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Since I began writing this paper, I have come upon a statement in an Indian journal that the Russians have reduced the duties on imports from Afghanistan by 50 per cent., and have tried to divert to the Trans-Caspian railway that pilgrim trade which since the Mohammedan conquest has been carried from Indian seaports up the Red Sea to Mecca. This has happened because Russia now has her splendid network of trunk railways extending from the heart of Europe to the borders of Afghanistan and Persia, while we sit entrenched below the Himalayas, rojoicing in the pomp and vanity of Empire, and neglecting the opportunities of securing commercial supremacy in Asia which lay ready to our hand. In the same way we have let go our control of the trade of Persia. A distinguished Englishman, who once held a high position at the Court of Persia, told me some years ago that, when our influence overstepped that of Russia at Teheran, the Shah offered to concede to this country the privilege of constructing railways within his dominions, which he has since transferred to Russia. I had an opportunity some time afterwards of mentioning to Lord Salisbury what I had heard, and he hastened to assure me that no such offer had been made by the Shah while he was at the Foreign Office. That, no doubt, was so, but the information conveyed to me was unimpeachable, and I can only suppose that the offer was made in one of those intervals when Lord Salisbury was out of power, and that it is pigeon-holed somewhere in our Foreign Office.

ADVANTAGES OF INTERNATIONAL
COMMERCE.

It is in the direction of expansion in Asia that we may look hopefully for the acquisition by India of a wider sphere of commercial influence. Nothing worse can happen for a nation than that it should sit down comfortably within its Own borders, and regard with jealousy and dislike what goes on elsewhere. It has become far too much the fashion in England of late to speak of the rapid progress made by some Continental States as an injury done to ourselves instead of hailing it as a contribution to the increased productiveness and wealth of the world. Of course, European States have advanced rapidly of late years, more rapidly, perhaps, than we have. Our progress was of an earlier date than theirs, and it is fifty years since we began to reap the full enjoyment of the industrial and commercial supremacy acquired for us by

successful wars, and by the inventive spirit applied in the development of our manufactures and the construction of our railways. Some time ago, the German Kaiser remarked, with his customary frankness, that in all matters of business England was, at least, a hundred years ahead of Germany. Naturally, all Continental nations have been eager to fill up this gap, and have made strenuous efforts to overtake us. They have been aided by a prolonged period of peace, which has lasted now for thirty years, and, in Germany, progress has been still further stimulated by the formation of a mighty Empire out of a multitude of petty States, and the uprising of a spirit of enterprise and adventure which reminds us of the England of Queen Elizabeth. All through the Continent of Europe, natura) resources have been developed, and new industries established. Immense strides have been made in the extension of railways, and the creation of greater facilities of rapid communication between different countries. The Alps have been tunnelled in half-a-dozen different directions at enormous cost, and a great inland traffic thus established between Central Europe and Italy. The construction of the Siberian Railway as far as Pekin has more than equalled the stupendous feats of American engineering, and has restored all Asia to active life.

One incidental consequence of this remarkable development of productive and organising ability in the two great continents of the Old World seems till now to have escaped public notice. I venture to point out that an economical and constructional revolution has taken place which has immensely extended, quickened, and made more comprehensive and secure the overland communications and exchange of trade in Asia and Europe, and has thus greatly narrowed the scope and influence of that "sea power" which forms England's peculiar strength, and which was quite overwhelming twenty years ago, when Captain Mahan wrote his famous book. Again, England herself has contributed largely to the successes that our Continental rivals have achieved in industries which were thought to be peculiarly our own. I remember that, when I was Member of Parliament for Oldham, the late Mr. S. R. Platt, the head of the principal firm of builders of cotton factory machines in Lancashire, told me that he himself had fitted up a hundred mills in Russia. Lancashire now, of course, feels the effects of the competition thus created.

"Keen were his pangs, but keener far to feel

He nursed the pinion that impelled the steel." If we still keep our place as the chief workshop of the world, we owe it to the superior skill of our mechanics and artisans, and to the unrivalled cheapness of their food and of the raw materials of their industry. But it is idle to suppose that we can keep back foreign nations by barring them out of our ports, or by attributing to their tariffs alone advances which are due to far other causes.

