr. Balfour's policy, but I have even a greater feeling 
 in favour of the policy advocated by JVIr. Chamberlain. 
 Mr. Balfour's policy by itself is of no value to agri- 
 culture. It will not tend to check the decline of 
 our agricultural population. It will not tend to 
 make the Empire more self-supporting with regard to 
 its food supply — we should be in great danger from 
 that point of view if we were ever invoh ed in war 
 with a foreign Power — and it will not tend to 
 the consolidation of the Empire. I support Mr. 
 Balfour's policy in the interests of the manufacturing 
 districts of the country. But as an Imperialist, and 
 as the would-be representative of an agricultural con- 
 stituency, I support the policy of Mr. Chamberlain 
 
 172
 
 CANADIAN PREFERENCE. 
 
 because I believe it would tend, though perhaps not 
 to the extent that we all hope, to diminish the decline 
 of our agricultural population ; and because I am 
 satisfied, for reasons which I will give before I sit 
 down, that it must certainly tend to the consolidation 
 of the Empire. 
 
 JNIr. Asquith, in his speech at Cinderford on October ■^griaki''s"" 
 8th, referred to Mr. Chamberlain's assertion that unless Policy. 
 we were prepared to establish preferential tariffs the 
 future of the Empire would be jeopardised . as an 
 assertion we are asked to accept and act on without 
 a shadow of proof or a scintilla of evidence. I will 
 give you my own reason for making the same assertion 
 as My. Chamberlain. There has been for the last two 
 or three years a very large influx of farmers from the 
 United States into the north-west of Canada. I have 
 been afraid that that influx might lead to a demand 
 for reciprocity with the United States, and if reci- 
 procity were once established, political union with the 
 United States would soon follow. But there is an 
 even greater justification for this opinion. Canada was 
 the first of our Colonies to institute the policy of pre- 
 ferential trade. In the year 1897 Canada gave to British 
 products in the Canadian markets a preference of twenty- 
 five per cent., subsequently increased to thirty-three 
 per cent. What took place last year at the Conference 
 of Colonial Premiers from our self-governing Colonies 
 all over the world ? It was unanimously resolved, on 
 the motion of Canada, ' that the principle of preferential 
 trading would, by promoting the development of the 
 resources and industries of the several parts, strengthen 
 the Empire ; that it was desirable that those Colonies 
 v\rhich had not already adopted such a policy should, 
 
 173
 
 PROBLEMS OF EMPIRE. 
 
 as far as their circumstances admitted, give substantial 
 preferential treatment to the products and manufactures 
 of the United Kingdom ; and that the Prime INIinisters 
 of the Colonies respectfully urge upon His Majesty's 
 Government the expediency of gi-anting to the products 
 and manufactures of the Colonies either exemption from 
 or reduction of duties now levied or hereinafter to be 
 imposed.' In the Dominion House of Commons on 
 April 10th of this year, ^Ir. Fielding, the well-known 
 Canadian Minister of Finance, said that if the British 
 Government and people did not show any appreciation 
 of the value of the preference, then, so far as the 
 British Government and people were concerned, they 
 could not complain if the Canadians saw fit to modify 
 or change their preferential tariff. JNIr. Fielding then 
 went on to speak of the growth of opinion in the 
 United States in favour of reciprocity with Canada, 
 and he said the Canadian Government had actually 
 been approached by an authorised representative of 
 the United States with the view of negotiating a 
 treaty of reciprocity. I think you will reahse in the 
 facts I have just mentioned that there is ample justi- 
 fication for the declaration that on the adoption or 
 otherwise of a system of preferential trade with the 
 Colonies largely depends the future unity of the 
 Empire. 
 The Congress During my rcccnt visit to Canada I obtained infor- 
 mation of some importance in connection with the con- 
 troversy. It has been freely asserted by those opposed 
 to the policy of Mr. Chamberlain and Mr. Balfour tliat 
 tlie Colonies do not want preferential trade. I can 
 show you that this assertion is not true as regards 
 Canada. First, the proceedings of the great Congress 
 
 174 
 
 at Montreal.
 
 THE MONTREAL CONGRESS. 
 
 of the Chambers of Commerce of the Empire, held at 
 Montreal, over which my father had the honour to 
 preside, were characterised by extreme loyalty to the 
 Imperial connection. Resolutions were in almost every 
 case unanimously passed. I wish to call attention 
 to two of these. The first ran as follows : ' That this 
 Congress affirms the principle that it is the duty of the 
 Colonies to participate in the defence of the Empire.' 
 That resolution was opposed in the first instance by the 
 French- Canadians present, but after the addition of a 
 few words to the end of the resolution, the Colonies 
 having their own initiative in the matter, the French- 
 Canadians were induced to support the resolution. That 
 resolution was of extreme significance, because it was the 
 first time the French-Canadians had recognised that it 
 was the duty of Canada to take part in the general defence 
 of the Empire. The fact that this was recognised, not 
 only by the French-Canadians, but by the representatives 
 of all the Colonies present, had very considerable 
 weight with the British delegates in inducing them to 
 meet the views of their Colonial colleagues when the 
 question of Preferential Trade came under discussion. 
 This was discussed for two days, and the following 
 resolution was passed: 'That, in the opinion of this 
 Congress, the bonds of the British Empire would be 
 materially strengthened, and a union of the various 
 parts of His Majesty's dominions greatly consolidated, 
 by the adoption of a policy based upon the principle of 
 mutual benefit, ^vhereby each component part of the 
 Empire would receive a substantial advantage in trade 
 as the result of its national relationship.' The Colonial 
 delegates would have desired a stronger resolution. 
 The British delegates had in many cases— certainly in 
 
 175
 
 PROBLEMS OF EMPIRE. 
 
 Canada as a 
 source of 
 wheat 
 supply. 
 
 that of the more important Chambers of Commerce 
 — received instructions not to commit their Chambers 
 to the poHcy advocated by JMr. Chamberlain. It is 
 exceedingly significant that after the interchange of 
 opinion which had taken place the Colonial delegates 
 were willing to modify their views to meet their British 
 colleagues, and that the British delegates were willing 
 to commit themselves to the opinion that the union of 
 the various parts of His Majesty's dominions would be 
 greatly consoHdated by the adoption of a commercial 
 pohcy based upon the principle of mutual benefit. Mr. 
 Chamberlain's policy has been put forward as a means 
 of consolidating the Empire. That policy at present 
 is supported in principle at any rate, if not in detail, 
 by the representatives of the Chambers of Commerce 
 of the Empire, many of whom went to that Congress 
 as Free Traders. 
 
 Then from ^lontreal I went to Winnipeg, the 
 capital of the north-west of Canada, to ascertain 
 whether the north-west of Canada was capable, as 
 is so freely asserted, of producing all the wheat 
 required in the United Kingdom. At a moderate 
 estimate, there are at least 125,000,000 acres in the 
 north-west of Canada suitable for agricultural purposes. 
 There are under wheat to-day some 3,000,000 acres 
 out of a total of 4,800,000 acres under cultivation. It 
 is estimated that the surplus available for export ft'om 
 Manitoba is some 40,000,000 bushels. The require- 
 ments of the United Kingdom by imports amount 
 to 200,000,000 bushels. Therefore Canada — Manitoba 
 and the North- West — is producing to-day about one- 
 fifth of the wheat the United Kingdom requires. The 
 acreage necessary to produce that quantity, allowing 
 
 17G
 
 THE CANADIAN NORTH-WEST. 
 
 for the existing proportion under other crops, is only 
 one-fifth of the estimated area of arable land in the 
 north-west of Canada. Therefore there is not the 
 sUghtest question that the ideal of making the Empire 
 self-supporting as to its food supply could be realised, 
 as far as wheat is concerned, from Canada alone. 
 
 The next question I wished to inquire into was An effective 
 as to what would be an effective preference for the 
 Canadian farmer as compared with the farmer in the 
 United States or in the Argentine Republic ? I was 
 informed by one of the leading grain merchants 
 in Winnipeg, who was good enough to draw up 
 a memorandum for me on the subject, that three 
 cents a bushel, or one shilling a quarter, would be a 
 fairly effective preference for the Canadian farmer, but 
 that six cents a bushel, or two shillings a quarter, 
 would be much better. You will gather, therefore, 
 that IMr. Chamberlain's preference of two shillings 
 a quarter would be adequate to secure the object in 
 view. That is a point of very considerable importance 
 on which many Tariff Reformers have had great 
 doubts. 
 
 The third point into which I wished to inquire The Ameri- 
 was as to whether the fears to which I have alluded ^^°^" "^' 
 with regard to the influx of American settlers were 
 justified. I gathered from those whom I met that 
 the American farmers — the farmers from the United 
 States who settled in Canada — became satisfied with 
 Canadian institutions, and were loyal to Canada, but 
 there was no reason why they should be loyal to the 
 connection with this country. With the British settlers 
 and their descendants the tie of sentiment is strong. 
 There is no such tie of sentiment in the case of those 
 
 177 N
 
 PROBLEMS OF ExAIPIRE. 
 
 who come from the United States, and if we want to 
 make these loyal to the British connection we shall 
 have to substitute the tie of interest for the tie of 
 sentiment, and make it more worth their while to 
 grow wheat under the British flag than under that of 
 the United States. 
 Canadian From Winnipeg I came back to Toronto, having 
 
 turers.^^ bccu iuvitcd to attend a meeting of the Canadian 
 INlanufacturers' Association, and to give an address at 
 their reception in the Parliament Buildings, Toronto. 
 The Canadian manufacturer, hke most other manu- 
 facturers, to whatever country they may belong, desires 
 protection for his own industry. But I can assure 
 you that the Canadian manufacturers — at any rate, all 
 those I saw, and I saw most of the leading members 
 of that Association — are loyal Britishers, and while 
 they desire a rearrangement of the Canadian tariff for 
 the benefit of their own industries, they also desire 
 such a rearrangement in order to give a more effec- 
 tive preference than that which exists at present 
 to the products of the mother country as compared 
 with those of Germany and the United States. 
 ' Canada for the Canadians ' was the cry one heard 
 a good deal of in Canada. But I am satisfied that 
 if Mr. Chamberlain's policy were carried out there 
 would be such an enormous development in Canada 
 that there would be room both for the British and 
 Canadian manufacturer. In the course of my ad- 
 dress to the Canadian Manufacturers' Association I 
 turned to Mr. Ross, a man well known in Canada, 
 the Premier of Ontario, and said to him, ' What 
 would have been the population of Canada to-day 
 if Mr. Chamberlain's policy had been in force for 
 
 178
 
 VALUE OF PREFERENCE. 
 
 the last twenty years ?' Mr. Ross blurted out on the 
 spur of the moment, 'Twenty millions.' Is any one 
 prepared to get up on a public platform in face of the 
 opinion of a competent person such as Mr. Ross, and 
 say that the Colonies care nothing for the policy put 
 before the country by Mr. Chamberlain ? 
 
 To sum up, the net result of my visit to Canada 
 was to convince me that Canada could produce all 
 the wheat we are likely to require in the United 
 Kingdom now, and for many years to come ; that the 
 preference proposed by Mr. Chamberlain is sufficient; 
 that Mr. Chamberlain's policy would build up the 
 Empire ; that if we do not adopt it we may lose 
 Canada, and if we lose Canada it will be the beginning 
 of the end of the British Empire. 
 
 179
 
 THE NEED FOR TARIFF 
 
 REFORM. 
 
 At the Tunhridge Wells Farmers Club, on 
 January 15th, 1904. 
 
 On the last occasion when I was present at a gather- 
 ing of the Club, we had the advantage and pleasure of 
 the presence of two distinguished Colonial Statesmen, 
 in Sir Edmund Barton and JNIr. Seddon. The subject 
 of Tariff Reform was aUuded to at that gathering, and 
 I think that many of you would have gathered from the 
 remarks I then made that I was not likely to be a 
 bigoted opponent of the policy which has now taken 
 its place in practical politics. The question has many 
 sides to it. Before dealing with it on its agricultural 
 side, I propose to say a few words from the industrial 
 and Imperial points of view ; on the latter of which I 
 feel more especially competent to speak. 
 Ourindus- In consideriuff the question of Tariff Reform on 
 
 trial position. , . , . , . i , , 
 
 the mdustrial side, a broad survey must be taken. 
 Of course, it is very often discussed from the point 
 of view of individual trades, but the objection to this 
 method of treatment is that it is possible to quote 
 particular trades which have been very hard hit by the 
 system of free imports, and it is also possible to quote 
 other trades that are doing fairly well. If you will 
 go to what is, after all, the most important table in 
 the great Blue Book which is being quoted by speakers 
 
 180
 
 OUR INDUSTRIAL POSITION. 
 
 on both sides, you will get figures which will show that 
 the industrial position of this country gives grave 
 ground for anxiety. In this table are given figures 
 showing the export of manufactured articles from this 
 country, as well as from France, Germany, and the 
 United States for a considerable period of years. It 
 is perfectly true that by taking only the last five years 
 it is possible to show these exports had increased ; and 
 some of the speakers against Tariff Reform are very 
 fond of taking the figures of the past five years. But 
 if you take the figures of a longer period — and I 
 maintain that to arrive at a right conclusion, you must 
 take a longer period — you will observe that our trade 
 is subject to periods of prosperity and of depression, 
 and that at the end of each decade our exports have 
 reached about the same figures as at its commence- 
 ment. Taking the last thirty years, our exports of 
 manufactured goods have remained practically station- 
 ary; while those from France, Germany, and the 
 United States have enormously increased since they 
 adopted a protectionist policy. On the other hand, 
 during the last few years of the period the importation 
 of manufactured articles has largely increased, showing 
 that foreign countries are beginning to seriously invade 
 our home market. 
 
 Another point which has had a very powerful influ- 
 ence in bringing me to my present convictions, is that 
 during the twelve years from 1890 to 1902 the balance 
 of imports over exports had practically doubled, having in- 
 creased from £92,000,000 to £181,000,000. This balance 
 represented the earnings of our shipping and the interest 
 on foreign investments. I^ast summer the Chancellor 
 of the Exchequer, in reply to a question put to him in 
 
 181
 
 PROBLEMS OF EMPIRE. 
 
 the House of Commons, said that as far as could be 
 judged from the Income Tax returns, the income from 
 investments abroad during the last ten years has in- 
 creased by about £12,000,000. Mr. Ritchie, it is 
 true, pointed out that much of the income from foreign 
 investments escaped taxation, but even making a 
 large allowance on this account it is clear that only a 
 small proportion of the heavy increase in the balance 
 of imports over exports can be accounted for in this 
 way. It is, moreover, certain that our shipping earnings 
 only account for a small proportion of the increase of 
 £89,000,000. I have asked many people how the 
 huge increase in the balance of imports over exports is 
 to be explained, but cannot get a satisfactory answer. 
 I cannot find a satisfactory reply in the Blue Book, 
 and if no satisfactoiy reply can be given, it comes to 
 this, that as a country we are hving on our capital. 
 Those who are opposed to Fiscal Reform constantly 
 quote the increases in income tax, savings bank, and 
 bankers' clearing-house returns, which are given as 
 evidences of our national prosperity. But if these facts 
 be taken in conjunction with the other facts I have 
 mentioned — the stationary character of our exports, the 
 great increase in the balance of imports over exports, 
 and the fact that a large proportion of our population 
 are living on the verge of hunger — it seems to me im- 
 possible to resist the conclusion, which is supported by 
 the census returns, that year by year an increasing 
 proportion of the people of this country are living idly 
 on accunmlated wealth, and that fewer are annually 
 earning their living in agriculture or any other industry. 
 If that be so, the country is approaching the condition 
 of the Roman Empire during the first centuries of 
 
 182
 
 IMPERIAL PREFERENCES. 
 
 the Christian era, immediately before its dissolution. 
 The tendency to which 1 have alluded has been assisted 
 by a policy which has been based upon the interests 
 of the consumer, and absolute neglect of the interests 
 of the producer. 
 
 To turn to the question in its Imperial aspect, imperial 
 
 ^ . . , Preferences. 
 
 The policy of Imperial preferences was instituted by 
 Canada in 1897, and the example of Canada had been 
 followed by South Africa and New Zealand, and it is 
 idle to assert that the Colonies are against the proposal. 
 It is obvious to every one who knows anything of the 
 Colonies and of their products that it is impossible to 
 give the Colonies a preference unless we are prepared 
 to put a duty upon food stuffs and raw materials. Mr. 
 Chamberlain declares that he is not prepared to put a 
 duty on raw materials, and, therefore, if the policy of 
 Imperial Preferences is to be carried out, we are bound 
 to put a duty on imported food stuffs. What Mr. 
 Chamberlain proposes is not to put additional duties 
 which would increase the cost of living to the people, 
 but to transfer the duties from things we cannot pro- 
 duce to those which we can produce at home. 
 
