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and sometimes fought for with the sword in order that it may be acquired or retained. What we suggest is a trade in preference, in trade advantages which should be conceded to each other, on the usual principle of trade, that it shall be to the benefit of both parties concerned. So far as lam aware no one has yet fathered, or is likely to father, any such proposition as that this matter of business is to be dealt with to the advantage of one of the parties only. There is not any business of that character, or which is assumed to be of that character. It must yield mutual advantage, and of the value of that advantage each party must be the judge. Mr. ASQUITH : 1 entirely assent to that proposition, if I may say so. It admirably states the case. Mr. DEAKIN : That is why the goodwill cannot be disturbed. It must always he admitted that each of the parties to the bargain must be the best judge of its own gain. We may have a strong and clear opinion as to how the other bargainer shouid proceed, in his own interest, but after all that is his affair. We may regret that we cannot do the business, but necessarily we must in every case bow to his decision. So in the present instance it appears to us to be possible for each to impose duties on a certain scale-—putting aside the advantage which may be gained from those duties—granting each other preferences under them without loss or risk of loss. The question, as it seems to me, which foreign nations will then put to themselves is not whether duties have been imposed for this particular purpose by Great Britain or by Great Britain and all her Dominions together. What the foreign exporter seeks is the best market; the market where he gets the best price, the biggest market. The position of the United Kingdom appears to us to be so unique, that it not only is to-day the best market for all the world, but may easily continue to be still the best market for all the world outside its own Dominions, even if preferences were conceded to those Dominions when their goods were entering its ports. That, again, is a business question. If the foreign producer can still sell in your market at a profit, even though it be a smaller profit than now, so long as it is a profit he will be induced to continue his trade. If, as is probably the case, even with any duty which you would impose, Great Britain still remained absolutely the best market in the world to him, the fact that it was not as good as it had been would not operate. Markets vary everywhere, owing to circumstances too many even to indicate Merchants are accustomed to sell, sometimes in good, and sometimes in indifferent, markets, and it does appear to us from our point of view that we are not suggesting anything unreasonable in the proposals we make even in respect of food stuffs and raw material, both of which we quite admit should be most carefully scrutinised before they could be dealt with. The special circumstances of this country seem to us to offer a margin in which both of those could be dealt with, and effectively dealt with to our great gain, yet without altering the place which the United Kingdom occupies to-day as probably the best market for them in the world. It is not for us to propose a new or criticise your present fiscal policy, but we may remark that consideration for your own British industries might lead to duties being levied, the object of which would be either to revive those industries which had suffered or were suffering, or to expand those already existing. That involves another set of principles altogether, and I should be distinctly departing from the rule laid down for myself if I entered upon any discussion of the merits or demerits of local protection. It ought to be clearly understood that my reason for mentioning it is this : that when the outer Dominions suggest a preference they not only believe that you should have that opportunity of profit, but also that in considering any proposal for

Eighth Day. 30 April 1907.

Preferential Trade. (Mr. Deakin.)