Other formats

    Adobe Portable Document Format file (facsimile images)   TEI XML file   ePub eBook file  

Connect

    mail icontwitter iconBlogspot iconrss icon

The Pamphlet Collection of Sir Robert Stout: Volume 77

The Colonial Office Conference and Preferential Trade within the Empire

page break

The Colonial Office Conference and Preferential Trade within the Empire.

Introduction.

There is a disposition in some quarters to regard the conference between Mr. Chamberlain and the Colonial Premiers, held in August, 1902, as a failure in so far as it related to the promotion of trade within the Empire. The contents of the recently-published Blue-Book dealing with the subject do not lend support, however, to the views of those who hold this opinion. It is true that no changes in the fiscal system of this country or of the individual Colonies were definitively settled upon, but the tone of the Conference was distinctly in favour of the promotion of closer commercial relations between the Mother Country and her offspring. Mr. Chamberlain's opening speech contained the following striking paragraphs on this point—

"The first salient fact is this: that if we chose—that is to say, if those whom we represent chose—the Empire might be made self-sustaining. It is so wide, its products are so various, its climates so different, that there is absolutely nothing which is necessary to our existence, hardly anything which is desirable as a luxury, which cannot be produced within the borders of the Empire itself. And the second salient fact is: that the Empire at the present time, and especially the United Kingdom, which is the great market of the world, derives the greater part of its necessaries from foreign countries, and that it exports the largest part of its available produce, surplus produce, also to foreign countries. This trade might be the trade, the inter-imperial trade, of the Empire....

page 64

"Our first object, as I say, is free trade within the Empire. We feel confident—we think it is a matter which demands no evidence or proof—that if such a result were feasible it would enormously increase inter-imperial trade; that it would hasten the development of our Colonies; that it would fill up the spare places in our lands with an active, intelligent, and industrious, and, above all, a British population; and that it would make the Mother Country entirely independent of foreign food and raw material."

The conference ended with the understanding that the Colonial Premiers should obtain the consent of their respective Governments to systems of preferential duties designed to promote inter-imperial trade on the lines suggested; and Mr. Chamberlain was careful to point out that something more than the Canadian 33 per cent, reduction on duties, initially much too high, will be required if useful results are to follow. The Colonial Secretary also intimated that, when the trade in manufactured goods between the home country and the Colonies had been developed along these lines, then, and not until then, it would be necessary to discuss the question of imposing reciprocal duties in favour of colonial produce in this country.

Since the principle of preferential trade has been thus endorsed by those taking part in the Colonial Office Conference, it will be of interest to examine some of the recent trade figures bearing on the subject.

The figures used in preparing this Chapter are official. They have been taken from the "Annual Navigation and Trade Returns of the United Kingdom," and from the "Statistical Abstract for the Colonial and other Possessions of the United Kingdom," for the year 1901. These are both Board of Trade publications. The figures given in the latter cover the period 1886—1900. The three questions which demand answers are the following—
I.Is the trade of the United Kingdom in goods of home manufacture advancing or declining?page 65
II.Does the British Empire produce at present sufficient food for its population; and, if not, can it be made self-supporting in this respect?
III.Does the British Empire provide at present a sufficient market for the surplus manufactured goods of the United Kingdom?

I. Is the Trade of the United Kingdom in Goods of Home Manufacture Advancing or Declining?

The only figures which can be usefully employed in an attempt to answer this question are those representing the

Diagram I.—Annual Export Values for the Chief Manufacturing Countries During the Last Quarter of a Century.

Diagram I.—Annual Export Values for the Chief Manufacturing Countries During the Last Quarter of a Century.

Each vertical division equals ten million sterling; each lateral division one year.

values of the imports and exports of manufactured goods for the United Kingdom.

There is no accurate means of determining the internal trade of the country. Bankers' Clearing House returns, bank deposits, and income tax yields have often been used page 66 to prove that the country is still wonderfully prosperous. None of these furnish, however, an exact criterion of the value and volume of the internal trade of the United Kingdom. The figures for the external trade, on the other hand, are easily available. Their accuracy is often challenged, but the system of collection and valuation of exports and imports now undergoes few variations, and the relative progress or retrogression in any scries of years can be proved by use of these figures, even though they may not be absolutely correct.

The values of the imports and exports of manufactured goods by the United Kingdom for the period 1893—1900 are presented in tabular form below.