 I have in previous speeches given my reasons for imperial 
 believing that it is necessary for us to adopt the policy 
 advocated by Mr. Chamberlain before the Colonies will 
 contribute seriously to the cost of maintaining the 
 Imperial Army and Navy at sufficient strength in times 
 of peace. We have many rivals in the command of 
 the sea, where we previously had only one. When I 
 first became the editor of the Naval Annual, thirteen 
 years ago, there was only one Power, France, whose 
 navy offered any serious comparison to our own. Now, 
 however, the navies of not only France, but Russia, 
 
 183
 
 PROBLEMS OF EMPIRE. 
 
 Germany, and the United States are increasing year 
 by year, and if we are to maintain the command of the 
 seas we must have a strong Navy. Further expenditure 
 may be necessary on the Navy; while the burden on the 
 taxpayer in this country has almost reached its limit. 
 Increased help will be needed from the Colonies, or 
 otherwise we shall lose the command of the seas, upon 
 which our prosperity and very existence as an Empire 
 depends. At present the Colonies are doing very 
 little, and Canada, in fact, has not hitherto made 
 any direct contribution to the defence of the Empire 
 in time of peace ; but I am satisfied from what I 
 have heard from Canadian friends who have recently 
 been visiting this country that if Mr. Chamberlain's 
 policy is carried through there will be a very much 
 greater disposition on the part of Canada to bear her 
 share of Imperial burdens than there is at the present 
 time. In a speech delivered at Epsom twelve years 
 ago I said : ' Though a commencement has been made 
 in this direction, it may well be doubted whether the 
 Colonies will face their fair share of the burden unless 
 you give them further advantages than a control of 
 Imperial questions. The Colonies, as you know, are 
 all rigidly Protectionist. On the other hand, it is said 
 that all that the Colonies hope for from a connection 
 with the mother country is the enjoyment of trade 
 advantages. I am a staunch believer in the economic 
 advantages of Free Trade to this country, even on the 
 present one-sided system ; but, in my opinion, it is well 
 worth considering whether we should not gain more 
 than we lose if, by entering into reciprocal trade 
 arrangements throughout the Empire, we induced the 
 Colonies to bear their fair share of the cost of Imperial 
 
 184.
 
 CANADA AND RECIPROCITY. 
 
 defence. In the present state of public opinion on 
 fiscal matters in this country, such an arrangement 
 may be impracticable. It is a problem which will 
 undoubtedly have to be faced sooner or later if this 
 Empire of ours is to be kept together, and it is a 
 question on which the electors of this country will have 
 to make up their minds.' I have long seen that the 
 question raised by INIr. Chamberlain would be the 
 prominent pohtical question of the day, and I believe 
 that on the decision of the people of this country, one 
 way or the other, hangs the future of the Empire. 
 
 In his Budget speech of 1903, the Canadian Minister Reciprocity 
 
 ,, ,^ T ^ iij ^th United 
 
 of Finance stated that the Canadian Government had states. 
 been approached by a representative of the United 
 States Government with a view to negotiating a treaty 
 of reciprocity between Canada and the United States. 
 If such a treaty be made it will not only mean the 
 loss of the great and growing market of Canada to 
 British goods, but it will mean, in my opinion, sooner 
 or later, political unity between Canada and the United 
 States. I will not ask you to accept merely my 
 opinion, but would refer you to the statements of ^Ir. 
 Blake, who was for many years the leader of the Liberal 
 Party in Canada. Mr. Blake took no part in the 
 Canadian General Election of 1891. He did not, 
 until the elections were over, make known the reason 
 of his action. He then published a letter, in which 
 he said that, in his judgment, reciprocity between 
 Canada and the United States would mean political 
 union with the United States, and as he did not think 
 that the people of Canada were prepared for annexation 
 to the United States, he was not prepared to advocate 
 reciprocity. 1 think that it will generally be admitted 
 
 185
 
 PROBLEMS OF EMPIRE. 
 
 Sir Robert 
 Giffen and 
 ineflfectual 
 Preferences. 
 
 that this point has a very important bearing on 
 the discussion now going on. While 1 think the 
 unity of the Empire will certainly be promoted by the 
 adoption of a policy of preferential trade within the 
 Empire, I have come to the conclusion that we cannot 
 hope to permanently hold Canada by the sentimental 
 tie alone. 
 
 In an article in the current number of the Niiie- 
 teenth Centui^i), Sir Robert Giifen, one of the most 
 important opponents of the pohcy, asks : ' What is the 
 use of discussing theories of Free Trade and Protection 
 when no material advantage can result to anybody from 
 the special proposals put forward?' After considering 
 the effect of Mr. Chamberlain's pohcy as regards 
 Canada, he says : ' A 25. rise in price will not of itself 
 increase the wheat area in production.' During my 
 recent visit to Canada I went to A¥innipeg and the 
 North-West for the express purpose of inquiring into 
 the points raised by Sir Robert GifFen in the course of 
 his article. Sir Robert GifFen asserts that the proposed 
 preference of 2*. on wheat would be ineffectual. I 
 believe that Sir Robert Giffen is mistaken. A leading 
 grain merchant stated to me, and his view was con- 
 firmed by others, that a preference of Is. to 2.s'. per 
 quarter would be ample to speedily develop the 
 Canadian North- West, and bring under cultivation all 
 the land required to produce the bread supply of the 
 United Kingdom. The following illustration will make 
 the value of the preference clear. Free grants of land 
 are given by the Canadian Government in what are 
 known as quarter sections, or 160 acres. Assuming 
 that on a farm of this size 100 acres are under wheat, 
 and that the production of wheat per acre is twenty 
 
 186
 
 INEFFECTUAL PREFERENCES. 
 
 bushels, or two and a half quarters, if wheat rises by 
 26'. a quarter, the Canadian farmer will get 5s. per acre 
 more for his produce, or 25/. in all. 25L per annum 
 will make all the difference to the small Canadian 
 farmer between a struggling existence and comparative 
 comfort. It cannot, of course, be asserted that as the 
 result of the preference, the Canadian or even the 
 British farmer will receive 2^. more than he does at 
 present for his wheat. The price of wheat is hable to 
 be affected far more by other causes than by the small 
 duty now proposed. But it can be said with certainty 
 that the Canadian farmer will receive 2s. more for his 
 wheat than his competitor across the border, that he 
 will make a profit larger by that amount than that 
 which his competitor is making, and that he will be 
 able to farm at a profit when his competitor is farming 
 at a loss. The obvious and certain effect of the prefer- 
 ence will be to tend to divert the stream of emigration 
 from the United States, the Argentine Republic, and 
 foreign countries to Canada, as well as to other British 
 Colonies. Mr. Ross, the well-known Premier of 
 Ontario, thinks that the population of Canada to-day, 
 if Mr. Chamberlain's policy had been in force for the 
 last twenty years, would have been twenty millions. 
 That is the opinion of a very competent man of the 
 material advantage to the Colonies of the estabUshment 
 of a poHcy of Imperial preference. The material ad- 
 vantage to us is that every emigrant to the Colonies 
 buys as many pounds' worth of British goods per head 
 as an emigrant to the United States does shillings' 
 worth, and thus provides more employment for British 
 workpeople. It is clear that Mr. Chamberlain's policy 
 will tend to build up the Empire. 
 
 187
 
 PROBLEMS OF EMPIRE. 
 
 A policy of Imperial preference should not, how- 
 ever, be judged only from the standpoint of material 
 advantages. The material value might be as small as 
 suggested by Sir Robert GifFen, but I would still 
 advocate the policy. It is, in my judgment, of the 
 utmost importance that the various peoples who live 
 under the British flag should feel that as regards trade 
 and commerce, which are the foundations of our Em- 
 pire, they are a single unit, and that the interest of no 
 part of the Empire can be threatened by the action of a 
 foreign Power, without the whole force of the Empire 
 being brought to bear to protect those interests. You 
 will remember the threatened action of Germany, owing 
 to the institution of the Canadian preference. The tone 
 of Germany has been absolutely changed since Mr. 
 Chamberlain's proposals became a question of practical 
 politics. 
 Food Supply. One other remark of Sir Robert GifFen I desire 
 to refer to. ' We want,' he says, ' about 20 milUon 
 quarters to displace the present foreign supply, and 
 there is a prospect of 10 million quarters only from 
 Canada in the next twenty years.' The net surplus of 
 wheat for export from the North- West he estimates at 
 about 3 million quarters at the present time. In 1903, 
 there were 3,170,871 acres under wheat, producing 57 
 million bushels, or 7 million quarters. For the previous 
 two years, two-thirds of the crop went east of Mani- 
 toba. It is generally assumed that the Provinces east 
 of Lake Superior produce sufficient wheat for their own 
 consumption, so that all the wheat shipped east of 
 Manitoba should be available for export. The leading 
 grain merchant already referred to, estimated that from 
 the crop of 1903 there should be available for export 
 
 188
 
 WHEAT SUPPLY 
 
 about 40 million bushels, or 5 million quarters. Sir 
 Robert GifFen's estimate is 3 million quarters. Sir 
 Robert GifFen's eminence as an economist or a statis- 
 tician I should be the last to dispute, but on the 
 question under discussion I think that the authority of 
 the man on the spot, with his special knowledge, is 
 entitled to the greater weight. 
 
 As to the possibilities for the future, at a moderate 
 estimate, there are 125,000,000 acres of arable land in 
 the Canadian North- West. Fifteen milHon acres under 
 wheat would be sufficient to produce all the wheat 
 required in the United Kingdom. If the proposed pre- 
 ference is as effective as the information I gathered in 
 the North- West led me to suppose it would be, I venture 
 to prophesy that within ten years Canada could supply 
 all the wheat we require in the United Kingdom from 
 outside sources. Canada, it must be borne in mind, is 
 not our only source of wheat supply. India has in some 
 years sent us very large quantities, and in 1901 (a fact 
 not generally realised ) Australasia sent us about the same 
 quantity as Canada. The idea of the Empire becoming 
 self-supporting as regards its food supply is not the 
 idle dream which Sir Robert GifFen would have us 
 believe. 
 
 To turn to agriculture. From the speeches made Weakness of 
 
 present 
 
 by Cobden and Mr. Chas. Villiers at the time of the position, 
 repeal of the corn laws, it is clear that the repealers 
 thought there was no risk to British agriculture by the 
 adoption of their proposals. It was their conviction 
 that the country would remain self-supporting, and it 
 is probable that if Mr. Cobden or his colleagues could 
 have had any conception of what would have been the 
 condition of the country to-day, they would not have 
 
 189
 
 PROBLEMS OF EMPIRE. 
 
 advocated the policy they did, and, however that may 
 be, the country would certainly have never carried it. 
 Another point the repealers looked to was a greater 
 stability in price, but there has been as much fluctuation 
 in the price of wheat since the repeal of the corn laws 
 as there was before. The conditions have absolutely 
 changed since 1846, and it is idle to discuss the poUcy 
 of tariff reform in the hght of the conditions of sixty 
 years ago. In 1846 we produced nine-tenths of our 
 staple food, but in 1902 we produced only one-fifth. 
 Our dependence on foreign countries for so large a 
 portion of our food supply has become a gi-eat national 
 danger. As regards the supply of some raw materials, 
 our position is little better. British cotton mills have 
 been working short time for many months past owing 
 to a shortage in the supply of raw cotton, and a deputa- 
 tion from the Cotton Manufacturers' Association of 
 Manchester recently asked JNIr. Balfour to take steps to 
 put a stop to the gambling in raw cotton in America. 
 For a great Empire to be absolutely at the mercy of one 
 single foreign country for the supply of raw material 
 for one of its greatest industries— cotton goods form a 
 quarter of our total exports — is deplorable. The 
 remedy is to encourage the growth of cotton under 
 the British flag. 
 Decline of It is uot ucccssary for me to enlarge upon the way 
 
 in which British Agriculture has suffered in the past 
 sixty years. Every one who has the least acquaintance 
 with agriculture must know that farmer after farmer 
 has been ruined after struggling against bad times. 1 
 have made a calculation as to what has been the effect 
 of the enormous conversion of arable land into pasture, 
 and the enormous extent of hop gi'ound grubbed during 
 
 190 
 
 agriculture.
 
 DECLINE OF AGRICULTURE. 
 
 the past twenty years in Sussex, and have come to the 
 conclusion that there is between 400,000/. and 500,000/. 
 less spent per annum in the cultivation of the soil in 
 Sussex alone. This is a very important point to bear in 
 mind in dealing with the question from a local point of 
 view. It means that enormously fewer men are em- 
 ployed in the cultivation of the land. At least two- 
 thirds of the sum I have mentioned would be spent in 
 actual wages to labourers, and if the figures will bear 
 examination, and I am satisfied that they will, they 
 mean that between 7000 and 8000 fewer men are em- 
 ployed in agriculture in Sussex than twenty years ago. 
 The hop industry has been most seriously affected. 
 There are .5600 fewer acres under hops in Sussex than 
 there were twenty years ago. I can speak from per- 
 sonal experience as manager of my father's estate in 
 the neighbourhood of Battle, that whereas when I was 
 a boy there was a hop garden on every farm, there is 
 now not a single hop garden on the Normanhurst estate. 
 Allotments and Small Holdings Acts are suggested for 
 meeting the difficulty. Are they Hkely to be of great 
 effect? During the past six years the only business 
 done by the Allotments and Small Holdings Committee 
 of the East Sussex Council was to receive a formal 
 appHcation for the enlargement of Hailsham cemetery ; 
 there had been no applications for allotments or small 
 holdings. I have as a landowner granted facilities for 
 small holdings or allotments where there has been a 
 demand for them, but I do not think much is to be 
 hoped for from an extension of the Allotments and 
 Small Holdings Acts until there is a greater demand 
 for land. 
 
 The real difficulty of the farmer is the question of 
 
 191
 
 PROBLEMS OF EMPIRE. 
 
 price, and it is doubtful whether any remedy will be 
 effectual which does not protect the British farmer from 
 the dumped agricultural produce of the foreigner. I 
 have often said when Col. Brookiield used to advocate 
 this policy that it was idle to advocate Protection for 
 the agricultural industry while the manufacturing indus- 
 tries were prosperous, but it is within the past ten years 
 that manufacturing industries have begun to show signs 
 of decay, and that we are beginning to see our home 
 market invaded by the produce of foreign Protectionist 
 countries. There is now an opportunity for agricul- 
 turists to press their claims upon the Government, and 
 unless Members of Parliament who represent agricul- 
 tural constituencies make their voices heard in the 
 discussion, the farmers and labourers will find them- 
 selves left out in the cold as on previous occasions. 
 
 I congratulate Mr. Boscawen most sincerely on his 
 success in getting a representative hop-gi'ower on Mr. 
 Chamberlain's Commission, but I should like to say 
 that I am not at all satisfied with the representation of 
 agriculture on the whole Commission. It is, in my 
 judgment, most inadequately represented, but we can 
 only hope that the agricultural sub-committee will be 
 enabled to get together a body of evidence which will 
 seriously impress, not only the Government, but tJie 
 people of the country. 
 Mr. Chamber- ^^ regards the value of Mr. Chamberlain's proposals 
 proposals. to the farmer. A 2^. duty on foreign wheat no practical 
 farmer believes would be of much value. The duty on 
 other articles of agricultural produce will be of more 
 value, but perhaps the most benefit to the agriculturist 
 will arise from the imposition of a higher duty on flour 
 than on wheat, which will have the effect of restoring 
 
 192
 
 DECLINE OF AGRICULTURE. 
 
 the milling business to this country, and so securing a 
 supply of cheap ofFal. 
 
 The principal objection to Mr. Chamberlain's policy 
 from the agricultural point of view is that the British 
 farmer would have to pay more for his machinery. 
 Most of the agricultural machinery imported into the 
 United Kingdom comes from Canada or the United 
 States. Some of the best-known firms of implement 
 makers on the American continent are established in 
 Canada. I visited the other day the Massey- Harris 
 works at Toronto. I heard also while in Toronto that 
 one of the largest firms of implement makers in the 
 United States were establishing factories in Hamilton, 
 Ontario, in order to get within the Canadian tariff. 
 The British fai-mer will therefore be able to purchase 
 the best of American agiicultural machinery in Canada, 
 and if he purchases it from Canada obviously he will 
 pay no more than he does at the present time. The 
 contention that owing to Mr. Chamberlain's scheme 
 agricultural machinery would cost more is without any 
 substantial foundation. 
 
