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EDWARD PULSFORD




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COMMERCE AND THE EMPIRE



COMMERCE AND
THE EMPIRE



EDWARD ,PULSFORD



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SENATOR FOR NEW SOUTH WALES IN
THE COMMONWEALTH PARLIAMENT



Published by

CASSELL AND COMPANY, Limited

LONDON, PARIS, NEW YORK
AND MELBOURNE MCMIII



PREFACE.



h- After woi'king many yeai's for Free Trade in Australia I feel em-
boldened to make an effort in the wider field of the Empire. The time
^ has arrived when, in my judgment, Free Traders in all the self-govern-
£2 ing Colonies should make an effort to bring their respective parts of
the Empire into line with British fiscal policy. The task is by no
means so difficult as some people think ; race sympathy is making it
easier every year ; and the very need of revenue makes the task less
instead of more difficult, since it is easier to obtain revenue without
than it is with restriction.

The necessity of dealing with the preferential phase of the subject
has caused me to hurry the publishing, and consequently the book is
cp less complete in many respects than I intended. The controversy with
regard to preferential duties will have one good result : it will lead to
ca a better general knowledge of the wliole subject, and will, therefore,
pave the way for the Self-Governing Colonies, one after another, to
raise the Free Trade flag. A British Free Trade Empire is a noble
object for which to tight.

During a period of about nine months, in 1900-1901, immediately

preceding the first Federal Election in the Australian Commonwealth,

I published a Avcekly paper, under the title of Our Country, dealing

;pr- solely with tlie fiscal controversy. The success of that ]niblication

§ proves that the cause of Free Trade is tlioroughly alive in Australia,

^ and that its adherents ai-e prepared at all times to fight the policy of



;i84-849



vi PREFACE.

restriction in whatever guise, or under whatever name, or by whatever
person it may be presented.

The manufacturing interest is the one that is specially protected in
Australia ; under a similar policy in the United Kingdom it would be
the Agricultural interest that would be specially protected. The con-
troversy in Austi-alia, therefore, presents points of vieAv somewhat
different from those in Great Britain, and consequently has an interest

of its own.

EDWARD PULSFORD
Sydney, Sejjtember, 1903.



CONTENTS.



CHAPTER

I. — A Chapter of Australian History .
II. — Some Definitions ......

III.— Aggregation .......

IV. — Steam and Electricity .....

V. — Alleged Decline of British Wealth and Commerce
VI. — British Exports ......

VII. — The Empire View of Import and Export Returns
VIII. — British Shipping ......

IX. — Re-Exports in Great Britain ....

X. — Great Britain and the Self- Governing Colonies
XI. — The Relative Extent of British Commerce
XII. — The Relative Value of Colonial Trade .
XIII. — Finance and Commerce .....

XIV. — The Preferential Tower of Babel .
XV. — Colonial Products and Preferential Treatment
XYl. — The Colonial Conference of 1902 .
XVII. — " Preference " — Further Advocacy .
XVIII. — Canada : Her Tariff Preference
XIX. — Preferential Possibiuties in Australia and New Zealand
XX. — The South African Preferential Tariff
XXI. — The Black Flag of Prohibition
XXII. — British Open Ports and Foreign Countries
XXIII. — Coming Developments and Changes .
XXIV. — The United States ......

XXV.— "Quiet Facts"

XXVI. — The Hopes of Cobden ver/ius The Fears of Adam Smith
XXVII. — Tariff Jingoism ......

XXVIII. — The Political Aaron's Rod ....

XXIX. — A Customs Duty : When is it Protective ?
XXX. — Taxing — Somebody Else .....



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CONTENTS.



CHAPTER

XXXI.— SroAR

XXXII. — The United Empire Trade League
XXXIII.— The Use and Abuse of Statistics
XXXIV. — Two Colonial Systems
XXXV.— Bbitish Countries — Old and New
XXXVI. — Crumbs of Controversy .



PAGE

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152
155
159
160
101



COMMERCE AND THE EMPIRE.

"We waft good will to every sphere.
The links of love to-day are thrown
From sea to sea — from zone to zone." — Kendall.



CHAPTER T.