Total Values of the Imports and Exports of Manufactured Goods by the United Kingdom.
Year. Imports. Exports.
1893 £72,100,100 £189,809,000
1894 75,200,000 184,647,000
1895 82,100,000 195,736,000
1896 88,000,000 209,832,000
1897 91,000,000 200,824,000
1898 92,400,000 199.075.ooo
1899 97,000,000 215,158,0001
1900 98,700,000 226,465,0001
At the first glance these figures may be held to justify the contention of those who claim that our manufacturers are more than holding their own. Our imports of manufactured goods have increased in value by twenty-six and a half million in seven years, but in the same interval of time the value of our exports of similar goods has gone up by thirty-six and a half millions. Comparisons of trade returns for single years are, however, never trustworthy, owing to the alternate periods of boom and depression which are experienced in all countries. The year 1900

1 The values of new ships have been deducted in 1899 and 1900, because not included in the earlier returns.

page 67 was the culminating year of a well-marked boom, and the comparison of the trade returns for this year with returns for previous years leads to much too favourable conclusions. The only safe course with figures for trade returns is to employ averages covering three, five, or ten year periods; and if the shorter periods be selected, to see that years of boom and depression are not compared together.

Taking quinquennial averages for our total export trade, and extending our inquiry back to 1870, we obtain the following figures for the years 1871, 1881, 1891, and 1899—all years of comparatively booming trade.

Year. Quinquennial Averages for Total Value of British Export Trade.
1871 £224.800,000
1881 226,000,000
1891 240,800,000
18991 255,400,000

The enthusiast for the maintenance of our Free Trade policy may still find comfort of a moderate kind in these figures, for they undoubtedly show growth—even though that growth be slow.

When these returns are worked out as values per head of the population, the Free Trader who has not allowed his belief in Free Trade to warp his judgment must admit that ground for satisfaction no longer exists. The population of the British Islands at the 1871 Census was 31,845,000. It has steadily grown since that year, and in 1899 the estimated population (based on the 1901 Census returns) was 41,100,000. Using these figures we find that the value of our export trade in £ sterling per head of the population has actually fallen in the last thirty years from 7.07 to 6.21, and the assertion of those who

1 This is the last year for which a quinquennial average can be calculated.

page 68 claim that our position as a manufacturing nation is being successfully undermined by our rivals is fully proved.

If further proof that we are losing our industrial position be required, it may be found in the figures presented by Sir Alfred Bateman in the recently published "Memorandum upon the Comparative Trade Returns of the United Kingdom and some leading Foreign Countries" (Board of Trade publication, 1902).

Diagram II.—Annual Export and Import (Real) Values for the Period 1854—1899.

Diagram II.—Annual Export and Import (Real) Values for the Period 1854—1899.

The straight line shows the increase of population during the same period. Each vertical division is equal to twenty million sterling; each lateral division to one year.

On page 20 of this "Memorandum" a tabular statement is given, showing the average annual value of the imports of thirty neutral countries from the United Kingdom, Germany, France, and the United States, for the two periods 1893—1895 and 1898—1900; these values being expressed as percentages of the total trade.

Although the year 1900 was a year of booming trade in the United Kingdom, the figures show that the trade of this country is declining when compared with that of its chief rivals. Expressed in percentages of the total trade for each importing country, we find that the changes in the value of the British trade in the periods named involved gains equal to 26 points in the case of nine page 69 of the importing countries, and losses equal to 83 points in the case of seventeen countries, while our trade with the remaining five countries remained in a stationary position. The net loss was therefore 57 points. In other words, between the years 1893 and 1900 our chief rivals have been increasing their export trade with neutral markets more quickly than we ourselves. Sir Alfred Bateman is pleased to regard the position reassuring, because we still retain a preponderating position. Would he be equally pleased with the situation where we trading under a protective tariff? One can imagine the striking use that would be made of these figures by Sir Alfred Bateman and the Cobden Club under such circumstances. If these losses continue, how long shall we retain the largest share of the trade with neutral markets?

The facts given above may be summarised in the following statement:—

The United Kingdom in 1871 reached the zenith of its growth as a manufacturing country under Free Trade conditions, and since that year there has been a slow but steady decline in its productive power relative to its population. There is consequently every reason for giving serious consideration to the question whether the time for some change in our fiscal policy has not now arrived.

II. Does the British Empire produce at present sufficient Food for its Population; and, if not, can it be made self-supporting in this respect?

