250 WHAT IT WILL COST US CHAP. and the virgin soil. It seems reasonable to say that the Preference will give an impetus to emigration into Canada. This, then, is the possible advantage which the Preference may give to the Colony. It is a little roundabout; it certainly falls far short of what is generally expected of a Preference. It gives no help to the present colonist; it only helps to fill up his country faster. It may be questioned if such a far-away gain is worth the disturbance— if it is worth while penalising our cousins, the Americans, for the sake of an advantage to brothers who are not yet in the country.1 If it be the case, then, that a small tax on food will not raise prices, it would appear that, if we do not gain much by getting a Preference, we gain as little by giving one. We pass now from possibility to probability. Confining our attention to corn, let us assume that corn rises in price by the full amount of the duty. The position, then, is that the foreigner pays 2s. to get in, but, as he gets 2s. more price, he is as well off as he is now, though, of course, no better off. The Colonies, on the other hand, get their corn in free, and, obtaining 2s. more 1 It is no part of the idea of Preferential Tariffs and the taxation of food, to protect our agriculture. But, as it is sometimes suggested that it would not be a bad thing if they did so incidentally, it may be pointed out that, if prices of food stuffs do not rise, the agricultural interests remain in the same position as at present. Nor does the Empire come much nearer being "self-sufficient"; for, as we see, there is no inducement to the present colonist to add a single acre to his holding. XXV. IF CORN PRICES RISE 251 price, are 2s. better off than they were. Our farmers also get the extra price, and they are 2s. better off. How does it affect us, the Consumers? We consumed altogether, in 1902, 84,000,000 qrs. of wheat and grain. The rise in price on this, at 2s. per qr., is £8,400,000. This is the extra price which our consumers have to pay. Of this total, 42,000,000 qrs, come from abroad, and they pay 2s. to the Exchequer, or £4,200,000. This, at least, is not loss; it comes back to us in government services. But 7,000,000 qrs. come from the Colonies, and these pay no tax. The 2s. on each quarter, or £700,000, goes to the Colonies as their share of the new benefitspaid out of our pockets, of course, but, presumably a willing payment for the good of our poor Colonial brethren. As to the 35,000,000 qrs. grown at home, they pay no excise or tax, and 2s. on this, or £3,500,000, go to the agricultural interest in the shape of higher prices. If it be the case, then, that the taxation of food will raise its price, we shall have to pay for getting a Preference from our Colonies. In the one item of grain alone, even when we have deducted the duty levied on foreign grain and paid into the Exchequer, it will cost us over £4,000,000.2 1 The figures are taken from a calculation made before the Edinburgh Chamber of Commerce on 23rd June, 1903. 2 Granting that £700,000 of this is a free gift to the Colonies, it may be said that 3 millions of the tax come back to a very considerable section of the people, the agricultural classes. True; but even here two serious considerations must be taken into account. The first is that, although these classes get £33 millions, they have to 252 IS THERE NO CHEAPER WAY? CH. XXV. But perhaps it is time to remember again that what all this scheme aims at is not our own advantage but the advantage of the Colonies. Its success, then, must be judged by this. Is not the result a little inadequate? To give £700,000 to Canada and Australia-the others do not send grain-we are to impose indirect taxation to the amount of over £8,000,000. Sir Robert Peel once said on a similar question: "If we must do it, for God's sake let us pay it directly." I ask, Would it not be much cheaper to vote a sum of £700,000 direct from the Exchequer to these Colonies ? 1 pay more for their bread, just like the rest of us. The second is that a considerable portion, if not the great bulk of it, teste Mr. Chamberlain (p. 245), will never go near the farmer or labourer, but will, inevitably, go to the landowner in raised rents. Of course, if it be true, as alleged by the protagonist of the movement, that the prosperity of one class is the prosperity of all, it does not matter if the farmers have to pay high rents; the landowners will have more money to spend ! 1 Mr. Chamberlain's ingenious calculation that, although food rises, there "will be no sacrifice," deserves only passing mention. All that is necessary, he says, is a "small transference of taxation from certain kinds of foods to certain other kinds of food." Man does not live by bread alone, but by sugar and tea. We can reduce the sugar and tea duties in such a way that the working man and his family will save as much on them as they pay extra in bread. His proposal is to take off half the sugar duty and three-quarters of the tea duty, thus relieving the price of these commodities by some £3 millions. The exchequer would lose this, but it would be compensated by the new Protective duties-the suggestion, I suppose, being that, instead of the home consumer paying these taxes, the foreign producer would pay them. But, of course, the scheme depends on the sugar and tea duties remaining at the present high level. When it is remembered that, before the war, there were no sugar duties whatever, and a tea duty of 4d. instead of 6d., it is seen that we are to get, as compensation for dear food, what we might have expected to get by the mere return of peace. CHAPTER XXVI, HOW PREFERENCE WILL AFFECT AGRICULTURE. A rise in prices will induce the return to wheat growing here, with the result that when, in time, prices fall again, our farmers will be caught as they were sixty years ago. As was said, the scheme of Preferential Tariffs is not intended to protect any of our industries. It has, indeed, been admitted that, incidentally, it might do so, and, without much thought, the suggestion also may have been accepted that, if it did, no great harm would be done. But what if the incidental Protection does harm to the very industry protected? According to the proposal, we are to give a financial inducement to the Colonies to send us wheat. It is always the first step that costs, and the first step is the breaking in of new land. We give a bounty to the Colonies to enable them to take this first step, and the land afterwards is as good, say, as our best land. Foot by foot the Canadian acreage grows, till in time the Canadian exports overtake the American exports. 254 THE RETURN CHAP. One thing, however, has been forgotten. It is that the American wheat grower is not suffering. He is not, indeed, getting the 2s. extra like the colonial, but he is getting as good a price for his wheat as he does now-paying 2s. duty and getting 2s. more price. Will the American supply stop? Why should it? Will the mere fact that the Canadian is getting 2s. more, induce the American farmer to grow less? But as the Canadian import increases, while, at the same time, there is no diminution of the foreign import, there comes the inevitable effect of an increase of supply, a fall in prices.1 Is there no harm in this? Does it only mean, after all, that our Colonies meanwhile have been paid a bounty, and that our agricultural people have got an extra price? It means much more. The cost of raising colonial wheat, perhaps, will fall; but the cost of raising British wheat will not. It is entirely different with us from what it is with our Colonies. They have millions of acres of virgin soil that only requires to be brought under the plough to make it permanently productive land. But we have no such surplus soil. Just now, all the wheat lands that pay are under wheat. If the inducement of 2s. a qr. extends our wheat fields, it must be by growing 1 This is recognised and welcomed. The confident expectation of Sir Gilbert Parker, for instance, is that, under this inducement, prices will rise in the first instance, then steadily begin to fall, and, ultimately, come below the present level. When it is prophesied that Preferential Tariffs will lead to the cultivation of our derelict land and empty the slums, this should be remembered. |