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the best customer coming first, By far our best customer is British India and Ceylon. As Sir James Mackay has pointed out so well to-day, it is far and away our best customer. The annual average which they took from us in the three years 1904, 1905, and 1906, was no less than 44,381,000/., an increase of 10,660,000/. as compared with the average of the previous triennial period. India is a Free Trade country, and we get the benefit of Free Trade there. Our second best customer is Germany, with 29,478,000/. That is an under-statement of our exports to Germany, because a great deal of what is put down to Belgium, and still more of what is put down to the Netherlands, is no doubt German trade. Germany is undoubtely our second best customer. Our third best customer is the Australian Colonies and New Zealand. Those are both protected up to this moment, I agree New Zealand is not wholly protected, and gives us a slight preference, to which Sir Joseph Ward referred, but Australia up to this moment is a protected market. I simply quote three figures for the moment to illustrate how little permanent effect — I will not say tariffs are not injurious; they are—a tariff wall has in excluding trade where the natural fore-es that make for trade, and in particular the productive power and productive flexibility of a country like this, are really pushing the trade ami are determined to force it in. Mr. F. R. MOOR : I do not like to interrupt, but would you tell us whether that trade with Germany includes in and out trade with you in connection with the raw products of the Colonies which may come here '. Mr. ASQLITII : No, this is United Kingdom produce only. Mr. F. R. MOOR : It has nothing to do with the Colonies ? Mr. ASQUITH : No. It is our own produce. I do not think, therefore, that the proposition that we are being excluded by tariffs from foreign markets is a proposition which bears close examination. There is another point which incidentally I should just like to mention, not in any way as disparaging the value of the Imperial markets, but as negativing some inferences which are sometimes drawn, I think, from incorrect or insufficient data. As a matter of fact if you take the trade of the United Kingdom with foreign countries, and with British possessions, and look at it lor the last 50 years, you will find that the proportions of thai trade which have gone to foreign countries and British possessions respec tively are practically constant. Take first the imports for the period 1855 to 1859, 50 years ago —and it is convenient to start there- the total imports into the United Kingdom then were 169,500,000/. Of this 76-3 per cent, came from foreign countries, and 23-7 per cent, from British possessions—that is not merely the self-governing Colonies, but the whole Empire. I will not weary you by going through the different periods of five years which I have here, but you will find those figures vary very little. They went up in 1900 1904 as high as 79-2 per cent, from foreign countries, and sank as low as 20-8 per cent, from British possessions; but in 1906, which is the last year—and this is rather instructive—the total imports having risen from 169,500,000/. 50 years ago to no less than 608,000,000/., an enormous rise, the proportion from foreign countries was 76-6 per cent, as against 76-3 per cent. 50 years ago, and the proportion from the British Empire 23-4 per cent, as against 23-7 —practically the same thing. Now look at the other side of the account —exports —and here I am confining myself to United.Kingdom produce. Tn 1855 to 1859, 50 years ago, the total was 116,000,000/., and of that, to foreign countries Went 68-4, anel to British possessions 31-6 per cent. This last year, 1906, the total had

Tenth Day. ■1 May 1907.

preferential Trade. (Mr. Asquith.)