A.—7

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the lines proposed by Canada, namely : (a) By further reducing the duties in favour of the United Kingdom ; (b) by raising the duties against foreign imports; (c) by imposing duties on certain foreign imports now on the free list. The Cape and Natal: A preference of 25 per cent, or its equivalent on dutiable goods other than specially rated articles, to be given by increasing the duties on foreign imports. The general resolution, that was finally adopted as covering the principle underlying the several proposals comprised in Mr. Balfour's memorandum, was as follows : — " 1. That this Conference recognises that the principle of preferential trade between the United Kingdom and His Majesty's dominions beyond the seas would stimulate and facilitate mutual commercial intercourse, and would, by promoting the development of the resources and industries of the several parts, strengthen the Empire. " 2. That this Conference recognises that in the present circumstances of the colonies it is not practicable to adopt a general system of free-trade as between the Mother-country and the British dominions beyond the seas. " 3. That with a view, however, to promoting the increase of trade within the Empire, it is desirable that those colonies which have not already adopted such a policy should, as far as their circumstances permit, give substantial preferential treatment to the products and manufactures of the United Kingdom. " 4. That the Prime Ministers of the colonies respectfully urge on His Majesty's Government the expediency of granting in the United Kingdom preferential treatment to the products and manufactures of the colonies, either 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 the earliest opportunity, the principle of the resolution, and to request them to take such measures as may be necessary to give effect to it." The Canadian Ministers handed in the following memorandum to explain their attitude on this question : — Memorandum by Canadian Ministers. This subject has frequently engaged the attention of the Conference. At an early stage Mr. Chamberlain suggested that the question could most conveniently be considered by the representatives of each colony placing themselves in communication with the President of the Board of Trade, Mr. Gerald Balfour, and the officials of that Department. Accordingly the Canadian Ministers had several protracted interviews with these gentlemen, and discussed the whole subject very fully. Opportunity was also taken to present the Canadian view to Mr. Chamberlain. Now that the Conference is drawing to a close it is desirable that the course of the discussion, and the conclusions reached by the Canadian Ministers, should be outlined and placed on record. From the beginning of the proceedings the Canadian Ministers have claimed that, in consideration of the substantial preference given by Canada for some years to the products of the Mothercountry, Canadian food-products should be exempted in the United Kingdom from the duties recently imposed. Eepresentations to this effect previously made through the High Commissioner for Canada were supplemented by the Ministers, both in writing and in the personal interviews with the Imperial Ministers. Mr. Chamberlain, on behalf of the Imperial Government, was unable to agree to the proposals of the Canadian Ministers. He represented that the Imperial Government, while highly appreciating the good feeling manifested by Canada in the granting of preferential treatment, did not think the material results to the trade of the United Kingdom were as great as the Canadian Ministers claimed. He further said that the change desired by Canada would be an important departure from the established fiscal policy of the kingdom, and that, if the proposals could be entertained at all, as to which he was not prepared to commit himself, it would be necessary for Canada to offer some material tariff concessions beyond those which she had already voluntarily given. t The Canadian Ministers, therefore, submitted a memorandum on the subject of the advantages already received by Great Britain from the Canadian preferential tariff, with a view to showing that these were of much value, and entitled to weight in the consideration of the whole subject. While urging that the benefits of the preference were such as to entitle Canada to the desired exemption from the duties on food-products in the United Kingdom, the Canadian Ministers stated that within certain limitations they were prepared to consider the request of Mr. Chamberlain for further concessions in return for the desired preference in the markets of the United Kingdom. While it was not deemed necessary to enter into questions as to the wisdom or unwisdom of the policy adopted by all Governments in Canada, of raising the revenues chiefly from Customs duties, the Canadian Ministers pointed out that under that policy large industries had grown up which had to be considered in connection with the proposed tariff changes. Large reductions of duties had been made in recent years, especially on British imports. It was feared that in some lines of importance further reductions might create a disturbance of trade which would not be conducive to the welfare of the country. But the Canadian Ministers pointed out that the Canadian tariff was by no means prohibitive, that large quantities of goods were imported, and that a great proportion of these came from foreign countries. In any lines in which it appeared that the goods would be manufactured in Great Britain, it might be possible to so readjust some duties as to give an additional advantage to the British manufacturer, and thus turn over to him a volume of trade which at present is held by the manufacturers of foreign countries.