451

A—s

should close our inter-Imperial trade to the vessels of foreign countries which deny similar privileges to us. I will give the reasons why I do not think it is advisable that we should, at any rate at the present moment, challenge these countries on this particular point. It will be found on detailed consideration that the matter is not quite so simple as it looks, and that, in fact, these proposals, framed undoubtedly in the interest of British ships and British trade, involve a great complication of difficult i which may well make us pause before we give our assent to them. It is convenient, in the first place, to discuss this proposal on its merits, quite apart from any complication introduced by treaty engagements or the limits of legislative power. The object is either to exclude foreign ships from our coasting or inter-Imperial trade, or by the threat thereof to put pressure on foreign governments to admit British ships to the corresponding trade in their dominions. In either case the object is to benefit British shipping. It could have no other beneficial result. On the contrary, the exclusion of foreign ships or any class of them from the right to carry goods between the United Kingdom and a British Colony, or between the Colonies themselves, must, if effective, tend pro tanto to handicap the buyers and sellers of those goods, by restricting their choice of transport facilities and probably raising the cost of carriage. The Australian exporter of wool and meat would hardly wish to be restricted to British ships to carry his goods to the United Kingdom in competition with the Argentine exporter of wool and meat, who could select British or foreign ships as best suited his purpose. Moreover, if goods can only travel direct between different parts of the Empire in British ships, while goods from foreign countries may travel either by British or foreign ships, a positive advantage is given to trade between the Empire and foreign countries as compared with trade within the Empire. If merchandise can be sent from Hamburg to Australia in ships of any nationality, but from London only in British ships, the result would hardly tend to benefit the port of London in it? competition with Hamburg, or to maintain the entrepot trade of the United Kingdom. Unless these disadvantages to the trader are compensated for in some way, the proposed reservation would operate as a discrimination adverse to direct trade within the Empire. If, nevertheless, the proposal is advantageous, it can only be because of the benefit to be conferred on British shipping. But is this benefit certain ? If confined, as proposed in the resolution, to the exclusion of vessels of countries which do not give reciprocity, it will produce but little practical result. The great bulk of the foreign shipping which actually engages in our inter-Imperial trade is Norwegian or German, and neither of these countries exclude us from their coasting or inter-Imperial trade. The only countries whose vessels would be excluded under the resolution are those of Russia and the United States, whose participation in our inter-Imperial trade is at present negligible. Mr. DEAKIN : Do not the Germans give some special advantages to the trade with their Colonies ? Mr. LLOYD GEORGE : No. Mr. DEAKIN : Not as regards shipping ? Mr. LLOYD GEORGE : No, none. Mr. DEAKIN : They tried to in the Marshall Islands. They shut us out and a vessel of ours had to go back twice because they were not allowed to trade in the Marshall Islands. The question of compensation for that is now under consideration.

Thirteenth Day 8 May 1907.

Coastwise Trade. (Mr. Lloyd George.)