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ment in full working order and with its vital principles unimpaired. Theoretically, it might seem that preferences in the case of protective duties would be excluded altogether, but practically the result has been different. One of the most interesting things about the Indian system of protection is that it has led directly to what has been in effect, if not in intention, a preference for Empire goods. In two very important cases, iron and steel and cotton piece goods, it has been found that the imposition of a lower rate of duty on goods made in the United Kingdom is entirely consistent with India's interests. My colleagues and I hope that an examination on similar lines of other protected industries may lead to a solution which will be in the interests of both India and of other parts of the Commonwealth. One other aspect of India's economic position may be briefly notice in passing. Like other parts of the Empire, she can neither meet her international obligations nor purchase her requirements of manufactured goods unless she can find a market for her raw produce. Her exportable surplus of certain commodities may, however, exceed—may even very greatly exceed—the Empire's present capacity to absorb them. India has to find markets outside the Empire for the great bulk of the exportable surplus of her products, although in normal years she purchases a greater proportion of her requirements from within the Empire than from without. These are facts which those responsible for India's welfare have constantly to bear in mind. The development of her foreign trade generally is one of her primary interests. But it is not in the mind of any of" us here, I am sure, that trade would be confined to Empire channels, and it is the hope of the Indian delegation that this Conference may prove to be an important step towards greater freedom of trade throughout the world. There is one item in the agenda the importance of which cannot be stressed too strongly. I mean the inter-relationship of monetary standards of the Empire and the desirability and feasibility of restoring and stabilizing the general level of prices and achieving exchange stability. For here we come to factors which affect the very foundations on which any structure of fiscal preferances has to rest. The benefits to production and trade of a preferential system may easily be swept away unless it is supported by a monetary and credit policy which assures a reasonable measure of stability of general wholesale prices. Above all things it is essential that the level of prices should be such as to reestablish equilibrium with costs and the burden of all fixed and semi-fixed money obligations. The precipitous fall in the level of wholesale prices in the last three years has created disequilibia of a character and an intensity which have had, and continue to have, the most unfortunate and dangerous consequences on the economic life and on the public and private finances of all countries, but particularly of countries, like India, which are mainly engaged in the production of primary commodities. Determined measures of readjustment are urgently necessary, and I desire to express, the earnest hope that the Conference may be able to reach agreement on a plan which will bring about this desired end. Although for the full attainment of this end world-wide co-operation will be necessary, much can be accomplished at Ottawa as a preliminary to international discussion. Moreover if a lead is given by us here it will have a potent influence towards restoring general confidence. Let me emphasize that India regards the monetary problem as one of vital and urgent importance. I have only one word to say in conclusion. In speaking on preferential tariffs I have dealt so fully, Mr. Prime Minister, with our special difficulties that I may have seemed to attach more weight to them than to the common aim and purpose which brings us together. I hope this is not the impression I have produced. The Indian delegation has come to Ottawa in the hope and the belief that between the various parts of the Empire agreements can be reached which will be mutually advantageous to the countries concerned and harmful to none. It is in this spirit that they will strive to play their part in the work of the Conference. The Chairman: The country of Southern Rhodesia has not yet attained the status of a Dominion, but it has established responsible Government, and by common consent the members of its delegation are present as observers, and we will now be addressed by the Prime Minister, the Hon. Mr. Moffatt. Hon. Mr. Moffat: Sir, I wish first, on behalf of myself and the other members of the Southern Rhodesia delegation, to associate myself with the thanks and appreciation expressed by the other members for the kind welcome extended to us by His Excellency the Governor General on behalf of the Government of Canada, and for the lavish hospitality which we are receiving.