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Ireland has, like the rest of the United Kingdom, grown in prosperity enormously during the free trade era. Doubtless certain Irish industries could be rendered even more profitable by a system of tariffs designed to give protection to those industries alone. If, for example, a heavy duty were imposed on the import of colonial and foreign wheat into the United Kingdom, it is probable that Irish farmers, in spite of their unsuitable climate, would turn again to wheat growing, and would reap handsome profits, even if they reaped poor harvests. But though every protectionist farmer or manufacturer instinctively assumes that protection is to be for him alone, in practice it never is so. The protection conceded to one industry is claimed by others, and when these others have been satisfied the original beneficiary may find himself worse off than he was without any protection at all. If, for example, the Irish linen spinners obtained a protective duty in their favour, the Irish flax-growers might demand and obtain a duty on imported flax, with disastrous consequences to the linen spinners.

There are, as it happens, few parts of the Empire which have a greater interest in Free Trade than Ireland. She is a small country quite incapable of supplying all her own wants from her own resources. Her prosperity must depend on the activity of her export industries, and no export industry can benefit by an import duty except so far as that duty enables the controllers of the industry to sell cheaper abroad by selling dearer at home. In a large country like Germany that policy is feasible for a limited number of industries; in a little country like Ireland it would be quite impracticable. When Irishmen talk of the advantages of protection, what they really mean is protection for Irish industries and agriculture at Great Britain's expense.

The same confusion of thought underlies a great deal that is said and written about the larger problem of imperial preference. There are a few keen imperialists in Great Britain who cherish Adam Smith's conception of internal free trade throughout the Empire, but there seems little prospect of their hopes being realised in any near future. Both here and in the Dominions the large majority of the advocates of imperial preference are strongly opposed to inter-imperial free trade. They have the word preference on their lips, but the spirit of protection is in their hearts. For this reason the apparent agreement between the advocates of preference at home and in the Dominions

is altogether delusive. They use the same phrase, but they do not mean the same thing. The colonist who asks the British Government to establish a preferential tariff pictures a tariff which will let in colonial goods free, or almost free, and will exclude foreign goods; the Englishman or Scotchman who makes the same verbal demand pictures a tariff which will give the Mother Country adequate protection both against colonial and against foreign goods, with a slight concession in favour of the colonies. The latter is exactly the type of preferential tariff established in some of the Dominions. Its inadequacy from the point of view of the Mother Country was frankly explained by Mr. Joseph Chamberlain at the Colonial Conference of 1902. He then said:

'But so long as a preferential tariff, even a munificent preference, is still sufficiently protective to exclude us altogether, or nearly so, from your markets, it is no satisfaction to us that you have imposed even greater disability upon the same goods if they come from foreign markets.'

But it is certain that so long as the protectionist theory predominates in colonial politics, the colonies will not freely open their ports to the manufactures of the Mother Country; it is equally certain that if the protectionist theory should obtain predominance in Great Britain the ports of the Mother Country, which are now wide open to colonial products, will be partly closed against them.

The moment the preferentialists from different parts of the Empire sit down to discuss details they will discover that they are fundamentally in disagreement, and, if they attempt to give any wide application to their respective theories, instead of binding the Empire closer together, they will create elements of disunion. Moreover, so far as the policy of preference is successful in confining the trade of the Empire within the Empire, to that extent will the fundamental disagreement between colonial and home producers become aggravated. As long as all parts of the Empire are free to trade where they will they can afford to be tolerant of domestic differences with one another; but if they are to be limited to the tied house' conception of commerce the conditions of inter-imperial trade will become matters of vital importance and of rancorous controversy. Some indication of the kind of temper that will be aroused can be gathered from the fierce indignation excited

in Lancashire by the action of the present Ministry in definitely sanctioning the adoption of a protectionist policy by the Government of India.

It cannot be too strongly insisted, in considering the great problem of imperial unity, that the protectionist spirit is in itself an element of discord, because it is finally based upon selfishness. That statement does not mean that free traders are personally exempt from the vice of selfishness. What it does mean is that the thing for which the free trader asks is something which he has to share with everybody else; whereas the protectionist asks for a tariff privilege for himself to hold against others. That privilege can only be obtained through the State, and thus the protectionist spirit leads directly to conflicts between States. That such trade conflicts should arise between different countries is a sufficiently grave evil; that they should also arise between different parts of the same Empire is an aggravation of the evil which we ought to strive our utmost to avoid. It has been avoided in the United States and in the German Empire by the establishment of complete fiscal unity. The United States is the largest single free trade area within the world. From the Atlantic seaboard. to the Pacific coast, from the Canadian borders to the borders of Mexico, trade is free. Goods may be carried over the whole of that vast area without requiring any permit or let-pass, 'without being subject to question, visit, or examination.' In exactly the same way complete free trade prevails throughout the numerous States of the German Empire.

