IMPERIAL CONFERENCE.

Evening Star, Issue 12687, 13 June 1907, Page 7

IMPERIAL CONFERENCE.

THE DEBATE ON PREFERENCE. [Know Our Special Correspondbht-j LONDON, May 5. From, the public point of view tho most Interesting stage of the Imperial Conference was reached this week, when tho question of preferential trading between the Mother Oountrv and tbe British Dominions Overseas camo up for discussion. The debate began at Tuesday’s session, when in -addition to the colonial Premiers and their attendant Ministers there were presunt Mr Asquith (Chancellor of the Lxfc-hequcr) Mr Llowd-George of the Board of Iraoe), Mr Runciman (Financial Secretaryto the Treasury), and various Treasury and Board of Trade officials. At the opening of the meeting Lord Elgin referred to the importance of the subject they were about to discuss, and s-aid that he was -tn-o that the rame uarmonious feeling would pervade the diseucsioi! as had marked the previous deliberations of the Conference. accordance with the practice previously followed, he proceeded to call on the Prime Minister of the Commonwealth, which had submitted the first resolution on tho subject on the agenda paper. . . Mr Dcabin, however, with ciaiactcnstio courtesy, proposed to waive his privilege in favor of the Premier of the senior and bigger Federation (Canada). Sir Wilfrid Lanrier shook his heed, but Mr Deakin .--gain pressed the Canadian Premier to ,-peak. dm; urged, Sir Wilfrid Launer made a one-minute speech, but it was one of tho most Important yet made- in the Conference. Ho declared that Canada’s position remained what it was in 1902, and the to content to adhere to tho resolutions of tire Conference, of 1902. It will simplify matters to explain the difference between the 1902 resoluTons and those which Mr Deakin is seeking to press upon tin’s Conference. Tho former was practically one- resolution in five paragraphs. Tho first three paragraphs may bo summarifed as having amnr.cd the opinion of the 1902 Conference that—1. Preferential Trade between tire United Kingdom and the colonics would strengthen the Empire. 2. Frectrado between the Mother Country and tbe colonies was not practicable. 3. The colonies should give -‘substantial preferential treatment to the products and manufactures of the United Kingdom.” Then followed two more paragraphs, which, as a good deed of the Conference discussion during the next few days relates to them, may bo quoted in full, viz. : 4. That the Prime Ministers of the colonies respectfully urge on 11 -- Majesty’s Government the expediency of granting in tie United Kingdom preferential treatment to tho products and manufactures of the colonies, cither by exemption from or reduction of duties now or hereafter imposed. 5. That the Prime Ministers present at the Conference undertake to submit' to their respective Governments at tho earliest opportunity the principle- of the resolution, and to request them to tako

tucb measures cs may lx: necessary to give effect to it. AUSTRALIA'S PRESENT PROPOSALS. Mr Deakin now proposes to reaffirm paragraphs 1 to 5 inclusive in the 1902 resolutions, to emit paragraphs 4 ami sabove quoted, and to substitute the following;—• 4. That it. is desirable that the preferential treatment accorded by the: colonics to the products and manufactures of tho United Kingdom be also granted to the products and manufactures of other selfgoverning colonies. 5. That it is desirable tbit the United Kingdom grant preferential treatment to the products and manufactures of tho colonies. Sir Wilfrid Latnier takes his stand on these of 1302.' He regards the difference lx-tween them as vital. All the last Conference would do, and all tills Conference should do (in Sir Wilfrid’s opinion), is to “ respectfully urge upon His Majesty's Government the expediency ” of granting preferential treatment to the colonies. He holds that it is not for the colonial Premiers to declare that it is ‘■desirable” that the Mother Country should do this. That ts a matter for the Mother Country to decide for herself, ME DEAKIN'S SPEECH. Mr Dt-akin then proceeded to read, for nearly two hours a speech that covered the ■whole history of the Preference movement, from its initiation by Jan Hofmoyr in rho 1387 Conference—which, by the way, was attended by Mr Deakin himself, who was then only thirty years of ago, but already a leading Australian statesman. Tho Commonwealth Premier explained that whilst the three- tiist paragrajrhs of the resolution of 19r-2 were retained, the fourth and fit dr paragraphs had been replaced by two resolutions of a wider scope, ■which did not introduce specially the question of reduction of or exemption, trotn duties present or future. Ho pointed out that tie question of Preferential Trade had been raised in the very first Conference in 1837, and that a proposal had been made by Mr Hofmoyr, a representative from Cape Colony, "lor creating a defence fund by placing a duty of about 2 per cent, on ail foreign imports into the Empire, quoting words used by Sir Samuel Griffith, who maintained that buying in the cheapest market is not the greatest consideration in the world—tlm, after all, that or any other system of fiscal policy can only bo adopted os a means to an ona, the end being the prosperity of the country to which we belong.

