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Dr. JAMESON : I do not know that there was a tariff really. As a matter of fact, at the time when Basutoland and Bechuanaland first joined in the Customs Union, they would be free while under the British Government, and there would be what was at that time called a transit due from whatever port it was up to their border. When the Customs Convention of 1903, which did not include anything beyond the three States, was passed, all those transit dues were abolished, and then His Majesty's Government asked that these Protectorates as you may call them, should be permitted to enter the Customs Union of South Africa. Mr. LLOYD GEORGE : They are inside the Customs Union now ? Dr. JAMESON : Yes, at the present moment. Mr. LLOYD GEORGE : And it is since they entered into the Customs Union that they, in common with the rest of South Africa, have made this concession to the Mother Country. Dr. JAMESON : As soon as they were in, they adopted the tariff of the Customs Union, which gives them a tariff on which they can make these reductions and preferences to the United Kingdom and to all the other reciprocating Colonies; so they are actually following the conduct of South Africa at present in their tariff, and also in preference against foreign countries. Mr. LLOYD GEORGE : Of course, but there is a tariff. That is the real difficulty, and it is no use ignoring it. That eloes involve setting up a tariff, if preference is to be given in that form. There is no doubt at all about it. Sir JOSEPH WARD : Except that this particular proposal is not a suggestion that you should set up a tariff here; but I take it the proposal from this Resolution is to make a reduction upon the present articles in your own tariff which are dutiable. That is the difference. Dr. JAMESON : I began by saying that this is not to set up a tariff. Mr. LLOYD GEORGE : That, I think, is very important. Dr. JAMESON : It is only to give some help to our trade, to our products coming over here as against the foreigner. Mr. LLOYD GEORGE : As regards the duties already existing in this country ? Dr. JAMESON : Yes, only on the articles where a tariff does exist. Mr. DEAKIN :It is only a prospect of getting that —a possibility. Dr. JAMESON : Yes, a prospect. Mr. LLOYD GEORGE : If I may, I will proceed. I regret that it should be necessary for me, not merely out of courtesy to Sir William Lyne and Dr. Smartt, but also from a full appreciation of the importance and the

Eleventh Day. 0 May 1907.

Preferentiai Trade.