A.—s

Tenth Day. 2 May 1907.

Mr. ASQUITH : Mr. Cobden did, I think, at one time make such a prophecy. Prophecies are one thing, facts are another. Prophecies artdangerous things at all times, and are sometimes the expressions of a hope. But at any rate that was not the ground—as anyone will see on reading Sir Robert Peel's speeches—upon which Sir Robert Peel, the author of our Free Trade system, adopted Free Trade. He was converted to Free Trade. Why i Not because he thought it was a good thing for the rest of the world, but because he thought it was an essential thing for Great Britain in the peculiar circumstances of her economic conditions. That opinion formed then by Sir Robert Peel, and followed and developed, subsequently, particularly by Mr. Gladstone, has remained for 60 years the very root and foundation of the fiscal policy of this country, and, gentlemen, I am bound to say to you, speaking with the same frankness which you have used in speaking to us, in my opinion, in the opinion of His Majesty's Government, and in the opinion of the vast majority of the people of these Islands, the vital necessity of Free Trade, and the maintenance of it, for our economic interests, is far more demonstrable to-day than it was 60 years ago. How do we stand to-day \ Let me ask you to realise what our position is : 43,000,000 of people in these two small islands bearing on our shoulders—l do not complain of it; it is a burden we are quite willing to sustain — the whole weight of the debt which has been incurred in the formation and development of this Empire, bearing also the cost —at any rate, the great bulk of the cost —of the Imperial defence, not only of these islands but of the whole Empire, in all its parts; 43,000,000 of people in two small islands with this burden upon their shoulders, and substantially dependent, both for their food and for the materials for the conduct of their industries, upon extraneous sources of supply. Those are the dominating conditions here in Great Britain and Ireland; conditions which do not prevail, happily, or unhappily, whichever way you like to look at it - in any of the communities which you who sit round this table represent. It is those conditions which we have to bear in our minds, and which we have constantly to keep in view when considering whether or not we shall make this or that change in the fiscal system of the country. To what, with people so circumstanced as I have described, is it due that we are able to maintain, to the extent that we have maintained it, our predominance in the markets of the world amidst growing rivalries? We have seen the development of great industrial communities like the United States and Germany, and the development of yourselves in Canada and Australia, the development on the part of our own kith and kin and fellow subjects. How is it we have been able to maintain our position so far as we have maintained it, and I think we have on the whole maintained it very well ? It is due to three things : in the first place to our special productive activity as a people which still keeps us, in many of the most important departments of production, at the head of the world. In the second place it is due to the profits which we derive from keeping open to the whole world the biggest market which is to be found anywhere, so that London and England are the clearing-house in which a great part of the intermediate business, as I may call it, of the whole commercial world is done. And it is due in the third place to the earnings of our shipping, which does the carrying trade, as you know, for more than half the world. Those are the means by which our wealth is maintained and secured, and, gentlemen, they all depend in the long run, as you will see if you reflect upon the special conditions to which I referred a moment ago, upon our being able to maintain, unimpaired .in quantity and unenhanced in price,, the food of our people and the raw materials of our industries. Curtail the sources of supply, raise the cost of supply, and you strike a deadly blow at the very foundations of our whole industrial

Preferential Trade.

308