A CHAPTER OP AUSTRALIAN HISTORY.

\VniLST for many years scarce a ripple stirred the placid current of
commercial life in the United Kingdom, many a fierce political battle
was fought in the main Australian Colonies — now the States — of New
South Wales and Victoria as to the policy under which commerce was
to be conducted. In Victoria the party which believed that expansion
of prosperity results from restx'iction of commerce early won ascendency,
and in the sixties succeeded in carrying a restrictive tariff. From that
period to the present Victoria has always been the stronghold of
Australian restriction. On the other hand, New South Wales has
always been true to the policy of freedom of trade ; attacks on this
policy have been made from time to time, but a general election has
never failed to sweep the danger away.

Naturally the free trade cause found powerful support in the
example, the legislation, and the faith of the Motherland. It has boeii
and still is the hope and determination of the free traders of Australia
to establish in the Southern world a great centre of commercial free-
dom, after the pattern of that which in the Northern world " stands
four-square to all the winds that blow." Was it — is it — too much to
hope that wlien once a great self-governing section of the Empire, like
Australia, endorses the policy of the United Kingdom by adopting it,
that gradually the other self-governing sections will follow the example,
till at last the world sees the whole Empire unitedly working out its
destiny on those high and beneficent lines which are embodied in the
principles of commercial freedom ?

The CommonM'ealth of Australia, the union of the whole six States
— previously the Colonies of Australia — came into existence on the
first day of 1901. The Governor-General had to select an Australian
statesman to form the first Ministry, and he ultimately selected the
Eight Hon. — now Sir — Edmund Barton, who is a restrictionist. The
election for the Senate and the House of Representatives took place
u few months later. Both Houses met in the month of May. Jn
B



2 COMMERCE AND THE EMPIBE.

October, the same year, the Federal tarilT was introduced into the
House of Representatives ; it was constructed on purely restrictionist
lines tempered only by revenue necessities. A severe party fight at
once ensued, which did not terminate till September of the following
year. In this fight the free traders gained victory after victory, first
in the House of Representatives and then in the Senate. When the
tariff finally emerged from the fight it was wonderfully toned down,
though still distinctively restrictionist. The free traders are eager for
the next electoral campaign, but the restrictionists deprecate a renewal
of the strife, a divergence of view wliich carries with it its OAvn
explanation. At latest the election must take place early in 1904-,
but it will probably be held in December, 1903, and no one in Australia
"vvill be surprised if the reins of power then come into the hands
of the free traders, under the leadership of the Right Hon. G. H.
Reid, who, it may be explained in passing, would have been entitled
to the ofl'er of the first Federal Premiership had he remained Premier
of New South Wales, the Mother State. An unexpected vote ter-
minated a five years' occupancy of that position very shortly before
the Federal appointment had to be made, and destroyed at the same
time Mr. Reid's right to the higher office.

From what has been said of the course of events in Australia
it will be clear that the subject of tarifi" policy has been closely studied
and keenly debated. It will also be clear that in the keen fight which
has raged in Australia, close attention must naturally have been paid
to all that transpired in other countries ; especially was it natural that
the utterances of public men in the United Kingdom in regard to
tariff policy should be closely watched. During recent years every
word spoken, or press statement published, which appeared to indicate
a tendency towards restriction, a lessened faith in freedom as applied
to commerce, in the Motherland, has been eagerly seized on by the
Australian restrictionist party to strengthen their cause and to restrict
still further all external trade, including that of the Motherland with
Australia.

Yes, there is no doubt that certain public men in the United
Kingdom have done a good deal to play into the hands of those
who think it to be good policy for Australia to exclude the goods
of other lands, of which the United Kingdom itself is the one
principally concerned. Talk about " Fair Trade " and about " Pre-
■^erential Trade " has all along, and most naturally, been accepted by
the restrictionist party as indicating the first steps towards a return
to the old fiscal conditions. Who can blame the party for using
all weapons that come to hand, and who can be surprised if there
are many who sorrow when they think of the source of supply of
some of these weapons !

