369

A—s

Mr. DEAKIN : Y T ou do not think you can compete with them because of the cheapness of their labour cost in that particular line ? Mr. LLOYD GEORGE : I would not like to say we could not compete, because I have not gone into it. But lam not prepared to challenge Dr. Smartt on that point. I accept his statement with regard to it, and I think it is very likely. I remember when I was in the Argentine they were rather getting ahead of us in the cheaper and shoddier kind of stuff, but could not come near us in the better class of article; and in the long run I find that tells. I was in the Argentine it is true at a time of depression of trade between this country and the Republic; but I find in the long run that quality has told, and as the Argentine Republic has become richer and richer it has got the money to buy" the better article, and our trade with the Argentine Republic is going up by percentages that would delight the heart of Sir William Lyne, if I could give them. Mr. DEAKIN : Why should you not make both ? You make the best article, and have the market for it. Very good That is the best thing, if you have to choose* But why cannot you keep that and beat them in the cheaper kinds also ? Mr. LLOYD GEORGE : I am coming to cotton by and by; but it is very difficult to retain both, because the moment wages go up, of course, you are driven into the better class of trade by the price. Mr. DEAKIN : I wanted to find out whether labour cost was the sole factor in making the distinction between your success in one and their capture of the other, or is it due to anything else! Mr. LLOYD GEORGE : No, there are the profits. We can make a better profit out of the better article Mr. DEAKIN : Why not make both ? Good profits on the dear and smaller profits on the cheap goods. Mr. LLOYD GEORGE : As T point out, we have no reason to complain of our cotton market. I have been rather led away by the cross-examination of Mr. Deakin—not that I object to it for a moment: on the contrary, lam very glad he has put those questions, if T have been able to_ answer them satisfactorily, but T have been rather led into a subject that I did not mean to go into, that is, into our present position in reference to our great trade rivals. Now, let me put another figure which will illustrate the position of things, I think, even better than the actual figures which I have given. _ I have given the amounts of our exports of manufactured goods: I should like now to give the exports of our manufactures per head of the population, because after all that is what counts. Eirrhtv millions of people working 10 orll hours a day could turn out naturally more than 40 millions of people working eight, nine, or ten hours a day. You must take population into account as a factor. We are a smaller country than any of those countries. lam not sure how we compare in mileage with France, but we are certainly smaller than Germany. Mr. DEAKTN : You are much smaller than France. Mr. LLOYD GEORGE : T accent that statement from Mr. Deakin. For the moment T forgot. We are much smaller than Germany, and, of course,

48—A. 5.

Eleventh Day. 6 May 1907.

Preferential Trade.