THE NINETEENTH CENTURY. No. XXVIII.-JUNE 1879. HOW SHALL WE RETAIN THE COLONIES? IN a former article in this Review I remarked that the practical abdication of authority over the colonies by the Imperial Government and Parliament had produced evils in more than one branch of their administration, and especially in their commercial legislation. I propose now to enter somewhat more fully into this subject, and I shall endeavour to show that there was no good reason for relinquishing the control which till of late the Imperial Parliament had always maintained over the commercial policy of the colonies, and that its ceasing to exercise that control has proved injurious to the colonies themselves as well as to the mother country. No one doubts that the interests of both have suffered from the restrictions imposed upon trade by almost all commercial nations under the name of protective duties. The injury they inflict upon us by excluding British produce from what would otherwise be profitable markets is what attracts most notice, but they are in reality even more hurtful to us by diminishing the power of the nations which impose such duties to supply us with various articles we might purchase from them with advantage. Great complaints are made of these duties by our merchants and manufacturers, but little notice has been taken of the fact that the commercial policy our colonies have of late been allowed to pursue unchecked has had much influence in encouraging other nations in adhering to the vicious system of what is called protection. Yet a little consideration 3 Q VOL. V.-No. 28. 八 must, I think, convince us that this influence has not been slight. Rather more than thirty years ago this country, after an arduous struggle, at length decided that its commercial policy should be reformed by applying in practice those principles of free trade which had long been recognised as sound in theory by the most eminent writers and thinkers on such subjects. Parliament resolved that for the future industry should be relieved from all the fetters which had hitherto been imposed upon it under the name of protecting duties, and that customs duties should be levied solely for the purpose of raising the revenue required for the public service. Full effect was given to this determination by the Acts which were passed for repealing the duties upon corn, the differential duties on sugar, wine, and timber, and the old navigation laws. When the first shock of so great a change had passed away, it was not long before its success was so decisively proved by the fast increasing prosperity of the country, as to produce a manifest effect on opinion in other nations, and after a time they began to show some disposition to follow our example, though little was actually done in that direction. But a few years ago a change took place in the current of opinion, and there has been a strong and general reaction in favour of the old policy of protection. Even in this country there have been symptoms that the controversy which was supposed to have been finally settled so long ago may be revived, and that some of the fundamental principles of our freetrade policy may again be called in question. Elsewhere the reaction has been more powerful. In Europe and in America not only has every attempt to introduce the policy of free trade signally failed, but in many nations the opposite policy. has obtained a greater ascendency than ever; already, in some cases, new protecting duties have been imposed, or old ones made heavier than before, and further changes in the same direction are announced as intended. In bringing about this change in the opinion and feeling of the world (which I regard as most unfortunate for the welfare of mankind), the illiberal commercial policy adopted by our colonies has had no small influence. To those who have paid any attention to the progress of discussion on this subject it must be well known that when the question has been raised in foreign countries as to the expediency of their following our example in commercial policy, the opponents of such a change have been accustomed to urge that it is very well for England now to throw over the system of protection because it is no longer wanted by her, but that it was by the aid of this system that she attained the commercial and manufacturing predominance over foreign countries which has become so great as to raise her above any danger from their competition, so that she can now safely admit their productions to her market; and it is asserted that, in recommending free trade to other nations, our object is to persuade them to abstain from attempting to build up great manufacturing trades as rivals to our own by the same means we have ourselves used with successthat is to say, by protecting these trades from competition while they are weak. All who know anything of the true history of our commerce and of the rise of our manufactures, will detect at once the fallacy of this view of the subject; it is nevertheless sufficiently plausible to deceive the ill-informed, and to encourage widely prevailing prejudices. Nothing could be better calculated to gain acceptance for this argument than the fact that while the British Government was pressing upon other Powers the advantages they would derive from adopting a free-trade policy, it permitted our colonies to act upon the opposite policy in its most extreme form. It was naturally believed that the system which was allowed by the British Government to be followed in the colonies was that which it knew to be the best for societies in the earlier stage of their industrial progress, and that when it urged other nations to abandon protection, of which they still stood in need, its object was merely a selfish one. Such was the conclusion which was drawn not unreasonably from the commercial legislation of our colonies, and I believe this has helped to produce that reaction of opinion on this subject in foreign nations to which I have adverted as having led to their adoption of measures very injurious to our commerce. I do not mean to say that what has been done in our colonies has been the principal cause of the change in the current of opinion in favour of protection, because I believe that another mistake in our policy, to which I will presently call attention, has had a still more powerful effect in bringing it about; but I am prepared to maintain that the influence in this direction of colonial legislation with regard to trade has been by no means unimportant. The question then arises-Was it right to give full license to the colonies thus to adopt measures injurious to the Empire as a whole? Up to the time of the great change in our commercial policy by the repeal of the Corn Laws in 1846, and by the measures of a similar character which followed it, there had never been any question as to its being the right and the