 In conclusion : I have come to the conviction that 
 some measure of protection for agriculture can be 
 justified, not perhaps from the standpoint of the econo- 
 mist and not merely from the agricultural point of 
 view, but on the broadest national grounds. I believe 
 of England, as Prince Bismarck believed of Germany, 
 that in the decline of agriculture there is the greatest 
 danger to our permanence as a race. 
 
 193 o
 
 III. 
 
 MISCELLANEOUS SUBJECTS.
 
 STUDIES IN AUSTRALIA 
 
 IN 1896. 
 
 Paper read at the Royal Colonial Institute, 
 February, 1897. 
 
 So many papers on various questions connected with 
 Australia have been addressed to the Royal Colonial 
 Institute, that it seemed to me that it would be more 
 useful to discuss some of the questions of which I made 
 a special study during the time recently spent in 
 Australia, than if I attempted to give a general review 
 of the position there, which many of you are much 
 more competent to do than myself. 
 
 AUSTRALIAN DEFENCES. 
 
 The first question to which my attention was de- (j^^^isons for 
 voted was that of Defence. I travelled to Australia by Coaling 
 
 , . n stations. 
 
 way of Canada, in order to see the naval station 01 
 Esquimault, the defences of which were being com- 
 pleted. It is interesting to note that the nucleus of 
 the garrison for this coaling station is furnished from 
 the Royal Marines, but is paid by the Dominion 
 Government — the only instance in which this system 
 obtains, though, for reasons which will be given later 
 on, it might be usefully imitated in the case of Thursday 
 Island and King George's Sound. I should hke also 
 
 197
 
 PROBLEMS OF EMPIRE. 
 
 Special 
 studies in 
 Australia. 
 
 Naval 
 defence of 
 Victoria. 
 
 Personnel of 
 the Victorian 
 Navy. 
 
 to say a word on JNIessrs. Huddart's Canadian- Aus- 
 tralian line. The service is maintained by two excel- 
 lent boats of about 3500 tons, which are well found in 
 every respect, and are exceedingly comfortable from 
 the passenger's point of view. They are capable of a 
 sea-speed of about fifteen knots. A third boat is 
 shortly to be added to the service. 
 
 To return from this digi*ession, while in AustraUa 
 I visited the forts at Port Phillip Heads, Victoria, at 
 Sydney Heads, New South Wales, and at Largs Bay, 
 South AustraUa, the naval establishments in the three 
 Colonies, and the ships belonging to the different 
 Colonial navies. 
 
 The naval forces maintained by the Colony of 
 Victoria include the turret- ship Cerberus, which is still 
 armed with her old 10-inch muzzle-loaders. The 
 similar ships, Magdala and Abyssinia, which are sta- 
 tioned at Bombay, have been rearmed with 8-inch 
 breech-loaders. Besides the Cerberus there are two 
 first-class torpedo boats, the Childers and Countess of 
 Hopetoun, and two small second-class boats. The 
 gunboats Albert and Victoria are for sale, or have been 
 sold. The wooden line-of-battle ship Nelson is still 
 kept in commission, and is used as a barrack ship. 
 The dinner given on board the Nelson on the anni- 
 versary of the battle of Trafalgar, was attended by 
 Commander Pascoe, the son of the flag-lieutenant of 
 the Victory who hoisted the famous signal. 
 
 The personnel of the Victorian Navy now consists of 
 177 men in the permanent force (reduced from 232), 
 and of 152 men in the Naval Brigade or Naval Reserve 
 (reduced from 342) — a total of 329 men. The com- 
 plements required for the Cerbei'u^ and the torpedo- 
 
 198
 
 AUSTRALIAN DEFENCES. 
 
 boats only amount to 232 men, so that the margin is 
 ample. The torpedo depot is in excellent order, and the 
 torpedo-boats are frequently exercised at steam tactics 
 and in running torpedoes. The Ce7'berus is also in good 
 condition. The personnel is, on the whole, good and 
 efficient ; but the reductions in its numbers, as weU as 
 in its pay, in common with other branches of the public 
 service, and the consequent uncertainty as to the future, 
 must tend to have an adverse effect on efficiency. 
 
 Upwards of 900,000/. have been spent on fortifi- Fortifications 
 cations and their armaments by the Colony of Victoria, —garrison. 
 Port Phillip, hke Port Jackson, has been made one of 
 the most strongly defended ports of the Empire. The 
 entrance is narrow, and a vessel must pass for several 
 miles along a channel commanded on both sides by the 
 guns in the forts ; mining defences are also provided. 
 The forts are manned by 288 Permanent Artillery — a 
 very fine corps — who would be supplemented in war- 
 time by 675 Garrison Artillery JVIilitia, a large pro- 
 portion of whom are recruits. The total military force 
 of Victoria, including the above, numbers about 5000 
 men — of whom 2985 are mihtia, 775 are volunteers in 
 the Victoria Mounted Rifles, and 899 are in the Vic- 
 torian Rangers. 
 
 In New South Wales no ships are at present main- ^gjj'gj^,.^^ 
 tained by the Colonial Government. There are two Wales. 
 partially paid naval forces. The naval brigade consists, 
 for the most part, of ex-seamen, whose duties in case 
 of war would apparently be to assist in manning the 
 forts. The Naval Artillery Volunteers would man the 
 torpedo-boats. The guns in the defences of Sydney 
 Heads are mounted at a good height above the sea, 
 and are well distributed. I must leave it to experts 
 
 199
 
 PROBLEMS OF EMPIRE. 
 
 Defences of 
 Queensland. 
 
 Defences of 
 
 South 
 
 Australia. 
 
 to say whether Sydney or Melbourne is the more 
 strongly defended. The permanent forces of New 
 South Wales include over 600 artillery, and a few 
 submarine miners. Besides these there are 800 cavalry, 
 500 artillery, and 2500 infantry — either militia or volun- 
 teers. The peace establishment of the New South 
 Wales forces is nearly 6000 men. 
 
 The Queensland Navy includes two gunboats of 
 450 tons, manned by the naval brigade. The actual 
 strength of the military force is over 3500. The per- 
 manent artillery number only 174. The strength had 
 been so much reduced that it was impossible to 
 provide reliefs for the garrison of Thursday Island, 
 and to maintain it at its proper strength ; some steps 
 have recently been taken to remedy this evil. A 
 battery of garrison artillery militia is being raised at 
 Cairns. 
 
 The South Australian Navy possesses one heavily- 
 armed little cruiser, the P?'otecto7\ The permanent 
 crew only numbers seventeen, including officers, the 
 complement being completed from the naval brigade. 
 When my father and I went on board, the ship was 
 under way. We steamed out to sea, dropped a 
 target, and gunnery practice was gone through while 
 steaming at the rate of seven or eight knots. Though 
 the bulk of the naval brigade men had only been on 
 board a few days, the practice was in most cases ex- 
 traordinarily good. We were very much struck with 
 the efficiency displayed. At Largs Bay there are small 
 forts, the main purpose of which appears to be to pro- 
 tect Adelaide from bombardment. The military forces 
 of South Austraha have recently been reorganized, and 
 now comprise about 1200 men. The number is small, 
 
 200
 
 AUSTRALIAN DEFENCES. 
 
 having regard to the size and population of the Colony. 
 By the Act framed in December, 1895, every male in- 
 habitant of the Colony between the ages of eighteen 
 and forty-five is liable for service; and the military 
 forces may be called upon to serve in any part of 
 Austraha and Tasmania. 
 
 In Western Australia the military force is small. Defences of 
 
 n 1 • 1 • Western 
 
 The garrison for the defences of the nnportant coalmg Australia, 
 station of King George's Sound — which must be the 
 base for the cruisers protecting the trade approaching 
 Australia via the Suez Canal or the Cape of Good 
 Hope — is much below the required strength. Part 
 of the gari'ison is to be provided by South Australia, 
 but the growth of Western Australia should obviate 
 the necessity for this inconvenient arrangement. 
 
 The military force of Tasmania only numbers 800 Tasmania, 
 efficients, and does not seem to be in a very healthy 
 state. 
 
 To sum up. It may well be doubted whether the 
 money spent by the Colonies on their local navies is 
 in all cases well spent. In South Australia the P?^o- 
 tector is so cheaply maintained that the expenditure is 
 justified. In Victoria, owing to the large extent of 
 open water inside the defences at Port Phillip 
 Heads, it is desirable that there should be some 
 floating defence for Melbourne. The Cerherus and the 
 torpedo-boats are sufficient for the purpose, and would 
 probably act as a greater deterrent to hostile cruisers 
 than the forts at the Heads. They could be kept 
 available for emergencies with a very much smaller 
 expenditure on permanent staff. It is not clear what 
 service the Queensland gunboats could render in case 
 of war. 
 
 201
 
 PROBLEMS OF EMPIRE. 
 
 Lack of The military forces at present maintained are, with 
 
 organization some cxceptions, insufficiently trained, and are unpro- 
 m ustra la. ^- j^^ with equipment to enable them to take the field. 
 The militia and volunteers, who constitute the bulk of 
 these forces, have only a few days' continuous training 
 during the year. Even the camps of exercise, which 
 do so much to promote the efficiency of both officers 
 and men, have been often abandoned in these bad 
 times. There is plenty of good material in the Colo- 
 nial forces, but it certainly needs to be better trained 
 and properly equipped. Though some steps have been 
 taken in this direction, the Federation of Australia is 
 especially necessary for the purpose of defence. Were 
 Australia federated it should be possible to effect con- 
 siderable economies in the permanent staff, and at the 
 same time to obtain greater efficiency. 
 The Affainst a serious attempt at invasion the defence 
 
 Australian " . . . ^ i r> 
 
 Auxiliary of Australia rests on British fleets many thousands of 
 miles away. Against attacks on commerce and raiding 
 expeditions (viz., two or three cruisers and one or two 
 transports with troops) the best defence is an active 
 naval defence by ships which are able to pursue and 
 fight the cruisers of the enemy, wherever they may be 
 found. This active naval defence is partly provided for 
 by the Australian auxiliary squadron, which, by an 
 agi'cement entered into in 1887, is equipped, manned, 
 and maintained, at the joint cost of the Imperial and 
 Colonial funds. The squadron consists of five cruisers 
 and two torpedo gunboats, three cruisers and one gun- 
 boat being always in commission, and the remainder in 
 reserve. The cruisers are satisfactory little vessels of 
 their type, and well fitted for their work, except on 
 the southern coasts of Australia, where larger and more 
 
 202 
 
 Squadron.
 
 AUSTRALIAN DEFENCES. 
 
 powerful vessels are needed. The torpedo gunboats 
 belong to a class which is singularly ill-adapted for ser- 
 vice on the Australian station. The contribution paid 
 by the several Colonies under the agreement is 126,000/., 
 35,000/. being supposed to represent interest on first 
 cost, and 91,000/. being for maintenance. A reference 
 to vote 16 of the Na^y Estimates shows that, in 
 addition to the 35,000/. an annuity of 60,300/. is paid 
 by the British taxpayer. 
 
 One point in this agreement demands special notice. ^/^^^^J^fron ^ 
 By article 4 the vessels shall be employed beyond the mistake, 
 limits of the Australian station only with the consent 
 of the Colonial Governments. The locaUsation of the 
 Austrahan auxiliary squadron, in deference to the wish 
 of the Colonies, is a mistake. I gave an illustration of 
 this in an address in the Melbourne Town Hall last 
 October, and the question is so important that it 
 will bear repetition here. During the troublous times 
 of last year it seemed quite possible that we might 
 have found ourselves at war with France and Russia. 
 The naval force maintained by these powers in waters 
 in the neighbourhood of Austraha is absolutely 
 insignificant compared to our own ; but in China the 
 Russian and French squadrons were equal, if not 
 sUghtly superior, to the British squadron, much as it 
 has been strengthened in recent years. If the British- 
 China squadron were to be defeated in battle the 
 command of the sea between Cape Horn and the 
 Suez Canal would be temporarily lost, British com- 
 merce would be interrupted, and Australia would be 
 Uable to invasion by Russian troops from ^^ladivostock, 
 or French troops from Saigon. The squadron now 
 in Australian waters would be powerless to prevent 
 
 203
 
 PROBLEMS OF EMPIRE. 
 
 Appreciation 
 
 by the 
 
 Government 
 
 of the 
 
 Australian 
 
 Auxihary 
 
 Squadron. 
 
 it. If the British-China squadron were reinforced on 
 the outbreak of war by ships from the Austrahan or 
 Pacific stations, it would have a reasonable prospect 
 of defeating, or, at any rate, holding in check the 
 combined squadrons of France and Russia. It is 
 certain that the vessels used for this purpose would do 
 more under present circumstances to defend the coasts 
 of Australia and Canada in Chinese waters than they 
 would ever do if they remained in Australian or Canadian 
 waters. I do not wish to be understood to suggest that 
 the squadron in Australia should be reduced and that 
 in China strengthened in peace time. 
 
 Against raiding expeditions accompanied by a few 
 troops which might escape our cruisers, Austraha must 
 be prepared to defend herself by maintaining a military 
 force, not necessarily numerous, but certainly efficient 
 and capable of taking the field against disciplined troops. 
 An efficient military force in the Australian Colonies 
 would not only render them secure against attack, but 
 could also give valuable assistance to the common de- 
 fence of the Empire by capturing the naval bases of the 
 enemy in neighbouring seas. 
 
 Though the agi-eement as regards the auxiliary 
 squadron is only made for ten years, it will not ter- 
 minate, except on notice being given by the parties to 
 the agreement. In a recent speech deUvered before the 
 British Empire League, the Duke of Devonshire said : 
 * I may say that Her Majesty's present Government 
 attach the greatest importance to the renewal in some 
 form or other of that agreement.' From the Imperial 
 point of view, a contribution of 135,000/. a year is 
 a very small item in Navy Estimates, which amount 
 to 22,000,000/. At the same time this contribution is 
 
 204
 
 A COLONIAL NAVAL RESERVE. 
 
 valuable as the recognition of a principle, and as an 
 earnest of what our fellow- subjects in the Colonies may- 
 some day be prepared to do. 
 
 At the last meeting of the Institute at which I The burden 
 
 *-" 1 1 J °' ImpenaJ 
 
 was present, when Sir George Clarke read a most Defence. 
 valuable paper on Imperial Defence, the discussion 
 which followed turned largely on the relative respon- 
 sibihties of the mother country and the Colonies in 
 this matter. In the period of growth of her Colonies 
 it seems to me clearly the duty of the mother country 
 to undertake the main burden of defence. In the 
 present circumstances of the Austrahan Colonies — 
 which, excepting Western Austraha, have been passing 
 through a period of severe depression — it is impossible 
 to expect a serious money contribution to the defence 
 of the Empire, and we have no right to expect it 
 until we are prepared to give them a constitutional 
 voice in the control of that expenditure. When the 
 Colonies no longer require such a large proportion of 
 their resources for the development of their territory, 
 we may surely hope that the Colonial taxpayer will be 
 prepared to stand shoulder to shoulder with the British 
 taxpayer in bearing the common burdens. We have been 
 able to hold our own well up till now against our pro- 
 bable enemies, but the history of the past year must 
 impress every EngUshman with the conviction that 
 other countries are growing increasingly jealous 
 of our greatness. Before long the British Empire 
 may have to fight for its very existence. JMay the 
 struggle be long deferred, but when it does come we 
 shall need all the help our Colonies can give us. 
 
 Under present circumstances it is impossible to ^^^1°"'^^ 
 expect any substantial help in the way of money, but Reserve. 
 
 205
 
 PROBLEMS OF EMPIRE. 
 