He referred to language of a similar character used by JMr Service and himself, as representing Victoria at- that Conference. He also mentioned what took place at the LJanfercnco at Ottawa in 1831, and Mr Hofmeyr’s attitude on that cession, when he brought forward a resolution in favor o? the initiation of reciprocal Customs arrangements by separate agreements between the colonics and Great Britain or between auy o£ them.

An appeal to tho electors of Australia had been issued in June, 1906, against taxes on food, their present system being spoken oi as involving taxation of foul, whereas he preferred to use the phrase “ duty,” and not “tax.” The appeal had been rejected by a majority oi three to one in the recent elections Their tariff was the result of mixed motives. They desired to raise revenue to give a stimulus to local production in other cases by tlseir duties actually to

foster production. Where a duty is a tax he raised the question as to who pays tho tax.

All trade being based on mutual profit, ho argued that there should be a trade in preferences, which should be'for the benefit of all parlies concerned. Just as the colonies studied their own interests. So he expected that those representing the' Mother Country would study the interests of their own people. The result of granting Preference would, ho believed, bo to .build up the Dominions Beyond the Seas. These are the best customers of tbe Mother Country, and will always ho a part of the same Empire and claim to bo regarded from that point of view. There is tho political mo tivo to bo kept in mind. How far is it possible for tire several unite of the political whole to assist each other? An advantage only slightly profitable to tho individual unit might be an enhanced advantage to the group of unite. Ho dwelt upon tho importance of keeping tho Empire together by resorting to every opportunity which can assist its consolidation, and urged that greater ■ co-operation was a nocess ty of the Empire’s continued existence. He quoted the figures of Mr J. H. Schooling, which made it dear that the total imports from foreign countries into the largo colonial and Indian markets showed increasingly a higher percentage than British imports during the last fifty years. Taking the caeo of Australia during the last twenty years, tho imports from foreign countries, compared with British imports, had increased from ah annual average of 27.3 per cent, in the decade 1880-89 to an annual average of 38.7 per cent, in tho decade 1896-1905, This result did not arise from any serious diminution of trade caused by tho development of Australian industries, but was contemporaneous with a sub stantial increase in tho combined trade. Great Britain had lost a large share of trade in manufactured goods, tho lots being partly due to the conservative ness of English 'methods, but not to English products being too dear. There had been dumping in Australia on the part of foreign countries ; the caso of agricultural implements sent in from the United States was instanced. Protective measures had been taken.