In 1896 Mr. Lowles, a member of the House of Commons, visited
Australia in the interests of " Preferential," or, as it is better de-
scribed, penalised trade. When he spoke in Sydney his platform was
graced by the presence of none but restrictionists ; not one free trader
took a seat beside him. The three Sydney free trade papers
all repudiated his mission ; the one Sydney restrictionist paper



COMMERCE AND TEE EMPIBE. 3

said that tlio mission meant that England was tired of free trade,
adding that for New South Wales "a protective policy is urgently
required against all the world, including Great Britain." The Mel-
bourne Age, by far the most important organ of the restrictionist
party in Australia, referring to Mr. Lowles's visit, claimed that it
represented the failure of free trade in England. Shortly afterwards
the same paper, dealing with a speech by Mr. Chamberlain, said that
that gentleman

may rest assured that the people lof Victoria have no intentiou of jeopardising
their future or subordinating theii- interests to those of Manchester or Birmingham
or Bombay.

It is clear enough that all the talk and agitation about " Pre-
ferential Trade " is but grist to the restrictionist mills, and it is time
his fact was recognised. Those who in the United Kingdom are
the cause of all this are but throwing out arguments which, like the
Australian native weapon, the boomerang, return with injurious result'i
to the United Kingdom itself, whence they were thrown.

The developments in England this year, 1903, have carried
delight and encouragement into all Australian restrictionist circles.
" England's eyes open — Preferential Trade " is the heading of a x'e-
strictiouist pamphlet, which is being issued in preparation for the
coming general election. The following is an extract from the
Melbourne Ags of August 10th : —

The great upheaval against free trade in England — its last stronghold — is
a mighty object lesson in Australia. The Chamberlain policy is a loud pro-
clamation that Cobdenism has failed in the British Isles, as everywhere else, and
whatever may be the outcome of the approaching protectionist campaign ia
England, it cannot fail to clinch the detennination of this progressive Common-
v/ealth against any sort of retrogression into the discredited fiscal delusions, which
have been condemned in every country upon earth.

Perhaps the Australian papers which the most keenly rejoice over
the movement in England are those which during the late war were
distinctly pro-Boer. One of them* published a cartoon founded on the
death of Caesar. The Australian free trade leader, Mr. Reid, represents
the dying Ccesar ; Mr. Chamberlain represents Brutus. " Et tu, Brute !
Joseph Chamberlain has abandoned the free trade idea and declared for
an Imperial Protective Tariff."

Another pro-Boer paper t contained the following : —

Chamberlain's speech has been the greatest blow English free traders
have ever received, and the leading free traders of New South Wales are recUng
under it.

The free traders of Australia are so accustomed to every incident in
the controversy being represented as meaning the triumph of restriction
that they pay little heed to these assertions. It is well, however, that
those persons ia Great Britain who are responsible should understand
that they are strengthening the tariff walls of Australia, and playing
right into the hands of the anti-British.

* The Bulletin, June 27th.

\ The Catholic F,ess, June Ith.



4 COMMEltCE AND THE EMFIliE.

A work entitled " The Coming Reaction " has recently been pub-
lished, in the course of which the author claims that tlie position of
Great Britain in textile manufactures is due to restriction in past years.
Tlie Australian organ of the restrictionist party — the Age — referring
to this, says it is a lesson for Australia, adding : —

If we were to allow our markets to become the undefended prey of all
the world, how could it be possible that the raw material of the great Australian
pastures could ever hope to be manufartured on the spot ? Wo arc a wool pro-
ducing nation. We ought to be a cloth manufacturing nation for all those
countries that cannot produce wool. If we were to copy English policy (of the
past), we might yet become so.

The •' Legislator " who wrote " The Coming Reaction " is by no
means working in a direction likely to promote a demand for British
woollens.

