IMPERIAL AND COLONIAL PREFERENTIAL TRADE.

THE relations of the British Colonies to the Empire, while continuing the same as in former years in form and in character of mutual obligations and control, are undoubtedly undergoing modifications of an important character. This, however, does not relate to laws defining, on the one hand, the extent of paramount authority, and, on the other hand, the degree of subordination, but rather as to the development of a marked spirit of imperialistic unity, and of a harmony of action based upon sympathy and sentiment.

The revolt of the American colonies, and the erection of a new nation upon what seemed for the time to be the ruins of the British Colonial Empire, marked a turning point in Britain's Colonial policy. This great blow shattered the policy of governing the Colonies from London; of interfering with their domestic affairs; and of making them preserves for British merchants, shippers, and manufacturers through arbitrary restrictions upon Colonial manufactures and trade. A more liberal and rational Colonial policy was entered upon. In Canada the French Canadian inhabitants were treated with justice and liberality; and by degrees the policy of Great Britain grew more forbearing, and the absence of interference in Colonial affairs grew more marked. Canada won for herself responsible government, in 1837, more through the removal of internal disorders and abuses than through the change of any Imperial policy at variance with the spirit of justice and liberty in the course pursued by Great Britain. Since confederation, in 1867, Canada has been truly a self-governing Colony. She makes her own laws, fixes her own tariff, controls her own military system, and contributes not a single dollar to the revenue of Great Britain. The only burden upon her in consequence of her connection with the Imperial system is the payment of the GovernorGeneral's salary of $50,000 per annum.

While under the provisions of the Canadian constitution the home government may veto any Canadian legislation within two years of the passage of the law, the power has never been exercised except at

Canadian request. The judicial committee of the Privy Council in London has appellate jurisdiction in all Canadian cases when a constitutional question is involved ; and the concurrence of the Imperial Parliament would be required to sanction any change in the constitution of Canada. In these respects only does Canada come short of being independent and self-governing.

The recent action of Canada, Australia, and New Zealand in placing contingents of Colonial soldiers at the service of the British Government in South Africa was entirely voluntary. The expense of raising and equipping the troops sent from Canada and of transporting them to South Africa was borne by the Canadian Government; and in addition to this the British allowance of pay has been supplemented by an additional grant of the same amount by Canada. The state of sentiment which prompted this action seems to have been chiefly incited by the remarkable demonstrations incident to the Jubilee year, when the Premiers of the various Colonies, accompanied by detachments of Colonial troops, leading Colonial statesmen, and a great host of Colonial citizens, met in London and added to the dignity and impressiveness of the great pageant. Following this, Canada gave to British imports a preference of 12 per cent in 1897-8, and of 25 per cent in 1898-9. This preference has been increased in the last session of Parliament to 33 per cent.

The granting of this preference was severely criticised by the Conservative opposition of Canada on the ground that Great Britain gave no preference to Canada in return, which it is asserted might have been obtained. The recent increase of the preference to 33 per cent has not been received with a cordial spirit of approbation by the manufacturing interests of Canada. The Conservative line of adverse criticism is met by the answer that Great Britain admits all the natural products of Canada free of duty; that Canadian exports to Great Britain exceed Canadian imports from Great Britain in the proportion of three to one; and that it was only reasonable that a policy should be adopted which would tend to stimulate the British export trade to Canada. In connection with this view of the matter account is taken of the fact that the fiscal policy of the United States renders our exports of farm and forest products to that country insignificant in volume, while our imports from that country are enormous, exceeding our exports to it in the ratio of nearly three to one; and this fact is held to furnish an additional reason for seeking to stimulate imports from the country to which we are bound by ties of interest.

The claim made by the Conservative leaders, that preferential treatment to Great Britain should only have been given in return for preferential treatment accorded by the tariff of that country to Colonial food products, and that such preferential treatment can be obtained if sought for, is to be one of the party issues in the next Dominion election, which may take place before the close of the present year, and which must take place before the end of July, 1901. That this claim of ability of the Conservative party to obtain such arrangement, if placed in power, will serve as an issue at the polls is foreshadowed by the amendment offered by Sir Charles Tupper, the leader of the Conservative party, to the motion of Mr. Fielding, the finance minister, when presenting the financial statement of the Government for the last fiscal year. The amendment offered by the Conservative leader is as follows:

"This house is of opinion that a system of mutual trade preference between Great Britain and Ireland and the Colonies would greatly stimulate increased production in and commerce between these countries, and thus promote and maintain the unity of the empire; and that no measure of preference which falls short of the complete realization of such a policy should be considered as final or satisfactory."