The difficulties in the way of establishing similar fiscal unity throughout the British Empire are both material and mental. On the material side the divergent economic conditions prevailing in the different portions of our far-flung Empire make complete fiscal unity almost impossible, and certainly undesirable. Where the conditions of life are totally different an arbitrary uniformity of law is not an advantage but an inconvenience. It is inconceivable that the same system of taxation which suits London and Edinburgh could be made to suit a tropical or semi-tropical dependency of the Empire. For example, the United Kingdom derives an enormous customs revenue from a high duty, about 1000 per cent., levied upon imported tobacco; it would be impossible to levy the same duty in India, for tobacco can be and is grown almost everywhere throughout India. Nor would there be the slightest

administrative gain in such uniformity, for in any case cargoes arriving at Bombay or Calcutta from Europe would have to be subjected to customs examination. A sea-divided Empire cannot in fact hope to gain those administrative advantages which the United States and Germany have gained by preventing the erection of, or by sweeping away, internal customs barriers. It is worthy of note that both the United States and Germany have failed to establish fiscal unity between their oversea possessions and the metropolitan State. The sea divides as well as unites.

Beyond these material considerations is the obstacle created by the sentiment of the peoples concerned. The people of Canada do not regard the Dominion merely as an administrative division of the British Empire; they have a Canadian as well as a British loyalty, and steps taken in disregard of the former might easily result in the destruction of the latter. The same consideration applies to the other self-governing Dominions. It even applies, though in a different sense, to India. The conception of India as a nation is not of course of native growth. It is an exotic conception imported from Europe, and so far has only affected the handful of Indians who have received an English education. But this handful is growing in numbers and in influence, and though they may never be strong enough to overcome the internal differences which divide the inhabitants of India from one another, they may be able to combine the mutually warring elements in that enormous population for the purpose of opposing external measures which can be represented as anti-Indian. At any rate, the self-governing Dominions would never consent to such a derogation from their conception of nationhood as would be implied in the surrender of their present powers of self-taxation to some new central government for the whole Empire.

For these reasons the fiscal unity which the United States and Germany enjoy throughout their continuous land territories must be pronounced unattainable by the British Empire.

Therefore if we are to avoid the danger of fiscal conflicts within the Empire our only hope lies in discouraging the spirit of protection which breeds these controversies. Unfortunately during the past twenty years or so a considerable party within these islands has devoted itself to preaching in the name of Imperial unity principles which cut at the very root of that unity, and to demanding in the name of progress that we should

hark back to the disastrous colonial policy of past centuries. To bolster up their campaign the spokesmen of this party have persistently depreciated the achievements of their own country during the era of free trade. They have dinned it into the ears of the world that England was in a state of decadence; part of the world has believed them, and England has suffered direct injury from that groundless belief. Surely the time has come when all Englishmen, whatever their fiscal creed, should be able to recognise how wonderfully their country has grown in riches and in strength during the past seventy years. That she needs to be watchful lest her economic prosperity and her defensive powers should be undermined by the insidious commercial methods of some ambitious rival everyone admits. But that admission involves no necessary acceptance of protectionist doctrines. France and Italy before the war, in spite of-perhaps even in consequence of their protectionist tariffs, suffered at least as much from German methods of commercial penetration as Great Britain.

Here again the eighteenth century furnishes a warning. Of all the achievements of Great Britain since the beginning of the free trade era none has been more remarkable than the expansion of our mercantile marine. Whether we compare ourselves with the United States or with Germany our progress in this prime element of our commercial prosperity and national strength has been immense and continuous right down to the outbreak of the present war. That progress has been achieved without any preferential favours for British shipping in British or colonial ports. Yet for nearly two centuries it was assumed that the Act of Navigation, passed in the reign of Charles II., was necessary for the maintenance of our mercantile marine. Even Adam Smith was so impressed with the apparent necessity of that piece of restrictive legislation as a weapon against the 'naval power of Holland, the only naval power which could 'endanger the security of England,' that he made it the text for his oft-quoted aphorism that defence is of much more 'importance than opulence.'

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That aphorism needs no justification, but England has had the peculiar good fortune that while seeking opulence she has also found defence. She has found it along the path of freedom. In the eighteenth century her restrictive commercial policy not only led up to the loss of the North American Colonies, but it also provoked the jealousy and the hostility of other nations.

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