But I would recommend you to leave this disconsolate proconsul alone. I do not agree with him when he says that South Africa is passing through a time of trial. South Africa is emerging from her time of trial. The darkest period is behind her. Brighter prospects lie before her. The improvement upon which we are counting is not the hectic flush of a market boom, but the steady revival and accumulation of agricultural and industrial productiveness. Soberly and solemnly men of all parties and of both races in South Africa are joining together to revive and to develop the prosperity of their own country. Grave difficulties, many dangers, long exertions lie before them; but the star of South Africa is already in the ascendant, and I look confidently forward to the time when it will take its place, united, federated, free, beside Canada and Australia, in the shining constellation of the British Empire.

When we have dealt with subjects which lie outside our own island, let us concentrate our attention on what lies within it, because the gravest problems lie at home. I shall venture to-night to make a few general observations upon those larger trendings of events which govern the incidents and the accidents of the hour. The fortunes and the interests of Liberalism and Labour are inseparably interwoven; they rise by the same forces, and in spite of similar obstacles, they face the same enemies, they are affected by the same dangers, and the history of the last thirty years shows quite clearly that their power of influencing public affairs and of commanding national attention fluctuate together. Together they are elevated, together they are depressed, and any Tory reaction which swept the Liberal Party out of power would assuredly work at least proportionate havoc in the ranks of Labour. That may not be a very palatable truth, but it is a truth none the less.

Labour! It is a great word. It moves the world, it comprises the millions, it combines many men in many lands in the sympathy of a common burden. Who has the right to speak for Labour? A good many people arrogate to themselves the right to speak for Labour. How many political Flibbertigibbets are there not running up and down the land calling themselves the people of Great Britain, and the social democracy, and the masses of the nation! But I am inclined to think, so far as any body of organised opinion can claim the right to speak for this immense portion of the human race, it is the trade unions that more than any other organisation must be considered the responsible and deputed representatives of Labour. They are the most highly organised part of Labour; they are the most responsible part; they are from day to day in contact with reality. They are not mere visionaries or dreamers weaving airy Utopias out of tobacco smoke. They are not political adventurers who are eager to remodel the world by rule-of-thumb, who are proposing to make the infinite complexities of scientific civilisation and the multitudinous phenomena of great cities conform to a few barbarous formulas which any moderately intelligent parrot could repeat in a fortnight.

The fortunes of the trade unions are interwoven with the industries they serve. The more highly organised trade unions are, the more clearly they recognise their responsibilities; the larger their membership, the greater their knowledge, the wider their outlook. Of course, trade unions will make mistakes, like everybody else, will do foolish things, and wrong things, and want more than they are likely to get, just like everybody else. But the fact remains that for thirty years trade unions have had a charter from Parliament which up to within a few years ago protected their funds, and gave them effective power to conduct a strike; and no one can say that these thirty years were bad years of British industry, that during these thirty years it was impossible to develop great businesses and carry on large manufacturing operations, because, as everybody knows perfectly well, those were good and expanding years of British trade and national enrichment.

A few years ago a series of judicial decisions utterly changed the whole character of the law regarding trade unions. It became difficult and obscure. The most skilful lawyers were unable to define it. No counsel knew what advice to tender to those who sought his guidance. Meanwhile if, in the conduct of a strike, any act of an agent, however unauthorised, transgressed the shadowy and uncertain border-line between what was legal and what was not, an action for damages might be instituted against the trade union, and if the action was successful, trade union funds, accumulated penny by penny, year by year, with which were inseparably intermingled friendly and benefit moneys, might in a moment have been swept away. That was the state of the law when his Majesty's present advisers were returned to power. We have determined to give back that charter to the trade unions. The Bill is even now passing through the House of Commons.

We are often told that there can be no progress for democracy until the Liberal Party has been destroyed. Let us examine that. Labour in this country exercises a great influence upon the Government. That is not so everywhere. It is not so, for instance, in Germany, and yet in Germany there is no Liberal Party worth speaking of. Labour there is very highly organised, and the Liberal Party there has been destroyed. In Germany there exists exactly the condition of affairs, in a Party sense, that Mr. Keir Hardie and his friends are so anxious to introduce here. A great social democratic party on the one hand, are bluntly and squarely face to face with a capitalist and military confederation on the other. That is the issue, as it presents itself in Germany; that is the issue, as I devoutly hope it may never present itself here. And what is the result? In spite of the great numbers of the Socialist Party in Germany, in spite of the high ability of its leaders, it has hardly any influence whatever upon the course of public affairs. It has to submit to food taxes and to conscription; and I observe that Herr Bebel, the distinguished leader of that Party, at Mannheim the other day was forced to admit, and admitted with great candour, that there was no other country in Europe so effectively organised as Germany to put down anything in the nature of a violent Socialist movement. That is rather a disquieting result to working men of having destroyed the Liberal Party.

But we are told to wait a bit; the Socialist Party in Germany is only three millions. How many will there be in ten years' time? That is a fair argument. I should like to say this. A great many men can jump four feet, but very few can jump six feet. After a certain distance the difficulty increases progressively. It is so with the horse-power required to drive great ships across the ocean; it is so with the lifting power required to raise balloons in the air. A balloon goes up quite easily for a certain distance, but after a certain distance it refuses to go up any farther, because the air is too rarefied to float it and sustain it. And, therefore, I would say let us examine the concrete facts.

In France, before the Revolution, property was divided among a very few people. A few thousand nobles and priests and merchants had all the wealth in the country; twenty-five million peasants had nothing. But in modern States, such as we see around us in the world to-day, property is very widely divided. I do not say it is evenly divided. I do not say it is fairly divided, but it is very widely divided. Especially is that true in Great Britain. Nowhere else in the world, except, perhaps, in France and the United States, are there such vast numbers of persons who are holders of interest-bearing, profit-bearing, rent-earning property, and the whole tendency of civilisation and of free institutions is to an ever-increasing volume of production and an increasingly wide diffusion of profit. And therein lies the essential stability of modern States. There are millions of persons who would certainly lose by anything like a general overturn, and they are everywhere the strongest and best organised millions. And I have no hesitation in saying that any violent movement would infallibly encounter an overwhelming resistance, and that any movement which was inspired by mere class prejudice, or by a desire to gain a selfish advantage, would encounter from the selfish power of the "haves" an effective resistance which would bring it to sterility and to destruction.

And here is the conclusion to which I lead you. Something more is needed if we are to get forward. There lies the function of the Liberal Party. Liberalism supplies at once the higher impulse and the practicable path; it appeals to persons by sentiments of generosity and humanity; it proceeds by courses of moderation. By gradual steps, by steady effort from day to day, from year to year, Liberalism enlists hundreds of thousands upon the side of progress and popular democratic reform whom militant Socialism would drive into violent Tory reaction. That is why the Tory Party hate us. That is why they, too, direct their attacks upon the great organisation of the Liberal Party, because they know it is through the agency of Liberalism that society will be able in the course of time to slide forward, almost painlessly—for the world is changing very fast—on to a more even and a more equal foundation. That is the mission that lies before Liberalism. The cause of the Liberal Party is the cause of the left-out millions; and because we believe that there is in all the world no other instrument of equal potency and efficacy available at the present time for the purposes of social amelioration, we are bound in duty and in honour to guard it from all attacks, whether they arise from violence or from reaction.

There is no necessity to-night to plunge into a discussion of the philosophical divergencies between Socialism and Liberalism. It is not possible to draw a hard-and-fast line between individualism and collectivism. You cannot draw it either in theory or in practice. That is where the Socialist makes a mistake. Let us not imitate that mistake. No man can be a collectivist alone or an individualist alone. He must be both an individualist and a collectivist. The nature of man is a dual nature. The character of the organisation of human society is dual. Man is at once a unique being and a gregarious animal. For some purposes he must be collectivist, for others he is, and he will for all time remain, an individualist. Collectively we have an Army and a Navy and a Civil Service; collectively we have a Post Office, and a police, and a Government; collectively we light our streets and supply ourselves with water; collectively we indulge increasingly in all the necessities of communication. But we do not make love collectively, and the ladies do not marry us collectively, and we do not eat collectively, and we do not die collectively, and it is not collectively that we face the sorrows and the hopes, the winnings and the losings of this world of accident and storm.