THE OPEN PORTS OF THE EMPIRE. Sir Michael Hicks Beach remarked lately that he had been impressed by the immense importance all foreign nations attached to England's open market. That is the real secret of our supremacy. When our market ceases to be open to all the world, we shall lose everything. It is not only free imports by which we flourish, but by perfect freedom in all things. We have become the carriers of the world because the foreigner knows that he can come to an English port without being vexed by a multitude of embarrassing restrictions. This is the reason why we enjoy a vast transshipment trade in goods sent to this country for redistribution among foreign States, and why London is still the great mart of exchange for the monetary transactions of the whole world.

THE TRANS-SHIPMENT TRADE OF EAST AND

WEST.

The surprising extent of our trans-shipment trade is not generally known to the British public. This trade in England is worth fourteen millions sterling a year, and the profits we make by it would more than outweigh the amount of a considerable protective tariff on foreign manufactures. It is only the trust

which foreign nations place in us which brings all this merchandise here for redistribution. I was amused to read the other day a speech by a member of the Government who loftily declared he did not want England to be an Imperial Carter Paterson. Yet what was Venice in the height of her wealth and fame but a magnified Carter Paterson? It was the command of the world's carrying trade that made her great. This passed from her to Spain and Portugal, and is now our inheritance.

It is not our Empire only which we control. We are the brokers, agents, merchants, shippers, and bankers of all other nations as well; they all pour their money into the lap of England. The Thames is still the chief international causeway, and the high tide of civilis

ation still flows in front of the Imperial Palace of Westminster. But it is not only in the West that the carrying trade belongs to us. In the East, also, thanks to our possession of India, we enjoy the monopoly of a most valuable trans-shipment trade. The total tonnage entered and cleared at the great seaports subsidiary to India of Colombo, Singapore, and Hong Kong, which we have placed as sentinels of the British Empire at the chief strategical points of the principal ocean highways to guard the freedom of the seas, reaches the enormous aggregate of fifty millions sterling. As the merchandise at these entrepôts is entered twice, both as imports and exports, the value of the goods consigned for redistribution should be reduced by one half to twenty-five millions. This added to England's fourteen millions, brings the grand total for the Empire up to thirty-nine millions.

CONCLUSION.

It is freedom alone, then, that priceless gift which England has bestowed upon mankind, that makes our strength, and we shall do well attractions, but, as a matter of policy, we ought not to part with it rashly. Protection has many to remember that, if Free Trade is the gospel of enlightened selfishness, Protection is the gospel of unenlightened selfishness. Are we going back to the old days when every British industry was safeguarded by legislation, and when, for instance, our woollen trade was thought to be so much endangered by the importation of the fine cottons of India, that the State required the shrouds of the dead to be made of wool, an edict which inspired Pope's couplet on the dying lady of quality

"Odious! In woollen! 'twould a saint provoke,

Were the last words that poor Narcissa spoke."

May I conclude with a few words of warning against the too eager adoption by the advocates of Imperial Federation of the discarded legislative methods of a bygone age? The Prime Minister assures us that the plan of letting commercial precede political union always succeeds, and instances the formation of the United Kingdom of Great Britain out of the two kingdoms of England and Scotland. But is it the case that fiscal unity was the first step in the federation of England and Scotland? My own impression is, that differences in the taxation of the two countries lasted till the middle of the 19th century. I can well remember that when, as a small boy, I made my first journey

on that road to England which is said to be taken at some time or other by all good Scotsmen, the coach stopped at Berwick for an examination of passengers' luggage before entering England, and I was deeply impressed

