CHAPTER XXVII. THE PRICE OF EMPIRE.

Summing up, the Return to Protection involved in preferential tariffs is a heavy price to pay for an experiment. Granting all the attractiveness of a “unified empire” it is more than doubtful if this would not be a long step towards its disintegration.

THUS we have summed up the gains and losses of Preference. It seems to come to this: that the demands of the self-governing Colonies are to dictate the commercial policy of an Empire which includes the not insignificant free-trade members of the United Kingdom, the Crown Colonies, and India. And, these “demands” are held as a threat over us. It is “the only system by which this Empire can be held together.”

It looks a poor return for having given these Colonies self-government. They have Protection; they are to retain it. They have unbounded prosperity; they are to have more. They have cheap bread; they are to have it cheaper.

We have Free Trade; we are to give it up. We have prosperity; we are to imperil it. We have millions to whom cheap food is a vital consideration; we are to tax their bread and meat, their tables and chairs, their pots and pans, the few poor rags of bedding and napery they possess.

At last we are faced with a straight issue. This is the price of Empire. The Colonies stood by us in the war. Our hearts warmed with pride. It is what we might have expected of the native-born, but we were glad we found it. And now the bill comes in.

The demand for a quid pro quo from a mother country which already gives so much, reminds me of a little girl I once knew, whose mother supplied her with pans and flour and raisins, in return for which the child sold the mother her cakes at “shop prices!” Did any other mother country ever give her colonies, not only parliaments and legislatures of their own, but liberty to tax her goods even to the extent of prohibition,¹ while, all the time, she paid almost the entire expenses for the defence of the family? Has she not lent to them freely? Has she not put their securities among her trustee investments? Does anyone think that they could borrow as cheaply as they do unless they were members of the British Empire? Is a preference in their tariffs not “the least they can do”?²

Already the Colonies send us the most of their exports. Naturally so; not because they love us and we love them, but because we are the one great country which admits their goods free. They do not, then, need to ask us for free trade, or claim it as their British birthright; they have it. They want more; like spoiled children, they want it all—the right of free trade confined to the children of the Empire. They ask us to tax foreigners, that they may get some of the trade which other nations are getting—trade on which they think they have a claim. Is it unreasonable to remind them that “reciprocity must not be all on one side”?

It is to be noted also that, in taxing foreign people, we may be taxing British capital. If the labour of other countries is foreign, a great deal of the capital is ours. Possibly not less than £100,000,000 of British money is invested in the Argentine Republic. The part of it sunk in railways, docks, warehouses, depends for its dividends on the handling and transport of the wheat, maize, linseed, wool, meat, cattle, raised very largely on British-owned estates. Is it quite reasonable to tax our own capital, even for the sake of our children?

There can be no question that the idea of a “United Empire” is a very grand one. Believing that Great Britain stands for freedom and peace, we must believe in its continued existence and growth as a world power. The patches of red on the map—these eleven million square miles with their population of some 400,000,000—are connected just now, more closely than we quite realise, by the coaling stations, dotted all over the world, that almost secure us the command of the seas. But can we not weld them together into one indissoluble whole? So Imperial Federation has caught the national imagination, and will be worked out in one way or another. But to make Preferential Tariffs the method and the bond, and to say that this is “the only system by which the Empire can be held together,” is not only, in my opinion, quite wrong, but is to draw an antithesis between Free Trade and Imperial Federation which might compel us to choose between the two.

Will such a system really make for unity? It looks plausible on the face of it. We are to “prefer” colonial goods, not sentimentally, but at some cost. Colonial merchants, being favoured guests in our ports, will increase their trade with us. The Preference will be a definite motive to the Colonies for remaining within the British Empire; at least a deterrent from leaving it.

The preliminary question is: Is there any sign that they wish to leave it?

What Canada may do¹ seems impossible to tell. She is the most cosmopolitan community on the face of the earth, and, though she speaks through a government which is thoroughly loyal, the government of to-day may not be the government of to-morrow.

