39

A.—6a

for the Dominions. Being the representative of Australia, and holding very strongly the views that we do hold, I must give my first choice to a tariff on foodstuffs and raw materials with preference to the Dominions. From a purely Australian point of view, I may state quite frankly that we should welcome any such solution of the problem. The Australian public is thoroughly accustomed to the idea of protective tariffs. They understand their significance, and the value of any preference that the British Government might be able to give under such a scheme would be immediately appreciated in the Dominions. I think it coifld. be claimed that a protective tariff with adequate preference could undoubtedly be: made to achieve all our objectives. lam aware of the prejudice that exists in this country against any tariff system being applied to essential foodstuffs, but I would point out to the Conference that the country which attempts to obtain, for any considerable period, its foodsupplies at prices below the cost of production will certainly be eventually faced by a gradual decrease of production, with the necessary corollaries of scarcity of supplies and high prices, and, if the trouble be not remedied, ultimately by starvation. At the present time the position in Britain appears to be approximating to these unhappy conditions. The British farmer is, I unelerstand, incurring heavy losses from his arable areas in spite of excellent crops. The Dominion producer, in many instances, is unable to obtain prices that cover his costs. Surely we must look at the problem, not as one of to-day, to-morrow, or the next day, but, taking a wider view, we must realize that proper measures to safeguard Empire agriculture will undoubtedly be in the interests of all classes of the community. The supply of some of the most important foodstuffs is now largely in the hands of foreign combines that manipulate prices to the detriment of both producer and consumer. Unless Empire agriculture; can be encouraged, Britain must expect to see the control of its food-supplies pass more and more into foreign hands, with what results in time of war recent experience can teach us. In view of the high prices which the British consumer has to pay for produce there is no real reason why a system of protection and preference based on a tariff should necessarily increase the cost of living. (2.) A Sliding-scale Tariff. The second suggestion that I put forward is a scheme of sliding scales for protection and preference. Protection for British agriculture and preference for the Dominions could be; introduced on a sliding scale so as to give some measure of stability to the market by bringing the tariff into operation only when the prices of commodities sank to So low a level as to be unremuncrative to the agricultural producer; in other words, a sliding-scale tariff. It has been suggested that the average cost of production of an essential commodity, such as, for instance, wheat, having been ascertained for the United Kingdom, the sliding-scale tariff should come into operation whenever the price sank below the average cost, thus giving to the British farmer protection only whon he needs it, and applying preference to the produce, of the Dominions at the same time. As the tariff would be applied only when prices had fallen below a certain level, it is probable that one result of this system would be to eliminate fluctuations to some extent, and this in itself would be a, benefit to the consumer as well as to the producer. (3.) The Method of Subsidies. The third suggestion is subsidies. A system whereby British and Dominion agriculture could be placed in a position, of definite advantage over foreign supplies would be a system of subsidies, where required, to British, agriculture, and some form of subsidy to the Dominions producer. It has been suggested that subsidies from the British Government to the Dominion products could be based upon the ascertained value of the preferences afforded by the Dominions to the Mothercountry. For instance, if Australia had given preferential treatment to Great Britain to the extent of, say, £8,000,000 in a year, a proportion of this amount could be returned by the British Government in the form of subsidies against freight charges, overhead expenses, &o. Such a subsidy could take the place of a tariff preference on essential foodstuffs or raw materials. It is argued that an arrangement of this sort would give an incentive to the Dominions to increase their preferences to British goods to the maximum amount in order to obtain as large a subsidy for their primary production as possible. I presume that under any such system the subsidies to the British farmer would only be available when the market price had sunk below a reasonable cost of production. On the other hand, if ~a subsidy system were to be regarded by the Dominions as in any way an adequate quid pro quo for thoir preferential treatment of British manufactures, the subsidies to the Dominions would have to be in continuous operation. I have now briefly indicated two methods of attaining our objective"that are based upon a tariff, and one method in'wbich"subsidies would bo'usod. There are two other methods worthy of "consideration" which do" not involve either tariffs or subsidies, but which are based upon the idea""of controlling the volume of T foreign imports. I am aware~of the feeling that"still exists in this"country against measures of control, and in considering these forms of solution lt"seems desirable to"discover"how control coukUbo applied with the very minimum of friction and the least possible interference with the <r normal methods of business and of trade. (4.) The Method of Import Licenses, One method that has been suggested for giving effect to our purpose is an import license system to discriminate against foreign countries. A suggestion of this sort was made by the Incorporated Society of Meat-traders to the Bridgeman Committee, and is mentioned in that Committee's report. A system in some way analogous to this is, I believe, carried, out at the present moment by the Hop