with the seizure by the Customs-house officers of a bottle of Scotch whisky, which a poor young man was innocently conveying from Edinburgh to his mother in Newcastle. This incident serves to show that, when you begin to discriminate in tariffs, there is no knowing where you will stop. It often seems to me that there is one example in the history of Europe of an attempt to establish a land-locked and self-sufficing Empire, seeking to be perfectly independent of foreign trade, which ought not to be overlooked. I refer to the overgrown Empire of the great Napoleon, which, when England alone remained unsubdued, "when Austria bent, and Prussia broke, and Europe bowed beneath the yoke," embraced the whole Continent from the Baltic to the Mediterranean. Napoleon then attempted to force England to make peace by destroying her commerce, and he forbade the importation of English goods into any of the Continental seaports. This policy recoiled upon himself. The English Government retaliated with the famous Orders in Council putting the whole of the Continent into a state of blockade; and, although Napoleon did us some damage, he did infinite harm to his own people. Smuggling became the favourite pursuit at every seaport, and was connived at by the whole population. Napoleon's own Marshals made fortunes by winking at the acts of the smugglers. All his Court took to smuggling; his own wife became the chief smuggler in the Empire, and the disastrous conflict went on till it was ended on the day of that battle of giants at Waterloo. Let us then beware of the beginning of tariff wars. Let us be on our guard, not, in pursuit of a vain chimera, to imperil the choicest fruits of human intelligence and human liberty.

DISCUSSION.

The CHAIRMAN said he thought that they might congratulate themselves on the raising of this particular branch of the controversy of fiscal reform, India being one main factor in our imperial fabric. The question which Mr. Maclean had raised as to India's position in an imperial and commercial federation appeared to have gone by the board, unless they might take into account the sporadic efforts made by means of letters to The Times, such

as the brief but lively passage-at-arms which he had with Sir Charles Elliott in the columns of that paper. In this connection he might also mention Sir Charles Elliott's very useful and suggestive article in The The imperial federaEmpire Review of this month.

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tion of the colonies and the imperial federation of India were two totally different things. They must not overlook the fact that India was governed by the sword, and was, as Mr. Maclean had said, for all practical purposes, already federated with Great Britain. As to commercial federation, he thought that some reasonable " give-and-take scheme, which would join both India and the colonies to He Great Britain, would be perfectly workable. thought that past history abundantly proved that the most effectual means of obtaining political union was through the Custom-house. And on this point he joined issue with Mr. Maclean. Was it possible to conceive any commercial arrangements under which the whole of our self-governing colonies should come in for substantial boons while India alone was left out in the cold? He did not quite gather from Mr. Maclean whether, assuming that the unofficial proposals for fiscal reform which had been brought forward by a great statesman were accepted by the country, he would still object to India being made to join. At any rate, Mr. Maclean had earned their gratitude for having, so to speak, opened the ball, and whether they agreed with him or not they would all appreciate his real knowledge of the subject, his lucid exposition, and his fair and temperate, if not altogether impartial, handling of it. For nearly a quarter of a century Mr. Maclean had a very large part in moulding public opinion in India, and he undertook the defence of Indian social and commercial interests against the generally immature and sometimes arbitrary action of the Indian authorities. He (the Chairman) believed that the highhanded caprice which used to characterise the executive efforts of Indian bureaucracy had now practically died out. He was particularly glad to mention that point in the presence of an old Secretary of State for India (Sir Henry Fowler), than whom, he sincerely believed, no one did more to bring about that most desirable state of things. Members of Parliament had had occasion to admire Mr. Maclean's independence of character, fearless exposure of abuse, and indifference to local unpopularity. Personally, he (the Chairman) disagreed with Mr. Maclean's conclusions, because he believed that he had arrived at those conclusions by a too close adherence and attention to the statics of the problem, and that he had underrated the dynamic forces which the modern conditions of commercial activity introduced all the world over. Assuming, for the sake of argument, that the unofficial preferential tariff proposals were accepted by the country, they might ask themselves what were the lines along which India should proceed in connection with those tariff proposals, and whether the balance of commercial and economic advantages and dis