Whilst Australian free traders are accustomed to the style of the
local restrictionist, and expect nothing different ; they do not think
a statement such as the following should appear in an English review : —

The importance of the hostihty expressed by the so-called free trade press of
the AustraUan colonies should not be over-rated. These newspapers and the
trading interests they represent have completely failed to convince the Common-
wealth Parliament of the wisdom of their views. Thoy are Cobdenite extremists
crying in a wilderness of protection ; and though they may represent important
mercantile interests at Sydney, they in no sense speak for Austrahan sentiment
as a whole.*

The most kindly thing that can be said of the term "so-called"
as applied to the " free trade press of the Australian colonies" is that
it is written in complete ignorance. There are seven morning papers,
in all, published in Sydney, Melbourne, Brisbane, and Adelaide, and of
these hve are free trade, not of the milk-and-water kind, but straight
out and uncompromising. Each one is edited with ability, and taken
altogether it would be difficult in any part of the British dominions to
find five papers that could be honestly called superior. Every sentence
in the quotation is a misrepresentation. To speak of " crying in a
wilderness of protection " infers that Australia is wholly protectionist,
yet any political infant knows that in the Mother State, New South
Wales, containing more than a third of the whole population of the
Commonwealth, free trade is distinctly in the ascendajit, and has never
yet been beaten at the polls. The youngest State, Western Au.stralia,
at the Federal election returned ten free traders out of the eleven
members to which it is entitled in the two Houses. So much for " the
wilderness of protection."

Then, as to " Aiistralian sentiment as a whole," it can be affirmed
positively that the Australian free traders as a whole regret and oppose
the preferential movement because they recognise nothing but re-
striction in it, and that the Australian restrictionists as a whole rejoice
in it, because they recognise in it a blow to free trade, and support to
their own policy.

* National Bevieic, July, page 868.



CHAPTER II.

SOME DEFINITIONS.

It will be observed that the writer uses the term "restriction" rather
than that of "protection." The reason for this is that as the policy in
question I'estricts the operations of many and only protects the opera-
tions of few, the word " restriction " is more appropriate. The word
"protection," as generally used, is distinctly misleading.,'.

The term " free trade" is used to mean trade free from all taxation
except such as may be needful for strictly revenue purjjoses, and the
term "free trader" to mean a person who insists on the tariff being
for revenue only, and also on the total re\'enue so collected being as
small as possible. The terms "high tariff" and "low tariff" are
looked upon as misleading, and therefore objectionable. Three hundred
per cent, is certainly " high," but levied on tobacco, and so that every
penny paid by the consumer goes into the public treasury, it is
defensible, provided the revenue be wanted ; whilst 10 per cent, is
certainly " low " ; but levied on any commodity, so that the money
paid by the consumer goes wholly or partially into private pockets
instead of into the public treasury, the tax is quite indefensible. The
free trader recognises that all duties, in proportion to their amount,
increase the cost of the commodities on which they are levied ; that as
the cost increases, the trade decreases ; and that as trade decreases,
the employment of labour and the profits of cajntal are correspondingly
lessened. Consequently he watches with a veiy jealous eye the impo-
sition of a duty even for the sole benefit of the public treasury, and lie
can never consent to the imposition of a duty the product of which
goes wholly or partially into other channels.

The term " penalised trade " is used instead of " preferential
trade," and " penalty " instead of " preference," because the volume
of trade and the number of people who would suffer exceed the volume
of trade and the number of people who would benefit by any system of
differential duties, and, therefore, as far as a term can convey any sense
of the woi'king of a policy, the larger consequences, and not the smaller,
should be embodied in the name by which that policy is known.



CHAPTER III.

AGGREGATION — IKCBEASKD AND INCREASING FREEDOM OF TRADE.

Steam and electricity have done something to destroy the old-
fashioned virtue of patience. Man did not invent these powers ; since
time began steam has always issued fi'om hot water, and electricity has
always been known to flash through the heavens. It took man thou-
sands of years to recognise and to harness to his own use these latent
powers of Nature. To-day, now that steam and electricity are his
servants, he api)ears to think that he must emulate them and always be
in a hurry. Haste ! the pressure of life ! herein lie some of the most
potent dangers of the twentieth century. Seed-time and harvest are
still separate seasons, but man seeks to sow and to reap on the self-
same day, and too often all the knowledge he desires, or gives himself
time to acquire, is the latest news of the political weathercock. But it
is well, after all, to stop to think and study. And the subject of what
has been the greatest influence at Avork in this world of ours for the
last two or three hundred years will well repay studious investigation.