duty of Parliament to regulate the commercial policy of the whole Empire. Colonies were formerly considered by all European nations to be valuable principally, if not exclusively, for the sake of the commercial advantages which the mother country derived from them, and these advantages were very jealously guarded. The object of all nations was to confine the trade of their colonies as nearly as possible to themselves, access to colonial ports being, as a general rule, either refused altogether to foreign traders, or only allowed under severe restrictions. The severity of this system had been much relaxed in the British colonies before the great change in our commercial policy took place, but the regulations with respect to the colonial trade which were still enforced by the authority of Parliament continued to be very strict, and in order to enforce obedience to them the whole custom-house establishment in the colonies was under the direct control of the Treasury, and the majority of the officers employed in this service were sent from home. The colonies were reconciled to this state of things by the privilege accorded to them of having their most important productions admitted into this country at lower duties than those imposed upon similar goods brought from foreign countries. When Parliament finally determined upon abandoning this mode of endeavouring to promote the commerce of the Empire by an artificial system of restrictions, and upon adopting the policy of free trade, it did not abdicate the duty and the power of regulating the commercial policy not only of the United Kingdom but of the British Empire. It was held that the common interest of all parts of that extended Empire required that its commercial policy should be the same throughout its numerous dependencies, and that this had not become less important than before because our policy was to be directed to the removal instead of, as formerly, to the maintenance of artificial restrictions upon trade. It was considered that the benefits of a liberal commercial policy would be greatly increased by its general adoption by other nations as well as by ourselves, and this, it was hoped, might gradually be brought about. But it was perceived that it would materially interfere with the attainment of this happy result if it should be observed by foreign countries that the former and narrower policy of endeavouring by restrictions or bounties to divert capital and labour into other than their natural channels was followed with the assent of the Imperial Government in any part of the Queen's dominions. Both Parliament and the Executive Government acted upon these views for some years after the policy of free trade had been adopted. Thus in the Act passed in 1850 for settling the constitutions of the Australian colonies, their legislatures were expressly restricted from imposing differential duties; in other colonies the instructions by which the governors had been long forbidden to give the royal assent to Acts imposing duties of this character were maintained in force, and in the case of New Brunswick, where the legislature wished to encourage the cultivation of hemp by a bounty, the Lieutenant-Governor was directed to withhold his assent from any new Act passed for that purpose, on the ground (which was fully explained in a despatch laid before the Assembly) that such a measure would be in contravention of the Imperial policy. To maintain that policy by using the royal authority to prevent any departure from it by the colonial legislatures was at that time considered to be the duty of the ministers of the Crown. But before long a different opinion as to the principles upon which the mother country ought to act towards the colonies began to prevail among those who became ministers. Not satisfied with requiring that great caution and discretion should be observed in exercising the authority of the Imperial Government to control the legislation of colonies having representative institutions (of which the necessity had long been recognised), it was now held that this authority ought not to be used at all, and accordingly the colonial legislatures were allowed to pass Acts in flagrant violation of the policy still professed by the Imperial Government. These legislatures imposed duties on imports, avowedly for the purpose of protecting colonial goods, in many cases against British goods, in some against those of other colonies with which their intercourse was thus checked to their common injury. I am of opinion that a great mistake was made by those who were ministers of the Crown, when Acts of this kind were passed, in not adhering to the rule that had formerly been observed, and withholding from them the royal assent. Two reasons have been assigned for the course which was taken; in the first place it has been said that by disallowing these Acts the Imperial Government would have interfered with the financial arrangements of the colonies, and prevented them from raising the revenue required for the public service by the most convenient means. This argument would be unanswerable if it were true that objecting to protecting duties need be an obstacle to raising a revenue by duties on imports imposed for that purpose only. I do not doubt that such duties really afford the best means that can be adopted in young colonies for raising a large part at least of the money wanted for carrying on their government, and therefore to prevent their being levied would be a vexatious and improper exercise of the Queen's authority. But duties upon imports may be so imposed as not to involve any protection to particular branches of industry, or any departure from that free-trade policy which Parliament has resolved to act upon. In the long discussions which preceded the adoption of this policy the advocates of free trade never contended for the abolition of all customs duties, but only for the repeal or alteration of those which had the effect of artificially directing industry into different channels from those into which it would flow if left to itself. The old Corn Law was condemned because it threw a heavy burden on the nation for the purpose of giving an artificial encouragement to the cultivation of corn; the higher duties imposed on sugar, wine, and timber when imported from abroad, as compared with those charged on these things when brought from our colonies, were in like manner objected to because they prevented the consumers from obtaining these articles as cheaply as they otherwise might have done, in order to stimulate the branches of colonial industry concerned in supplying them to our market. But it was always held that revenue might be raised by duties on imports without violating any sound principle, provided that goods were charged with the same duties wherever they might come from, and also that articles subject to duties on importation |