As to Canada’s paying in proportion to her population, that would be an unfair basis, because she is a young country with very little accumulated wealth, and is developing and opening up enormous tracts of territory at a great cost to the sparse population. Great Britain is a small country with a large population, and has been in process of development for nearly 2,000 years, for I believe some Roman roads are in use to-day. The time will come when Canada will be able to do far more.
3. As to how trade would be affected, I answer that the trade of the United Kingdom would be greatly benefited. The duty would tend to protect for yourselves your home market, which you are rapidly losing. It would give you advantages over the foreigner in the markets of 360,000,000 of people in the British possessions, in which at present you are being attacked in the most pitiless and disastrous commercial war. It would turn emigration into your own dominions, instead of aiding to build up foreign, and possibly hostile, countries. In the British Colonies the inhabitants purchase from the United Kingdom many times as much per head as the inhabitants of foreign countries, and it is the direct interest of the Mother Country to save her population to build up her own Empire. Your food supply also, which is in a most dangerous and perilous condition—a condition which leaves our Empire dependent upon the friendship of one or two nations for its very existence—would be rapidly produced upon British soil among your own people, and would make you once again an independent and powerful nation. At present you are existing upon sufferance.
4. Sir Robert Giffen speaks about the entrepot trade and the difficulty of allowing goods to pass in bond. We Canadians have so many goods passing in bond through the United States, and the United States have so many passing in bond through Canada, without the slightest difficulty on either side, that we cannot see how there could be any trouble about such an arrangement. This system could apply to Hong Kong and Singapore, and it should not require much thought or ingenuity to arrange minor details of that kind, if the broad principle was once agreed upon.
The question of taxing raw material for manufactures and its effect upon exports to foreign countries could be easily arranged by the simple expedient of granting a rebate of the duty on goods sent to foreign countries. I fancy this is an expedient well understood by most civilised nations.
It is asked also what would be result of putting an extra 10 per cent. on exports from the United States into Canada. It ought very largely to increase the sale of British manufactured goods in Canada, but I notice that Sir Robert Giffen, in counting the advantage to the United Kingdom, leaves out the United States, and only counts European competitors. This is rather remarkable, when we remember that the Canadian imports from the United States in 1900 were £22,570,763 and from all European countries under £4,000,000. In this connection it is interesting to note that British imports into Canada had been declining for some years before 1897, but when the 33 1/3 per cent. preference was given to the United Kingdom the imports from it into Canada rose from £6,000,000 worth in 1897 to £9,000,000 in 1900.
Sir Robert Giffen claims that the Colonies would gain the full amount of the 10 per cent. tax on the foreigner in increased prices. If so, why should not the United Kingdom gain the 10 per cent. on all she sold in the Empire? The rule should certainly work both ways; but, as a matter of fact, a large portion of the duty would be borne by the foreigner. The greater part of the present tax on flour is now being paid by the United States railways, through the reduction of their freight rates in order to meet it.
Sir Robert Giffen repeats a second time, to impress it upon his readers, that the proposed preferential arrange ments would impose a charge upon the people of the United Kingdom of £42,000,000, as if the people would have to pay that amount more than they do now. This I emphatically deny. It will only mean a rearrangement of taxation. A little more would go on grain and manufactured goods and other things, but it could come off tea and tobacco or income tax, so that the taxpayer would pay no more, and it makes little difference to him on what he pays it, if he actually pays out the same amount for his needs each year.
In Canada we feel that Great Britain is steadily losing her trade, that her home markets are being invaded, that she is in great and constant danger as to her food, that her mercantile marine is slipping from her, her agriculture being ruined, and that anything that would tend to keep the markets of the Empire for the Empire would be of enormous advantage to her. The British Empire League in Canada suggested the scheme they have urged me to advocate in this country. This scheme has received general support in Canada, but the League will, I am sure, be pleased with any effective plan which will put matters in a better position for the advantage of the Empire as a whole.
Your obedient servant,