No view of society can possibly be complete which does not comprise within its scope both collective organisation and individual incentive. The whole tendency of civilisation is, however, towards the multiplication of the collective functions of society. The ever-growing complications of civilisation create for us new services which have to be undertaken by the State, and create for us an expansion of the existing services. There is a growing feeling, which I entirely share, against allowing those services which are in the nature of monopolies to pass into private hands. There is a pretty steady determination, which I am convinced will become effective in the present Parliament, to intercept all future unearned increment which may arise from the increase in the speculative value of the land. There will be an ever-widening area of municipal enterprise. I go farther; I should like to see the State embark on various novel and adventurous experiments, I am delighted to see that Mr. Burns is now interesting himself in afforestation. I am of opinion that the State should increasingly assume the position of the reserve employer of labour. I am very sorry we have not got the railways of this country in our hands. We may do something better with the canals, and we are all agreed, every one in this hall who belongs to the Progressive Party, that the State must increasingly and earnestly concern itself with the care of the sick and the aged, and, above all, of the children.

I look forward to the universal establishment of minimum standards of life and labour, and their progressive elevation as the increasing energies of production may permit. I do not think that Liberalism in any circumstances can cut itself off from this fertile field of social effort, and I would recommend you not to be scared in discussing any of these proposals, just because some old woman comes along and tells you they are Socialistic. If you take my advice, you will judge each case on its merits. Where you find that State enterprise is likely to be ineffective, then utilise private enterprises, and do not grudge them their profits.

The existing organisation of society is driven by one mainspring—competitive selection. It may be a very imperfect organisation of society, but it is all we have got between us and barbarism. It is all we have been able to create through unnumbered centuries of effort and sacrifice. It is the whole treasure which past generations have been able to secure, and which they have been able to bequeath; and great and numerous as are the evils of the existing condition of society in this country, the advantages and achievements of the social system are greater still. Moreover, that system is one which offers an almost indefinite capacity for improvement. We may progressively eliminate the evils; we may progressively augment the goods which it contains. I do not want to see impaired the vigour of competition, but we can do much to mitigate the consequences of failure. We want to draw a line below which we will not allow persons to live and labour, yet above which they may compete with all the strength of their manhood. We want to have free competition upwards; we decline to allow free competition to run downwards. We do not want to pull down the structures of science and civilisation: but to spread a net over the abyss; and I am sure that if the vision of a fair Utopia which cheers the hearts and lights the imagination of the toiling multitudes, should ever break into reality, it will be by developments through, and modifications in, and by improvements out of, the existing competitive organisation of society; and I believe that Liberalism mobilised, and active as it is to-day, will be a principal and indispensable factor in that noble evolution.

I have been for nearly six years, in rather a short life, trained as a soldier, and I will use a military metaphor. There is no operation in war more dangerous or more important than the conduct of a rear-guard action and the extrication of a rear-guard from difficult and broken ground. In the long war which humanity wages with the elements of nature the main body of the army has won its victory. It has moved out into the open plain, into a pleasant camping ground by the water springs and in the sunshine, amid fair cities and fertile fields. But the rear-guard is entangled in the defiles, the rear-guard is still struggling in mountainous country, attacked and assailed on every side by the onslaughts of a pitiless enemy. The rear-guard is encumbered with wounded, obstructed by all the broken vehicles that have fallen back from the main line of the march, with all the stragglers and weaklings that have fallen by the way and can struggle forward no farther. It is to the rear-guard of the army that attention should be directed. There is the place for the bravest soldiers and the most trusted generals. It is there that all the resources of military science and its heaviest artillery should be employed to extricate the rear-guard—not to bring the main army back from good positions which it occupies, not to throw away the victory which it has won over the brute forces of nature—but to bring the rear-guard in, to bring them into the level plain, so that they too may dwell in a land of peace and plenty.

That is the aim of the Liberal Party, and if we work together we will do something for its definite accomplishment.



IMPERIAL PREFERENCE

I

IMPERIAL CONFERENCE,[2] DOWNING STREET, May 7, 1907

The economic aspect of Imperial Preference, both from the point of view of trade and of finance, has already been dealt with very fully by the Chancellor of the Exchequer and the President of the Board of Trade, and I desire in the few observations with which I shall venture to trespass upon the indulgence of the Conference to refer very little to the economic aspect, and rather to examine one or two points about this question of a political, of a Parliamentary, and almost of a diplomatic character. I want to consider for a moment what would be the effect of a system of preferences upon the course of Parliamentary business. The course of Colonial affairs in the House of Commons is not always very smooth or very simple, and I am bound to say that, having for eighteen months been responsible for the statements on behalf of this Department which are made to the House of Commons, I feel that enormous difficulties would be added to the discharge of Colonial business in the House of Commons, if we were to involve ourselves in a system of reciprocal preferences. Every one will agree, from whatever part of the King's dominions he comes, or to whatever Party he belongs, that Colonial affairs suffer very much when brought into the arena of British Party politics. Sometimes it is one Party and sometimes it is another which is constrained to interfere in the course of purely Colonial affairs, and such interferences are nearly always fraught with vexation and inconvenience to the Dominions affected.

Now, the system of Imperial preference inevitably brings Colonial affairs into the Parliamentary and the Party arena; and, if I may say so, it brings them into the most unpleasant part of Parliamentary and political work—that part which is concerned with raising the taxation for each year. It is very easy to talk about preference in the abstract and in general terms, and very many pleasant things can be said about mutual profits and the good feeling which accrues from commercial intercourse. But in regard to preference, as in regard to all other tariff questions, the discussion cannot possibly be practical, unless the propositions are formulated in precise, exact, and substantial detail. Many people will avow themselves in favour of the principle of preference who would recoil when the schedule of taxes was presented to their inspection.

I, therefore, leave generalities about preference on one side. I leave also proposals which have been discussed that we should give a preference on existing duties. It is quite clear that no preference given upon existing duties could possibly be complete or satisfactory. It could at the very best only be a beginning, and Dr. Jameson and Dr. Smartt, when they urged us with so much force to make a beginning by giving a preference on South African tobacco, have clearly recognised and frankly stated, that that preference would in itself be of small value, but that it would be welcomed by them as conceding "the larger principle." Therefore, we are entitled to say, that before us at this Conference is not any question of making a small or tentative beginning on this or that particular duty, but we have to make up our minds upon the general principle of the application of a reciprocal preference to the trade relations of the British Empire.

If that be so, surely the representatives of the self-governing Dominions who ask us to embark on such a system, ought to state squarely and abruptly the duties which in their opinion would be necessary to give effect to such a proposal. The question whether raw material is to be taxed is absolutely vital to any consideration of Imperial preference. Although it is no doubt a very good answer, when the direct question is raised,—What are your notions? to say that the Colonies would leave that to the Mother Country, those who urge upon us a system of reciprocal preference are bound to face the conclusions of their own policy, and are bound to recognise that that request, if it is to be given effect to in any symmetrical, logical, complete, satisfactory, or even fair and just manner, must involve new taxes to us on seven or eight staple articles of consumption in this country. I lay it down, without hesitation, that no fair system of Imperial preference can be established which does not include taxes on bread, on meat, on that group of food-stuffs classified under the head of dairy produce, on wool and leather, and on other necessaries of industry.

If that be so, seven or eight new taxes would have to be imposed to give effect to this principle you have brought before us. Those taxes would have to figure every year in our annual Budget. They would have to figure in the Budget resolutions of every successive year in the House of Commons. There will be two opinions about each of these taxes; there will be those who like them and favour the principle, and who will applaud the policy, and there will be those who dislike them. There will be the powerful interests which will be favoured and the interests which will be hurt by their adoption. So you will have, as each of those taxes comes up for the year, a steady volume of Parliamentary criticism directed at it.

Now that criticism will, I imagine, flow through every channel by which those taxes may be assailed. It will seek to examine the value, necessarily in a canvassing spirit, of the Colonial Preferences as a return for which these taxes are imposed. It will seek to dwell upon the hardship to the consumers in this country of the taxes themselves. It will stray farther, I think, and it will examine the contributions which the self-governing Dominions make to the general cost of Imperial defence; and will contrast those contributions with a severe and an almost harsh exactitude with the great charges borne by the Mother Country.

There has just been a debate upon that subject in the House of Commons; but the manner in which that question when raised was received by the whole House, ought, I think, to give great satisfaction to the representatives of the self-governing Dominions. We then refused to embark upon a policy of casting-up balances as between the Colonies and the Mother Country, and, speaking on behalf of the Colonial Office, I said that the British Empire existed on the principles of a family and not on those of a syndicate. But the introduction of those seven or eight taxes into the Budget of every year will force a casting-up of balances every year from a severe financial point of view. It has been said, and will be generally admitted, that there is no such thing in this country as an anti-Colonial party. It does not exist. Even parties, like the Irish Party, not reconciled to the British Government, who take no part in our public ceremonial, are glad to take opportunities of showing the representatives of the self-governing Dominions that they welcome them here, and desire to receive them with warmth and with cordiality. But I cannot conceive any process better calculated to manufacture an anti-Colonial party, than this process of subjecting to the scrutiny of the House of Commons year by year, through the agency of taxation, the profit and loss account, in its narrow, financial aspect, of the relations of Great Britain and her Dominions and dependencies.