 I believe the Colonies could give us, with mutual ad- 
 vantage, very considerable help in the way of men, 
 on the lines suggested in the discussion already referred 
 to. In Canada I obtained some valuable information, 
 and in Australia my father and I took every opportunity 
 of discussing the possibility of estabhshing branches of 
 the Naval Reserve in the Colonies. We had conferences 
 of shipmasters at Government House. I met repre- 
 sentatives of the steamship owners both in Sydney 
 and Melbourne, and representatives of the Seamen's 
 and Firemen's Union in Adelaide and in Sydney, 
 and I received many letters of warm encouragement 
 from all classes of persons, including Swedish and 
 Norwegian captains who had served in British ships. 
 The results of these inquiries are embodied in an article 
 in the Nineteenth Century of December last, and may be 
 briefly summarised here. About 5000 men are em- 
 ployed in the inter-colonial trade and in fishing. A 
 large proportion of these are foreigners, and compara- 
 tively few are Colonial born. The foreigners are 
 principally Scandinavians or Danes who are naturalised 
 Australians, who look upon AustraUa as their home, 
 and would be ready to serve her in case of emergency. 
 There seems no doubt that the high rates of pay attract 
 the pick of the seamen from British ships, and that 
 there exists excellent material for the Naval Reserve in 
 the Colonial Marine. The shipowners of ^^icto^ia 
 assured me that they would give every facility to Royal 
 Naval Reserve men in their employ to perform their 
 drills, and would not fill their places during their absence. 
 They are exceedingly anxious to have a supply of 
 Colonial-born young seamen coming forward. Their 
 ships are all steamers, and they recognise that they 
 cannot train seamen for themselves. 
 
 20G
 
 A COLONIAL NAVAL RESERVE. 
 
 The only solution of the difficulty is on the lines I The t'-»,'°'9g 
 
 J *' ^ or a Colonial 
 
 have suggested elsewhere, for dealing with the dearth Naval 
 of British seamen in the British Mercantile Marine. 
 Some of the fine sailing-ships trading to the ports of 
 Melbourne and Sydney should be subsidised by the 
 Colonial Government to carry a certain number of 
 Colonial boys. After three years in these vessels these 
 lads would have a fair acquaintance with seamanship. 
 They should then serve a year in a sea-going man-of- 
 war, at the conclusion of which they would be eligible 
 for the first-class Naval Reserve, and would enter the 
 Colonial Mercantile Marine as A.B.'s. The present 
 retaining fee of a first-class Naval Reserve man is 6Z. 
 per annum. To attract and hold Colonial seamen in 
 sufficient numbers in the Royal Naval Reserve the 
 retaining fee would probably have to be raised to 10/. 
 The Colonial Governments might fairly be asked to 
 provide a proportion of the increased fee. The Aus- 
 tralian Naval Reserve man, in case of need, would be 
 utilised, in the first place, to make up the complements 
 of the ships of the auxiliary squadron, which are kept 
 in reserve, but he would also be liable to serve, like 
 the Naval Reserve man enrolled in England, in H.INI.'s 
 ships in every part of the world. 
 
 IRRIGATION COLONIES. 
 
 During the last ten years large sums of money have irrigation 
 been spent in Queensland, New South Wales, South 
 Australia, and Western Australia, on artesian boring, 
 on the whole with conspicuous success. The water 
 so obtained is used for watering stock, but there is, I 
 believe, only one place — a small settlement in the 
 neighbourhood of Bourke — where artesian water is used 
 
 207
 
 PROBLEMS OF EMPIRE. 
 
 for irrigation. In Victoria numerous irrigation trusts 
 have been formed to utilise the waters of the Murray 
 River and its tributaries. These trusts have been un- 
 successful financially, and the Government has hitherto 
 obtained but a small proportion of the interest due to 
 them on the money advanced. The principal causes 
 of failure are, first, extravagance in construction, and 
 secondly, the fact that the farmers would not buy water 
 from the trust in a season when there was a fair rain- 
 fall. The irrigation trusts of Victoria must therefore 
 be mainly regarded as an insurance against drought. 
 It would be impossible, within the limits of this paper, 
 to review the whole question of irrigation and water 
 conservation, which is of such vital importance to the 
 whole of Australia. I will content myself with saying that 
 I fear the possibilities of developing the interior by irriga- 
 tion are not so great as I estimated them to be seven or 
 eight years ago. That the possibilities are considerable 
 is evident from the present position of the two large 
 irrigation Colonies of Renmark and Mildura. 
 Miidura. So little is known in this country of the true history 
 
 of the enterprises associated with the names of the 
 Messrs. Chaffey ; so much abuse has been heaped upon 
 the promoters and others connected with these enter- 
 prises ; the opinion is so generally held that they have 
 been absolute failures, that it will not be out of place 
 if I ask your attention for a few moments to the subject. 
 I shall deal principally with Mildura, because it has been 
 recently the subject of inquiry by a Royal Commis- 
 sion which only reported last September, and having 
 spent three days there, I am able to speak with 
 some knowledge of its past history and its present 
 position. 
 
 208
 
 Chaffey. 
 
 IRRIGATION IN AUSTRALIA. 
 
 After extensive inquiries prosecuted by Mr. Deakin Terms of the 
 into the systems of irrigation of California and India, with^Messrs. 
 an agreement was concluded in 1887 between the 
 Government, of which Mr. Deakin was a member, and 
 the Messrs. Chaffey, by which the latter acquired 
 250,000 acres of land on the river Murray. The prin- 
 cipal points in the agreement were as follows : 
 
 1. A licence to occupy 50,000 acres for the term 
 
 of 20 years. Crown grants of this land to be 
 issued to the Messrs. Chaffey at the rate of one 
 acre for every 5l. expended on irrigation works 
 and permanent improvements on ordinary land 
 and for every 2/. expended on land subject 
 to flooding. 
 
 2. A licence to occupy a further area of 200,000 
 acres of land. Crown grants on this being issued 
 at the rate of one acre for every 1/. expended on 
 improvements and for a payment to the Treasury 
 of a further £l per acre. 
 
 3. A total sum of 300,000/. to be expended by 
 
 licensees and their assigns within 20 years. 
 5. The hcensees not to be allowed to sell more than 
 80 acres of fruit-growing land or 160 acres of 
 agricultural land to any one person, or to retain 
 in their own hands more than 5000 acres of irri- 
 gated land. 
 
 It has been asserted that the Government drove a 
 hard bargain with Messrs. Chaffey. It was clearly 
 favourable to the former. If the scheme were carried 
 out in its entirety, the Government would receive 
 200,000/., or 16*. an acre, for land which but for the 
 expenditure of the Hcensees was practically worthless. 
 
 209 p
 
 PROBLEMS OF EMPIRE. 
 
 The ChafFeys had no sooner obtained this concession 
 from the Victorian Government, and a similar conces- 
 sion from the South Australian Government for land 
 at Renmark, than they formed the Company known as 
 Chaffey Bros., Limited. 
 Floating of The financial management of the company from the 
 
 scheme. '" outsctwas hopclcss. ThcChaffcys had a very small amount 
 of capital of their own. They no doubt thought that they 
 would be able to raise sufficient capital in the open 
 market, but in this anticipation they were grievously 
 disappointed. The shareholders' capital subscribed is 
 stated in the report of Commission to have been 70,000/., 
 of which nearly 30,000/. belonged to the Renmark 
 undertaking. This amount was obviously quite inade- 
 quate to carry through an enterprise of the magnitude 
 of that at Mildura. Various expedients were resorted 
 to for raising money, such as the issue of debentures, 
 loans from banks, &c., a high and increasing rate of 
 interest being paid for the accommodation. Land was 
 sold either for cash or on the instalment principle, the 
 payments being spread over ten years. Large sums of 
 money were derived from this source. In the year 1891 
 alone over 100,000/. worth of land was sold, and after 
 the initial stages of the undertaking the settlement was 
 largely carried on by the money derived from land sales. 
 As soon as the influx of new settlers ceased, the financial 
 resources of the company became to a great extent 
 dried up. An unsuccessful attempt was made to raise 
 money by a fresh issue of debentures on the London 
 Market in the spring of 1894. Shortly after this 
 the company had to go into liquidation, and its un- 
 pledged assets are now the property of the debenture- 
 holders. 
 
 210
 
 MILDURA. 
 
 The management of those departments which were Criticism of 
 
 the Mildura 
 
 in the hands of Messrs. Chaffey is almost as iinfavour- scheme. 
 ably criticised in the report of the Royal Commission as 
 the financial management. ' Foremost among the causes 
 of failure,' it says, ' must be placed the grave errors made 
 in laying out the settlement and in making provision 
 for the supply of water for irrigation purposes.' It is 
 quite certain that the undue spreading-out of the settle- 
 ment, which now covers over 50 square miles, was one 
 of the principal causes of failure. At Renmark the land 
 was settled block by block owing to the wise control 
 exercised by the Government ; the South Australian 
 agreement with the Messrs. ChafFey containing the im- 
 portant provision — which is not to be found in the 
 Victorian indenture — that no grant should issue until 
 water has been laid to some point suitable for the irri- 
 gation of each 500 acres proposed to be conveyed. At 
 Mildura the Colony was kept fairly compact at first — 
 that is, as long as settlement went on gradually. But in 
 1890 and 1891, in response to the extensive system of 
 advertising adopted, a tremendous rush of settlers took 
 place, eager to take up land at the apparently high 
 price of 20/. an acre which the ChafFeys were asking for 
 it. For many months, sales went on at the rate of 
 10,000/. a month. It is not in the least to be wondered 
 at that when sales were going on at this rate the Messrs. 
 Chaffey should have allowed settlers to take up land 
 more or less where they pleased in Blocks A and B, and 
 should even have sold land in Block C, eight or nine 
 miles from the river. They naturally thought, as most 
 of us would have done, that if settlement proceeded at 
 the same rate the intervening blocks would soon 
 be taken up. They also were, no doubt, influenced 
 
 211
 
 PROBLEMS OF EMPIRE. 
 
 by the hope of being able to sell these intervenmg 
 blocks at an enhanced price. A further reason for the 
 spreading out of the settlement arose from the fact that 
 people would ask for a number of contiguous blocks to 
 be reserved for themselves and their friends, and after 
 the land had been reserved for them, only one or two 
 blocks were taken up or cultivated. This Mr. ChafFey 
 stated in his evidence before the Commission, as well as 
 to me personally, and the statement is corroborated by 
 Mr. Salmon, a valuer, who reported adversely on 
 Mildura as an investment for his clients. Which of us, 
 if we had been in the position of men desirous of 
 making money for the company, would not have been 
 influenced by the same motives ? It is very easy to be 
 wise after the event, and to say that every block in each 
 square mile of land should have been taken up before 
 settlers were allowed to select land further out. 
 The supply of To describe the arrangements for the supply of water 
 water. £^^ irrigation purposes would take too long. There are 
 
 four separate pumping plants raising water from the 
 river, the most important of which is that knovni as the 
 Billabong system, and which utilises a creek or billabong 
 as a reserv^oir. From the Billabong the water is lifted by 
 successive stages into the 50 foot channel, thence into 
 the 70 foot channels, and thence into the 85 and 90 foot 
 channels — centrifugal pumps being used. There are 
 127 miles of main channels and 250 miles of smaller 
 subsidiary channels commanding 33,000 acres of land, 
 over 31,000 acres of which are attached to the BiUabong 
 system. When the financial resources of the company 
 became straitened the pumping machinery was allowed 
 to get into a bad state of repair. At the same time 
 from various causes the channels became incapable of 
 
 212
 
 MILDURA. 
 
 conveying the water pumped into them. In certain 
 portions it is estimated that as much as 50 per cent, 
 was lost. 
 
 On a ereneral review of the management of the Disadvantage 
 
 ^ „ , ? . „ , of the Billa- 
 
 Chaffeys, as far as concerns the selection oi the bong system. 
 pumping plant and the construction of the channels, 
 it seems to me that it is not open to the severe criti- 
 cism which has been frequently passed upon it, notably 
 in the report of the Royal Commission. They have 
 made mistakes, it is true, and they themselves are 
 ready to admit it. Whether the pumping plant, the 
 machinery and boilers, were of the best kind for the 
 work which they had to do may be open to question, 
 but there is no doubt that they were the best of their 
 kind, and capable, if kept in good order, of supplying 
 sufficient water for the land they were intended to 
 irrigate. That the plant and the power might have 
 been differently distributed with advantage is very 
 possible. The great fault in the Billabong system is 
 that there is no reserve in the event of a breakdown, 
 and that the working of the whole system depends on 
 the weakest link in the chain. That the channels were 
 in many cases hastily and therefore imperfectly con- 
 structed is probably true ; but I do not believe that 
 any one could have foreseen the excessive leakage and 
 damage from seepage, which did not occur until some 
 years after the channels had been made. The evidence 
 is not conclusive as to the cause of this leakage. It 
 may, however, be due to the boring of crayfish. 
 
 Two other mistakes have been made, for which the Error of 
 
 judgment in 
 
 Messrs. ChafFey, and particularly Mr. W. B. Chaftey, stocking the 
 may be held partly responsible. In many cases the p'^^p^'^' 
 wrong sort of trees were planted to suit the particular 
 
 213
 
 PROBLEMS OF EMPIRE. 
 
 soil, that is to say, apricots were planted on soil more 
 suited to lemons, and vice versa, the consequence of 
 which was that many blocks have had to be replanted. 
 Another mistake was, that many of the trees supplied 
 to the settlers were not true to name, and had after- 
 wards to be rebudded or replaced. It is difficult to 
 see how the first error could have been avoided until 
 actual experience had been gained of the capacity of 
 the various soils on the Mildura settlement. For the 
 second error the nurserymen who supplied the trees 
 are mainly to blame. Both these misfortunes have 
 greatly retarded the progress of Mildura. Future 
 settlers will benefit by the experience of their pre- 
 decessors. 
 Opposition to Prominent among the causes for the failure of the 
 company must be placed the action taken by the 
 settlers themselves in 1892-93. Though the Engineer 
 of Water Supply reports that he found the majority of 
 the settlers were satisfied with the management of the 
 Messrs. Chaffey, there was a strong hostile minority, 
 some of whom claimed to have water supplied to 
 them free, as it had been during the first three years 
 after the settlement was started, though in the adver- 
 tisements issued by the Chaffeys it was stated that the 
 water rate would probably be about six shilHngs an 
 acre. This rate was levied in 1890, but in 1891 a very 
 much higher rate was levied. The principal complaint 
 was not so much that the water rate was too high, 
 but that the water supply was insufficient for irrigating 
 the land already planted, owing to the leakage from 
 the channels. The original settlers became apprehen- 
 sive that if new settlers kept coming in their own 
 plight would become worse. They therefore took 
 
 214
 
 MILDURA. 
 
 steps to deter new settlers fi'om taking up land, and 
 they did in fact succeed in putting a stop to settle- 
 ment. Their action was perfectly natural under the 
 circumstances, but it dried up the resources with 
 which the Colony was being carried on, and brought 
 about the failure of the company. Had settlement 
 continued at the same rate as in 1891, funds would 
 have been available for lining the channels where 
 necessary, the vacant blocks commanded by the chan- 
 nels would have been settled up as anticipated by 
 the ChafFeys, and the company might have pulled 
 through. 
 
 If the ChafFeys failed to do their duty in certain TheGovem- 
 respects, ought not the Government in the first place have retained 
 to have seen that the enterprise had a fair chance of fupendsion. 
 being started with sufficient capital ? In the second 
 place, ought they not to have exercised some super- 
 vision over the progress of the settlement ? The Com- 
 mission hold that the statement that Mildura and 
 Renmark were under the supervision of the Govern- 
 ments of Victoria and South Australia, which was so 
 extensively advertised, and was the means of inducing 
 the majority of the settlers to take up land, was 
 justified by the wording of the indentures. No super- 
 vision or control was attempted at INIildura, though 
 numerous official and semi-official visits were paid to 
 observe the progress of the settlement. In Soutli 
 Australia there was some attempt at official control, 
 which was at any rate effective in preventing the 
 spreading out of the Colony. 
 
 So far we have been dealing with the questions Fruit- 
 affecting the settlement as a whole. We must now Miidura may 
 inquire. What has been the result to uidividual settlers ? ^'" i?'"^^^^^^- 
 
 215
 
 PROBLEMS OF EMPIRE. 
 
