III.

SETTING BACK THE CLOCK OF EMPIRE.

THREE years ago Lord Rosebery, falling into a whim of the elder Disraeli, indulged himself with a speculation as to what might have happened to this country had the American Colonies never revolted. He suggested that, with the growth of population in what is to-day the United States, the centre of gravity of the Empire would have been displaced, and the seat of Government "would, perhaps, have been moved solemnly across the Atlantic, and Britain have become the historical shrine and the European outpost of the World Empire."1 Dreams of the might-have-been are not always the fantastic futilities that the Gradgrinds love to think them, for lost opportunities or averted dangers do not infrequently recur. Some such thought as this must have crossed the minds of a good many people as they meditated on Mr. Chamberlain's recent expositions of Imperial policy. There is, as yet, no question of the shifting of the physical centre of gravity of the Empire, but it must be clear to any one who has studied the practical aspects and diplomatic history of Imperial Federation, that of late years the political thought of the Mother Country has been profoundly modified by the proselytising influence of Colonial economic doctrine. Mr. Chamberlain's pronouncements bring us face to face with the possibility of this doctrine prevailing, and with the consequent risk of the moral centre of gravity of the Empire becoming displaced. How near or how remote that possibility may be will not be revealed to us until the issue is fought out at the polls. For the moment we have to count with the fact that the most conspicuous statesman of our time, and one of the acutest political intellects in Great Britain, has 'verted to Colonialism and has undertaken to preach its gospel to his fellow countrymen.

This, it seems to me, is the most pregnant aspect of the crisis into which the Colonial Secretary has plunged us. I propose to say something presently of the political and economic value of the several propositions he has recently submitted to the country; but, in order to gauge the depth of conviction which lies behind them, it is desirable that in the first place I should trace their evolution and the circumstances which have led Mr. Chamberlain to adopt them.

Fiscal unity is no new idea in the history of the British Empire. (1) Rectorial Address at Glasgow, November 16th, 1900.

L

It existed on a basis of preferences, more or less mutual, from the time of Cromwell's Navigation Act to the Repeal of the Corn Laws, and for ten years after that on a Free Trade basis not less compulsory on the whole Empire.1 The parting only came in 1858, when Canada adopted a frankly Protectionist Tariff, and successfully resisted the claims of the Imperial Government to veto it. From that time the Mother Country and the Colonies pursued diametrically opposed fiscal policies. Towards the end of the 'seventies, however, heretical tendencies began to manifest themselves in Great Britain. An abnormal and protracted depression of trade shook the faith of a large section of the public in the Cobdenite gospel, and gave birth to the so-called Fair Trade agitation. At the same time, in Canada, tariff difficulties with the United States directed men's minds to the desirability of capturing the rich grain market of the Mother Country. Sir John Macdonald seized the opportunity to discuss a preferential arrangement with the Imperial Government in 1879, but Sir Michael Hicks-Beach was then Colonial Secretary, and the suggestion was not listened to.2 Fair Trade, as a system of protection for Great Britain, was practically killed at the General Elections of 1885, but its spirit migrated into the Imperial Federation movement founded during the previous year. Here it allied itself with the Colonial Preferentialists, and in this way the proselytising campaign of Colonial Protection was definitely launched in this country.

Favoured by the growth of the Imperial spirit and the absence of any practical scheme on the Free Trade side for giving organised form to the unity of the Empire, the Protectionists made rapid strides. The Colonial Conference of 1887 warmly favoured their preferential ideas, and a strong impulse was given to them in 1890, by the dissatisfaction caused by the aggressive protection of the McKinley Tariff. In 1894, the new movement felt strong enough to try conclusions with the Imperial Government. Early in the year Mr. Rhodes proposed to insert in the regulations for the administration of the Colonies of Matabeleland and Mashonaland, a clause securing a customs preference to the Mother Country.3 Two months later the Colonial Conference at Ottawa formally notified the Imperial Government of "its belief in the advisability of a customs arrangement between Great Britain and her Colonies, by which trade within the Empire may be placed on a more favourable footing than that which is carried (1) Grey Colonial Policy of the Russell Administration, Vol. I. pp. 4, 280, 286. Davidson Commercial Federation, pp. 54-56.

(2) Pope: Memoirs of Sir John Macdonald, Vol. II., p. 219.

(3) Parl. Pap., No. 177 (1894). Report Brit. South African Co. 1892-1894, pp. 28-30.

on with foreign countries," and asked that the provisions of the German and Belgian Treaties of Commerce, which stood in the way of such an arrangement, should be denounced.1 To both these représentations Lord Ripon, who was then Colonial Secretary, returned an uncompromising non-possumus, based on the unshakable fidelity of the Mother Country to the fiscal and commercial system adopted by her half-a-century before.2

Lord Ripon's despatches, embodying this decision, were deprived of much of the significance that would otherwise have attached to them, by the fact that they were the last act of an expiring Government. They left the situation, however, in a very unsatisfactory state. Their stiff rejection of the Colonial overtures was not calculated to stimulate or sustain the Imperial faith. Controversy on the common ground of the Imperial ideal would have been far better than the virtual assumption that such common ground did not exist. Mr. Chamberlain, who succeeded Lord Ripon at the Colonial Office, swiftly recognised the danger. He came into office with a strong conviction that "the arrangement between our Colonies and ourselves is essentially a temporary one," and that "either it will be strengthened by ties of federation or it will be loosened altogether." Although a professed Free Trader, he had never held uncompromising views on the fiscal question, and consequently his study of the Imperial problem was not likely to be hampered by what have been called "Economic Shibboleths."