advantages was such that that balance was likely to inure to India's welfare or the reverse. What would happen to India if she did join the Imperial Customs Federation? Probably she would be asked to reduce considerably her duty on those imported goods received from Great Britain and the colonies, and, on the other hand, to raise her import duties on articles received from foreign parts. What did the imports into India consist of? Mainly manufactured and partly manufactured articles, with the exception, he believed, of kerosene and raw silk. India now depended for her revenue to a great extent upon her Customs. He believed that the volume of imported goods would not suffer any great diminution if the import duty was raised to a reasonable extent. But, as to her exports, it might be asked whether the foreign countries to which she sent her products would not retaliate if she raised her duties on imported goods. To answer that question adequately one must consider what the nature of the exports from India was. They consisted of food and raw material, with a single infinitesimal exception, gunny bags, and he thought that foreign nations would hesitate before they took measures of reprisal against India, the direct consequence of which would be that they would raise the cost of the food necessary for their populations, and of indispensable ingredients for the carrying on of their industries. The author referring to wheat grown in India, said that the area of cultivation was practically exhausted; but he (the Chairman) had an impression that in the United Provinces and the Punjab there was something like from 24 millions to 30 millions of acres absolutely lying fallow, and certain to be put under the plough if there was a preferential arrangement under which wheat came into England free. Let them think what an advantage it would be to India if she was encouraged to grow more wheat and grain. It would widen her area of employment, and diffuse her wealth. and an incidental element of the prosperity would be that measures would be taken in order to avert the too frequent recurrence of blight and famine. The author indulged in what he (the Chairman) considered to be a rather undeserved sneer at the action of the Indian Government in connection with sugar. He should have thought that the author's great belief and conviction in favour of free trade would have commended that action to his judgment. What had happened was that the action which had been taken had led to the abolition of bounties upon sugar. Surely, bounties upon sugar were not a thing that could be said to be compatible with the doctrine of free trade. A commission was appointed by the Government to enquire into the matter, so that there could be no question but that the action which had been taken was decided upon after a most thorough, searching, and impartial investigation. The effect of taxing bounty-fed sugar taken into India was that it had very considerably reduced the importation of that kind of sugar, and that had been replaced by sugar coming from countries in which we ourselves

were interested-Egypt, Mauritius, and the West Indies. The only other objection which he had heard raised to preferential tariffs was that India would not be able to purchase those cheap and nasty scissors and knives which arrived there in such large quantities from Germany. Why should it be assumed that the enterprising cutlers of Sheffield given a firmer hold on the home market would not be able to produce articles which, though they might cost a few annas more, would be far more durable, and which, in the long run, would be far more cheap? He would sum up his remarks by saying that his own humble view was that a reasonable scheme of preferential arrangement would be distinctly beneficial to India. He believed that the policy of blind and unconscious drift, in deference to an economic ideal, was dead-dead as mutton. He thought also that a hard and hide-bound system of protection would be no better for India than it would be for England. But he would assert that, if foreign nations universally rejected the demand which one day the people of this country would infallibly make for fair treatment, we should have to encounter the evils of protection by a defensive retaliation, or by any process ready to hand, in order to stave off greater evils, namely, the evils of loss of trade and loss of employment. The resources of British civilisation in the adoption of an imperial fiscal policy would be found, he hoped, not to be exhausted. Then India would be able to reap her rightful and legitimate share of the benefits accruing from that system, as one of the partners. She would, he thought, courageously accept her part of the burden, and stand as one of the most flourishing elements in our splendid and indivisible Empire.

The Rt. Hon. Sir HENRY FOWLER, G.C.S.I., M.P., said that he should like to ask where India came in in the present fiscal proposals. India had been left out of all the proposals that had been made. There were two schemes before the country. The Chairman had alluded to the unofficial scheme, and the reader of the paper had dealt with a portion of both schemes. The first scheme which they had to deal with was the official one, which was that of the Prime Minister, and those whom he represented. But how was that scheme going to affect India? He would invite Indian experts to answer that question. He understood the official scheme to be that, when nations imposed upon us harsh, unfair, and unjust tariffs, it should be in the power of the British Government to retaliate upon those nations by tariffs of a penalising character. How would India be affected by such a transaction? Mr. Maclean had pointed out that India was already federated, and was part of the British Empire, as much as Kent or Sussex. He was not aware that anything was dumped down" in India, and he was not aware that any of the industries of India had been ruined. He was under the impression that the industries of India were, perhaps, more prosperous to