Mr. Chamberlain, the English Colonial Secretary, met the assumption thus presented, that Great Britain would revive the corn laws and tax the food of her citizens for the benefit of her Colonial dependencies, by the following statement made in answer to a motion by Mr. Hedderwick, M. P., bearing upon the questions of Colonial and Imperial relations. Mr. Chamberlain's reference to the matter was this:

"We are not going to interfere in the domestic affairs of the Colonies, nor are they going to interfere in ours. I have never advocated, as has been reported, the formation of an imperial Zollverein, but I have pointed out that if there was to be any kind of fiscal arrangement with the Colonies, I believe the only form that would meet with the slightest favor would be an imperial Zollverein, in which there would be free trade between the portions of the empire and duty as against strangers."

This would seem to be explicit enough; and the obvious inference is that no proposal for preferential duties upon food for the advantage of the Colonies would be considered by Great Britain, except as a corollary of the free admission of all British manufactures and products into the markets of the Colonies. Nothing, in fact, short of such an Imperial Zollverein could be considered.

It is proposed to inquire into the relative volume of British trade

with the Colonies and with foreign countries, and into various matters fiscal and commercial, with a view to arriving at a conclusion as to whether any reasonable hope can be entertained by Canada that the British Government will concede what Sir Charles Tupper asserts can be obtained. It is also proposed to deal with the practical outcome of the granting of preferential duties by Canada to Great Britain, as relates to the influence exerted by that policy upon the volume of exports from the United States to Canada.

A scrutiny of the trade returns of Great Britain will give satisfactory evidence that the assumption of the Conservative party of Canada that Great Britain will impose a tax upon foreign food products for the benefit of Canada is not well founded. In the statement of British trade for 1898, which is the latest for which returns are available, the pound sterling has been converted into dollars at the rate of five dollars to the pound, and percentages have been worked out to illustrate more strikingly the story that the figures tell:

Colonial percentage of total exports....

Exports to British North American Colonies..

British North American colonies percentage of total

.$1,470,069,000

450,553,000

1,019,516,000

30.64

$37,705,000

2.56

TOTAL TRADE.

Total trade.....

Total Colonial trade.

Total foreign trade...

Colonial trade percentage of total trade.

Total trade British North American Colonies

British North American Colonies percentage of total

.$3,821,962,000

947,723,000

2,874,239,000

24.77

$141,478,000

3.70

The proposal of the Canadian Conservative opposition, it will thus be seen, is that Canada with less than five per cent of the import

trade of Great Britain, with less than three per cent of the export trade, and with less than four per cent of the total trade of that country, should be put upon a favored footing in the markets of that country by placing duties upon the breadstuffs, the animals and their products, of the United States and of other foreign nations, and by admitting all from Canada and other Colonies, free of duty. It requires but little reflection to arrive at the conclusion that British interests will not permit the adoption of such a policy even at the united requests of all the Governments of the British Colonial Empire, much less at that of Canada, the proportions of whose trade are so insignificant as compared with the enormous volume of Britain's aggregate trade as to render the proposal to tax the British consumer for the benefit of the Canadian producer utterly inadmissible. In fact, there is scant reason to suppose that an Imperial Zollverein, with free trade throughout the Empire, and the admission of British goods free of duty into all the Colonial markets, would possess attractions for British statesmen, if it were to be secured at the cost of duties upon food products for the benefit of Colonial producers.

In the present state of Britain's trade in the export of the products of her skilled labor it is evident that a tax upon the food of her artisans will not be resorted to. For half a century free trade has been a cardinal feature in British commercial policy. Cheapness of production is essential to the continuance of Britain's supremacy in the business of exporting finished wares. Cheap raw material and cheap food, the latter of which is practically a raw material in the production of goods, are essential to success. A tax upon either would do violence to the time-honored policy of the great free-trade power, whose goods are found in all markets, and whose merchant marine performs three-quarters of the ocean-carrying trade of the world. This supremacy in the export of manufactures is now threatened by the keen competition of Germany and the United States, and the struggle already in full play is certain to become more acute.

The volume of export of manufactures from the United States has increased greatly in recent years. Already the Great Republic has practical control of the iron and steel trade in all neutral markets. This trade has slipped from the grasp of Great Britain with no prospect of its return. The intelligence of operatives, the vast aggregations of capital, and the methods of management in the United States, in pushing trade, give promise that further inroads will follow. The manufacturing interests of the United States, if confined merely to