Some say that it is Canada’s “manifest destiny” to join the United States. The political impulse is geographical continuity; the commercial attraction is that she would thus get a market of 80,000,000 people on a Free Trade basis—with, one supposes, the corollary that she would still keep our Free Trade market of 42,000,000 people, to say nothing of the British possessions.

It may be so. On similar grounds, it might be said that Austria’s manifest destiny is to join the German Empire; yet she does not. Old ties of kinship, pride in the British name and traditions, will have something to say against any such union. The name of republic does not attract everybody as compared with the reality of freedom. One would think that the people of Canada, having all the liberty they want, have little political inducement to join the United States. It is not as if she were a colony in the old sense. Do we not respectfully salute her as the Dominion of Canada?

Others say that she is only waiting on our adverse decision to conclude a Reciprocity Treaty with the United States. This, perhaps, would mean the abandonment of her Preference to us, or giving the same preference to America. Against this, however, stands the consideration that Canadian manufacturers have as much reason to fear American competition as they have to fear ours. Evidently, what the Canadian manufacturers want, is to remain as they are, with sufficient protection against us, America, and all the world.

We hear, again, of aspirations for independence. This seems to me an argument made in Ireland. How much better off Canada would be as a Republic than as a Dominion, is a little obscure, while the burdens she would have to assume in making herself independent, are by no means obscure. And it is not at all clear that aspirations for independence would be in the slightest degree checked by Preferential Tariffs.

But suppose it granted that the preference to our own kinsfolk and the handicapping of the foreigner is, in itself, an act which the Colonies will welcome as at least a sign that we are willing to make sacrifices to hold the Empire together, the question remains: Will this make for unity?

Let us remember what Free Trade is. It is the commercial side of our political faith. It is the extension to the international sphere of the freedom we have at home: the free buying of what others as freely sell at “natural prices”—the prices determined by free rivalry in service. Sixty years ago, a free people exercised their freedom of choice and adopted it. The same freedom of choice this mother-country extended to her self-governing Colonies. Unfortunately, as we think, these colonies chose to restrict their freedom to internal trade, and adopted Protection against outsiders, including ourselves. Now, under Preferential Tariffs, we are both to go back on our choice; we each of us restrict our freedom and consent to be tied by each other’s hands. We form ourselves into a mechanical unity; lose our natural relations with the rest of the world; and seek compensation within our own house. But will this secure unity among the members of the household?

The first consideration that strikes me is that a family may enjoy the shelter of the one roof and yet be very far from being a united family. We are not, I imagine, going to step down from our own position as the mother country, and become only one of a league of equal states: the family must still have a head, and that head must be Great Britain. But the children, be it remembered, have long ago enjoyed houses of their own, and will not take kindly to the resumption of parental government. And, being the mother country, the question will be continually emerging: Are the individual children of the Empire all getting even-handed treatment?

In the present proposals, the mother country is asked to favour her children in a way that seems, at first glance, very unfair. One Colony has its chief interest in wheat, and the wheat is to come in free, as against 2s. on foreign wheat. But another Colony has its chief interest in wool, and there is to be no duty on foreign wool.¹ The duty on meat would benefit New Zealand as regards £3½ millions of her exports, out of a total of £12 millions. But it would not benefit Australia in anything like the same proportion. One hopes that, in all this cut-and-dried scheme for the taxation of food and the non-taxation of raw materials, it has not been forgotten that it will be the British Empire which concludes these reciprocal treaties, and not Great Britain alone.

There is, indeed, a more fundamental difficulty in these proposals. A reduction in our tariff to certain Canadian products is not a preference to “Canada”; it is a preference to a certain group of industries in Canada; and any advantage there is goes to the individuals in that group. Thus a preference on grain benefits the North-West, including Manitoba and the Territories—one-eighth only of the whole population—and does nothing for the other Provinces. A preference on meat would be welcomed by Ontario, but would do nothing for British Columbia and the Maritime Provinces. It will be a little difficult to convince the non-favoured provinces, and the individuals of the non-favoured groups, that such a preference is an inducement to loyalty. We, in this country, know something of the bad feeling which can be called forth by an “injustice” to one member of the British Isles.

