the former could be much more easily replaced than the latter.

From the standpoint of the economist, therefore, the question which is of most weight is whether the balance of advantage with regard to these matters lies with the particular country he is considering or with its opponent. But the economist is not in a position to judge of certain other matters of almost equal importance. He is in a position to lay down the economic conditions-those which are likely to make for or against success on economic grounds: but he cannot judge of the psychological conditions in consequence of which, as Professor Pigou remarks, "the country which in a tariff conflict suffers the greater injury, will not necessarily be the one to yield." Nor can he forsee the political conditions by which the policy of retaliation must in any particular case necessarily be influenced. To judge of these matters, in a famous phrase of Adam Smith's, "does not perhaps belong so much to the science of a legislator, whose deliberations ought to be governed by general principles which are always the same, as to the skill of that insidious and crafty animal, vulgarly called a statesman or politician whose councils are directed by the momentary fluctuations of affairs."

CHAPTER VIII.-Continued.

§ 7. THE next matter which requires our attention is the subject of Colonial Preferences-that is, reductions in tariff rates granted to the products of the Mother Country by the Colonies and by the Colonies to the Mother Country. In this connection we must take notice of the fact that the preferences in question may affect not only the import duties respectively levied, but also the export duties levied-that is, exports from the Mother Country to the Colonies or the Colonies to the Mother Country may remain untaxed in the country of export, whilst exports to, as well as imports from, other areas may be taxed.

Apart from "open-door colonies," whose tariff régime is fixed by international agreement, and where the questions discussed in this section consequently do not arise, we may divide colonies from the standpoint of tariff form into two classes—

(1) Those with assimilated tariffs.

(2) Those possessing, if we may take over a useful phrase from the French, "tariff personality."

In the first case the colony is in general subject to the same tariff as the Mother Country itself in the second case the colony has a tariff devised in view of its own specific needs. Care must be taken to guard against confusing these concepts of assimilation and personality with those of subordination and autonomy: these latter distinctions refer to the tariffmaking power and not to the tariff itself. It is true that a colony possessing complete tariff autonomy will not generally assimilate its position to that of the Mother Country: but the converse is not in the least true. A colony may possess no tariff autonomy or only autonomy in the very restricted sense that the local bureaucracy is responsible for the details of the tariff with a centralised veto, and yet assimilation may not be practised. On the other hand, a customs-making body truly representative of the colonies as well as of the Mother Country-say an "Imperial Tariff Parliament "

2

of the British Empire-might yet adopt the idea of tariff assimilation. The decision to adopt one or other of these principles springs, in fact, from economic consideration which do not move completely parallel to the ideas underlying self government, although the acceptance of the principle of autonomy disposes to the idea of tariff personality more than the idea of colonial subordination does. The choice of assimilation or personality rests ultimately upon the acceptance of the view that in a definite sense Mother Country and Colonies form one area. From the standpoint of sentiment this may be accepted: from the standpoint of economic structure and need it is obviously open to destructive criticism. To this point we must later return.

When the idea of assimilation is accepted in its most complete form, the idea of a preference, together with the concept of "Mother Country " and "Colony," really disappears. There is, strictly speaking, only the national territory, wherever situated, and freedom of trade between the metropolitan and the overseas area is placed on the same footing as trade between two parts of the metropolitan area itself. But whether we describe the differential advantage as a "Preference" or not, it remains a differential advantage to traders, within the limits of the area, which can be directly compared to the differential advantages accorded by colonies with tariff personality to the Mother Country, if any such advantages are accorded at all.

§ 8. What we have now to do is to describe in some detail the relations existing in the tariff systems of the chief colonising powers.1

1. We may first deal with a country whose Colonial Empire has disappeared in consequence of the dispositions of the Treaty of Peace. Under the German law, as it existed before the treaty, German goods imported into the colonies enjoyed most-favoured-nation treatment, whilst "the products of the German colonies and protectorates may enjoy the customs reductions and reductions arrived at by treaty by means of a resolution of the Federal Council." (Tariff law of 1902, § 1, last paragraph.)