Then this system of reciprocal preference, at its very outset, must involve conflict with the principle of self-government, which is the root of all our Colonial and Imperial policy. The whole procedure of our Parliament arises primarily from the consideration of finance, and finance is the peg on which nearly all our discussions are hung, and from which many of them arise. That is the historic origin of a great portion of the House of Commons procedure, and there is no more deeply rooted maxim than the maxim of "grievances before supply." Now, let me suppose a system of preference in operation. When the taxes came up to be voted each year, members would use those occasions for debating Colonial questions. I can imagine that they would say: We refuse to vote the preference tax to this or that self-governing Dominion, unless or until our views, say, on native policy or some other question of internal importance to the Dominion affected have been met and have been accepted. At present, it is open to the Colony affected to reply: These matters are matters which concern us; they are within the scope of responsible, self-governing functions, and you are not called upon to interfere. It is open for the Dominion concerned to say that. It is also open for the representative of the Colonial Office in the House of Commons to say that, too, on their behalf.

But it will no longer be open, I think, for any such defence to be offered when sums of money, or what would be regarded as equivalent to sums of money, have actually to be voted in the House of Commons through the agency of these taxes for the purpose of according preference to the different Dominions of the Crown, and I think members will say, "If you complain of our interference, why do you force us to interfere? You have forced us to consider now whether we will or will not grant a preference to this or that particular Dominion for this year. We say we are not prepared to do so unless or until our views upon this or that particular internal question in that Dominion have been met and agreed to." I see a fertile, frequent, and almost inexhaustible source of friction and vexation arising from such causes alone.

There is a more serious infringement, as it seems to me, upon the principle of self-government. The preferences which have hitherto been accorded to the Mother Country by the self-governing States of the British Empire are free preferences. They are preferences which have been conceded by those States, in their own interests and also in our interests. They are freely given, and, if they gall them, can as freely be withdrawn; but the moment reciprocity is established and an agreement has been entered into to which both sides are parties, the moment the preferences become reciprocal, and there is a British preference against the Australian or Canadian preferences, they become not free preferences, but what I venture to call locked preferences, and they cannot be removed except by agreement, which is not likely to be swiftly or easily attained.

Now I must trench for one moment upon the economic aspect. What does preference mean? It can only mean one thing. It can only mean better prices. It can only mean better prices for Colonial goods. I assert, without reserve, that preference can only operate through the agency of price. All that we are told about improving and developing the cultivation of tobacco in South Africa, and calling great new areas for wheat cultivation into existence in Australia, depends upon the stimulation of the production of those commodities, through securing to the producers larger opportunities for profit. I say that unless preference means better prices it will be ineffective in achieving the objects for the sake of which it is urged. But the operation of preference consists, so far as we are concerned, in putting a penal tax upon foreign goods, and the object of putting that penal tax on foreign goods is to enable the Colonial supply to rise to the level of the foreign goods plus the tax, and by so conferring upon the Colonial producer a greater reward, to stimulate him more abundantly to cater for the supply of this particular market. I say, therefore, without hesitation, that the only manner in which a trade preference can operate is through the agency of price. If preference does not mean better prices it seems to me a great fraud on those who are asked to make sacrifices to obtain it; and by "better" prices I mean higher prices—that is to say, higher prices than the goods are worth, if sold freely in the markets of the world.

I am quite ready to admit that the fact that you make a particular branch of trade more profitable, induces more people to engage in that branch of trade. That is what I call stimulating Colonial production through the agency of price. I am quite prepared to admit that a very small tax on staple articles would affect prices in a very small manner. Reference has been made to the imposition of a shilling duty on corn, and I think it was Mr. Moor[3] who said, yesterday, that when the shilling duty was imposed prices fell, and when it was taken off prices rose. That may be quite true. I do not know that it is true, but it may be. The imposition of such a small duty as a shilling on a commodity produced in such vast abundance as wheat, might quite easily be swamped or concealed by the operation of other more powerful factors. A week of unusual sunshine, or a night of late frost, or a ring in the freights, or violent speculation, might easily swamp and cover the operation of such a small duty; but it is the opinion of those whose economic views I share—I cannot put it higher than that—that whatever circumstances may apparently conceal the effect of the duty on prices, the effect is there all the same, and that any duty that is imposed upon a commodity becomes a factor in the price of that commodity. I should have thought that was an almost incontestable proposition.

Here you have the two different sides of the bargain, the sellers and the buyers, the sellers trying to get all they can, and the buyers trying to give as little as they can. An elaborate process of what is called "the higgling of the market" goes on all over the world between exchanges linked up by telegraph, whose prices vary to a sixteenth and a thirty-second. We are invited to believe that with all that subtle process of calculation made from almost minute to minute throughout the year, the imposition of a duty or demand for L1,000,000 or L2,000,000 for this or that Government, placed suddenly upon the commodity in question as a tax, makes no difference whatever to the cost to the consumer; that it is borne either by the buyer or by the seller, or provided in some magical manner. As a matter of fact, the seller endeavours to transmit the burden to the purchaser, and the purchaser places it upon the consumer as opportunity may occur in relation to the general market situation all over the world.

That is by way of digression, only to show that we believe that a tax on a commodity is a factor in its price, which I thought was a tolerably simple proposition. What a dangerous thing it will be, year after year, to associate the idea of Empire, of our kith and kin beyond the seas, of these great, young, self-governing Dominions in which our people at present take so much pride, with an enhancement, however small, in the price of the necessary commodities of the life and the industry of Britain! It seems to me that, quite apart from the Parliamentary difficulty to which I have referred, which I think would tend to organise and create anti-Colonial sentiment, you would, by the imposition of duties upon the necessaries of life and of industry, breed steadily year by year, and accumulate at the end of a decade a deep feeling of sullen hatred of the Colonies, and of Colonial affairs among those poorer people in this country to whom Mr. Lloyd George referred so eloquently yesterday, and whose case, when stated, appeals to the sympathy of every one round this table. That would be a great disaster.

But there is another point which occurs to me, and which I would submit respectfully to the Conference in this connection. Great fluctuations occur in the price of all commodities which are subject to climatic influences. We have seen enormous fluctuations in meat and cereals and in food-stuffs generally from time to time in the world's markets. Although we buy in the markets of the whole world we observe how much the price of one year varies from that of another year. These fluctuations are due to causes beyond our control. We cannot control the causes which make the earth refuse her fruits at a certain season, nor can we, unfortunately, at present, control the speculation which always arises when an unusual stringency is discovered. Compared to these forces, the taxes which you suggest should be imposed upon food and raw materials might, I admit, be small, but they would be the only factor in price which would be absolutely in our control.

If, from circumstances which we may easily imagine, any of the great staple articles which were the subject of preference should be driven up in price to an unusual height, there would be a demand—and I think an irresistible demand—in this country that the tax should be removed. The tax would bear all the unpopularity. People would say: "This, at any rate, we can take off, and relieve the burden which is pressing so heavily upon us." But now see the difficulty in which we should then be involved. At present all our taxes are under our own control. An unpopular tax can be removed; if the Government will not remove it they can be turned out and another Government to remove the tax can be got from the people by election. It can be done at once. The Chancellor of the Exchequer can come down to the House and the tax can be repealed if there is a sufficiently fierce demand for it.

But these food taxes by which you seek to bind the Empire together—these curious links of Empire which you are asking us to forge laboriously now—would be irremovable, and upon them would descend the whole weight and burden of popular anger in time of suffering. They would be irremovable, because fixed by treaty with self-governing Dominions scattered about all over the world, and in return for those duties we should have received concessions in Colonial tariffs on the basis of which their industries would have grown up tier upon tier through a long period of time.

Although, no doubt, another Conference hastily assembled might be able to break the shackle which would fasten us—to break that fiscal bond which would join us together and release us from the obligation—that might take a great deal of time. Many Parliaments and Governments would have to be consulted, and all the difficulties of distance would intervene to prevent a speedy relief from that deadlock. If the day comes in this country when you have a stern demand—and an overwhelming demand of a Parliament, backed by a vast population suffering acutely from high food-prices—that the taxes should be removed, and on the other hand the Minister in charge has to get up and say that he will bring the matter before the next Colonial Conference two years hence, or that he will address the representatives of the Australian or Canadian Governments through the agency of the Colonial Office, and that in the meanwhile nothing can be done—when you have produced that situation, then, indeed, you will have exposed the fabric of the British Empire to a wrench and a shock which it has never before received, and which any one who cares about it, cannot fail to hope that it may never sustain.

