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Problems of Empire/Canada and the Preferential Tariff

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CANADA & PREFERENTIAL TRADE.


Rye, October 10th, 1903.


Recent History of Liberal Party. In coming before such a gathering as this, a gathering representing a party to which I have hitherto been politically 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 political 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. Chamberlain has been able to do in the nineties. Ever since the retirement of Mr. Gladstone, whose leadership was unquestioned, the Liberal Party has been torn by divisions. One section, that led by Sir William 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, '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 delivered 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 'Methods of barbarism.' 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 Liberal 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 believed the resolution on the war which was going to be put at the annual gathering of the Federation would have an injurious effect on 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. Chamberlain's Speech on May 15th, 1903.  We now come to Mr. Chamberlain's speech of May 15th. What was the attitude of the Liberal 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 consider 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 expected, and which would be workable. It would have to be considered whether the people of this country could be brought to agree 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 temptation to make political capital out of that question was irresistible to a party so divided and so impotent as the Liberal Party had been for many years. Lord Rosebery's two principal lieutenants, Sir Edward Grey and Mr. Asquith, were already uncompromisingly committed 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 politician 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.

Tariff Reform. To turn to the great question of the moment, the 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 enunciated 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 introduced, 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 Government. 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 delivered by Mr. Chamberlain at Glasgow on Tuesday last, followed by that which he delivered at Greenock, I am not at all sure that the country is not prepared to go a little further. I am in favour of Mr. Balfour's policy, but I have even a greater feeling in favour of the policy advocated by Mr. Chamberlain. Mr. Balfour's policy by itself is of no value to agriculture. 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 involved 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 constituency, I support the policy of Mr. Chamberlain 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.

Mr. Chamberlain's Policy. Mr. Asquith, in his speech at Cinderford on October 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 Mr. 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 reciprocity 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 preferential 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 which had not already adopted such a policy should, as far as their circumstances admitted, give substantial preferential treatment to the products and manufactures of the United Kingdom; and that the Prime Ministers of the Colonies respectfully urge upon His Majesty's Government the expediency of granting 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, Mr. 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. Mr. 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 realise in the facts I have just mentioned that there is ample justification 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 of Montreal. During my recent visit to Canada I obtained information of some importance in connection with the controversy. It has been freely asserted by those opposed to the policy of Mr. Chamberlain and Mr. Balfour that the 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 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, whereby 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 that of the more important Chambers of Commerce—received instructions not to commit their Chambers to the policy advocated by Mr. 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 consolidated by the adoption of a commercial policy 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.

Canada as a source of wheat supply. Then from Montreal 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 from Manitoba is some 40,000,000 bushels. The requirements 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 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 slightest 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.

An effective Preference. The next question I wished to inquire into was 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 Mr. 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 American influx. The third point into which I wished to inquire 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 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 Manufacturers. From Winnipeg I came back to Toronto, having been invited to attend a meeting of the Canadian Manufacturers' Association, and to give an address at their reception in the Parliament Buildings, Toronto. The Canadian manufacturer, like most other manufacturers, 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 effective 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 address 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 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.