403

A—s

I confess I see a fertile, frequent, and almost inexhaustible source of friction and vexation arising from such causes aloYie. Then I should like to say that there is a more serious infringement as it seems to me, upon the principle of self-government. The preferences which have hitherto been accorded to the Mother Country by the self-governing States of the British Empire are free preferences.* They are preferences which have been conceded by those States, in their own interests and also in our interests too. They are freely given, and, if they gall them, can as freely be withdrawn; but the moment reciprocity is established and an agreement has been entered into to which both sides are parties, the moment the preferences become reciprocal, and there is a British preference against the Australian or Canadian preferences, they become not free preferences, but what T venture to call locked preferences, and they cannot be removed except by agreement, which is not likely to be swiftly or easily attained. Now, Lord Elgin, I must trench for one moment upon the economic aspect. What does-preference mean? It can only mean one thing It can only mean better prices. It can only mean better prices for Colonial goods. Dr. JAMESON : Oh, no. It will make a much larger volume of trade which is often better than better prices. Mr. WINSTON CHURCHILL: I assert, without reserve, that preference can only operate through the agency of price. All that we have told about improving and developing the cultivation of tobacco in South Africa, and calling great new areas for wheat cultivation into existence in Australia, depends upon the stimulation of the production of those commodities, through securing to the producers larger opportunities for profit I say that unless preference means better prices it will be ineffective in achieving the objects in favour of which it is urged. Dr. JAMESON : Surely if I sell 100 lbs. of tobacco at ±d. per lb profit Ido much better than selling 5 lbs. at %d. per lb. profit. Surely that is very patent. J Mr. WINSTON CHURCHILL : But the operation of preference consists in putting a penal tax upon foreign goods, and the object of putting that penal tax on foreign goods is to enable the Colonial supply to rise to the level of the foreign goods plus the tax, and by so conferring upon the Colonial producer a greater advantage, to stimulate him more abundantly to cater for the supply of that particular market. I say, therefore, without hesitation, that the only manner in which a trade preference can operate is through the agency of price. lam bound to say that if preference does not mean better prices it seems to me a great fraud ou those who are asked to make sacrifices to obtain it. It means higher prices—that is to say, higher prices than the goods are worth if sold freely in the markets of the world. Dr. JAMESON : If you use the words " more profit " instead of " better prices," then that will explain the thing. Mr. DEAKTN : Wholesale production is always cheaper than retail. Tt would be a great advantage to our farmers if they could simply increase their acreage at existing prices. On the whole transaction, without the

Twelfth Day. 7 May 1907.

Preferential Trade. (Mr. Churchill.]