whatever. Ten years later, they proved to be the opening stanzas of a poem of some length, concerning which Mr. Disraeli, whom the author then knew but slightly, and who had recently suffered a sad bereavement in the death of Lady Beaconsfield, kindly wrote: "I cannot go to rest to-night without writing to tell you how deeply I have been moved by your poem. It cannot fail to touch the public heart." I came in time to know him well. He was very tender-hearted, and the wisest man I have ever known. Cardinal Newman, whom I never had the good fortune to know personally, wrote on the same occasion in a kindred vein, and said it had always seemed to him that the ottava rima is the finest form of verse even for the English tongue. Another eminent Statesman then in the enjoyment of unequalled popularity, good-naturedly, and with characteristic concern rather for the ethical than for the æsthetic side of things, also wrote concerning it at considerable length, and dwelt on the observation that Butler's Analogy had placed him in an impregnable fortress. That statement was evoked by the circumstance that the poem in question represents objectively the tragedy oftentimes caused by the conflict between sincere Faith and equally sincere Doubt. . . . Now, Lamia, are you satisfied? It would be difficult to be more unreserved; and the responsibility must be yours, not mine.

[May I say that I am responsible for what is published in the Diary, but not for what is held back. I have vainly pointed out that the foregoing lines may possibly interest some people, but that they are a little jejune. In order to do them justice, and to make them acceptable to the ungentle reader of to-day, the letters referred to should be reproduced textually, the very manuscript of them photographically copied, and portraits of the writers of them appended. Such is the habit, such the custom, of the times. But I urge him in vain to row with the current. He replies, Nitor in adversum, and asks if I do not think a photograph of myself would serve the purpose as well. I answer that I will consult Veronica. But that would be useless; for in the matter of behaviour she is more old-fashioned even than he. All argument is unavailing. When I tell him he is deplorably behind the Age, he only smiles, and quotes Joubert's "Mourons en résistant! Let us to the last stand on the ancient, honourable ways!"-Lamia.]

VOL. XLIII

ΙΟ

AUSTRALIA AND PREFERENTIAL

TRADE

I BELIEVE that few persons realise that the experience of Canada before 1897 (the first year of Preference) is being repeated in the Commonwealth that is to say, England is falling behind in the Australian market, and her foreign rivals are gaining ground.

By the courtesy of Mr. Coghlan, Government Statistician for the State of New South Wales, I am able to submit some figures which will bring into clear relief this change in the character of Australasian seaborne trade.

During the last twelve years British imports into Australia have decreased by £2,200,000, which is a percentage decrease of 9.3 per cent.; while during the same period the imports of foreign produce have increased to £4,100,000, which is a percentage increase of 43.5 per cent.

Or we can look at these figures in another way.

In 1891 British produce formed 63 per cent. of the total imports into Australia. In 1902 it had sunk to 53 per cent. ; while during the same period foreign imports, which had been in 1891 only 25 per cent. of the total imports, had increased to 33 per cent. The figures are shown in tabulated form:

During the same period the proportion borne by the produce of British possessions to our total imports had slightly increased. In 1891 they were 11.5 per cent. of the whole, or in amount £4,300,000. In 1902 they were 13.2 per cent. of the whole, and in amount £5,300,000.

This decline in the volume of British trade is partly due to less borrowing both on public and on private account. But the importance of this influence is easily exaggerated; because we also borrow from foreign countries an amount which, though not in itself large, is sufficient to be an important factor in affecting foreign imports; so that an allowance must also be made upon this account in respect of the imports of foreign produce. I regret that it is not possible to give any useful estimate of the influence of loans in swelling or decreasing the volume of imports during the last ten years. reliable returns previous to the imposition of dates of which vary for different States; following the Bank crisis of 1893, and during the recent drought, there were considerable temporary advances and repayments. Nevertheless, the cessation of borrowing has undoubtedly diminished the volume of British imports into Australia.

But there are no income taxes, the and in the years

But the matter of importance is not so much the decline in the volume of British imports, as the fact that, while British imports are decreasing, foreign imports are increasing; and that while the proportion of the total import trade done by the Commonwealth with Great Britain is yearly lessening, the proportion of it which is done by foreigners is yearly growing.

Mr. Coghlan has prepared a table for me (p. 148) which is of remarkable interest in this connection, and which certainly deserves close scrutiny from all who are anxious to arrive at a reasoned conclusion upon the most important political question submitted for decision in our time.

*An income tax was first collected in New South Wales in 1896; in Victoria in 1895; in Queensland in 1902.

The accuracy of these figures is beyond dispute. They show that whatever year be taken as a starting point, and whether the inquiry be limited to fluctuations in the imports of British and Irish produce, or extended, as in the last table, to include all produce whether British or foreign which is shipped from the United Kingdom, there has been a steady expansion of foreign trade with the Commonwealth at the expense of British, which has been especially marked since 1897.

The optimists, who are for doing nothing under these grave circumstances, assert with truth that an increasing quantity of wool, hides, and tallow, which are our principal articles of export, is being bought by foreign buyers in Sydney and Melbourne, instead of being sent as formerly for sale in London. This may explain that we are buying more from the foreigner because we are selling more to him. But this most superficial explanation ignores two facts, viz., (1) that Great Britain never retained for her own consumption more than about half our wool; and (2) that goods which are sent to Germany or France are not necessarily paid for by German or French products; so that it does not follow, because we sell direct to the foreigner those products which we used formerly to sell to him through English agencies, we should cease to receive our payment as before in English goods. The truth is that the increase in foreign imports is due, in part, to the diversion of the carrying trade to the heavily subsidised German and French steamers,* and, in part, to an actual displacement of British by foreign goods; and while it may be true that our direct exports to Europe stimulate some direct return, yet there is no reason to doubt but that, if we gave a preference in our market both to British ships and British goods, England would not only increase her carrying trade but we should take a larger portion of the payment for our foreign sales in British goods.

If such a measure only arrested the decline in British exports to the Commonwealth the money gain to England would be great; but if it also won back for England the trade which

*Table showing the tonnage inwards and outwards to and from Australia of oversea ships, British and Foreign, since 1881: