A.—s

404

Twelfth Day. 7 May 1907.

alteration of a farthing in prices, they then would be much better off, because they would cultivate a larger crop more cheaply, transmit it more cheaply, and get the shipping accommodation more cheaply in bulk. They would get all the advantages of wholesale production instead of retail production. Mr. WINSTON CHURCHILL : If there is no enhancement of price to be expected on the part of the Colonial producer, why does not he now embark on all these developments which are promised ? Mr. DEAKIN : Because with present supply to your open market that might mean reducing the price below the profitable limit. We are satisfied with the prices of the last four or five years, but if we had produced much more we might have brought it below that satisfactory limit, unless we had a preference. It really amounts to what I tried to put as the wholesale and retail argument without alteration of price. Mr. WINSTON CHURCHILL : There is an advantage in wholesale production. lam not disputing that. Mr. F. R. MOOR : A more important point is this, it stimulates the population of your large Colonies where you have such an enormous undeveloped area of country. Mr. WINSTON CHURCHILL : That is quite true. lam quite ready to admit that the fact that you make a particular branch of trade more profitable, induces more people to engage in that branch of trade. That is what I call stimulating Colonial production through the agency of price. I am quite prepared to admit that a very small tax on staple articles would affect prices in a very small manner. Reference has been made to the imposition of a shilling duty on corn, and I think it was Mr. Moor who said, yesterday, that when the Is. duty was imposed prices fell, and when it was taken off prices rose. That may be quite true. I do not know that it is true, but it may be. The imposition of such a small duty as Is. on a commodity produced in such vast abundance as wheat, might quite easily be swamped or concealed by the operation of other more powerful factors. A week of unusual sunshine, or a night of late frost, or a ring in the freights, or violent speculation, might easily swamp and cover the operation of such a small duty; but it is the opinion of those whose economic views I share —I cannot put it higher than that —that whatever circumstances may apparently conceal the effect of the duty on prices, the effect is there all the same, and that any duty that is imposed upon a commodity becomes a factor in the price of that commodity. I should have thought that was an almost incontestable proposition. Mr. DEAKIN : Most of your propositions seem incontestable to you, but our experience refutes many of them. Mr. WINSTON CHURCHILL : In that respect, Mr. Deakin, I enjoy the same advantage of conviction as you enjoy yourself. Mr. DEAKIN : We do not say our opinions are incontestable. We say they are open to argument and illustration by experience.

Preferential . Trade. (Mr. Deakin.)