The figures which have been utilised for answering these questions are based upon the official returns given in the two Board of Trade publications already quoted. It is customary for writers on this subject to confine their attention to the figures representing the present export of food-stuffs from the Colonies to the Mother Country. This method is incorrect. A certain proportion of the food produced in the Mother Country and her Colonies is at present diverted to markets outside the Empire. Under page 70 more favourable tariff and freight conditions this would be consumed within it.

In order to judge of the present and future possibilities of feeding the populations under the British flag by products of the Empire, it is therefore necessary to take into account the value of the food-stuffs exported at present to foreign countries. The following totals are based on the values of the Total Food Exports of the United Kingdom and of the various Colonies and dependencies of the Empire. The figures cover the eight years 1893—1900. They show that, whereas in the year 1893, 34 per cent, of the food imported into the United Kingdom could have been obtained within the Empire, in 1900 the proportion had slightly improved, the percentage being 35.4 per cent.

Total Values of the Food Exports of the British Empire, and Imports of the Mother Country.
Year. Total Exports of the Empire. Total Imports of the United Kingdom.
1893 £59.562,000 £175,300,000
1894 56,668,000 172,870,000
1895 53,221,000 174,266,000
1896 55,934,000 183,006,000
1897 56,886,000 189,621,000
1898 65,196,000 204,116,000
1899 77,679,000 204,646,000
1900 76,283,000 215,370,000
The answer to the question is therefore in the negative—the British Empire does not at present produce sufficient food to feed its population. This at once leads us to ask—must this position of dependence upon foreign countries for food continue? Personally, the writer does not think so. There is no doubt that, under more favourable conditions as regards freights and tariffs, the trade between the Mother Country and her Colonies in food-stuffs could be enormously increased. Canada and New Zealand possess some of the finest wheat-growing land in the page 71 whole world, and Professor James Long has estimated that 55,000 farmers, settled on 100-acre farms in Canada alone, could supply our deficiencies in this respect. This settlement of the best wheat-growing lands in the North-West provinces of Canada is already taking place by emigration from the States, but it would have been more satisfactory if the new-comers had been of home, instead of American, origin. The following figures, showing the value of the total food exports of Canada for the eight years 1893—1900, are of interest, as they prove the rapid agricultural development which is even now occurring in that portion of His Majesty's dominions—
Total Values of the Food Exports of Canada to all Countries.
1893 £11,592.000
1894 12,391,000
1895 10,652,000
1896 10,953,000
1897 £12,769,000
1898 18,645,000
1899 17,085,000
1900 18,995,000

An increase of over 50 per cent, in eight years is a startling indication of the agricultural possibilities of Canada. Should a preferential tariff system be inaugurated for British products, the growth of Canada as a food-producing country will be still more rapid in the future.

Australia and New Zealand likewise show considerable growth in recent years in the value of their food exports, and the figures given below are highly instructive as to the influence that more favourable tariff and freight regulations might have upon the agricultural production of this quarter of the Empire.

Total Values of the Food Exports.
1893. 1897. 1900.
Australia £7,151,000 2,151,000 £7,726,000
New Zealand 2,406,000 £11,250,000 4,145,000
Totals £9,302,000 £10,132,000 £15,395,000
page 72

The increase in eight years is nearly 62 per cent., and is still greater than that shown by Canada.

While, therefore, the United Kingdom is still dependent upon foreign countries for nearly two-thirds of its food supply, the figures show that a rapid agricultural development is occurring in two quarters of the Empire. This development only waits the adoption of a preferential tariff system in order to be still more marked.

There is little doubt, were such a system once inaugurated, that the population of the United Kingdom by 1915 could be supplied with a sufficient quantity of food, grown within the Empire, at a cost little in excess of that at present ruling.

III. Does the British Empire provide at present a sufficient market for the surplus manufactured goods of the United Kingdom?

The total values of the exports of manufactured goods by the United Kingdom have been obtained from the Trade and Navigation Returns of the Board of Trade. The figures of the past eight years are as follows—
Total Values of Manufactured Goods Exported by the United Kingdom.
1893 £189.809,000
1894 184,647,000
1895 195,736,000
1896 209,832,000
1897 £200,824.000
1898 199,075,000
1899 215,158,000
1900 226,465,000

The values of new ships have been deducted in 1899 and 1900, because not included in the earlier returns.

The above figures show an increase of £36,600,000 in the eight years, equal to a gain of 19 per cent.; but the value of our export trade varies greatly in successive years, and comparisons of individual years are never trustworthy.