He went on to point out that Australian trade is affected by shipping and other subsidies. They cannot send anything to Gorman colonies, German goods being carried on homo and colonial railways at nominal rates. In Prance the duty keeps out Australian butter; in America the duty keeps cut Australian wool. Only raw materials for their own manufactures are admitted free. There is no trade in frozen meat with Europe except with England. There is a prohibitive duty in Germany and in Franco upon tinned meat. Australia was r.ot likely to find a market on the Continent, and therefore wished to obtain greater advantage in the British market. Of the trade of Groat Britain which Australia could supply wholly or in part there was £213,000,000. t of this, £10,000,000 was at present supplied by Australia, £40,000,000 by other British possessions, £160,000,000 from foreign sources. The possibilities of expanding inter-imperial trade were immense, and the huge purchasing power apparent in the above figures furnishes a strong lever by which justice could be secured to British goods and colonial goods alike. An extension of the export trade of Australia was absolutely necessary to enable them to bring a larger area under cultivation with increased population, and to open up markets for its produce. Without Preference, he doubted if Australia could maintain its jiosition in British markets. It might be expected that with a preference oh wheat their exports might be increased fourfold, and that by the help of its increased export of butter an additional populaudn of 40,000 might be employed. SECOND DAY’S DISCUSSION. Tiic discussion on Imperial Preference was continued at tho Imperial Conference on Wednesday, Mr Deakin concluding the admirable speech which ho began an tho previous day. He pointed out what a valuable influence the possession of a preferential policy would bo for the Empire in dealing with other countries, and urged that there should be preference not only in trade but in the charnels of trade,-and in population. He was supported in vigorous speeches by Sir J. Ward, who declared that preference would not mean any addition to the cost of living in England; and Dv Jameson, who called attention to the growth of feeling in favor of Tariff Reform in England. Mr Deakin resumed his address by emphasising that there had been an immense increase of productive power in Australia, cultivation having been largely increased by more extensive use of machinery, and that the gross totals of trade were satisfactory. He had, however, followed the system of referring to the progress and distribution i of trade by, percentages in regard to tho relative trade with foreign countries and I with the British Empire. The purchasing j power of the British Empire was an enormous asset, and should be used unitedly. If retaliation were in prospect. Powers discriminating against Great) Britain and the colonies would desire to. treat. Other smaller nations were able to negotiate advantageously. and frequently concession could bo obtained by concession. Ho did not wish any aggressive spirit to he adopted. Ho did not tliink that foreign countries doing a large export trade with the British Empire could afford to retaliate, and they could not object to our doing what they do themselves in the way of preference. Tire Commonwealth could net abolish its Customs tariff, but discrimination was possible whilst preserving its revenue. Tho tariff was relatively a light one. An increase of present duties was possible, but the free list wad also available, and an ad- I vantage given to British) goods would on- | able them to replace foreign goods in. the classes which Great Britam is capable of producing,, and would bring about a largo addition to the trade between Great Britain and Australia. Arrangements had already been made .‘or intercolonial preference, but tho scope of these arrangements could nut bo of the same magnitude as an arrange- , mint with the Mctber Country. It was to j be anticipated that the day would soon ar- j rive when there would be a committee of experts, whose duty it would be to review the trade of the Empire as a whole, with a view tq taking all possible steps to increase trade between the various constituent parts of the Empire. The growth of a sense of the corporate unity of tho Empire must- be recognised without any infringement of the absolute independence of the individual action of the self-governing colonics. Co-operation must he mutually j beneficial, and sacrifice was not asked for. No definite scheme such as he had discussed had yet been put forward in Australia. There were provincial divergences still remaining, but opinion was steadily moving towards preference. Tire hope of the early grant of reciprocity by the Mother Gciiiitiy had never been strong enough to encourage them to elaborate a plan for mutual concessions. The arrangement between New Zealand and Australia for an instalment of preferential trade had fallen through, partly through Mr Scddun’sdeath, and the matter would no doubt b- taken up again soon. A complete revision of the Customs tariff was to bo undertaken in the new Parliament, which would go into the whole question, and this would give an opportunity of reconsidering everything, including the Bill whicli contained tho provision for conferring preference to goods conveyed in British ships manned by white labor, which had been passed at the end of the session without as full deliberation as the subject demanded. Australia had completed preferential arrangements with South Africa and Canada, and hoped to do so later with New Zealand. Preference began as a business operation, but would also assist towards the building up of the Empire economically, industrially, and productively. The people of the British race would thereby be kept within their own vast territories. There should be preference in population as well as in trade, and preference also in the channels of trade. The recent Shipping Conference gave them hope that British shipping would be asfisted and given preference. The maintenance of all these links between the portions of the

Empire would stimulate and embody the sentiment of the unity of the Empire, which will decide its destiny. Sir Joseph Ward, Prime Minister of New Zealand, said a great deal in Mr Deakin’s speech represented the position as to New Zealand as well as Australia. It was most desirable that the question of preference should l>© taken out <>£■ the arena of party politics. Preference was not to be confused with Protection. If in England, he would be an advocate of cheap food ; and if he thought that what New Zealand asked would cause dearer food, he would not urge the request upon the Conference, or upon New Zealand, but as he firmly believed it would not add to the cost of living in England, bo was a warm supporter of preference. Ho Quoted the tariff of the New Zealand Preference Act, and pointed out that New Zealand had extended reciprocal arrangements to Canada, and has also negotiated a* treaty with South Africa. Ho pointed out that the exports from the United Kingdom were £610,000 leas in 1904-1906 than in 1899-1901 to Australia and Now Zealand, and, excepting to Russia, they had increased their trade to every other country. The opponents of tlio United Kingdom were evidently pushing them aside. The inward and outward trade of Australia and New Zealand was about £140,000,000 to £150,000,000 per year; they were the third best customer for the products of the United Kingdom. Australia and New Zealand were in their infancy as to age, and their popu’ation was under 5,000,000. Yet their out v, ard trade to Australia and Now Zealand was only exceeded by that to India and Germany. The ono had 234,000,000 people, and the other 60,000,000, and lie believed that Britain’s outward trade to the Continental countries was almost at —if it had not reached—ita limit, as those countries with their high tariffs and large populations were yearly becoming more independent of outside countries, and would continue to do so, whereas Australia, Canada, South Africa, and Now Zealand were only at the beginning of their expansion, and as the years went on they would, with increased population, become greater and greater- purchasers from England, and he urged that not for to-day only, but for the years that were to follow', should they frame a policy for tho benefit of all parts of the Empire. Recurring to tho distinction between Preference and Protection, ho argued that a duty placed by Great Britain upon dairy produce or similar products from America and Russia would not cause those articles to rise in price, as there would be competition between Canada, Australia, and New Zealand in supplying the home market. He referred to the high tariff against the colonies of foreign Continental countries, who took nothing except raw materials. Germany, as the result of a settled policy, and as tho outcome of largo subventions in the way of shipping subsidies, had transferred the emporium of some goods from Londorn to the Continent. Ho went on to advocate the appointment of trade correspondents. He waif assured by Mr Lloyd-Gcorge that this matter was being attended to, and that a number of appointments such as he (the speaker) contemplated had already been made in Australia and Canada. Ho also advocated taking a leaf out of the book of some of our rivals, and assisting shipping communications by subsidies. Ho would also make the Suez Canal free, in which case New Zealand would bo prepared to tako its part in providing the sum required. Now Zealand ’and Australia might be -brought within twenty days of London via -Canada, and New Zealand would do its part. Ho looked forward to tie time when Great Britain and the colonies would bo a group of preferential trading countries, and with preferences established within the British Empire, when, if further extensions of trade was required, they could, as an Empire, negotiate on fair terms for reciprocal treaties with foreign countries to the advantage of the whole.

