Preference: Price.

Negotiations between Britain and the Dominions started with a 10 per cent. ad valorem duty imposed by Britain on certain foreign goods. This duty was due to expire on Nov. 15; its continuance was part of the British offer at Ottawa. Over and above that, Britain was prepared to give a greater preference than this 10 per cent. in certain cases. Consider butter. If Britain had confined her offer to continuing the 10 per cent. ad valorem, then, whatever the price of butter might be, Danish would pay 10 per cent. on value, and Dominion butter would enter Britain free. But Britain now gives Dominion butter a preference over foreign of 15/- per cwt. (not ad valorem), and this means a 15 per cent. preference when butter is at 100/- per cwt., receding to a 10 per cent. preference (as now) when butter is at 150/- per cwt.