Turning now to the figures representing the value of the total imports of manufactured goods by our Colonies and dependencies, we find that if the imports of similar goods by the United Kingdom be included, the answer to our page 73 inquiry is in the affirmative—the Empire does at present provide an adequate market for the surplus manufactures of the United Kingdom. The detailed figures are given below—for the reasons already given, totals covering a series of years being employed.

Total Value of the Imports of Manufactured Goods, by the Various Divisions of the British Empire, in million Sterling.
1893 £189,135,000
1894 174,675,000
1895 195,206,000
1896 219,839,000
1897 £230,999.000
1898 227,879,000
1899 246,675,000
1900 266,088,000

The figures for the latest year for which returns are available (1900) show that the Empire, as a whole,

Diagram III.—Annual Values of the Exports of the United Kingdom for the Period 1856-1900, At the Prices of 1881.

Diagram III.—Annual Values of the Exports of the United Kingdom for the Period 1856-1900, At the Prices of 1881.

The curve thus represents the fluctuation in the volume of our export trade. Each vertical division equals ten million sterling; each lateral division one year.

imported £40,000,000 worth more goods of this description than were exported by the United Kingdom, the exact totals being £266,088,000 and £226,465,000 respectively. The increase in the eight years has been over £76,000,000, and there is consequently little doubt that the present demand for manufactured goods by the British Empire is in excess of its producing power.

page 74

The visions of those who see this country filled with deserted mills and factories and starving operatives, as a result of any attempt to restrict British trade to British channels of supply are therefore wholly false. Such visions are the result, not of a serious study of the figures beam; on the subject, but of preconceived ideas as to the value of the colonial trade.

Were not one pound's worth of our goods sold outside the countries over which the British flag is flying, our manufacturers would still have a larger trade than is theirs to-day.

The inauguration of a preferential tariff system for the Empire is therefore a change in our fiscal policy which would tend to benefit, rather than to endanger, our home industries.

IV. Conclusions.

The writer may claim to have proved by the figures given in this Chapter that the assertions made by Free Traders regarding the security of our present position as a manufacturing nation, and the appalling dangers that are involved in tariff changes, are wholly fictitious.

Our present position is not secure: it is highly insecure. Our exports per head of the population have declined steadily in value since 1870, and are still declining. In 1900 and 1901 we imported nearly £100,000,000 of foreign manufactured goods, and the United Kingdom is becoming each year more of a "dumping-ground" for the surplus products of Germany and America. Only those who have made Free Trade into a fetish can assert, in face of these facts, that all is well.

The appalling dangers that are involved in any change in our fiscal policy are likewise the creation of the disordered mental vision of Free Traders.

There is an adequate market at the present moment within the Empire for the whole of its output of manu- page 75 factured goods. The demands of this market are rapidly growing. Should the whole of our present export trade to foreign countries be lost, our manufacturers would still have to increase their production by £40,000,000 worth of goods to meet the present demands of the home country, and of the Colonies and dependencies of the Empire.

As regards the food-supply of the population of the Empire, the figures show that we can at present produce one-third of this under the British flag, and that the proportion is slowly increasing. Here, again, the Empire provides an adequate market for all the food produced within it; and it will be years before the agriculturists of Canada and New Zealand have overtaken the demand for meat and grain. A preferential-tariff system would but accelerate this development of the food resources of the Empire.

Free Traders, in their slavish adherence to the underlying dogma of their policy—cheap food and cheap manufactured goods—forget that one must be a producer before one can be a consumer; and are also disposed to ignore the danger that under the present conditions of international trade (miscalled by them Free Trade) our home and colonial industries may be undermined and destroyed by protected industries in other lands.

In the opinion of many the time has arrived when this danger must be recognised, and when steps must be taken by the Home and Colonial Legislatures to relieve the threatened industries from such unfair competition. Will the Colonial Premiers be able to induce their respective Governments to take action on this momentous question; and will the Home Government support them by introducing a system of preferential duties on colonial products?

The following extract from Mr. Chamberlain's speech at Birmingham on May 16th, 1902, proves that there is one member of the present Government who is alive to the dangers of our present position, and is prepared to page 76 take the steps necessary for increasing the over-sea trade with our Colonies—

"At the present moment the Empire is being attacked on all sides, and in our isolation we must look to ourselves. We must draw closer our internal relations, the ties of sentiment, the ties of sympathy, yes, and the ties of interest. If by adherence to economic pedantry, to old shibboleths, we are to lose opportunities of closer union which are offered us by our Colonies, if we are to put aside occasions now within our grasp, if we do not take every chance in our power to keep British trade in British hands, I am certain that we shall deserve the disasters which will infallibly come upon us."