Such a deadlock could not be relieved merely by goodwill on either side. When you begin to deflect the course of trade, you deflect it in all directions and for all time in both countries which are parties to the bargain. Your industries in your respective Colonies would have exposed themselves to a more severe competition from British goods in their markets, and would have adjusted themselves on a different basis, in consequence. Some Colonial producers would have made sacrifices in that respect for the sake of certain advantages which were to be gained by other producers in their country through a favoured entry into our market. That one side of the bargain could be suddenly removed, without inflicting injustice on the other party to the bargain, appears to me an impossibility.

I submit that preferences, even if economically desirable, would prove an element of strain and discord in the structure and system of the British Empire. Why, even in this Conference, what has been the one subject on which we have differed sharply? It has been this question of preference. It has been the one apple of discord which has been thrown into the arena of our discussions. It is quite true we meet here with a great fund of goodwill on everybody's part, on the part of the Mother Country and on the part of the representatives of the self-governing Dominions—a great fund of goodwill which has been accumulated over a long period of time when each party to this great confederation has been free to pursue its own line of development unchecked and untrammelled by interference from the other.

We have that to start upon, and consequently have been able to discuss in a very frank and friendly manner all sorts of questions. We have witnessed the spectacle of the British Minister in charge of the trade of this country defending at length and in detail the fiscal system—the purely domestic, internal fiscal system of this country—from very severe, though perfectly friendly and courteous criticism on the part of the other self-governing communities. If that fund of goodwill to which I have referred had been lacking, if ever a Conference had been called together when there was an actual anti-colonial party in existence, when there was really a deep hatred in the minds of a large portion of the people of this country against the Colonies and against taxation which was imposed at the request or desire of the Colonies, then I think it is quite possible that a Conference such as this would not pass off in the smooth and friendly manner in which this has passed off.

You would hear recrimination and reproaches exchanged across the table; you would hear assertions made that the representatives of the different States who were parties to the Conference were not really representatives of the true opinion of their respective populations, that the trend of opinion in the country which they professed to represent was opposed to their policy and would shortly effect a change in the views which they put forward. You would find all these undemocratic assertions that representatives duly elected do not really speak in the name of their people, and you would, of course, find appeals made over the heads of the respective Governments to the party organisations which supported them or opposed them in the respective countries from which they came. That appears to me to open up possibilities of very grave and serious dangers in the structure and fabric of the British Empire, from which I think we ought to labour to shield it.

My right honourable friend the Chancellor of the Exchequer has told the Conference with perfect truth—in fact it may have been even an under-estimate—that if he were to propose the principle of preference in the present House of Commons, it would be rejected by a majority of three to one. But even if the present Government could command a majority for the system, they would have no intention whatever of proposing it. It is not because we are not ready to run electoral risks that we decline to be parties to a system of preference; still less is it because the present Government is unwilling to make sacrifices, in money or otherwise, in order to weave the Empire more closely together. I think a very hopeful deflection has been given to our discussion when it is suggested that we may find a more convenient line of advance by improving communications, rather than by erecting tariffs—by making roads, as it were, across the Empire, rather than by building walls. It is because we believe the principle of preference is positively injurious to the British Empire, and would create, not union, but discord, that we have resisted the proposal.

It has been a source of regret to all of us that on this subject we cannot come to an agreement. A fundamental difference of opinion on economics, no doubt, makes agreement impossible; but although we regret that, I do not doubt that in the future, when Imperial unification has been carried to a stage which it has not now reached, and will not, perhaps, in our time attain, people in that more fortunate age will look back to the Conference of 1907 as a date in the history of the British Empire when one grand wrong turn was successfully avoided.

FOOTNOTES:

[2] The following, among others, were present at the Conference:

The Earl of Elgin, Secretary of State for the Colonies; Sir Wilfrid Laurier, Prime Minister of Canada; Sir F.W. Borden, Minister of Militia and Defence (Canada); Mr. L.P. Brodeur, Minister of Marine and Fisheries (Canada); Mr. Deakin, Prime Minister of the Commonwealth of Australia; Sir W. Lyne, Minister of Trade and Customs (Australia); Sir Joseph Ward, Prime Minister of New Zealand; Dr. L.S. Jameson, Prime Minister of Cape Colony; Dr. Smartt, Commissioner of Public Works (Cape Colony); Sir Robert Bond, Prime Minister of Newfoundland; Mr. F.R. Moor, Prime Minister of Natal; General Botha, Prime Minister of the Transvaal; Sir J.L. Mackay, on behalf of the India Office.

[3] The Prime Minister of Natal.



IMPERIAL PREFERENCE

II

HOUSE OF COMMONS, July 15, 1907

Mr. Lyttelton had moved the following vote of censure:

"That this House regrets that his Majesty's Government have declined the invitation unanimously preferred by the Prime Ministers of the self-governing Colonies, to consider favourably any form of Colonial Preference or any measures for closer commercial union of the Empire on a preferential basis." (Mr. Lyttelton.)

This was met on behalf of the Government by the following Amendment:

"To leave out all after the word 'that' and add the words 'In the opinion of this House, the permanent unity of the British Empire will not be secured through a system of preferential duties based upon the protective taxation of food.'" (Mr. Soares)

The vote of censure was rejected, and the Amendment carried by 404 to 111.

A vote of censure is a very serious thing. When it is moved with great formality on behalf of the official Opposition, it is intended always to raise a plain and decisive issue. I must, however, observe that of all the votes of censure which have been proposed in recent times in this House, the one we are now discussing is surely the most curious. The last Government was broken up three years ago on this very question of Imperial preference. After the Government had been broken up, a continuous debate proceeded in the country for two years and a half, and it was terminated by the general election. This Parliament is the result of that election, and there is not a single gentleman on this Ministerial Bench who is not pledged, in the most specific terms, not to grant a preferential tariff to the Colonies. Now, because we have kept that promise, because we are opposed to preferential tariffs, because we have declined to grant preferential tariffs, and because we have done what all along we declared we were going to do, and were returned to do, we are made the object of this vote of censure.

It may be said, "We do not blame you for keeping your promise, but for making the pledge." But what did the Leader of the Opposition promise? He promised most emphatically before the election that if he were in power as Prime Minister when this Colonial Conference took place, he would not grant preference to the Colonies. On many occasions the right hon. gentleman said that not one, but two elections would be necessary before he would be entitled to take that tremendous step. I have the right hon. gentleman's words here. Speaking at Manchester in January 1905, the right hon. gentleman said: "If that scheme were carried out, I do not see that we could be called on to decide the colonial aspect of this question until not only one, but two elections have passed." Yet the right hon. gentleman is prepared, I presume, to join in a vote of censure on his Majesty's Government for not granting that preference which he himself was prohibited from granting by the most precise and particular engagement.

Is it a vote of censure on the Government at all? Is it not really a vote of censure on the general election? Is it not a cry of petulant vexation at the natural, ordinary, long-expected sequence of events?

The right hon. gentleman[4] who moved the Resolution made a very mild and conciliatory speech. But he confined himself to generalities. He avoided anything like a statement of concrete proposals which he thinks the Government ought to adopt. Those who take part in this controversy nowadays avoid any statement of the concrete proposals that would follow if their view were adopted. We are told what a splendid thing preference is, what noble results it would achieve, what inexpressible happiness and joy it would bring to all parts of the Empire and to all parts of the earth, what wealth would be created, how the Exchequer would gain, and how the food of the people would cheapen in price. But, though the Government is blamed for not acting on these suggestions, we are never told what is the schedule of taxes which it is proposed to introduce to give effect to these splendid and glittering aspirations.

It is perfectly impossible to discuss colonial preference apart from the schedule of duties on which it is to be based. It is idle to attempt to discuss it without a definite proposal as to the subjects of taxation and as to the degree to which those different subjects are to be taxed. And the right hon. gentleman the Member for West Birmingham, when he dealt with this question, felt that in common fairness he must be precise and definite. We know what he proposed in the way of taxation on corn, meat, fruit, and dairy produce. What we want to know is this. Is that tariff before us now? Do the Opposition stand by the right hon. Member for West Birmingham, or do they abandon him? That is what the House and the Government want to know—and that is what the Colonies want to know. It is indispensable to the discussion of this question that there should be a clear statement from the Leader of the Opposition whether or not we are to regard the Glasgow preferential tariff of the right hon. Member for West Birmingham as still current as a practical policy.

Then the House has been told that the Government might have given a preference on dutiable articles. Such a preference would introduce into our fiscal system an entirely new, and, as the Government think, the wholly vicious feature of discriminating between one class of producers and another. The whole basis of our financial and fiscal policy is, that it draws no distinction whatever between different classes of producers, whether they reside here or abroad, whether they live in foreign countries or in our Colonies. I am quite prepared to state that proposition in its simplest form. That is the fundamental principle of our fiscal system, and there is no discrimination. We have but one measure to give to those who trade with us—the just measure of equality, and there can be no better measure than that.

