A—s

298

Dominions so as to establish what has come to be described as " Preference," those who are responsible for the Government of India, with which this country carries on a very large and imjiortant trade, have given the subject serious and constant consideration. As in duty bound, they have looked at the question from an Indian point of view; but they have considered it no less from a wider and Imperial aspect, The interests of India are indissolubly bound up with the interests, not only of Great Britain, but also with those of His Majesty's other Dominions beyond the seas, and it may be safely asserted that the interests of Great Britain, as well as those of most of the over-sea Dominions, owing to the intricate and inter-dependent web of commerce, are equally bound up with the prosperity and interests of India, It is a matter of deep regret to those responsible for the Government of India that they should find themselves at variance on this most important question with the distinguished statesmen who represent Canada, Australia, New Zealand, and South Africa, and who have stated their case, if I may say so, with an earnestness and an eloquence befitting that high patriotism and love of country which inspire their proposals. Under the existing fiscal system India enjoys a highly advantageous position. Since the establishment of a gold standard in India, securing a stable rate of exchange, a measure initiated by Lord Lansdowne's Government in 1893, and brought to fruition by you, my Lord, during your term of office as Viceroy, the finances of India have been in a satisfactory condition. The trade and commerce of the country have been prosperous and flourishing, and have been fully equal to the strain of providing the means of remitting the large amount annually required to discharge both her public and private sterling obligations. There is no sign that this prosperity is insecure, nor is any important trade or industry seriously menaced by the restrictive tariffs of foreign countries. The rapid growth of the external trade of India can be shown by a few figures. In 1896-97 the total value of the sea-borne trade (merchandise and treasure) was 132,000,000/. In 1905-6 it was 214,000,000/. sterling. This is an increase of 66 per cent, in 10 years. Taking merchandise only, in 1896-97 the imports were 47,000,000/. sterling, and exports 66,000,000/. In 1905-6 the imports were 69,000,000/. and the exports 105.000,000/. sterling. Thus imoorts increased by 47 per cent, and exports by 60 per cent, in 10 years. A very good share in the increased trade of Ind ; a has been enjoyed by this country. The value of British imports into India in that period has increased by nearly 40 per cent, They still represent 66 per cent, of the total imports of India. A remarkable feature of the Indian figures is the growth of the exports to foreign countries. Some of the best customers of India are the protected countries of Europe. Without the markets which they supply, it is very doubtful whether India could dispose of the particular commodities which she is able to produce. Mr. DEAKIN : Raw materials? Sir JAMES MACKAY : Mostly. Further particulars on this point are given in the India Office- Memorandum on " Preferential Tariffs in their application to India," which is being submitted to the Conference. It seems, therefore, to be clear that the interests of India call for no change in the direction under discussion. It is equally clear that any change materially affecting the present circumstances of Indian trade might be fraught with danger. The maintenance of an excess of exports over imports sufficient to discharge her sterling obligations is an essential requirement for India. It is a fact of no smairimportance that the purchasing power of Tndia in British markets, and her ability to discharge her sterling obligations, are

Tenth Day. 2 May 1907.

Preferential Trade. (Sir James Mackay.)