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land into cultivation. But what about manufactured articles? It meant that everything that India bought now was to have a duty levied upon it. Therefore, they would be confronted with the cotton question. At present India, for revenue purposes, raised a duty of something like five per cent. That would have to be turned into ten per cent. But why should India be further taxed? The Indian people would have to

would have to increase the Customs duty in India by five per cent., and the Indian people would have to pay. Where was their compensation for doing that è The unity of the Empire was very well in its way, but he did not think that that was an argument which they could very well apply to the Indian peasant. His complaint was, that India had been forgotten. Three out of four of the living ex-Viceroys of India were antagonistic, in the interests of India, to the proposed fiscal policy. He believed that all the living preceding Secretaries of State for India were also opposed to the policy, and certainly one of the ablest speeches that had been delivered in the whole of this fiscal controversy, was delivered by Lord George Hamilton, who approached the question from the Indian point of view, and, as Secretary of State for India, refused to be a party to the proposed changes, whether they were official or unofficial.

day than they had been within the memory of man. He would enter a caveat against what the Chairman had said with reference to the effect of the sugar legislation in India. He was under the impression that there was more sugar imported now into India from the bounty-giving countries than there was before the legislation took place. But he wanted to know what was the industry in India which would be benefited by retaliatory duties. The bulk of the manufactures ofpay the tax. If this scheme was carried out, they India consisted of articles on which no or small tariffs were levied in the countries to which they went. What had India to gain by causing a war of tariffs which would inevitably result in those products which India sold being penalised in the country to which she was now sending them virtually free at the present time? Again, if there were retaliatory duties, two sides would play at them. The United States now imported a large number of commodities from India and admitted them at a low tariff. If retaliation was commenced by this country against the United States the United States would retaliate on the whole of the British Empire. Well, India would gain nothing by that. But what was to be her position with reference to her own tariffs? He agreed absolutely with Mr. Maclean that it would be a very disastrous thing if Sir John Strachey's policy was finally abandoned. It was altered for a time because owing to the fall in the value of the rupee India was in a great monetary crisis, and was obliged to impose duties. As to the cotton duties, they could not allow India to relieve herself from the excise duties which we levied upon cotton. Where was the preference? Were they going to impose duties upon cotton goods from England? If so, he thought that there would be a great deal to say in Lancashire upon that question, and also in India, because at the present time the overwhelming bulk of the imports into India consisted of the cotton goods of Lancashire. Therefore a great difficulty would be created there. They did not really know what the proposed plan was. Nobody had told them how the official programme of retaliation was to be carried out. With our complicated commerce, how could the retaliatory duties be inflicted? Assuming that they were levied, he thought that they would be injurious to India. But let them take the unofficial programme, which was more like business, for that was a proposal which he thought they would come to very soon. What was that? It was that there was to be a preference granted to food coming into the United Kingdom. There was to be, in addition, an import duty levied upon all manufactured or partly - manufactured goods coming into this country. How did that affect India ? That was what he asked the experts India had no disadvantage at present in her export of wheat. The risk of the Indian market was the uncertainty of the crop. He believed that there was an enormous future for India in the cultivation of wheat and the export of it, but a great deal had to be done before that could be carried out, and especially in the way of bringing more wheat

to say.

Sir EDGAR VINCENT, K.C.M.G., M.P., said that the Chairman had remarked with great truth that in this discussion India had gone by the board. He would suggest that, if Mr. Maclean reprinted his admirable paper, he might take as a second title for it "The Strange Case of Cinderella," because, while all the self-governing colonies had been invited to this preferential feast, India had been left out. He thought that all present would be agreed that, if the Government gave preferential treatment to Australia and to Canada, it could not do otherwise than give it to India. He would add that the preferential conditions given to Indian trade must not be less favourable than those which were given to Canada and Australia. Canada and Australia levied protective duties upon English goods, but they were to receive preferential treatment. India and South Africa did not levy protective duties on English goods. Therefore, in fairness, they were entitled to superior treatment. How would the unauthorised policy work out in the case of India? England would have to give India preferential treatment, but that would be found very difficult. In order to give it to Indian cotton, England would have to put a duty on American cotton. But would this country stand an import duty upon one of her staple industries? Again, could a duty be put upon jute other than Indian, in order to give Indian jute a preference? Or could the duty on China tea be increased, in order that the duty on Indian might be reduced? In such an event would not the Chancellor of the Exchequer be placed in a revenue difficulty? India would be able to claim to act towards English manufactures in the same way as

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