We are charged with pedantry in dealing with the Colonial Conference, through not making some concession upon existing dutiable articles. The Colonial representatives, when they asked for a preference on wine and tobacco, did not ask for it because it was of value to them by itself. They knew well that the operation of such a preference must be unfair and unequal. They knew well that Canada, which has the most solid claims upon us for a preferential recognition, would receive no benefit from such a preference. But the Colonial representatives of South Africa asked for a preference on wine and tobacco in order that, as they avowed with candour, we should "concede the principle." That is a perfectly proper proceeding on their part; it is the natural way of advancing the views which they hold, because it would lead up to the larger principle and the larger policy.

But the Government are opposed in this case to "the larger policy." The Government sit now on these Benches because they are opposed to it as a Government and as a Party. It is one of the fundamental conditions of our existence that we are opposed to such a policy. How, then, by any process of argument, can the Government be censured for not making an exception which must inevitably have led to and would avowedly have been used for the breaking of the great rule to which they have committed themselves?

It is a dangerous thing in this controversy, with the ugly rush of vested interests always lying in the wake of the Protectionist movement to be considered, to make even verbal concessions. Some time ago I made a speech in which I said that there was no objection to the extension of inter-colonial preference. By this I meant the reduction of duties between Colonies which have already a discriminating tariff; and it seemed to me in such a case that there is a net reduction of duty to the good. I do not see any objection to that, because under the most-favoured-nation principle we gain any advantage which is gained by either party to the transaction. In any case, the sums involved in inter-colonial preference at the present time are extremely small, and, however that might be, the matter is one which is wholly outside our control, because we have no authority over the Colonies in this respect, and we may just as well look pleasant about it and accord a sympathetic attitude to such a process.

Yes; but let those who reproach us with pedantry and with not showing a sympathetic desire to meet the Colonies listen to this: When such a statement is made by a Minister, is it accepted as a desire on the part of the Government to extend sympathetic treatment to the Colonies? Not at all. It is taken as an admission, and used for the purpose of trying to pretend that the Government have abandoned the principle of their opposition to the larger question of Imperial preference. If, although we think them unsatisfactory, we were, out of complaisance, to accord the small preferences suggested upon dutiable articles, we should be told in a minute that we had given up every logical foothold against preference, and that nothing prevented us imposing a tax on bread and meat except our inability to follow the drift of our own arguments.

I have referred to preference, but there is another proposal. The right hon. gentleman the Member for St. George's, Hanover Square, put forward a proposal earlier in the year, and it was renewed in a slightly different form by Mr. Deakin[5] at the Conference. The proposal was to impose a 1 per cent. ad valorem surtax on all foreign merchandise coming into the ports of the British Empire. That is the proposal which has been put forward as the least objectionable form of the preferential proposals, and it has been said of it that it was the least objectionable because it gave no loophole for the corruption which may spring up in the wake of the other proposals.

Let me ask the House to examine this proposal for a moment. Has any serious, civilised Government—I ask for information—ever been to the pains and trouble of erecting round their coasts a tariff, with all its complications, with the need of exacting certificates of origin on every class of goods, with the need of demanding strict assessment of all commodities brought to their shores—has any nation ever erected the vast and complicated network which would be involved in such a duty, simply for the paltry purpose of imposing a duty of 1 per cent.? I say there is no argument and no reason for such a course, and the only argument which could justify it is the argument used by Dr. Smartt at the Colonial Conference when he said (page 514 of the Blue Book), "The foreigner pays, and we do not." Mr. Deakin felt the force of the objection which would be entertained in this country to introducing such a tariff as the right hon. gentleman has proposed, simply for fiscal purposes, and he proceeded to say that Great Britain, if she was a party to such a bargain, should be permitted to raise the money in her own way, and to contribute her proportion to the common fund. That was a great concession to the self-government of the Mother Country.

There is no doubt a great difference between subventions and preferences. A subvention may be raised by a perfectly orthodox fiscal process. No more money is taken from the taxpayer than is required. The whole yield of the tax by which the subvention may be raised certainly goes to the Exchequer, and when the subvention is paid to the foreign or Colonial Government, it does not go, as a preference would go, to benefit particular interests in the Colony, but it goes to the Government of the Colony for the general purposes of State, and not for private advantage on either side. Therefore it seems to me that the method of subvention is on all grounds to be preferred to the method of preference.

It is of course necessary, however, in examining a question of subvention to look at it on its merits. This proposal of 1 per cent. put forward by Mr. Deakin carried the support of the official spokesman of the Opposition. Let us look at it on its merits. Look first at the proportions on which this new fund was to be subscribed. Canada was "to dedicate"—that was the expression used by Mr. Deakin—L400,000, New Zealand L20,000, Newfoundland L6,000, Cape Colony L40,000, Natal L26,000, Great Britain L4,500,000, and Australia—the proposing body—what was she to "dedicate" to this fund? No more than L100,000 a year, or one forty-fifth part of the contribution which was to be made by this country. And for what object was this fund to be accumulated? It is hard enough for the Chancellor of the Exchequer to raise the money to carry on so great an establishment as this country is forced necessarily to maintain. But here is a proposal to raise no less than L4,500,000 of extra taxation. For what objects? For objects not specified, for objects not yet discovered, for objects which could not be stated by those who made the proposal. The right hon. gentleman said that there was to be a meeting of the representatives of the different Colonies in the different great cities of the Empire—one different great city each year for seven years, excluding London, where there was to be no meeting, and they were to search for a method of spending this money. Such plans have only to be stated to fall to pieces.

The House will see that the real essential fallacy of the protectionist proposal is the idea that taxation is a good thing in itself, that it should be imposed for the fun of the thing, and then, having done it for amusement, we should go round afterwards and look for attractive methods of expenditure in order to give support to the project. These are the actual proposals made to us at the Colonial Conference. These are the sort of proposals in respect of which we are, forsooth, to be censured because we have not found it possible in the name of the Government of this country to give our assent to them.

I will submit a proposition to the House as a broad, general rule. I daresay the Leader of the Opposition may rake up some ingenious, hard case in conflict with it; but as a broad, general rule I believe it will be found true to say that there is no power in a Government to impose indirect taxation outside the limits of its territorial sovereignty. Although I am quite ready to admit that, by sudden and unexpected alterations of the tariff, temporary advantage might be gained, and some share of the wealth of other people and other countries might be netted for this or that set of traders within your own border, in the long run the whole yield of any tax, export or import, will come home to the people of that country by whom it is imposed. It will come home plus the whole cost of collecting the tax, and plus, further, the inconvenience and burden of the network of taxation which is needed. It will come home to them, if they be consumers, in the quantity, quality, or price of the articles they consume, and, if exporters, in the profit, convenience, or reserve power of the business which they conduct.

There is no parity between the sacrifices demanded of the Mother Country and the proposals of preference made by the various Colonies. To them it is merely a fresh application of their existing fiscal system. To us it is a fiscal revolution. To them it is a mere rewriting of their schedules to give an increased measure of protection to their home producers. To us it is a tax on food, and, as I assert again and again, upon raw material, and thus upon all the industries of these islands. If the Conference has established one thing clearly it is this, that none of the great self-governing Colonies of the British Empire are prepared to give us effective access to their own markets in competition with their home producers. That was established with absolute clearness; and even if they were prepared to give us effective access to their home markets, I submit to the House that, having regard to the great preponderance of our foreign trade as against our Colonial trade, it would not be worth our while to purchase the concession which they would then offer at the cost of disturbing and dislocating the whole area of our trade. Therefore, we propose to adhere, and are prepared if necessary to be censured for adhering to our general financial system, which is governed by the rule that there should be no taxation except for revenue, and based on the commercial principle of the equal treatment of all nations, and the most-favoured-nation treatment from those nations in return.

Important as are the economical arguments against a preferential policy, they are in my opinion less grave than the political disadvantages. On other occasions I have addressed the House on the grave danger and detriment to the working of our Colonial system which must follow the intermingling of the affairs of the British Empire in the party politics and financial politics of this country. To establish a preferential system with the Colonies involving differential duties upon food is to make the bond of Imperial unity dependent year after year upon the weather and the crops.