 In the first place, it is generally acknowledged that 
 the climate and most of the soil of Mildura is ad- 
 mirably adapted for growing fruit under irrigation. 
 There are great varieties of soil. The bulk of the 
 land is mallee scrub. There are, besides, pine ridges 
 and box flats ; the soil on the pine ridges is generally 
 considered the best. Fruit trees are said to make 
 more progress in five years at Mildura than they do 
 in other parts of the Colony in seven. Vines, apricots, 
 lemons, oranges, peaches, pears, olives, are amongst 
 the principal trees grown. Lemons are the most 
 paying crop, apricots probably come next. Ohves can 
 be grown on the inferior soil — even on that which is 
 affected to some extent by seepage. Fruit-growing 
 at JNIildura has been carried on, as we have seen, in 
 spite of many initial difficulties, such as want of a 
 proper supply of water, want of knowledge of the 
 proper trees which were suitable to the different soils, 
 and the dishonesty of nurserymen in supplying trees 
 not true to name. Yet the statements made to 
 the Commission undoubtedly show that, in spite of 
 these drawbacks, fruit-growing at Mildura can be 
 made an exceedingly profitable business. In some 
 cases the returns are extraordinary. Mr. T. Wilkinson, 
 an old Lincolnshire farmer, who had been many years 
 in New Zealand, received in 1895-96 742/. for the 
 produce of eleven acres of vines on his twenty acre 
 block — the net return being about 340/. Mr. Mitting 
 from nine acres of raisins netted 362/., but this appa- 
 rently does not allow for the value of his own labour. 
 Another witness gives 80/. as the net return from one 
 and a half acres of peaches not yet four years old. The 
 returns from lemon-trees, as given by Mr. Pickering, 
 
 216
 
 MILDURA. 
 
 Lord Ranfurley's manager, and Mr. Levien, are the 
 most remarkable of all. INIr. Pickering gives 740/. as 
 the net return from 20 acres of lemons. Deducting 
 cost of cultivation at 6/. an acre, which is apparently 
 not included, the net return is reduced to 620/., or 31/. 
 an acre. JNIr. Levien gives 149/. as the net return 
 from two and a half acres (quarter acre being affected 
 by seepage), after deducting all expenses of culti- 
 vation, &c. This is equivalent to a return of consider- 
 ably over 60/. an acre. To the objection that the 
 returns which have just been quoted are not the 
 average results from land at JNlildura, it may be fairly 
 replied that many successful settlers whose land is 
 mortgaged would obviously be reluctant to publish the 
 profits they are realising; and that the settlers who 
 were examined before the Commission, with but one 
 or two exceptions, expressed themselves as exceedingly 
 hopeful if not as confident of success. The favour- 
 able opinions expressed as to the future of IMildura 
 are always subject to the provision of a proper water 
 supply, for which many said they would be willing to 
 pay twice or three times the present water-rate of 1/. 
 an acre. 
 
 Melbourne is at present the principal market for Markets for 
 ^lildura produce, which is carried by river to Echuca products, 
 (past Swan Hill) and thence by rail, at 37*. a ton. 
 In 1895 the prices obtained for certain fruits, notably 
 for raisins, were low, owing to individual growers 
 throwing this produce on the market at the same time. 
 In 1895, the prices obtained were l^d. to 2d. per lb.; 
 in 1896, S^d. to 5d. per lb. A considerable proportion 
 of the fruit is now dealt with by the Mildura Fruit Pre- 
 serving Company, and by the JNlildura Fruit Growers' 
 
 217
 
 PROBLEMS OF EMPIRE. 
 
 Association — a co-operative society of the best kind, 
 which has akeady done a great deal (as is apparent 
 from the figures quoted above) to secure better prices 
 for its members. The Commission came to the con- 
 clusion that the market prospects for Mildura fruits, 
 both green and preserved, are decidedly favourable. 
 Mildura has not yet overtaken the local demand for 
 lemons, oranges, raisins, and dried fruits. In the home 
 market, and in the markets of the world generally, 
 Mildura can only hope to compete, under present con- 
 ditions, with other fruit-growing countries in lemons, 
 dried apricots and peaches, the best sort of raisins, and 
 olives. Great improvements have already been made 
 in methods of production. It is certain that, as time 
 goes on, the cost of production will be considerably 
 diminished, and further improvements will be made. 
 The fruit-preserving companies are capable of dealing 
 with a far larger quantity of fruit than they deal with 
 now, which means a reduction in the fixed charges 
 which each pound of fruit has to bear. It would be 
 unwise to extend the cultivation of raisins and currants 
 beyond the amount necessary to supply the home 
 demand. The same may be said of oranges. In 
 canned fruits California at present holds the pre- 
 eminence ; though it is possible that Mildura, with a 
 diminished cost of production, may be able to com- 
 pete with her in the future. There is little evidence 
 that the vignerons can compete successfully, with the 
 assistance of irrigation, with wine-makers in other parts 
 of the Colony under natural conditions. 
 Lack of I have said sufficient to show that Mildura has a 
 
 hlScapto great future, provided that she is able to overcome her 
 development, pj-^j^ent difficulties, viz., the defective water supply, and 
 
 218
 
 MILDURA. 
 
 absence of funds to make it efficient. AYith regard to 
 the former, the principal causes are the condition of 
 the channels, and the bad state of repair of much 
 of the pumping plant. To these may be added the 
 costliness in some respects of raising the water to the 
 land, and the fact that, under the present arrangement 
 of the pumping stations on the Billabong system, a 
 breakdown in one may mean the stoppage of the water 
 supply for the whole area irrigated. What steps are 
 to be taken to remedy the defective supply of water ? 
 
 Mr. Tolley, the Secretary of the Trust, proposes Suggestions 
 to abandon the whole Billabong pumping system, and remedy of 
 to erect a new concentrated station at Red Cliffs, quite supply : 
 outside the hmits of the existing settlement, and to le/fscSe, 
 improve the Town and Homestead pumping plants. 
 The chief features of his scheme are that the water 
 would be raised in one lift by Worthington pumps into 
 a 70 ft. channel and a 90 ft. channel, and that these 
 are to be connected with the existing channels by the 
 construction of ten miles of new channelling. He also 
 proposes that thirty-four miles of the existing channels 
 and distributories should be lined in the worst places 
 with cement concrete, at a cost of 25,000/. The total 
 cost of the scheme is estimated at 68,000/. — less pro- 
 ceeds of sale of Billabong plant — and the annual 
 working expenses are estimated at 7110/., as compared 
 with 11,000/. under the present system, the saving 
 being chiefly in labour and fuel. Interest and sinking 
 fund would absorb 3732/., so that there would be no 
 immediate relief to the financial strain on the settle- 
 ment. The advantages claimed for the scheme are : 
 that it would irrigate the wliole of the sold land, 
 15,000 acres, in the time that it now takes to irrigate 
 
 219
 
 PROBLEMS OF EMPIRE. 
 
 4000 acres ; that reserve power is provided in case of a 
 
 breakdown; and that it is capable of easy expansion 
 
 (6)Mr.Ander- with the nccds of the settlement. Mr. Anderson, 
 
 sod's scheme. , , , i i /> i . • j 
 
 whose report we have au-eady referred to, considers 
 that the better course is to improve the existing 
 system, and to wait till the settlement grows in the 
 direction of Red Cliffs before erecting a new plant at 
 this place. The Commission adopt Mr. Anderson's 
 view. They recommend that a loan, not exceeding 
 30,000/. — to be expended in lining the channels where 
 required, and in the improvement of the pumping 
 plant, under the supervision of a Government officer — 
 be made to the JNIildura Imgation Trust ; and that a 
 further advance of 400Z. a month from October 1896 
 to April 1897 be made, so as to subsidise the work of 
 distributing water for the coming season. Though 
 they recommend an immediate advance of 5000/., to 
 form part of the loan, for carrying out Mr. Anderson's 
 recommendations as to the plant, they apparently do 
 not adopt these in their entirety. JNIr. Anderson's pro- 
 posals are estimated to cost 32,000/., and the lining of 
 the channels 25,000/., or a total of 57,000/. A Bill to 
 give effect to the recommendations of the Commission 
 was about to be introduced into Parhament when I 
 left the Colony at the end of November. By last mail 
 1 heard from my father that the Bill had become law. 
 With this assistance from the Government I beheve 
 that Mildura will be shortly self-supporting, and will 
 become again a profitable field for settlement. Except 
 in the market gardens in the neighbourhood of Paris, 
 I know of no place where so much money is to be 
 made out of the land. It is an excellent place for 
 any colonist to settle on who has a small amount of 
 
 220
 
 AUSTRALIAN RAILWAYS. 
 
 capital, and it offers special advantages to a man with 
 a family, as the labour of every member is valuable 
 at picking time. A great influx of settlers at the 
 present moment would be undesirable ; but, as the 
 carrying capacity of the channels is increased, it is to 
 be hoped that new settlers will gradually take up the 
 land already commanded by the irrigation system. 
 
 In conclusion : reviewing the whole history of The 
 
 Tifi 1 !• 1 • n • temporary 
 
 JVlildura, there seems to me little occasion for accusing failure of 
 any of the promoters of culpable dishonesty. Great reaUy an 
 mistakes have been made, it is true, but these are Judgment. 
 inseparable in a new enterprise of this magnitude. 
 To the Messrs. ChafFey are, at any rate, due the 
 thanks of the Colony for showing that it is possible 
 to turn almost worthless land into a beautiful fruit- 
 garden. 
 
 RAILWAYS. 
 
 Before discussing the railway systems of New South Breaks of 
 Wales, Victoria, and South Australia, a few remarks drawback to 
 may be made on Australian railways generally. The IScation"^"^"" 
 first and most obvious point that arrests the attention, 
 as well as the progi-ess of the traveller is, that no less 
 than three different gauges are in use on the Australian 
 continent. Western Australia, whose railway system 
 is detached by over 1000 miles from those of the other 
 Colonies, has adopted the 3 ft. 6 in. gauge. South 
 Australia has both the 3 ft. 6 in. and 5 ft. 3 in. gauge. 
 Victoria has the 5 ft. 3 in. gauge throughout. New 
 South Wales has adopted the standard gauge of the 
 world, viz., 4 ft. 8 J in. Queensland utilises the 3 ft. 
 6 in. gauge on the various separate systems running 
 inland from Brisbane, Rockhampton, and other ports 
 
 221
 
 PROBLEMS OF EMPIRE. 
 
 Mr. Eddy's 
 scheme for 
 the 
 
 unification 
 of gauges. 
 
 Unprofitable 
 Hnes. 
 
 along the coast. A traveller landing in Adelaide 
 and wishing to proceed to Brisbane by rail would 
 travel from Adelaide via Melbourne to Albury on 
 the Victorian border, on the 5 ft. 3 in. gauge ; from 
 Albury via Sydney to Jennings on the Queensland 
 border, on the 4 ft. 8 J in. gauge; from Jennings to 
 Brisbane on the 3 ft. 6 in. gauge. These breaks of 
 gauge are a great bar to inter-communication between 
 the Colonies, and must lead to considerable loss of 
 economy in working and equipment. It is certain that 
 the breaks of gauge at Albury and Jennings divert a 
 large portion of the passenger traffic between Melbourne 
 and Sydney, and between Sydney and Brisbane from 
 the railways to the steamers. It is satisfactory to know 
 that the subject is engaging the attention of the most 
 capable railway administrators in the Colonies. 
 
 The lines on which reform should proceed were laid 
 down in a letter from Mr. Eddy to the Minister for 
 Railways in New South Wales in 1889. The main 
 principles of his scheme were : ( 1 ) That the cost of 
 adopting a uniform gauge shall be borne by the 
 whole of the Colonies affected; (2) the decision must 
 be come to from the standpoint of which gauge (the 
 4 ft. 8^ in., or 5 ft. 3 in.) can be adopted at the least 
 cost and inconvenience ; (3) the whole of the railways 
 in New South Wales and Victoria, the railways in 
 South Australia now laid to the 5 ft. 3 in. gauge, as 
 well as the line to Broken Hill, and all lines in 
 Queensland, south of Brisbane, leading to New South 
 Wales, shall be altered to the standai'd gauge. 
 
 A glance at the railway maps of the different Colo- 
 nies, provided that the inquirer has some knowledge 
 of the physical features and the productive possibilities 
 
 222
 
 AUSTRALIAN RAILWAYS. 
 
 of the various parts of the continent, will give the 
 best answer to the question whether the railways have 
 been constructed on the best lines for opening up the 
 country, and at the same time giving a fair return on 
 the capital invested. It would be answered in the 
 affirmative as far as the Queensland, New South Wales, 
 and, in a lesser degree, the South Australian railways 
 are concerned. Even in Victoria it might have been 
 answered in the affirmative up to the year 1884. But 
 since that time large sums of money (7,500,000/. under 
 the Act of 1884 alone) have been expended on the 
 construction of lines which do not pay working expenses, 
 much less the interest on capital cost ; do little to open 
 up the country ; and the principal effect of which has 
 been to take away traffic from previously existing lines. 
 The Age newspaper took a leading part in resisting 
 this reckless policy of railway construction, and in a 
 very strong article published on November 24th, 
 1896, urged that the non-paying lines should be 
 made to cover their working expenses or the traffic be 
 discontinued. 
 
 I do not propose to discuss the railway systems of 
 Queensland or Western Australia, as I had no oppor- 
 tunity of visiting those Colonies. 
 
 The New South Wales railways were by the Act New South 
 
 , , w flics 
 
 of 1888 placed under the control of three commissioners, railway 
 who are practically independent of Parliamentary 
 interference, as far as the internal management of the 
 department is concerned. Mr. Eddy is the chief 
 commissioner and the responsible head of the department. 
 The Act expired in 1894, but after some discussion was 
 renewed. The following are the principal statistics 
 of the railways for 1895 as compared with 1888. 
 
 223
 
 PROBLEMS OF EMPIRE. 
 
 It must be remembered that the returns of 1895-96 
 suffered considerably from the general depression 
 which still overshadowed all the eastern Colonies; 
 from the drought which caused a loss of 13,000,000 
 sheep and lambs ; from the coal-strike in Newcastle ; 
 and from floods at Bourke, which swept away several 
 miles of line. 
 
 Reduction 
 of working 
 expenses on 
 the trunk 
 lines. 
 
 Miles open 
 
 Cost per mile 
 
 Gross earnings 
 
 Net earnings 
 
 Working expenses 
 
 earnings 
 
 Capital 
 
 Rate earned on capital 
 
 of 
 
 gross \ 
 
 1888. 
 
 2,114 
 13,11«. 
 2,295,124Z. 
 764, 573?. 
 
 677o 
 28,600,000?. 
 
 2-85°/o 
 
 1895. 
 
 2,531 
 14,538?. 
 2,820,417?. 
 1,268,529?. 
 
 55°/o 
 38,287,090?. 
 
 The high capital cost— 14,000/. per mile— of the 
 New South Wales railways is in great measure due to 
 the difficult country through which the lines have been 
 constructed. The worst grades are unfortunately on 
 the trunk lines. Considerable sums of money have 
 been spent in recent years in reducing the steepest 
 gradients, and in lengthening the radius of the sharper 
 curves — a pohcy which has already led to great economy 
 in working, and is being vigorously continued. The 
 worst difficulties of railway construction in New South 
 Wales have already been surmounted. Future ex- 
 tensions of the system must be mainly over the gi'eat 
 western plains, where railway construction presents few 
 difficulties, if we except the bridging of the Darling and 
 its tributaries, which are liable to floods. Lightly built 
 extensions of existing lines are projected at a cost of 
 2000/. a mile ; but even were these lines substantially 
 
 224
 
 AUSTRALIAN RAILWAYS. 
 
 built for heavy traffic the capital cost per mile of the 
 New South Wales railways should become very 
 materially reduced. 
 
 New South Wales is not without its burden of New South 
 unprofitable lines. No less than 1117 miles of line fail J^profitabie 
 to earn their interest charges, though with the exception '"^'^^^ys- 
 of the connection between Murrumburrah and Blayney, 
 and that part of the Northern Railway between Armi- 
 dale and the Queensland border, all lines pay their 
 working expenses. The capital cost of the lines at 
 present unprofitable amounts to 13,300,000/. The loss 
 on the through line to Queensland should be materially 
 reduced were a uniform gauge adopted, giving better 
 facilities for traffic. The opening of the new sulphide 
 works at Illawarra should make a great difference to 
 the receipts on the line from Sydney to Nowra, and 
 many of the at present unprofitable branches may 
 be expected to pay as the country becomes settled 
 up. 
 
 The principal causes which have led to the improved Means by 
 position of the railways since they came under the pre- rconomy is 
 sent management are : ( 1 ) Improvements in the permanent ^^^^f^ 
 way by a reduction of gradients and curves. (2) Use of 
 the best materials in the repair of the permanent way, 
 and consequent reduced cost of maintenance. (3) Use 
 of much more powerful locomotives and better rolling 
 stock. A very powerful engine has recently been 
 designed in the Colony, embodying the best features of 
 Enghsh and American locomotives. The Commissioners 
 estimate that the saving per annum by the reduction of 
 gradients, and the introduction of more powerful loco- 
 motives amounts already to 100,000/., and that as the 
 traffic increases in volume, so will the annual saving be 
 
 225 Q 
 
 effected.
 