But if we are overborne by this consideration of even-handed treatment, and so far sacrifice our obvious interests as to extend our preference to all the great exports of our Colonies, we place ourselves in a very singular position as regards other countries. We shall come into rude collision with the very principle on which the Retaliatory proposals are founded; we shall, in all probability, do serious injury to our trade with many foreign countries which have treated us well, and little prejudice to others which have shown us no consideration. This, of course, is only one illustration of the hopeless incompatibility of the two policies which Mr. Chamberlain proposes to run in double harness. It might conceivably be possible to adopt Retaliation without becoming definitely protective, but it requires little judgment to foresee that the adoption of Retaliation and Preferential Tariffs together must land us, in a very short time, in the most illogical and incongruous tariff in all Europe.

All this takes account only of the relation between the Mother Country, the Colonies, and the rest of the world. But beyond this, again, is the relation of the Colonies to each other. To each Colony every other is a competitor, just as much as foreign countries are; and we may be sure that, in drawing up its tariff, each will attempt to get the greatest advantage from and give the least advantage to every other part of the federated Empire. But, to keep a United Empire, all these diverging interests must be reconciled with the interests of the mother country, and with those of the Free Trade members which she has in her keeping. Such a task was never yet attempted by any nation under heaven: it seems to me quite beyond human power.

Lastly, there remains the question of permanence. If this bond of Preferential tariffs is once established, it cannot be broken but by the consent of at least the majority. This means that our fiscal liberty is gone, and that the fiscal liberty of the Colonies is equally gone. What, then, if a strong Protectionist party in the Colonies begins preaching that their industries are being sacrificed to English manufactures, and demands drastic revision of the Preference clauses? What, again, if, after a temporary victory of Protection and the establishment of Preferential tariffs, an out-and-out Free Trade government comes into power here, asking if the selfish interests of two or three small sparsely populated Colonies are to outweigh the interests of the Mother Country and of her other possessions?

It seems to me that, wherever we look, the prospects are all of conflicting and comparative interests, compromise tariffs, incessant bargainings, incessant readjustments, incessant bickerings and heart burnings, incessant temptation to disunity and bad feeling. If this is “the only system by which the Empire can be held together,” we may well despair of the future. Does not everyone see, indeed, that the unity we now have has already been perilled by the raising of questions which should never have been raised? Is not the very inquiry we have been forced to make—the gain or loss to us of Preferential tariffs—one which the true patriot must heartily wish had never been necessary?

¹“Fiscal policy,” says Earl Grey, “was not intended to cover the liberty of establishing protective tariffs against us.” His explanation is, that, “at the time when Protection was explicitly introduced, we had people in power who had no hope—perhaps no great wish—to keep the Colonies.”—Commercial Policy of the British Colonies, p. 14.

²In 1897, Sir Wilfred Laurier, introducing his Preference by saying, “We have done it because we owe a debt of gratitude to Great Britain,” used the significant words: “Suppose England abandoned her Free-Trade record. She would inevitably curtail the purchasing power of her people. And do you not think we should suffer from that, we who alone have natural resources enough to feed her millions from our fertile fields? I have too great a belief in English common sense to think they will ever do any such thing. . . . We know that the English people will not interfere with the policy of Free Trade, and we do not desire them to do so.”

¹I imagine the other Colonies may be left out of account; thus far, they have shown no thought of leaving the Empire.

¹ Wool constitutes about half the total exports of Australia and one-third of the total exports of New Zealand to the United Kingdom (in 1902 £9¾ millions out of £19¾ millions for Australia, and £3¾ millions out of £10¾ millions for New Zealand). It is one of the inevitable anomalies which would ensue under a Preference that, even if we gave a reduction on wool, Australasia would not appreciably gain, as she already sends us £13½ millions out of our total import of sheep and lambs’ wool of £20 millions.