Dr Jameson, Prime Minister of the Cape Colony, felt that the ground had been almost entirely covered by the previous speeches, though on so vital a question m representaive could refrain from expressing his, view individually. South Africa, though economically not in the front rank as compared with Canada and Australasia, had been responsible for the inception of the idea of Preference, Mr Rhodes and Mr Hofmeyr having taken a prominent part in bringing tho question forward. Further, tho practical proposals embodied in the South African Customs Convention had boon largely due to Lord Milner. These representative names showed that in South Africa the question had been kept out of party politics. He endorsed every word of Mr Deakin, and felt that elaboration of what he had said would only weaken the effect. He advocated Preference being tried as an experiment, with a view to seeing whether it would grow into a principle. He did not ask His Majesty’s Government to change their Imperial fiscal policy, but to change methods. In advocating Preference, he desired to make for Freetrade by gradual steps. British trade was at first built up by Protection and such expedients as the navigation laws. Other nations have taken the same course, and were now competitors, All the colonies already see eye to eye, and wish His Majesty’s Government to sec eye to eye with them in bringing the whole Empire to work together to secure the most favorable terms from foreign nations. Looking back fourteen years, he referred to the objections which had been taken by Lord Ripon to the resolution in favor of Preferential Trade passed at the Ottawa Conference in 1894 —the objection due to tho treaties with Belgium and Germany, which were subsequently denounced —the difficulty in carrying out specific tariffs—the objection that Preference would interfere with tho natural channels of trade. He hoped for some small concession from the Chancellor of the Exchequer. Ho noted the action taken by tho President of tho Board of Trade in the recent Merchant Shipping Bill in the direction of subjecting foreign shipping to the same conditions as British. He and the other Premiers had received many resolutions from working men’s associations in this country in favor of Preferential Trade, and felt sure that the opinion of this class was that under Preference they would gain. He instanced wane and tobacco as two South African products on which a Preference would (five an impetus to trade. He pointed out the second paragraph of the resolution of tho Cape Colony was not a threat, but a warning from their own experience. There was a minority against colonial Preference without reciprocity in the United Kingdom, but the Colony would he unanimous in granting Preference to the Mother Country if reciprocity were established, however small in extent. Mr Moor. Prime Minister of Natal, also expressed the feeling that the ground had been covered by the preceding statements. He wished (o lay stress unon the fact that foreign nations have built around them-sri'-es high tariff walls, whilst, at the same time, they have had the population of England and India, in addition to their own population, as a market for their trade. This was an enormous advantage to them, owing to the large volume of their production for the more extensive market. Another process which was going on was the diversion of raw materials to foreign countries, where they are worked up for competition with Great Britain and the colonies. South Africa was affected by the grant of subsidies to steamers and by rebates on foreign railways. We must not only talk of tariff reform. Cheapening of shipping freights and rapidity of inter-communication arc also important. It is difficult to make any definite statement as to how much advantage is given to foreign countries in these ways by adjusting railway rates and subsidising shipping! but an endeavor should be made to get at tho facts. He was neither a Freetrader nor a Protectionist. He believed in a discriminating scientific tariff, without committing himself to either side. The South African tariff was not perfect, and must bo a growth, adjusted and readjusted. Tire people of Great Britain were being taxed on wines, sugar, tobacco, tea. The colonies asked His Majesty’s Government to grant relief by reducing taxation —e.g., on tobacco. What objection was there to making an experiment? If nothing comes of it, discussion will,'at airy rate, have had tho advantage of making everybody think. The movement has grown in South Africa, reciprocity having been given to Canada, Australia, and New Zealand. (To he contiriued,J ,