And there is even a more unstable foundation for Imperial unity. Does it never occur to right hon. gentlemen opposite that this solution which they offer of the problem of Imperial unity places the Empire not on a national, but on a purely party basis, and upon a basis repudiated by at least half the nation? Some day it may be that they will return triumphant from a general election. As party politicians they may rejoice, yet I think a wise statesman would try to win for the British Empire, our Colonial relations, the same sort of position, high above the struggle of Parties, which is now so happily occupied by the Crown and the Courts of Justice, which in less degree, though in an increasing degree, is coming to be occupied by the fighting Services. Whatever advantages from a Party point of view, or from the point of view of gratifying Colonial opinion, may be gained by food preferences, they would be very small compared with the enormous boon of keeping the field of Colonial politics separate from the social and economic issues on which Parties in this country are so fiercely divided.

It is possible to take a still wider view of this question. If I quote the right hon. gentleman the Member for West Birmingham, let me assure the House that I do not do so for the purpose of making any petty charge of inconsistency, but because the words which I am going to read are wise and true words, and stand the test of time. When the right hon. gentleman spoke at Manchester in 1897, not in the distant days before the great Home Rule split, but when he was already a Minister in the Unionist Government, and had been Secretary of State for the Colonies for nearly two years, he used these words, of the highest wisdom: "Anything in the direction of an Imperial Commercial League would weaken the Empire internally and excite the permanent hostility of the whole world. It would check the free imports of the food of the people. It is impracticable; but if it were practicable, and done in the name of the Empire, it would make the Empire odious to the working people, it would combine the whole world against us, and it would be a cause of irritation and menace. Our free commerce makes for the peace of the world."

Let us then seek to impress year after year upon the British Empire an inclusive and not an exclusive character. We who sit on this side of the House, who look forward to larger brotherhoods and more exact standards of social justice, value and cherish the British Empire because it represents more than any other similar organisation has ever represented, the peaceful co-operation of all sorts of men in all sorts of countries, and because we think it is, in that respect at least, a model of what we hope the whole world will some day become. The House has to-night a considerable and important opportunity. If in rejecting this vote of censure, which is so ill-conceived and so little deserved, we choose to adopt the Amendment, we shall have written upon the records of Parliament a profound political truth, which will not, I think, soon be challenged, and which, I believe, will never be overthrown.

FOOTNOTES:

[4] Mr Lyttelton.

[5] Prime Minister of the Australian Commonwealth.



THE HOUSE OF LORDS

HOUSE OF COMMONS, June 29, 1907

On June 24, Sir Henry Campbell-Bannerman had moved:

"That, in order to give effect to the will of the people as expressed by their elected representatives, it is necessary that the power of the other House to alter or reject Bills passed by this House should be so restricted by law as to secure that within the limits of a single Parliament the final decision of the Commons shall prevail."

This was carried after three days' debate by 315 to 100.

I will not venture at any length into an abstract constitutional discussion upon this Motion, because, after all, we have an extremely practical issue before us. It seems to me that this great question must be looked at from three points of view. There is the issue between the two Houses; there is the issue between the two political Parties; and then there is the national issue. The quarrel which is now open between the House of Lords and the House of Commons arises from two events—the general election of 1906, and the rejection of the measures of the new Liberal Government, culminating in the destruction of the Education Bill by the House of Lords at the end of that year. Either of these events is memorable in itself, but placed in juxtaposition and considered together they have a multiplied significance. The general election of 1906 was the most vehement expression of public opinion which this generation has known; and that expression of public will was countered in the December of the same year by the most arbitrary and uncompromising assertion of aristocratic privilege upon record.

Let the House think of it. The process of the election of Members of Parliament is extremely elaborate. The candidates go about the country for two or three weeks saying all they have to say for themselves in the different constituencies which they are contesting; at the end of that exhaustive discussion there is an elaborate process of voting; the returns are counted with the most scrupulous care; and as the result 670 Members, representing 6,000,000 of voters and many more who take a deep interest in public affairs but have no votes, are returned to the House of Commons in the name of the people of Great Britain and Ireland. The new Parliament assembles. Scarcely any question at the election had been more a test question, so far as the supporters of the Government are concerned, than the question of the amendment of the education system of the country. A Bill dealing with education is brought forward as the principal measure of the first session of the new Parliament. Weeks are occupied in its discussion. It represents the fulfilment of the election pledges of every Member who supported it. The Bill is passed by perhaps the largest majority that ever sent a Bill from this House to another place.

Nor was it a revolutionary Bill, to turn the world upside down and inside out; on the contrary, it was a Bill which, if vitiated in any respect, was vitiated by the element of compromise. Immense concessions were made in it, and rightly, I think, to conscientious and agitated minorities. It was a Bill which so moderate and consistent a statesman as the Duke of Devonshire, of whose ill-health the House learns with grave concern, urged the House of Lords to pass into law.

Sir, the Leader of the Opposition told us the other day that it was the habit of his Majesty's Government to introduce Bills which they did not mean to pass. No one—not even the right hon. gentleman himself—can say that the Government have not earnestly desired to pass the Education Bill. Every concession that could be conceived was made, but to what purpose? After the House of Commons had humbled itself before the House of Lords, after we had gone to the extreme limit of concession which self-respect, which a proper sense of the dignity of this House, and a due observance of the pledges of the Liberal Party permitted, the House of Lords curtly, bluntly, uncharitably, and harshly flung the Bill out in our faces mutilated and destroyed. I do not wish to import an element of heat into this discussion, but I respectfully submit to the Conservative Party that that act on the part of the House of Lords places them in a new position—a new position in the sense that never before had their old position been taken up so nakedly, so brazenly, and so uncompromisingly.

It is true that we have an excuse put before us with much suavity of language in these debates—we are told that the House of Lords seeks to interpret the will of the people, and it is explained that by "the will of the people," what is meant is the persistent, sub-conscious will, as opposed to any articulate expression of it. The right hon. gentleman who leads the Opposition told us that what he meant by the persistent will was the will of the people expressed continuously over a period of thirty years. That is what he called "democracy properly understood."

Having regard to that part of the question which concerns the issue between the two Houses, we repudiate emphatically the claim of the other House to what the French call faire l'ange—to "play the angel," to know better than the people themselves what the people want, to have a greater authority to speak in the name of the people than their representatives sent to Parliament by the elaborate process I have described. To dispute the authority of a newly elected Parliament is something very like an incitement to violence on the part of the other House. The noble Lord[6] laughs; but we are anxious to convince him and his friends that we are in earnest. We go through all the processes which the Constitution prescribes, we produce an enormous majority, and we express the opinion of that majority, but still the noble Lord and other noble Lords, less intelligent, but more remote, tell us that they are not convinced. What steps do they suggest that we should take in order to bring home to them the earnestness of our plea? What steps do they suggest that the people should take in order to assert their wishes? I hold entirely by what I said that to dispute the authority of an elected body fresh from its constituents is a deliberate incitement to the adoption of lawless and unconstitutional methods. The assertion which the House of Lords made at the end of last year is an intolerable assertion. I believe the country is altogether unprepared for it; and I wonder it was thought worth while to risk an institution which has lasted so many centuries, in the very skirmish line of Party warfare.

I am aware there is a special reason for the temerity of the House of Lords. It is not a very complimentary reason to the Members or the leaders of the late Government, but it is argued that the Conservative Party cannot be worse than they are. No matter what they do, nor how they are hated or reprobated by the country, the Conservative Party cannot possibly occupy a more humiliating and unpleasant position than they did after the last two years of the late Administration. Consequently, having reached the low-water mark of political fortune, they think they can afford to be a little reckless, and that at the very worst they will be returned in their present numerical proportions.

That is a very natural explanation of their action; but if we for our part were to accept the assertion lately made by the House of Lords—an assertion which is the furthest point to which aristocratic privilege has attained in modern times—that assertion itself would become only the starting-point for a whole new series of precedents and of constitutional retrogressions; and worse than that, if by any chance, having raised this issue, we were to be defeated upon it—if having placed this Resolution on the records of the House we were to fail to give effect to it, or were to suffer an electoral reverse as the conclusion of it—then good-bye to the power of the House of Commons. All that long process of advance in democratic institutions which has accompanied the growth of the power of the House of Commons, and which has also been attended by an expansion of the circles of comfort and culture among the people of this country—all that long process which has gone steadily onward for 200 years, and which has almost exclusively occupied the politics of the nineteenth century—will have reached its culmination. It will have come in contact with that barrier of which we have heard so much in this debate. The tide will have turned, and in the recoil of the waters they will gradually leave exposed again, altered no doubt by the conditions of the age, all the old assertions of aristocratic and plutocratic domination which we had fondly hoped had been engulfed for ever.

Hon. gentlemen opposite would be well advised to treat this Resolution seriously. This Parliament is still young, but there are some things at which they have laughed which have already become accomplished facts, I could not have during the past eighteen months listened to their taunts about the permanence of Chinese labour without reflecting now with satisfaction that Chinese labour is going. Yes, and other people may follow. We are only at the beginning of this struggle. We are not necessarily committed to every detail of the proposal; we are opening the first lines for a great siege, we have to sap up to the advanced parallels, to establish our batteries, and at no distant date open our bombardment. It may be many months before we shall be able to discern where there is a practicable breach; but the assault will come in due time.