"Return

1A general oversight is given by H.C. Paper, No 2969, of 1909, showing the Fiscal Advantages at Present given by France, Germany, etc." Now somewhat out of date. See also J. W. Root, "Colonial Tariffs," 1906; and the references given in connection with the particular country mentioned.

2, In the case of Holland.-"No preference as regards customs treatment is accorded to the produce of its colonies, or by Dutch colonies to the produce of the Mother Country."

3, Much more complicated is the position with regard to the French Colonial Empire. The situation varies as between (1) Algeria, (2) The "Assimilated Colonies, (3) The "Non-Assimilated" Colonies, (4) The Protectorates

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of Tunis and Morocco. Corsica can be better treated under a different heading. For reasons of convenience we will begin with the assimilated and non-assimilated groups, the position. of which, in principle, is governed by the Tariff Act of 1892.1 It should be mentioned that under the influence of the Second Empire a liberalising movement had resulted in giving considerable freedom to the colonies: whilst in the eighties of. last century, the "Forward Policy " of one school of thought, and the desire to make the colonies pay in view of the sacrifices which the new imperialism was entailing, united other schools with the first in an attitude of distinct reaction of which the clauses of the Act of 1892 are the witness. Art. 3-6 deal directly with the colonies. Art. 7 maintains the Algerian régime.

These Articles run as follows:

"Art. 3. The duties and immunities applicable to the products imported into the Mother Country from the colonies, the French possessions, and the countries within the protectorate of Indo-China, are fixed in conformity with Table E, appended to the present law.

"Table E, above mentioned, does not apply to the following:-The French territories on the West Coast of Africa (except the Gaboon), Tahiti, and her dependencies, the French establishments in India, Obeck, Diego-Suarez, Nossi-Bé, and St. Marie de Madagascar. In all cases long cloths of French origin coming from the French settlements in India are exempt from duty. Exemptions or abatements (détaxes) can, in addition, be accorded to other natural or manufactured products proceeding from the said settlements, a list of such products

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1 On French colonial tariff policy generally, see Pallain, vol. i., pp. 169-237 Girault, The Colonial Tariff Policy of France" (Carnegie Peace Endowment Publication), with numerous references to other publications.

to be fixed by decrees of the Council of State for each possession. The domestic products and manufactures which, on their importation into France, do not benefit by such exemption will be subject to the duties under the minimum tariff.

"Foreign products imported into the French colonies. and possessions and into the protectorate of Indo-Chinawith the exception of the territories enumerated in paragraph 2-are subject to the same duties as if they were imported into France.

"Decrees in the form of public administrative regulations, drawn up in accordance with the report of the Minister of Commerce, Industry, and the Colonies, and, after consultation with the Councils General or Administrative Councils of the Colonies, will specify the products on which, as exceptions to the preceding rule, special rules of duty will be levied.

Paragraphs 1 and 3 of the present Article will not apply to each colony until after the regulation described. in paragraph 4 has been introduced, but without this. delay in any case lasting longer than one year. In any case the Government will have the power of at once granting the advantages of Table E, either entirely or in part, to such colonies as at present apply in their entirety the duties of the home tariff to foreign products, or who impose duties under that tariff on colonial produce coming from abroad.

"Art. 4. The Councils General and the Administrative Councils of the Colonies may also consult as to those exceptions to the customs tariff of the Mother Country which it may be deemed necessary to demand. The results of these deliberations must be laid before the Council of State, and action will be taken with regard to them in the same form as the regulations of public administration described in the foregoing article.

"Art. 5. The products of one French colony imported into another French colony will not be subject to any customs duty.1

Foreign products imported from one French colony

1 This rule applies, it should be carefully noted, whether the colony from which, and to which, the goods are sent is assimilated or non-assimilated.