The greatest influence has undoubtedly been, and is to-day, the
movement for aggregation of interests : aggregation versiis segrega-
tion. It took man nearly as long to discover the power that lay in
aggregation as it took him to discover the powers that lay in steam and
electricity; but the selfish and the segregative instinct had to be fought,
and fought everywhere, to make progress possible. Aggregation has
its first and most elementary example in the family. Then follow the
local or parochial aggregation ; the provincial aggregation ; the national
aggregation ; the racial aggregation ; and, finally, the world aggrega-
tion. " Age of progress," " prosperity growing," and similar expressions-,
are heard on all sides. " Splendid result of the United States and of
Germany being each more or less segregated from other nations."
"Well, segregation is the death principle, aggregation is the life prin-
ciple, therefore neither the United States nor Germany has grown and
prospered because it was segregated from other nations, but both have
grown and prospered because of the ever-increasing aggregation within
their own wide borders.

Wherever it is sought to bring into force this principle of aggrega-
tion of interests there is sure to be oi)])Osition, more or less keen, from
those who believe — often honestly believe— in segregation as a better
policy. Yet a cai'eful study of the world's history will make it
abundantly clear that progress has always been associated with, and
has resulted from, aggregation. Take the case of the United Kingdom
first of all. In no other instance among the nations of Europe was



COMMERCE AND THE EMPIRE. 7

the principle of segregation so successfully fought as in the United
Kingdom. Long before what is called the free trade era arri%ed,
internal freedom of trade had been secured, not only within England,
Scotland, Wales, and Ireland separately, but within the whole of them
as one aggregation. The United Kingdom of to-day would not have
existed, would not have been a possibility, if the four countries had
been separated each one from the others by a separate and opposing
tariff, and if this segregation had further kept the different countries
apart. A very competent writer — McCulloch — says : —

The freedom of internal industry has ever since (1624) been vigilantly
protected ; full scope has been given the principle of competition ; the whole
kingdom has been subjected to the same equal law ; no obstacles have been thrown
in the way of the freest transfer of commodities from one country or place to
another ; the home trade has been perfectly unfettered ; and though the public
have not been supplied with commodities at so low a price as they might have
obtained them for had there been no restrictions on foreign commerce, they have
obtained them at the lowest price that would suffice to pay the home producers the
cost of producing and bringing them to market. It is to this freedom that the
comparatively flourishing state of indastry in Great Britain is mainly to bo
ascribed.

In 1624 the well-known statute of James I. declared that mono-
polies of every description were "altogether contrary to the laws of
this realm, void and of none effect." In this was heard the voice of a
free people. It indicated a spirit and a policy under which the United
Kingdom — in comparison with any other country — greatly prospered.
Thei'e was a time when goods passing between British cities like
London, York and Bristol were subjected to taxation as to-day they
might be bstween London and New York, or Hamburg. But these
internal restrictions were tlirov/n off mostly centuries ago ; centuries, in
fact, before the corresponding restrictions, the segregating influences,
were thrown off in Europe.

The United States are claimed as a great triumph for segi-egative
policy. Yet if there be any country in this world which clearly has
advanced by leaps and bounds through a policy of aggregation, that
country is the United States. This has been recognised and well put
by Carnegie in his work " Triumpliant Democracy " : —

The Mississippi and its tributaries traverse the great Western basin, a miUio
and a quarter square miles in extent, and furnish an internal navigable system o
twenty thoiisand miles. A steamer starting from Pittsburg in Pennsylvania, four
hundred and fifty miles inland from New York, and two thousand from the mouth
of the Miebissippi, passing through these water highways, and returning to its
starting-place at the smoky metropolis of iron and steel, will sail a distance much
greater than n^und the world. Nor will it in all its course bo stopped by any
Government official, or be taxed by any taritf. Tlie flag it carries will ensure free
passage for ship and cargo miimpedcd by any fiscal charge Avhatever, for the whole
continent enjoys the blessings of absolute freedom of intercourse among its citizens.
In estimating the influences which promote the consolidation of the people, much
weight must be given to this cause. Fifty-six milhor.s of people [now over


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Online LibraryEdward PulsfordCommerce and the empire → online text (page 1 of 19)