The right hon. gentleman opposite[7] said he welcomed this contest with great confidence. I wonder if the Conservative Party realise, to use an expressive vulgarism, what they are "letting themselves in for" when this question comes to be fought out on every platform in every constituency in the country? They will not have to defend an ideal Second Chamber; they will not be able to confine themselves to airy generalities about a bicameral system and its advantages; they will have to defend this Second Chamber as it is—one-sided, hereditary, unpurged, unrepresentative, irresponsible, absentee. They will have to defend it with all its anomalies, all its absurdities, and all its personal bias—with all its achievements that have darkened the pages of the history of England. And let me say that weighty constitutional authorities have not considered that the policy on which we have embarked in moving this Resolution is unreasonable. Mr. Bagehot says of the House of Lords:

"It may lose its veto as the Crown has lost its veto. If most of its members neglect their duties, if all its members continue to be of one class, and that not quite the best; if its doors are shut against genius that cannot found a family, and ability which has not L5,000 a year, its power will be less year by year, and at last be gone, as so much kingly power is gone—no one knows how."

What is the position of the Conservative Party when they attempt to defend the House of Lords? They are always telling us to imitate the Colonies; they are always telling us that we ought to adopt the fiscal systems and other methods employed in the self-governing Colonies; but what is their unprejudiced view of the relations which are held between the two Chambers under the bicameral system in the Colonies and as established by their own Australian Commonwealth Act in the last Parliament? By that Act they have given power to the Lower Chamber to over-ride the Upper Chamber in certain circumstances. The Commonwealth Act says that when the Chambers differ they shall meet together, and that the majority shall decide, measures being taken, however, that the numbers of the Upper Chamber shall not be such as to swamp the opinion of the Lower Chamber. Imitating them, and following in their footsteps, we have adopted such a plan in the Transvaal and Orange River Colony Constitutions.

The Leader of the Opposition asked us yesterday whether the people are not often wrong, and he proceeded characteristically to suggest that he always considered them wrong when they voted against him. I am not prepared to take such a rough-and-ready test of the opinion and of the mental processes of the British democracy as that. I should hesitate to say that when the people pronounce against a particular measure or Party they have not pretty good reasons for doing so. I am not at all convinced that in 1900 the electors were wrong in saying that the war should be finished—by those who made it. Even in the last election I could, I daresay, find some few reasons to justify the decision which the people then took; and if we should be so unfortunate in the future as to lose that measure of public confidence now abundantly given to us, then I shall not be too sure that it will not be our own fault. Certain am I that we could not take any step more likely to forfeit the confidence of the people of England, than to continue in office after we have lost the power to pass effective legislation.

I will retort the question of the Leader of the Opposition by another question. Has the House of Lords ever been right? Has it ever been right in any of the great settled controversies which are now beyond the reach of Party argument? Was it right in delaying Catholic emancipation and the removal of Jewish disabilities? Was it right in driving this country to the verge of revolution in its effort to defeat the passage of reform? Was it right in resisting the Ballot Bill? Was it right in the almost innumerable efforts it made to prevent this House dealing with the purity of its own electoral machinery? Was it right in endeavouring to prevent the abolition of purchase in the Army? Was it right in 1880, when it rejected the Compensation for Disturbance Bill? I defy the Party opposite to produce a single instance of a settled controversy in which the House of Lords was right.

[An honourable Member: What about Home Rule?]

I expected that interruption. That is not a settled controversy. It is a matter which lies in the future. The cases I have mentioned are cases where we have carried the law into effect and have seen the results, and found that they have been good.

Let me remind the House that, but for a lucky accident, but for the fact that Letters Patent can be issued by the Crown and do not require the statutory assent of Parliament, it would very likely have been impossible for this Government to have made the constitutional settlement in the Transvaal and in the Orange River Colony, because the Constitutions would probably have been mutilated or cast out by the House of Lords, and the Executive Government would have found itself responsible for carrying out the government of Colonies on lines of which it wholly disapproved, and after their own policy had been rejected.

I proceed to inquire on what principle the House of Lords deals with Liberal measures. The right hon. Member for Dover[8] by an imaginative effort assures us that they occupy the position of the umpire. Are they even a sieve, a strainer, to stop legislation if it should reveal an undue or undesirable degree of Radicalism or Socialism? Are they the complementary critic—the critic who sees all the things which the ordinary man does not see? No one can maintain it. The attitude which the House of Lords adopts towards Liberal measures is purely tactical. When they returned to their "gilded Chamber" after the general election they found on the Woolsack and on the Treasury Bench a Lord Chancellor and a Government with which they were not familiar. When their eyes fell upon those objects, there was a light in them which meant one thing—murder; murder tempered, no doubt, by those prudential considerations which always restrain persons from acts which are contrary to the general feeling of the society in which they live. But their attitude towards the present Government has from the beginning been to select the best and most convenient opportunity of humiliating and discrediting them, and finally of banishing them from power.

Examine, in contrast with that of the Education Bill, their treatment of the Trades Disputes Bill. Lord Halsbury described that Bill as outrageous and tyrannous, and said it contained a section more disgraceful than any that appeared in any English Statute. On what ground then did they pass that Bill, if it was not the ground of political opportunism and partisanship? What safeguard can such a Second Chamber be to the commercial interests of this country? Is it not clear that they are prepared to sacrifice, if necessary, what they consider to be the true interests of the country in order to secure an advantage for the political Party whose obedient henchmen they are? The Trades Disputes Bill was a very inconvenient measure for the Conservative Party to leave open, because so long as it was left open a great mass of democratic opinion was directed against them. And so it was passed. On the other hand, the Education Bill was very inconvenient for the Liberal Party to leave open, because they are supported by Catholics and Nonconformists, and to bring in an Education Bill to satisfy those two extremes is not to solve a problem, but to solve a double acrostic. So that Bill was not passed. Upon a measure which it would be inconvenient to the Liberal Party to leave open the House of Lords rejected all compromise. Upon a measure which it would be inconvenient for the Conservative Party to leave open, they submitted at once—their action being irrespective of merits in either case. That, I suppose, is what the Leader of the Opposition called "an averaging machinery."

I press these points in order to justify me in making this statement, that the House of Lords, as it at present exists and acts, is not a national institution, but a Party dodge, an apparatus and instrument at the disposal of one political faction; and it is used in the most unscrupulous manner to injure and humiliate the opposite faction. When Conservative Members go about the country defending a Second Chamber, let them remember that this is the kind of Second Chamber they have to defend, and when they defend the veto let them remember that it is a veto used, not for national purposes, but for the grossest purposes of unscrupulous political partisanship.

I have dealt with the issues between Houses, and I come to that between Parties. Great changes in a community are very often unperceived; the focus of reality moves from one institution in the State to another, and almost imperceptibly. Sometimes the forms of institutions remain almost the same in all ceremonial aspects, and yet there will be one institution which under pretentious forms is only the husk of reality, and another which under a humble name is in fact the operative pivot of the social system. Constitutional writers have much to say about the estates of the realm, and a great deal to say about their relation to each other, and to the Sovereign. All that is found to be treated upon at length. But they say very little about the Party system. And, after all, the Party system is the dominant fact in our experience. Nothing is more striking in the last twenty-five years than the growth and expansion of Party organisation, and the way in which millions of people and their votes have been woven into its scope.

There are two great characteristics about the Party institutions of this country: the equipoise between them, and their almost incredible durability. We have only to look at the general elections of 1900 and 1906. I do not suppose any circumstances could be more depressing for a political Party than the circumstances in which the Liberal Party fought the election in 1900, except the circumstances in which the Conservative Party fought the election of 1906. At those two elections, what was the salient fact? The great mass of the voters of each political Party stood firm by the standard of their Party, and although there was an immense movement of public opinion, that movement was actually effected by the actual transference of a comparatively small number of votes.

When Parties are thus evenly balanced, to place such a weapon as the House of Lords in the hands of one of the Parties is to doom the other to destruction. I do not speak only from the Party point of view, although it explains the earnestness with which we approach this question. It is a matter of life and death to Liberalism and Radicalism. It is a question of our life or the abolition of the veto of the House of Lords. But look at it from a national point of view. Think of its injury to the smooth working of a Liberal Government. At the present time a Liberal Government, however powerful, cannot look far ahead, cannot impart design into its operations, because it knows that if at any moment its vigour falls below a certain point another body, over which it has no control, is ready to strike it a blow to its most serious injury.

