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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 33+¹⁄₃ 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?

Industrial development in Germany and the United StatesThe free trade position cannot be defended by arguments applicable to the conditions of fifty years ago. 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) comparative 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:-

				Average	Average	Increase per
				1880-1884	1895-1899	annum
United Kingdom			...	234	249	6.4
Germany	...	...	...	156	192	23.1
United States		...	...	166	237	42.8

During the last years of this period Germany and the United States have become increasingly pro-

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