 PROBLEMS OF EMPIRE. 
 
 South 
 Australian 
 railway 
 statistics. 
 
 Costs. 
 
 increased. Important as the above causes have been in 
 contributing to the improved position of the New South 
 Wales railways, nothing has probably contributed more 
 to this result than the increased efficiency of the staff, 
 and of the labour employed. Mr. Eddy has striven 
 hard to create amongst the New South Wales railway 
 employes the same esprit de corps which exists amongst 
 the employes of his old service, the London and North- 
 western Railway Company in England, and there is 
 good evidence that his efforts have been attended 
 with success. The average rates of pay of nearly 
 every class of employe in the New South Wales 
 railways were higher in 1894 than in 1888, which 
 may be directly attributed to the increased efficiency 
 of the labour. 
 
 The following are the principal statistics of the 
 South Australian railways (excluding the Palmerston 
 line) in 1887 and 1896 :— 
 
 Miles open 
 
 Passengers carried 
 
 Tonnage of goods carried 
 
 Gross earnings 
 
 Working expenses 
 
 Percentage of working ex-\ 
 penses to gross earnings.../ 
 
 Capital cost 
 
 Interest earned on capital 
 
 1887, 
 
 1896. 
 
 1,220 
 
 1,722 
 
 3,366,000 
 
 5,436,000 
 
 782,000 
 
 1,057,000 
 
 550, 000^. 
 
 986, 500^. 
 
 350,000Z. 
 
 583,000?. 
 
 67-/o 
 
 59°/o 
 
 8,461, 274Z. 
 
 12,583,443 
 
 2-52'>/o 
 
 3-21^/o 
 
 Of the miles at present open for traffic 493 are 
 of the 5 ft. 3 in. gauge, 1229 of the 3 ft. 6 in. gauge. 
 Of the broad gauge lines, the Midland system cost 
 14,000/. a mile, the Southern system cost 9700/. a 
 mile. The narrow gauge lines have cost from 4300/. 
 (South-Eastern system) to 5400/. (Northern system). 
 
 226
 
 AUSTRALIAN RAILWAYS. 
 
 There is thus a great saving on fii-st cost by the 
 adoption of the narrow gauge, but there is no sub- 
 sequent saving in working expenses, as compared with 
 the broad gauge. The Northern hne has recently 
 been carried to Oodnadatta, 686 miles from Adelaide. 
 The railway in the Northern territory is narrow gauge. 
 Its present terminus is Pine Creek, 147 miles from 
 Palmerston. The extension of the Northern line for 
 250 miles from Hergott Springs has been a great 
 burden on the Colony. It passes through desert 
 country. The traffic upon it is practically nil, 
 and only one train is run a fortnight. From four 
 stations fairly distributed along the line the traffic was 
 as foUows : — 
 
 
 Cattle. 
 
 Sheep. 
 
 Wool. 
 
 (Tons.) 
 
 Tonnage 
 forwarded. 
 
 Tonnage 
 received. 
 
 Oodnadatta 
 
 20 
 
 23 
 
 13 
 
 
 62 
 5 
 6 
 8 
 
 538 
 
 Anna Creek 
 
 Strang ways Springs... 
 Stuarts Creek 
 
 19 
 23 
 19 
 
 
 
 It is difficult to understand why, when the Govern- 
 ment decided to make this extension, the railway was 
 not carried up the eastern instead of the western side 
 of Lake Eyre, which would have brought it 150 miles 
 nearer the Queensland border. A considerable portion 
 of the traffic from the back stations on the Barcoo and 
 the south - western corner in Queensland passes to 
 South Australia at present via Hergott Springs and 
 Farina. In 1895, 15,000 cattle and over 56,000 sheep 
 were shipped fi'om Hergott Springs alone. As the 
 Southern Queensland line extends westward the whole 
 of this traffic will gradually pass to Brisbane. The 
 
 227
 
 PROBLEMS OF EMPIRE. 
 
 South Australian railways would have been enabled 
 to keep this traffic very much longer, and would pro- 
 bably have been able to extend it for a time had the 
 line been carried as I suggest. The only possibiUty 
 of the Northern line ever becoming remunerative is 
 through the discovery of a rich mining district in the 
 centre of the continent. The idea of ultimately ex- 
 tending the line right across the continent deserves a 
 passing notice. The present termini at Oodnadatta 
 and Pine Creek are over 1000 miles apart ; the country 
 between them is a desert. The line would cost at least 
 5,000,000/. to construct, and would not under any at 
 present conceivable conditions be valuable for through 
 traffic. It is obvious that no goods traffic would pass 
 this way from the southern parts of Australia, on 
 account of the cost of carriage by rail as against the 
 cost of carriage by sea. Little passenger traffic could 
 be expected. Port Darwin is 3000 miles from 
 Colombo, Albany is only 3350 miles, and Adelaide 
 1000 miles further. It is safe to say that few travellers 
 would prefer the certain discomfort of a journey 
 across the central desert of Australia to the possi- 
 bility of a rough passage across the Bight without 
 a very substantial saving in time. There would 
 be none at the present rate of railway travelling in 
 Australia. 
 Railway The rate of interest earned on capital for the year 
 
 1895-96 has already been stated to be 3*21 per cent. 
 The actual interest charges amovmted to 468,374/., 
 and there was a deficiency of 64,896/. to be made good 
 from the general revenue. Though this result com- 
 pares favourably with the position ten years ago, it is 
 very much less favourable than it has been in many of 
 
 228 
 
 finance
 
 AUSTRALIAN RAILWAYS. 
 
 the intervening years — the principal reason, of course, 
 being the construction of new and unprofitable lines. 
 For the five years 1888-92 inclusive, the net return on 
 capital was never less than 4 per cent. ; in 1 890 it was 
 5 per cent. ; in 1891 it was 5*3 per cent. The returns 
 for 1895-96 were affected by the unfavourable season. 
 The present season is even worse. Stock has suffered 
 severely, and the wheat crop has almost been ruined 
 by drought. The coaching traffic, as in New South 
 Wales and Victoria, shows a satisfactory increase, and 
 helps to reduce the loss. The cost of maintenance, 
 renewal of way works, &c., for both gauges has been 
 reduced from 85/. per mile in 1892-93 to 71/. per mile 
 in 1895-96. For the broad gauge the reduction is from 
 141/. to 104/. per mile, for the narrow gauge from 58/. 
 to 56/. per mile. 
 
 There are 3600 employes on the South Australian Short time 
 railways. Short time was worked by traffic and loco- 
 motive running employes for nearly four years, and was 
 only abolished at the close of the year 1895-96. Short 
 time still continues for the men employed in the work- 
 shops. As there is no immediate prospect of there 
 being sufficient work to employ these men full time, 
 the Commissioner recommends that the numbers shall 
 be adjusted to the requirements. ' The continuance 
 of short time,' he says, ' is demoralising to the men, and 
 does not tend to economical working.' The locomotive 
 engineer's report is even stronger on this point. He 
 says : ' The system of keeping men on short time for 
 several years tends to demoralise, engenders a spirit of 
 dissatisfaction and discontent in the minds of those 
 called upon to suffer, and it is not to be wondered at 
 that work costs more to execute under such conditions, 
 
 229
 
 Victorian 
 railways. 
 
 PROBLEMS OF EMPIRE. 
 
 and that discipline is undermined and rendered diffi- 
 cult to maintain.' Short time is not the only cause 
 which militates against the efficiency of the staff. 
 ' In a few years,' says the locomotive engineer, ' all 
 the present graded enginemen and firemen will be 
 receiving the maximum rates of pay irrespective of 
 the value of the work performed.' This system also 
 obtains in other branches of the service. The Com- 
 missioner last year proposed a scheme by which the 
 system would have been gradually altered without 
 reducing the pay of any man then in the employ 
 of the department ; but, though the new regulation 
 was actually gazetted, it was subsequently ruled to be 
 invalid. 
 
 My remarks on the railways of Victoria will be ex- 
 ceedingly brief. Mr. Mathieson has only recently come 
 from Queensland to take up the Herculean task of re- 
 organizing the Department, and reducing the deficit 
 which has to be met out of the general revenue of 
 the Colony. Criticism would therefore be out of 
 place. 
 
 The following is a summary of the present position 
 of the railways as compared with 1890-91 : — 
 
 Miles open 
 
 Gross earnings 
 
 Net earnings 
 
 Working expenses of gross \ 
 
 earnings J 
 
 Deficit 
 
 Capital 
 
 Rate earned on capital 
 
 1890-91. 
 
 2,471 
 
 3, 298, 567 Z. 
 987,922Z. 
 
 70-05% 
 
 332,116Z. 
 
 2-72% 
 
 1895-96. 
 
 3,122^ 
 
 2,401,392Z. 
 
 854,917Z. 
 
 64-4%* 
 
 583,685^ 
 38,108,151/. 
 
 2-24<'/o 
 
 * Includes pensions and gratuities. 
 230
 
 AUSTRALIAN RAILWAYS. 
 
 Though 650 more miles of line were open at the Heavy de- 
 end of last year than were open in 1890, the gi-oss met. 
 revenue was 800,000/. less, and the deficit to be made 
 good from the general revenue had risen to nearly 
 600,000/. This is constituting a heavy burden on the 
 resources of the Colony, and I have already mentioned 
 the chief cause, viz., the construction of new and un- 
 profitable lines. 
 
 That unprofitable fines are not the only cause of the ^J^t^X^jf;*^. 
 deficit on the Victorian railways was brought out very organization 
 strongly in the Report of the Railway Inquiry Board way system. 
 of 1895. The Report speaks of the whole service as 
 disorganized if not demoralised. Each branch was 
 independent of higher control, the authority of the 
 administrative officers was weak, political influence was 
 contributing to destroy discipline, the salaries of officers 
 in responsible positions were low, while the wages paid 
 to artisans and labourers were higher than those ruling 
 outside the Department. The abuse of the system of 
 free passes, the successful competition of teamsters for 
 the carriage of goods from Ballarat, Bendigo, and 
 Goulburn Valley to Melbourne, and the want of proper 
 accommodation for travellers, are other points alluded 
 to in the Report. Steps have already been taken 
 to remedy this unsatisfactory state of things. Mr. 
 Mathieson, since he entered upon his duties last July, 
 has been occupied in the classification and general 
 regrading of the staff", in the revision of fares and 
 freights, and in the reorganization of the stores and 
 other branches of the service. Better passenger vehicles 
 are being provided, and I speak from experience when I 
 say that on some of the lines the carriages are as good 
 as can be wished for. Provided that political inter- 
 
 231
 
 PROBLEMS OF EMPIRE. 
 
 ference is rigidly excluded from the internal manage- 
 ment of the Department, Mr. Mathieson should be able 
 to effect a great improvement in the financial position. 
 He has, however, to face a most serious loss in goods 
 traffic for the current year, owing to the drought, from 
 which many parts of the Colony have suffered. 
 
 I had intended to discuss the village settlements of 
 Victoria, South Australia, and New South Wales, and 
 to give some account of that most interesting and suc- 
 cessful experiment for dealing with the problem of the 
 unemployed at Leongatha, but time will not permit. 
 
 Two remarks I would hke to make in conclusion. 
 In the first place, I think the Governments of the 
 various Australian Colonies, more especially those of 
 New South Wales and Victoria — are deserving of the 
 veiy gi-eatest credit for the heroic efforts they have 
 made to produce an equilibrium between revenue 
 (which has suffered so much from the depression) and 
 expenditure. 
 Growth of In the second place, it is my profound conviction 
 
 lov3.1tv in , •'X 
 
 Australia. that the scntimcnt of loyalty to the mother country is 
 far deeper in Australia to-day than it was when I was 
 there ten years ago. Just as ^ve in England have 
 come to recognise, so have our fellow subjects in the 
 Colonies become convinced, that their future gi-eatness 
 depends on our remaining firmly united under the 
 British flag. 
 
 232
 
 THE EGYPTIAN QUESTION. 
 
 Speech at Boscombe, November 10th, 1898. 
 
 We have all been glad to read in our newspaper The 
 this morning that the conduct of the French Govern- Stitudfif 
 ment in deciding to withdraw from Fashoda was S'*'i,''^P^ 
 
 ,, ^ the l^asnoda 
 
 allowed to pass unquestioned in the French Chamber, question. 
 and has not been unfavourably criticised by the French 
 press. The Fashoda incident may be described as 
 closed, but the Egyptian question is not yet settled. 
 I am one of those who beheve that it is high time to 
 put an end to our equivocal position in Egypt ; and I 
 hope you will not take it amiss if I attempt to review 
 to-night the history of the Egyptian question, and to 
 consider what bearing that question has on British 
 interests in other parts of the world. 
 
 The rebellion of Arabi Pasha, which led to British British 
 intervention in Egypt, broke out in 1882. We asked in*|g5^t^°n 
 the French to co-operate with us in putting down that ^^^^- 
 rebellion. M. de Freycinet, who was then Prime 
 Minister, proposed that the French should co-operate 
 by sending 4000 infanteiie de marine to occupy the line 
 of the Suez Canal. The Senate, like the Chamber, 
 rejected the Government proposals, and the French 
 fleet withdrew from Alexandria. We were left to put 
 down the Arabi rebellion single-handed, and we have 
 been responsible for the administration of Egypt ever 
 since. 
 
 233
 
 PROBLEMS OF EMPIRE. 
 
 The policy of There is not the least reason to doubt that the mass 
 oi the r rench people were exceedingly mortified at the 
 decision of the French Chambers. The Paris news- 
 paper, Le Matin, frankly acknowledges that ' From 
 time to time we ' (the French) ' inaugurated the policy 
 of pin-pricks on Great Britain, a policy which had no 
 definite object, and which was bound to turn out badly. 
 We now find ourselves confronted by people who have 
 at last been exasperated by the continual pricks we 
 have given them.' What are the pricks here alluded 
 to ? Among them are the demands for the evacuation 
 of Egypt, when Egypt was manifestly unable to stand 
 alone ; when, if we had left the country, either France 
 would have stepped into our place or Egypt would 
 have been overrun by the JMahdi's hordes ; the obstacles 
 which were thrown in our way in the reform of admini- 
 stration, and the refusal to allow the Egj^tian Budget 
 surplus to be used for the alleviation of taxation or the 
 development of the country ; the refusal by the French 
 representatives on the Caisse de la Dette to allow funds 
 to be used for the expedition which gave back to Egypt 
 the Province of Dongola. I need not dwell on French 
 action in Tunis, in West Africa, or in Madagascar, 
 where they have established the protective duties usual 
 in French Colonies, in defiance of their pledges, but 
 Lord Rosebery's words at Epsom, on October 13th, are 
 well worth quoting: — 
 
 Lord ' There has been a disposition in the last two or three 
 
 Rosebery at ,,.. i-i r.-r-iii 
 
 Epsom. years to encroach and impnige on the rights of England 
 
 in various parts of the world in a way which is not 
 gratifying to Englishmen, and which 1 do not think is 
 calculated to promote those cordial relations with other 
 Powers, which it must be the wish of a great com- 
 
 234
 
 THE EGYPTIAN QUESTION. 
 
 mercial Empire like ours to cultivate. The present 
 Government has shown no want of conciliation ; some 
 may think that they have gone too far in the path of 
 conciliation in various parts of the world ; but it is no 
 part of my province to discuss that question to-night. 
 All I wish to say is that Great Britain has been conci- 
 Hatory, and that her conciliatory disposition has been 
 widely misunderstood. If the nations of the world are 
 under the impression that the ancient spirit of Great 
 Britain is dead, or that her resources are weakened, or 
 her population less determined than ever it was to 
 maintain the rights and the honour of its flag, they 
 make a inistake which can only end in a disastrous 
 conflagration.' 
 
 Fifteen years ago, after the suppression of the Arabi 
 Rebellion, we might have declared a protectorate over 
 Egypt. That was Mr. W. E. Forster's view ; and this 
 step might have been taken with little opposition. 
 The Egyptian question would then have been settled 
 for all time. But the step was not taken, why, it is 
 hard to explain, and we were more than once very near 
 evacuating Egypt. 
 
