TO THE GOVERNOR OF NEW ZEALAND.

63

A.—No. la.

it is singular that Lord Kimberley should give two instances only of British American legislation of the kind, and that he should assign to that legislation the character of " dealing with a limited list of " raw materials and produce not imported to those Colonies from Europe." There are other Acts of the British American Provinces of a similar nature, but which leave to the Governor in Council to determine the articles to be admitted. Indeed, it is difficult to understand on what grounds Lord Kimberley considers the two clauses which he quotes from the Newfoundland Act to have the character he assigns to them. The clause quoted from the Prince Edward Island Act professes to deal with "raw " materials and produce," but includes several manufactures. The clauses from the Newfoundland Act do not even profess to exclude manufactures from the list; and the first of those clauses, instead of not dealing with goods imported from Europe, proceeds to the length of exempting from duties the articles mentioned, being " the growth, produce, or manufacture of the United Kingdom." In respect to the second question, " Whether Her Majesty's treaty obligations with any Foreign " Power interfere with such relaxation?" i.e., the rule or law against differential duties, the Colonial Treasurer observes, that Lord Kimberley admits the correctness of the view taken by New Zealand. It is a matter which should create much satisfaction, on broad and enlightened national grounds, that the right of Her Majesty's Colonies to make between themselves arrangements of a federal or reciprocal nature, without conflicting with treaty agreements, has been recognized. It would have been demoralizing to the young communities of Australasia, had they been taught to believe that reciprocal tariff arrangements between the Colonies were inconsistent with Her Majesty's treaties with Foreign Powers, but that they could override the spirit of such treaties by the subterfuge or evasion of a Customs union. If, for instance, it be a wrong to any Foreign Power that New Zealand should admit free of duty any produce of New South Wales, while for like produce from any other colony or country a duty would be demanded, the wrong would be just as great if, by Imperial legislation, such free admission were legalized through a Customs union. It should clearly be impossible to vary a treaty by the legislation of only one party to it; and seeing that New South Wales and New Zealand were originally one Colony, with one tariff, and may by Imperial legislation become so again, it is evident that if such a result can be brought about without the infringement of Imperial treaties, any terms of more modified arrangement, such, for example as the free admission of only some goods, would not be open to objection on the score of bad faith with Foreign Powers. Lord Kimberley admits that the quoted paragraph of the Zollverein Treaty has no application to the case of arrangements between different Colonies. Its object seems to be to prevent the Colonies making such reciprocal arrangements with the United Kingdom of Great Britain and Ireland as from time to time may be found desirable. A provision of this nature is at least open to the objection that it is constantly liable to be infringed. In the Act of the Canadian Dominion already referred to, and which, from what Lord Kimberley writes, appears to have been under the special consideration of Her Majesty's Government, there are provisions which beyond question conflict with the quoted paragraph in the Zollverein Treaty. The list of free goods in the Schedule to the Act, comprises two items which are to be free if of British produce or manufacture. The clause quoted by Lord Kimberley from the Newfoundland Act, which makes free of duty the articles mentioned, "the growth, produce, or "manufacture of the United Kingdom," also conflicts with the provisions of the Zollverein Treaty. Again, the argument which the Colonial Treasurer has used as between the Colonies, applies as between the Colonies and the Imperial country. Why should a foreign treaty contain a provision tending to preclude the union of different parts of the Empire ? If Great Britain were to confederate her Empire, it might and probably would be a condition, that throughout the Empire there should be a free exchange of goods. The arguments in favour of a Customs union between Colonies have as much force in their application to a wider union embracing the whole Empire. Either the Zollverein Treaty would prevent this, or the necessary legislation would make the quoted clause inoperative. The effect, if not the intent, of the stipulation in the Zollverein Treaty is to make Great Britain hold the relation of a foreign country to her Colonies. It is appropriate here to urge on the Secretary of State, since he has the subject under his notice, not to confine his consideration to the mere question of intercolonial arrangement. His Lordship entirely refrains, in his allusions to the British American Acts, from noticing that they contain not only a discretionary power to admit Colonial articles free, but also to admit, under similar conditions, articles from the United States. Great as is the distance between the British American and Australasian Colonies, the vast limits of the United States bring that country into ready communication with Australia as well as with British America. It may be for the interest of the Australasian Colonies, just as much as it has been for that of the British American Colonies, that arrangements should be made to admit free, articles from the United States or from some other country. It is desirable that the Secretary of State should define the position of the Australasian Colonies in this respect. Are they to be denied the power which for a long period the British American Colonies have uncontrolledly exercised ? That power gives them the right to make reciprocal arrangements with their American neighbour; for only on the ground of the arrangements being reciprocal, would they fail to be infractions of the " most favoured nation " clauses of British treaties with Foreign Powers. The Australasian Colonies would value similar powers. The third and fourth questions raised by Lord Kimberley are sufficiently analogous to make it convenient that they should be considered together. They are: —"Whether a general power should "be given to the Australasian Governments to make reciprocal tariff arrangements, imposing " differential duties, without the consent of the Imperial Government in each particular case ?" and " Whether, on grounds of general Imperial policy, the proposal can properly be adopted ?" The Colonial Treasurer submits that these questions really raise the issue, whether in the original Constitutions granted to them, the Colonies should have been allowed so much discretion as to fixing their own tariff's ; and, if this be the issue, the Treasurer admits that much may be said against the discretion which has been granted. The exporters of Great Britain are, no doubt, largely affected by the nature of the Colonial tariffs ; but it can make no difference to them whether New South Wales and New Zealand exchange