It comes to this, that no matter how great the majority by which a Liberal Government is supported, it is unable to pass any legislation unless it can procure the agreement of its political opponents. Observe the position in which the present Executive Government is consequently placed. Take only the question of passive resistance. The action of the House of Lords at the present time forces the Executive Government to lock up in prison men with whose action they entirely sympathise and whose grievance they have faithfully promised to redress. Such a position is intolerable. Indeed, I am sure that if right hon. gentlemen opposite would only utilise that valuable gift of putting themselves in imagination in the position of others, they would see that no self-respecting men could continue to occupy such a position except with the object of putting an end to it for ever.

Much might be said for and against the two-Party system. But no one can doubt that it adds to the stability and cohesion of the State. The alternation of Parties in power, like the rotation of crops, has beneficial results. Each of the two Parties has services to render in the development of the national life; and the succession of new and different points of view is a real benefit to the country. A choice between responsible Ministries is a great strength to the Crown. The advantage of such a system cannot be denied. Would not the ending of such a system involve a much greater disturbance than to amend the functions of the House of Lords? Is there not a much greater cataclysm involved in the breakdown of the constitutional organisation of democracy—for that is the issue which is placed before us—than would be involved in the mere curtailment of the legislative veto which has been given to another place?

I ask the House what does such a safeguard as the House of Lords mean? Is it a safeguard at all? Enormous powers are already possessed by the House of Commons. It has finance under its control, it has the Executive Government; the control of foreign affairs and the great patronage of the State are all in the power of the House of Commons at the present time. And if you are to proceed on the basis that the people of this country will elect a mad House of Commons, and that the mad House of Commons will be represented by a mad Executive, the House of Lords is no guarantee against any excesses which such a House of Commons or such an Executive might have in contemplation. Whatever you may wish or desire, you will be forced to trust the people in all those vital and fundamental elements of government which in every State have always been held to involve the practical stability of the community.

Is the House of Lords even a security for property? Why, the greatest weapon which a democracy possesses against property is the power of taxation, and the power of taxation is wholly under the control of this House. If this House chooses, for instance, to suspend payment to the Sinking Fund, and to utilise the money for any public purpose or for any social purpose, the House of Lords could not interfere. If the House of Commons chose to double taxation on the wealthy classes, the House of Lords could not interfere in any respect. Understand I am not advocating these measures; what I am endeavouring to show to the House is that there is no real safeguard in the House of Lords even in regard to a movement against property.

But surely there are other securities upon which the stability of society depends. In the ever-increasing complexities of social problems, in the restrictions which are imposed from day to day with increasing force on the action of individuals, above all, in the dissemination of property among many classes of the population, lie the real elements of stability on which our modern society depends. There are to-day, unlike in former ages, actually millions of people who possess not merely inert property, but who possess rent-earning, profit-bearing property; and the danger with which we are confronted now is not at all whether we shall go too fast. No, the danger is that about three-fourths of the people of this country should move on in a comfortable manner into an easy life, which, with all its ups and downs, is not uncheered by fortune, while the remainder of the people shall be left to rot and fester in the slums of our cities, or wither in the deserted and abandoned hamlets of our rural districts.

That is the danger with which we are confronted at the present moment, and it invests with a deep and real significance the issue which is drawn between the two Parties to-night. It is quite true that there are rich Members of the Liberal Party, and there are poor men who are supporters of the Conservative Party; but in the main the lines of difference between the two Parties are social and economic—in the main the lines of difference are increasingly becoming the lines of cleavage between the rich and the poor. Let that reflection be with us in the struggle which we are now undertaking, and in which we shall without pause press forward, confident of this, that, if we persevere, we shall wrest from the hands of privilege and wealth the evil, ugly, and sinister weapon of the Peers' veto, which they have used so ill so long.

FOOTNOTES:

[6] Lord Robert Cecil.

[7] Mr. Balfour.

[8] Mr. Wyndham.



THE DUNDEE ELECTION

KINNAIRD HALL, DUNDEE, May 14, 1908

A new Government has come into being under a Prime Minister who, like his predecessor, is tied to Scotland by strong and intimate bonds. Give him a fair chance. Give the Government which he has brought into being the opportunity of handling the great machinery of State. Be assured that, if you do, they will employ it for the greatest good of the greatest number. I am well satisfied at what has taken place since I have been in Dundee. I see a great concentration of forces throughout the constituency. I see the opportunity of retrieving, and more than retrieving, the injury which has been done to the cause of progress and reform by elections in other parts of our island.

Ah, but, a very sad thing has happened; an awful thing has happened—the Liberal Party has gone in for Home Rule. The Scotsman is shocked, The Times is speechless, and takes three columns to express its speechlessness; The Spectator, that staid old weekly, has wobbled back to where it never should have wobbled from; the Ulster Unionists declare that the Government has forfeited all the confidence that they never had in it, and thousands of people who never under any circumstances voted Liberal before are saying that under no circumstances will they ever vote Liberal again. And I am supposed to be responsible for this revolution in our policy.

Why, the statements I have made on the Irish question are the logical and inevitable consequence of the Resolution which was passed by the House of Commons, in which every member of the Government voted, which was carried by an enormous majority—more than 200—a month ago[9]—a Resolution which, after explaining the plain and lamentable evils which can be traced to the existing system of government in Ireland, affirmed that the remedy for those evils would be found in a representative body with an Executive responsible to it, subject to the supreme authority of the Imperial Parliament.

The Irish question at the present time occupies a vastly different position to what it did in the year 1886. Ever since 1880 the attention of Parliament has been devoted constantly to Ireland, and the attention of Parliament, when devoted constantly to one object, is rarely fruitless. The twenty-five years that have passed have seen great changes in Ireland. We have seen a great scheme of local government, which Lord Salisbury said would be more disastrous than Home Rule itself, actually put into force. We have seen the scheme of land purchase, which in the year 1886 did more to injure the Home Rule Bill than anything else, actually carried, not indeed to a complete conclusion, but carried into practical effect by a Unionist Administration. These are great events; and their consequences, I think, ought to encourage us to move forward, and not to move back. They have produced results in Ireland which are beneficent, and the Irish question no longer presents itself in the tragic guise of the early eighties. They have produced an effect on Great Britain too. All over our country people have seen Bills which they were told beforehand would be ruinous to the unity and integrity of the United Kingdom—Land Bills and Local Government Bills—passed into law; and so far from the dire consequences which were apprehended from these measures, they have found—you here have found—that great good has resulted from that legislation. Many people are encouraged by what has taken place to make a step forward in the future; and I think if we need to look for any further encouragement, we should find it in the great and undisputed triumph which, under the mercy of Heaven, has attended our policy in South Africa, and has resulted in bringing into the circle of the British Empire a strong and martial race, which might easily have been estranged for ever.

The Irish polity finds its fellow nowhere in the world. It is a Government responsible neither to King nor people. It is not a democratic Government, nor an autocratic Government, nor even an oligarchical Government. It is a Government hag-ridden by forty-one administrative Boards, whose functions overlap one another and sometimes conflict with one another. Some are fed with money from the Consolidated Fund, some are supplied by vote of the House of Commons, some are supplied from savings from the Irish Development grant. Some of these Boards are under the Viceroy, some under the Chief Secretary, some under Treasury control, and some are under no control at all. The administration resulting from that system is costly, inefficient, unhandy beyond all description: a mighty staff of officials and police; a people desperately poor; taxation which rises automatically with every increase in the expenditure of this vast and wealthy island; and a population which dwindles tragically year by year. Add to all this a loyalist caste, capable and well-organised, who are taught generation after generation to look for support not to their own countrymen, but to external force derived from across the sea. There exists in effect in Ireland at the present time almost exactly the same situation which would have grown up in South Africa, if we had not had the wit and the nerve to prevent it. Take the whole of this situation as I have described it, thrust it into the arena of British politics to be the centre of contending factions, and the panorama of Irish government is complete.

With these facts before us, upon the authority of men like Lord Dunraven, Sir Joseph West-Ridgeway, Sir Antony MacDonnell, Lord Dudley, and others who have served the Crown in Ireland—is it wonderful that we should refuse to turn our eyes away from the vision of that other Ireland, free to control her own destiny in all that properly concerns herself, free to devote the native genius of her people to the purposes of her own self-culture—the vision of that other Ireland which Mr. Gladstone had reserved as the culminating achievement of his long and glorious career? Is it wonderful that we should refuse to turn our eyes away from that? No; I say that the desire and the aim of making a national settlement with Ireland on lines which would enable the people of that country to manage their own purely local affairs, is not an aim that can be separated from the general march of the Liberal army. If I come forward on your platform here at Dundee it is on the clear understanding that I do not preclude myself from trying to reconcile Ireland to England on a basis of freedom and justice.