 In spite, however, of our equivocal position, we set what the 
 to work with a handful of Englishmen to reform the oJcupation 
 administration of a country which was almost bankrupt, f^r^ Egypt. 
 and the people of which were suffering fi'om years of 
 oppression and misrule. Sir Alfred JMilner tells us in 
 his admirable book on England in Egypt how that 
 work was accomplished. It is a work of which 
 Englishmen may well be proud, and which is, from 
 some points of view, almost more remarkable than our 
 administration of India. With very small available 
 funds the material resources of the country were de- 
 
 235
 
 PROBLEMS OF EMPIRE. 
 
 veloped by the construction of irrigation and drainage 
 works, thousands of acres being thus added to the 
 cultivated area. The administration of justice was 
 purified, and official corruption was gradually stamped 
 out. The finances were reformed ; much oppressive 
 taxation was remitted ; and, as the taxable resources 
 of the country increased, more would have been accom- 
 plished in the same direction but for the senseless and 
 irritating opposition of the French representatives on 
 the Caisse de la Dette. Then, again, what is more 
 remarkable than the change which has taken place in 
 the character of the people of Egypt themselves ? The 
 despised fellaheen, who, twelve years ago, in the battles 
 on the shores of the Red Sea, threw themselves on their 
 knees, to be slain by Osman Digna's dervishes, have 
 become, under the leadership of a few British officers, 
 the soldiers who have won, or assisted in winning, the 
 battles of Toski, Abu Hamed, the Atbara, and Omdur- 
 man. The work done by England in Egypt gives her 
 a claim to a position in that country which no other 
 nation can share ; and that work is not yet completed. 
 Our position What is our position as regards the Upper Nile 
 
 Nile. Valley and the Egyptian Soudan ? The dream of ex- 
 
 tending British territory from the Cape to Cairo origi- 
 nated in the brain of that great empire-builder, Mr. 
 Cecil Rhodes. He, in South Africa, has done his share 
 of the work. Sir Harry Johnston, in Central Africa, 
 has done his. A few English capitalists, under the 
 leadership of Sir William Mackinnon, preserved for us 
 a portion of East Africa, and secured a route for British 
 commerce, free from the protective duties of French 
 or Germans, into the heart of the great Continent, a 
 gi'ateful country repaying them for their patriotic 
 
 236
 
 THE EGYPTIAN QUESTION. 
 
 services by buying them out at ten shillings in the 
 pound. What those services are worth, future gene- 
 rations of Englishmen will realise. The regions to 
 which I have just alluded were generally recognised as 
 lying within the British sphere of influence in the 
 partition of Africa which took place in 1890. More- 
 over, the British sphere of influence was specifically 
 acknowledged to extend over the Nile Valley, by 
 agreements made in 1890 with Germany and with 
 Italy. It was similarly recognised by the agreement 
 made with the Congo Free State in 1894, under which 
 a lease was granted to the Free State for the life-time 
 of the present King of the Belgians. We have always 
 maintained that the Nile ^"alley and the Egyptian 
 Soudan, including the provinces of Kordofan, Darfur, 
 and Bahr-al-Gazal, though temporarily lost to Egypt 
 by the Mahdist Rebellion, still remained Egyptian 
 territory. A few years ago, the French Foreign 
 Ministers of the day were fond of pointing out (I 
 suppose when they feared that we might seize it for 
 ourselves) that the Khedive and the Sultan were still 
 the supreme rulers of the old Egyptian Soudan. 
 Lately, however, they have taken another line, and have 
 tried to maintain that Egyptian claims have lapsed, 
 owing to the non-exercise of Egyptian authority. 
 
 An exactly parallel case can be quoted against Arbitration 
 
 J i^ ^ " . . in respect to 
 
 this contention. In 1873, Portugal and Great Britam DeiagoaBay. 
 submitted their dispute with regard to Delagoa Bay to 
 arbitration. Portugal claimed rights of sovereignty, as 
 existing since the discovery of the bay by Portuguese 
 navigators in the sixteenth century. Great Britain 
 claimed under treaties concluded in 1823 between 
 Captain Owen and certain native chiefs, whom he 
 
 237
 
 PROBLEMS OF EMPIRE. 
 
 believed to be independent, contending that any earlier 
 rights which Portugal might have possessed had been 
 allowed by her to fall into abeyance. Marshal 
 JNIacMahon, then President of the French Repubhc, 
 acting as arbitrator, disposed of Great Britain's plea 
 as follows : ' Whereas, if the accidental weakness of 
 the Portuguese authority in these parts were able in 
 1823 to lead Captain Owen into error, and cause him 
 to consider in good faith, as actually independent of 
 the Crown of Portugal, the native chiefs of the terri- 
 tories, now in dispute, the acts concluded by him with 
 these chiefs were none the less in violation of the rights 
 of Portugal.' 
 Our claim to Whatever may have been the bearing of Marshal 
 
 Nile Valley 
 
 maintained. MacMahou's award in the case just referred to, we 
 have never admitted the claim of any other Power to 
 a position in the Nile Valley. In March, 1895, Sir 
 Edward Grey, in his much-quoted speech in the House 
 of Commons, pointed out that ' The advance of a 
 French expedition, under secret instructions, right 
 from the other side of Africa into territory our claims 
 over which have been known for so long, would be not 
 merely an inconsistent and unexpected act, but it must 
 be perfectly well known that it would be an unfriendly 
 act, and would be so viewed by England.' On the 
 10th December, 1897, M. Hanotaux, the then Minister 
 for Foreign Affairs, was expressly informed that Her 
 Majesty's Government adhered to the language of their 
 predecessors. 
 
 It is unnecessary to dwell upon the fact that the 
 exertions which have culminated in the reconquest of 
 the Soudan were ours. We have not expended the 
 blood of British soldiers and the money of the British 
 
 238
 
 THE EGYPTIAN QUESTION. 
 
 taxpayer in order that half of the fruits of our 
 victories may be reaped by others. But for the 
 pressure of the Anglo-Egyptian forces on the Khalifa's 
 army from the north, Major Marchand would either 
 never have reached the Nile Valley, or would have 
 been annihilated as soon as he got there. 
 
 No just appreciation of the whole Egyptian question Upper Nile 
 is possible without considering the value to Egypt of irrigation in 
 the possession of the Upper Nile Valley. Egypt E^^pJ 
 depends absolutely for its prosperity on irrigation from 
 the Nile. Neither the cotton crop — worth 10,000,000/. 
 annually — nor rice, nor sugar, could be grown without 
 summer irrigation, which practically requires the whole 
 water supply of the Nile, that water supply being 
 derived from the great lakes and the Bahr-al-Gazal. 
 Should any extensive system of irrigation be established 
 in the Upper Nile Valley or in the Bahr-al-Gazal, 
 Lower Egypt would probably be ruined. Therefore 
 the power which is responsible for Egypt must control 
 the sources of its prosperity. 
 
 As to the intrinsic value of the Soudan, a few words Value of the 
 must be said. The country more immediately to the 
 north of Khartoum is a desert, and therefore valueless. 
 The valuable parts of the Soudan are in the Provinces 
 of Kordofan, Darfur, and the Bahr-al-Gazal. Of this 
 latter district, Slatin Pasha, who was Govenor of 
 Darfur, says : ' It is a most fertile district, extending 
 ' over an enormous area, watered by a labyrinth of 
 
 * streams. The soil is exceptionally good, producing 
 ' quantities of cotton and indiarubber. There are cattle 
 
 * in abundance, and I estimate the population at between 
 *five and six million.' The Province was brought under 
 the Government of the Khedive by Gessi Pasha. He 
 
 239
 
 PROBLEMS OF EMPIRE. 
 
 was succeeded by Lupton Bey, who, defended his Pro 
 vince long after the Mahdist RebelHon had cut him off 
 fi'om all communication with Khartoum and Egypt. 
 In 1883, he was able to boast that he was the only one 
 of the Soudan Governors who could give the Egyptian 
 Government a clear profit of something like 60,000/. 
 for that year. In the course of his advance to the 
 Nile, Major INIarchand has established several French 
 posts in the Bahr-al-Gazal, and has proclaimed French 
 sovereignty over places which were centres of Egyptian 
 authority in the pre-Mahdist days. That is why, 
 although the Fashoda incident may be closed, the 
 Egyptian question is not yet settled. 
 Need of a The British people are not satisfied with the equi- 
 
 over the vocal positiou in which they stand in Egypt. I have 
 NUe?"^ e gj^^^j^ y^^ wliat are our rights, what are our claims, and 
 what are our responsibilities. The time has arrived 
 when we must declare, in unmistakable terms, a Pro- 
 tectorate over Egypt and the whole of the Valley of 
 the Nile. We have refrained from taking this step, 
 which, as I have already pointed out, we might have 
 taken fifteen years ago, more out of consideration for 
 the susceptibilities of the French than for any other 
 reason, and the result has been endless friction and 
 irritation between the two nations ever since. It is 
 good for neither that this state of things should con- 
 tinue, and it can only be put an end to by our accepting 
 in name the position which we have long held in fact, 
 viz., the position of tlie protectors of Egypt. 
 An Egyptian Are wc strouff euouffh to take the step which I am 
 
 Protectorate. <r} o j. 
 
 urging ? We are stronger at sea to-day than we have 
 been for years past. I stated here in the spring that we 
 were strong enough to meet the navies of any two, 
 
 240
 
 THE IMPORTANCE OF CHINA. 
 
 possibly of any three, other Powers. Not only for this 
 reason is the present time favourable for declaring a 
 protectorate over Egypt. Russia for the moment has 
 all she can digest in the Far East. She showed no 
 sympathy with France over the Fashoda incident, and 
 she will, for the next year or two, be sufficiently 
 occupied with the Trans-Siberian railway and other 
 operations in the same part of the world. The Czar's 
 rescript was honestly enough intended on the part of its 
 author, but considered in its general relation to Russian 
 policy it is simply an effort to gain time. How, indeed, 
 can any sensible man look upon it in any other light, 
 when Russia has just decided to spend 10,000,000/., 
 outside the ordinary estimates, on the Navy? With 
 Germany our relations are much more amicable than 
 they have been for several years past. With Italy 
 and Austria, especially the former, we have nearly 
 always been on friendly terms. No opposition need be 
 expected from either of these Powers, and in the 
 present internal condition of both countries they would 
 not weigh much in the scale. There remains France, 
 and with France, even if backed by Russia, we are 
 competent to deal. Under all these circumstances I 
 am of opinion that a protectorate must be declared in 
 Egypt. The risk of war is small; the gain to the 
 future peace of the world would be gi-eat. 
 
 Though Egypt is naturally uppermost in our minds China, 
 just now, we must not allow our attention to be 
 diverted from the Far East. The China question is of 
 infinitely greater importance to the future of the 
 Empire than any question affecting Egypt and the 
 Soudan. The population of China is commonly esti- 
 mated at 400 millions, or nearly one-quarter of the 
 
 241 R
 
 PROBLEMS OF EMPIRE. 
 
 human race. The governing classes are hopelessly 
 effete and corrupt, but the commercial classes stand 
 high, and Gordon showed that the masses of the 
 people contain splendid fighting material when led 
 by European officers. The Chinese Empire is totter- 
 ing to its fall. On the occasion of the recent palace 
 revolution at Pekin, the friends of progress were de- 
 capitated, thrown into prison, or degraded. Whatever 
 Power controls these 400 millions of people in the future 
 will control the destinies of Asia, if not of the world. 
 Russia has already got a grip on Manchuria ; her 
 Cossacks are patrolling the treaty-port of Newchwang. 
 She will soon have her hand on Pekin, and unless 
 stopped in time will overrun the whole of the interior 
 of China. I condemned the policy adopted in our 
 dealings with Russia earlier in the year as unwise. 
 We should have cordially acquiesced in Russia's advance 
 in the North — which we were in a position to stop — in 
 return for recognition by Russia of British spheres of 
 influence in Central and Southern China. It will be 
 more difficult to obtain such a recognition now; but 
 the attempt should none the less be made. 
 Critical The qucstions we have been discussing to-night are 
 
 Britishexport of vital interest to the masses of the British people. 
 trade. q^^j. g^port trade is declining, and year by year the 
 
 country is less able to support itself. Did foreign 
 countries pursue the same liberal policy in their colonies 
 as that adopted in our own, there would not be so much 
 need for us to peg out claims for the future. But we 
 have to take things as they are ; and we must jealously 
 watch the extension of foreign dominion over regions 
 from which we know that our own people will be 
 excluded by every possible means. 
 
 242
 
 THE SITUATION IN SOUTH 
 
 AFRICA. 
 
 Speech at Bournemouth^ October 5th^ 1899.* 
 {Reprinted from ' Boiirnemonth Director i/.'') 
 If the rumour that war had beorun was true, then Declaration 
 
 ^ of war. 
 
 that meeting was held one day too late, but he was glad 
 to think from the latest tidings he had received, and 
 from his own strong belief that the Boers would not 
 take the initial warlike step on the frontier, that at 
 present war had not broken out. His opinion, he 
 confessed, had all along been that there would be no 
 war. If he had been wrong, and the Boers had declared 
 war, he would never believe that the prospects of a satis- 
 factory settlement were diminished by the fact that 
 Her Majesty's Government made it plain that they 
 were prepared to resort to arms to put an end to the 
 state of unrest which had stopped the progress of all 
 South Africa for some years past, and of which the 
 Tiansvaal Government had been the focus. 
 
 So many mistakes had been made in the past by liberal 
 
 *' . . responsibility 
 
 the Imperial Government in South Africa that it was for the 
 
 -111- 1 1 1 i 1 situation. 
 
 doubly mcumbent on them now to take a compre- 
 hensive view of the situation, and not to run, as so 
 
 * Mr. Brassey, during the months of August and September, had 
 -visited the Transvaal, Rhodesia, Natal, and Cape Colony. War broke 
 out in less than a week after this speech was delivered. 
 
 243
 
 PROBLEMS OF EMPIRE. 
 
 many Liberals were inclined to do, in blind blinkers. 
 Liberals had special responsibilities in the matter, be- 
 cause, as was well pointed out in the Daily News, it 
 was a Liberal Government, guided by a great and 
 magnanimous statesman, that gave the Transvaal back 
 its independence in 1881, after three disasters to small 
 bodies of British troops at Ingogo, Laing's Nek, and 
 Majuba, and this at a time when sufficient reinforce- 
 ments had arrived upon the scene to make it certain 
 that a continuation of the war would have resulted in 
 the ultimate triumph of British arms. It was even said 
 that a Liberal Government was responsible for some 
 of the difficulties with which they were face to face 
 in South Africa to-day; but to this he would retort 
 that it was the action of British officials, for which a 
 Conservative Government was responsible, who, by 
 their delay in granting the free constitution which was 
 promised when the Transvaal was annexed in 1881, had 
 prevented the Transvaal becoming a loyal and con- 
 tented portion of the British Empire. Mr. Gladstone, 
 in making the concession of 1881, said in his letter to 
 the loyaUsts of that day, that his policy would secure to 
 the settlers of whatever origin the full enjoyment of 
 their property, and of all civil rights. 
 Kruger's Vice-President Kruger, in his speech to the Raad 
 
 iiT^iSi.'"" on behalf of the Triumvirate, dehvered in April, 1881, 
 said : * I deem it my duty to clearly express before you 
 and before the whole world that our respect for her 
 Majesty the Queen of England, for her Majesty's 
 Government, and for the whole English people has 
 never been greater than now, when we have been 
 enabled by this Treaty to give you proof of England's 
 noble and magnanimous love of right and justice.' 
 
 244
 
 THE TRANSVAAL. 
 
 Further, in the proceedings before the Royal Com- 
 mission of 1881, which sat in South Africa, President 
 Kruger said that British subjects were on the same 
 footing as burghers as regarded trade — equal protection 
 for every one ; and in answer to Sir Evelyn Wood, 
 ' equal privileges as far as burghers' rights were con- 
 cerned — except as regarded new arrivals, who were 
 required to remain one year in the country before be- 
 coming burghers.' 
 
 How far Mr. Gladstone's intention and Mr. Kruger 's British 
 pledges had been earned out, might be gathered from demanded a 
 Sir H. Campbell-Bannerman's words the other day : — urtknder? 
 'The Uitlanders have not the municipal government, ^"^^^"ces. 
 the police protection, the organized maintenance of 
 order, the even-handed administration of justice, which 
 in all civilised communities are regarded as the very 
 elements of civil right and civil freedom.' The Liberal 
 Party under their great leader was the enemy of in- 
 justice and oppression all over the world ; on behalf of 
 Irishmen, on behalf of Bulgarians, and in still later 
 days on behalf of the Armenians — his voice was always 
 uplifted on the side of liberty and the rights of citi- 
 zenship. If he had been aUve to-day would not his voice 
 have been uplifted on behalf of our fellow-countrymen 
 in the South African Repubhc, though the very fact 
 that they were our fellow-countrymen seemed to be 
 with some people a reason why no action should be 
 taken on their behalf. At a meeting which he ad- 
 dressed in July last, just before he went abroad, he 
 pointed out that the solution of the Uitlanders' gi'iev- 
 ances in the Transvaal was bound up, as far as he was 
 able to judge, with the future supremacy of this country 
 in South Africa, and he expressed his confidence in the 
 
 245
 
 PROBLEMS OF EMPIRE. 
 
 judgment and capacity of Sir A. Milner to deal with 
 the situation. He would not recall one word he said 
 on that occasion. 
 