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6

It was clear to the new Colonial Secretary, from the moment he took office, that the rejection of the Ottawa resolutions imposed on the Mother Country the duty of formulating an alternative plan, and to this task he accordingly addressed himself. Two courses were open to him. Either he could reply to the Colonial scheme of a Protective Tariff in the Mother Country, by reviving Lord Grey's policy of Imperial Free Trade, or he could seek for a compromise. The first course was scarcely within the field of practical politics. It would have constituted a demand for unconditional surrender on the part of Colonial economists, at a moment when the tide of battle was running perceptibly in their favour, and under any circumstances a victory for it could not have been looked for until after a controversy

(1) Blue Book, C. 7,553, pp. 2-3.

(2) Ibid., C. 7,824.

(3) The despatches in reply to the Ottawa resolutions are dated June 28, 1895, four days after the resignation of the Rosebery Cabinet, and only twenty-four hours before the formal induction of the new Government.

(4) Speech at Belfast, October 12th, 1887.

(5) See the curious qualifications in a speech quoted in Hazell's Annual (1886), p. 173.

(6) Chamberlain : Foreign and Colonial Speeches, p. 168.

1

which might have lasted generations. Would the spirit of Imperial solidarity outlive such a controversy? Rightly or wrongly Mr. Chamberlain was of opinion that it would not. Consequently he addressed himself to the question of a compromise. The scheme he ultimately hit upon was not new. In 1891 Lord Goschen had declared that "if the Colonies were prepared for a Customs Union, giving free trade within the Empire, he should say they meant business." A similar view had been expressed by the City of London branch of the Imperial Federation League in 1892, and even Lord Ripon had declared in his despatch of 1895, that such an arrangement would be, in principle, free from objection." This scheme had the advantage over the preferential plan of providing for a substantial exchange of sacrifices by the Mother Country and the Colonies, but still the balance of doctrinal gain would have remained with the Protectionists, and to this extent it would have marked a further stage in the progress of the Colonial propaganda. Nevertheless Mr. Chamberlain formally adopted it as "a proper subject for discussion,' likely to lead to "a satisfactory and workable arrangement," 2 and for seven years he laboured hard to persuade the Colonies to accept, or, at any rate, consider, it. His efforts were vain. Although at the Colonial Conference of last year he definitely stated that His Majesty's Government were ready to acquiesce in the principle of a "free interchange," and to entertain proposals for corresponding restrictions in regard to tariff relations with foreign countries, the Colonies held fast to their old scheme.3

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Mr. Chamberlain was not unprepared for this impasse. While struggling for the Zollverein he had all along kept open a line of retreat in the direction of Preferences. When, in 1896, Canada endeavoured, as Mr. Fielding said the other day, to force the issue," by reducing her customs duties on British goods, Mr. Chamberlain, reversing the action of Lord Ripon in regard to Mr. Rhodes's proposal, accepted the boon, and prevailed upon Lord Salisbury to denounce the German and Belgian treaties of commerce which threatened to render it inoperative. His idea seems to have been that, while a systematic policy of Preferences was to be deprecated on the ground that it would inevitably land the country in Protection, the whole cause of Imperial unity would be jeopardised by a dogged and dogmatic adhesion to the British Zollverein idea, if it was shown that its acceptance by the Colonies was hopeless. Meanwhile the forces that were making for Imperial unity might well be humoured

(1) Hazell's Annual (1892), p. 612, and 1893, p. 349. C. 7,824, p. 4.
(2) Foreign and Colonial Speeches, pp. 172-175.

(3) Cd. 1,299, pp. x., 5.

(4) Canada: Budget Speech (1903), p. 23.

and even cultivated by the acceptance and concession of innocuous preferences, as opportunities for doing so presented themselves. From the first this idea was strenuously opposed by the late Chancellor of the Exchequer, who recognised in it his old foe of 1879. In 1899 a struggle took place in the Cabinet over a demand of the Australian Colonies to be exempted from the additional wine duties. Not content with opposing this demand on its merits, the Treasury drew up an elaborate minute, in which the whole question of Preferences was reviewed and uncompromisingly denounced. Later on the question was revived in connection with the tea and sugar duties, but the Chancellor again proved obdurate, and the Colonial Secretary did not insist. The final fight raged over the corn and flour duties. Until the close of the Colonial Conference last year, the inadequacy of the preferences given by Canada precluded any strong effort on the part of the Colonial Secretary to obtain a Tariff preference from the Treasury for the Dominion. But the situation was changed when Canada formally offered an additional preference on selected articles, to be settled by negotiation, if the United Kingdom would exempt her food products from the duties imposed by the new Finance Act. In these circumstances Mr. Chamberlain strongly urged that the corn duty should not be applied to Colonial produce. Mr. Ritchie, who had meanwhile become Chancellor, was at first unable to make up his mind, and the question was shelved until the return of Mr. Chamberlain from his South African tour. When in due course he arrived home, he was more than ever penetrated with the conviction that if nothing was done to meet the Colonial offers on the Trade question, the disintegration of the Empire would only be a question of time. He found that the Cabinet had already resolved to renew the corn duties, and accordingly he pressed vigorously for the exemption of the Colonies. The details of the debates that ensued cannot, of course, be fully known, but it is understood that they were not unmarked by strong feeling. The Cabinet proved divided, and Mr. Ritchie, following in the traditions of the Treasury, declared that he would sooner abandon the duty altogether than admit the Preference principle. This declaration opened the road to a compromise. It was agreed to withdraw the corn duty so as to deprive the Colonies of any grievance, and meanwhile to leave Ministers free to bring the whole question of Preferential trade in its broadest aspects before the country, with a view to its decision by the nation in the usual constitutional way.

In this way the question was widened to its present Protectionist scope. It is clear from such evidence as is available that (1) Cd. 1,299, pp. 36-38. Speech at Birmingham, May 16th, 1903.