 His visit to South Africa had enormously strength- 
 ened the impression that unless they could ensure the 
 same treatment for Britishers and all other white men 
 in the South African Republic, that the Dutch and 
 men of other than the British race receive in all parts 
 of the world under the British flag, South Africa would 
 be lost to the British Empire, and the present unrest 
 would end sooner or later in a terrible civil war, the 
 more terrible because there would be no paramount 
 Power to hold the balance of power between the two 
 races. He had returned with unabated confidence in 
 Sir A. Milner 's policy. He believed that the position 
 in South Africa and the grounds for Imperial inter- 
 vention were admirably reviewed in the last portion 
 of his celebrated dispatch of May 4th, and he was con- 
 vinced that in endeavouring to secure from President 
 Kruger, as he did with the most admirable patience 
 at the Bloemfontein conference, the concession of an 
 effective franchise, he was taking the best, and, indeed, 
 the only means to a peaceful solution of the South 
 African question. 
 Influence of His first fccling, and perhaps his principal feeling, 
 
 in this Transvaal question, was one of disappointment 
 — he might almost say disgust — that Mr. Gladstone's 
 magnanimous pohcy of 1881 was not now, and never 
 had been, reciprocated by the Transvaal Government. 
 In the establishment of Dutch as the official language 
 — an entirely foreign language to the Transvaal — in the 
 introduction of ' Hollanders ' — people coming from 
 Holland — into their administration, and in all other 
 
 246 
 
 Dr. Leyds.
 
 A DUTCH REPUBLIC. 
 
 matters, their policy had been anti-British and hostile 
 to the best interests of South Africa as a whole. The 
 central idea of the Transvaal policy — certainly since that 
 evil genius, that bete noire of South Africa (Dr. Leyds) 
 came on the scene — had been to create a Dutch 
 Republic which should first abolish the Orange 
 Free State, then the Cape Colony and Natal, and 
 which would in time become strong enough to ex- 
 clude British influence from South Africa altogether. 
 The discovery of gold provided funds for carrying out 
 this pohcy for arming themselves and their neighbours 
 to the teeth — this statement was no mere verbiage, for 
 on his journey down to Buluwayo, JNIauser rifles were 
 carried in the same train, and he himself saw an Orange 
 Free State farmer get out of the train at a roadside 
 station with six or seven of the rifles and distribute 
 them to men waiting on the station — and for procuring 
 the assistance of the Government and the Raad of the 
 Free State, whose conduct, in his mind, was otherwise 
 inexplicable. The influx of Uitlanders, on the other 
 hand, had made it impossible that this policy could ever 
 be realised in the sense in which it was intended. 
 The Uitlander population already outnumbered the 
 Boers, and it would certainly, on a moderate estimate, 
 treble its numbers, and might become ten times more 
 numerous within the next ten years. 
 
 If it should prove to be true that the Boers had Difficulties 
 
 . of the 
 
 declared war, it was an absolute proof, to his mind, situation. 
 that the pohcy, to which he had alluded, had all along 
 been the central idea of the Transvaal Government, 
 and he thought the gratitude of every one was due to 
 Sir A. Milner, for being the first High Commissioner 
 who had really grasped the situation and had done 
 
 247
 
 PROBLEMS OF EMPIRE. 
 
 his best to avert the consequences. While he had no 
 sympathy with the Transvaal in this matter, he, hke 
 any one else who had studied the history of the Boers, 
 could not help feehng much sympathy with them in 
 their reluctance to gi-ant a franchise which would in 
 time give to others the controlling influence in the 
 State. The concession of an effective franchise, as Mr. 
 Kruger knew full well, would be the beginning of the 
 end — the end of the present system of government in 
 the Transvaal. The result of the ill-advised action of 
 the Transvaal Government in past years, in imposing 
 hard restrictions upon the attainment of the franchise 
 by Uitlanders, was the almost total exclusion of the 
 Uitlander population from any share in the administra- 
 tion or in the general government of the country ; 
 and from this Uitlander population at least nine- tenths 
 — some said nineteen-twentieths — of the revenue of the 
 country was drawn. Under such circumstances, was 
 the great unrest in the Transvaal a matter for wonder ? 
 Reasonable concessions would have strengthened the 
 independence of the Transvaal Government. A large 
 proportion of the Uitlanders did not want British rule, 
 which was absolutely proved at the time of the 
 Jameson raid, when the Reform Committee split on 
 the question of what flag they should hoist, and 
 ended their dispute by hoisting the Transvaal flag. 
 It was an idle contention to say that if it had not 
 been for the Jameson raid, reasonable concessions 
 would have been gi-anted. The refusal to make con- 
 cessions was the cause, and not the consequence, of 
 the Reform movement in 1895 ; and the only chance 
 of concessions being granted was during the Jameson 
 raid, when Kruger thought 20,000 rifles were opposed 
 
 248
 
 THE REFORM MOVEMENT IN 1899. 
 
 to him, and not merely 2000. That raid was uni- 
 versally deplored throughout South Africa. It had 
 embittered the feehng of the two races, caused many 
 people in Cape Colony to transfer their sympathies from 
 the Uitlanders to the Boers, and, to some extent, been 
 responsible for the change of attitude on the part of the 
 Orange Free State. Many people in South Africa 
 believed that Mr. Rhodes and Mr. Chamberlain were 
 privy to the Jameson raid, but he did not share the 
 belief. 
 
 Coming to his recent personal experiences in South The 
 Africa, Mr. Brassey said he was told by many people in the Reform 
 Cape Town that the Uitlander grievances were grossly ^'^**'°"- 
 exaggerated, that the Reform movement in 1899, like 
 that of 1895, was being promoted by capitaUsts — by 
 Mr. Rhodes, Mr. Beit, and people of that kind, and 
 that the Uitlanders were the scum of the earth. The 
 first hour he spent in Johannesburg convinced him that 
 the last-named assertion was untrue. As far as he 
 could judge he should say that the population of that 
 town was on the whole above the average of most large 
 English towns. It was true that the population included 
 a considerable number of disreputable persons, such as 
 illicit liquor-sellers, pickpockets, and others of that 
 kind, but in the main the character of the people was as 
 he had stated. In regard to the men who were running 
 the Reform movement, he found they mostly belonged 
 to the professional classes — mining engineers, doctors, 
 and lawyers. He had the privilege of meeting several 
 of the men who were taking part in the movement, 
 notably, Mr. Wybergh, the President of the South 
 African League, and he sought to learn how far the 
 gi'ievances were voiced by the miners and other work- 
 
 249
 
 PROBLEMS OF EMPIRE. 
 
 men on the Rand, it being arranged by Mr. Wybergh 
 that a deputation of representative working-men should 
 meet him at the offices of the South African League. 
 As the result of this meeting, he assured the audience 
 that he formed an exceedingly favourable opinion of the 
 character of the men who were now conducting the 
 Reform movement in Johannesburg. He beheved 
 that they were honest men, taking part in the movement 
 from honest political motives, one of the leaders in fact 
 having given up a valuable position in one of the largest 
 companies on the Rand, in order to take part in the 
 movement. As to how far capitalists were concerned 
 in the movement, his investigations led him to beheve 
 that there was to-day none of that corrupting business, 
 that blank-cheque business, that spoilt the Reform 
 agitation of 1895. He did not beheve that capitaUsts 
 were taking an active part in the movement; 
 it certainly was not run or financed by capitalists. The 
 finances of the South African League were not in a 
 flourishing condition, there being a debt of 150/. ; and 
 from people he could trust he had ascertained that the 
 majority of the subscriptions was derived from indi- 
 viduals who paid 1/. or 2/. a piece. 
 Uitiander As to how far the grievances were felt by the Uitlander 
 
 population, he should say they did not press hardly upon 
 either the capitahsts or the workmen, the country being 
 so rich and the wages so high. The political grievances, 
 on the other hand, were, without doubt, very serious, 
 but that they were severely felt by the whole mass of the 
 Uitlander population he was not prepared to assert. 
 A large portion of the population consisted of Cornish 
 miners, and these men, who in England had been accus- 
 tomed to receive 1/. a week, were not hkely to be active 
 
 250 
 
 grievances
 
 THE UITLANDER GRIEVANCES. 
 
 political agitators when they were receiving 1/. a day. 
 The most serious of all the grievances of the Uitlanders Partiality 
 were, he thought, the uncertainty of the administration courts. 
 of justice, and the uncertainty of the law. By the 
 former he meant that it was unlikely for a conviction 
 to be procured against a Dutch inhabitant of the 
 Transvaal, and that even if a conviction were secured, 
 it was not likely that the whole sentence would be 
 carried out. ^Ir. Brassey gave instances in illustration, 
 and referred at length to other grievances given in the 
 Blue Book. 
 
 In 1897, the Transvaal Government appointed a 
 commission to inquire into the difficulties and grievances 
 under which the mining industry were labouring, all the 
 Commissioners being of high official standing. These 
 men took an immense amount of valuable evidence, 
 and made several important recommendations — which 
 Mr. Brassey enumerated — and yet these were for the 
 most part ignored or rejected by a small committee of 
 the Volksraad to which the Commissioners' findings 
 were referred. Could they wonder that every one 
 engaged in the mining industry in Johannesburg was 
 disgusted with the Government which treated its 
 Commission in this manner ? A particular giievance The Judges' 
 from the point of view of most Enghshmen was the °*^ ' 
 judges' law passed in 1897, under which judges, on assum- 
 ing office, were compelled to take an oath which bound 
 them to carry out any resolution of the Raad, whether 
 they thought it consonant with principles of justice or 
 not. JMr. Brassey referred in terms of disapproval to the Restrictions 
 
 , . . \ T on civu 
 
 Aliens' Expulsion Law, the press law in the Transvaal, rights, 
 and the form of municipal government, stating with 
 regard to the last-mentioned matter, that in the 
 
 251
 
 PROBLEINIS OF EMPIRE. 
 
 Johannesburg municipality since 1897, half of the 
 elected members had had to be burghers, whilst power 
 was given to President Kruger and the Executive 
 Council to appoint a Mayor for five years, and also 
 to remove him from the post at any time they 
 thought fit. 
 
 Amongst other provisions in the Transvaal muni- 
 cipal law, was one that the President need not carry 
 out the resolutions of his Council if he was of opinion 
 that they were contrary to the law of the State. 
 The Touching upon education in the Transvaal, the 
 
 educational o a ^ ^ ^ 
 
 grievances, speaker Said that, under the original education law, 
 English was on equal terms with Dutch, a system 
 under which the language question was easily solved 
 in the Orange Free State. Later, when Dutch became 
 the predominant medium for education, English had 
 the preference over other foreign languages. From 
 1892 onwards in the State schools no English was 
 taught in the lower standards, and the time devoted 
 to foreign languages in the upper standards was three 
 or four hours per week. It cost 8/. more per annum 
 to educate a child in the Transvaal than in Cape 
 Colony, and, while in Cape Colony 4*4 per cent, of the 
 children reached standard six, in the Transvaal State 
 schools only 0.4 reached that standard. Meanwhile, 
 the Uitlanders had started schools of their own. By a 
 Volksraad resolution of 1892, a capitation grant of 4/. 
 to 51. per head was given to schools in which children 
 of other parentage than Dutch were taught under the 
 following conditions: (1) That children should satisfy 
 the inspector in a knowledge of the Dutch language 
 and of South African history from the Dutch point of 
 view — a condition rendering it inoperative in many 
 
 252
 
 THE ATTITUDE OF NATAL. 
 
 cases ; (2) that no child of Hollander or Dutch South 
 African parents, or a child under six, could earn a 
 grant. The effect of this in one school in particular, 
 at Bloemfontein, was that of the 120 children attending 
 it seventy were Dutch and twenty under six, and of the 
 remaining thirty, some would fail to pass. So it was 
 not surprising to know that that school did not earn a 
 sufficient amount from the State to pay it to employ a 
 qualified teacher in the Dutch language. The law 
 passed in 1896 did nothing to mend matters, and, 
 further, under the regulations imposed, the teachers 
 in the State schools must be Hollanders qualified to 
 teach English — by three months' residence in England. 
 In IMarch last an important meeting was held in the 
 Chamber of Mines, at which it was stated that there 
 were over 3000 children on the Rand without sufficient 
 facilities for education, although parents were willing to 
 pay for it. At that meeting, and subsequently, over 
 100,000/. was subscribed for the purpose of starting a 
 scheme of education for the children of poor Uitlander 
 parents on the Rand, and most of the mine-o-wners 
 assessed themselves in a large sum of money — a fact 
 which was very gratifying. 
 
 In other remarks, speaking of Natal, Mr. Brassey Natai's 
 said he had sought to discover the reason for the very 
 strong line which the people of this small but very 
 prosperous Colony had taken on the South African 
 question, and said he found that it was because they 
 were exceedingly disgusted with the anti-British atti- 
 tude adopted by the Transvaal Government for so 
 many years past. The Dutch people in the Colony of 
 Natal, who, until recent years had been loyal subjects 
 of the Queen, had now become in many cases disloyal, 
 
 253
 
 PROBLEMS OF EMPIRE. 
 
 and men were throwing up commissions in local Volun- 
 teer corps and such like things. 
 The recent ^Iy, Brasscv described the negotiations which had 
 
 negotiations, ;' imi i-ni-i 
 
 taken place between the iransvaal and English 
 Governments during the last few months, and, in 
 concluding his speech, said it was his deliberate 
 opinion that the Government could not have accepted 
 unreservedly the franchise proposals of August 19th. 
 The fact of the Transvaal Government having suc- 
 cessfully kept the Uitlanders in subjection for years 
 past had caused unrest all over South Africa, and 
 unless we asserted our position as the paramount 
 power now, no settlement had a chance of being per- 
 manent. He did not wish to enter into a criticism of 
 the conduct of the Government in this matter, but it 
 was quite possible that some of the dispatches might 
 have been more temperately worded if they had been 
 wi'itten by an old diplomatist like Lord Salisbury, 
 instead of a new diplomatist of the character of Mr. 
 Chamberlain ; but, in dealing with this question, Her 
 Majesty's Government had been extraordinarily patient. 
 He beheved Sir Alfred JMilner had done his best to 
 avert war, but he thought the Government was in 
 fault in allowing that gentleman's dispatches to Mr. 
 Chamberlain, and IMr. Chamberlain's dispatches to Sir 
 Alfred ]VIilner, to be published. 
 
 Mr. Brassey asked his audience whether they had 
 been struck, as he had, with the patience of the 
 Uitlanders, in spite of all they had gone through — 
 tradesmen ruined and the mine-owners losing between 
 them about one and a half million pounds per month — 
 and said he should like to impress upon the Govern- 
 ment that it was not very fair to delay much longer. 
 
 254
 
 THE BASIS FOR SETTLEMENT. 
 
 The Government had been rightly patient hitherto, but 
 the present state of suffering could not be prolonged 
 indefinitely. 
 
 The struffffle of the Transvaal Government to The only 
 
 *^c5 hrisis for A 
 
 exclude the Uitlanders from a share in the govern- permanent 
 ment of the country was like struggling to stem 
 a flood with a few spadesful of sand. They might 
 deplore the gold discovery and the enormously in- 
 creased Uitlander population, but the gold was dis- 
 covered and the population was there, and they had 
 to deal with circumstances as they found them. The 
 only basis upon which the Dutch and British in South 
 Africa could live together in harmony was that of equal 
 rights and equal privileges in whatever part of that 
 country they might live. Men with the longest heads 
 in South Africa prophesied that a great struggle was 
 comintT in the not far distant future in which it would 
 be necessary for the Dutch and British to stand shoulder 
 to shoulder as they had in times past. Let them hope 
 sincerely that the present question might be settled 
 before that time came. 
 
 255
 
 • 
 
 LONDON : PRINTED BY STRANGEWAYS & SONS, 
 TOWER STREET, CAMBRIDGE CIRCUS, W,C.
 
 1J1"^X T Jl>XV*-»A * * 
 
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