she has lost to foreigners, her sales in the markets of the Commonwealth would soon show an increase of at least £10,000,000 per annum, and her unseen imports in the shape of freights would be increased by another million. Her experience in the Canadian market would be repeated on a larger scale; while any advantages which might be offered in the carrying trade would be an additional benefit which Canada has not given. Moreover, these gains would increase each year as the immense resources of Australia were developed and her trade increased.

Australia, on her part, stands to gain much more. The value of the imports with Great Britain for the year 1902 of products which Australia could supply amounted to the enormous sum of £236,000,000. The detailed figures appear in an interesting table, for which I am again indebted to Mr. Coghlan:

A YEAR'S IMPORTS INTO THE UNITED KINGDOM OF PRODUCE
WHICH AUSTRALIA COULD SUPPLY.

These figures ought to dissipate the notion, which is being sedulously fostered by the enemies of Reform, that under any scheme of Preference it is the colonial and not the British

farmer who stands to gain. The £236,000,000 which England paid to the foreigner in 1902 for primary products which one portion of the Empire can produce, would more than pay for all possible imports from British possessions, and leave an ample margin for the British agriculturist. The very magnitude of the annual demand is a sufficient guarantee to the British farmer that he cannot be excluded from his own market by colonial produce. For it cannot be too clearly kept in mind that Preference is a device for dividing between British and colonial producers trade which is now being done by foreigners, and not one for favouring any part of the Empire at the expense of another.

At present the share of Australia in this potential trade is insignificant. If we except wool, Australia supplies only a little more than 3 per cent. of the products in the above list; while the share of foreign nations in this class of trade amounts to 75 per cent. Deduct wool and allow a margin for error of 5 per cent. upon the other items, and we have 75 per cent. of £200,000,000, which is £150,000,000, as the sum spent by England with foreigners in the purchase of products which Australia might supply. If the Commonwealth could secureas with her immense natural resources she should be able to secure only a small portion of this enormous trade, her industrial position would be assured. Details are naturally of more interest to Australian than English readers; but by taking a few items the greatness of the opportunity which is offered to Australia will be clearly seen.

There is annually imported into Great Britain 185,000 tons of butter. Of this vast quantity Australia only sent in 1902 12,000 tons; while foreign countries sent 154,000 tons. Under a Preferential Tariff if Australia only obtained one-eighth of the trade which is now being done by foreigners she could add 19,000 tons of butter to her exports, valued at £2,400,000, and this would mean employment for 41,000 persons!

Great Britain also imports about £6,000,000 worth of cheese every year, to which Australia's contribution is less than £1000. Here, again, is an opening for trade that Preferential treatment should expand.

Wheat and flour is another large item of import from foreign countries, which amounted in value in 1902 to £33,000,000. Australia supplied of this £2,068,000. Yet, given a certain market, such as would be opened in Great Britain by a slight Preference, we might easily expand our exports fivefold and send away 70,000,000 bushels every year.

Of other grains, principally oats, barley, and maize, the

annual import into the United Kingdom is about £27,000,000, of which Australia's share is a paltry £1300. Yet there is no reason why we should not export maize, which grows well in Queensland and New South Wales, and oats and barley, which grow prolifically on our highlands, and thus obtain some share of the £25,000,000 now being paid annually to foreign countries.

If we secured only one-fifth of the foreign trade in these cereals (ie., £5,000,000), and if our export of wheat could be raised to the figure I have mentioned (70,000 bushels), an additional 180,000 men could earn a living in these States.

The possibilities of increased trade in meat and live stock is equally great. England imports bacon to the value of £13,500,000, other meats £26,300,000, and live animals for food £9,400,000, or, in all, £49,200,000. Of this large trade Australia supplied, last year, less than £2,000,000, which is under 4 per cent. of the whole. Under a system of Preference this might be enormously increased.

Sugar and fruit are two other products which Australia can produce for export, and for which she may expect a consider able sale under a system of Preferential Trade both in South Africa and England.

It is true that Australia cannot monopolise the advantages of Preference, but must share these with Canada and other portions of the British Empire. It is true, too, that Canada, from her nearness to the market, may profit more than a distant Colony. But how does this affect the question?

Community of interest is the fundamental basis of belief in Empire; and to urge upon Australia the rejection of all schemes of Preference because Canadians may get the lion's share of benefit, is as grotesque as if Sir H. Campbell-Bannerman were to oppose a measure in the House of Commons because Leeds would get more out of it than Birmingham, or Liverpool than London! Imagine an argument against the Ground Game Act: "That the farmers in game-preserving counties would get a special advantage"!

Yet arguments against a general scheme of Preference which are addressed to local prejudice are only not seen to be absurd, because Englishmen have not yet realised that Canadians and Australians are just as truly British as though they had been born in Devonshire or Dublin. The Empire is one; and whatever measure benefits a part must benefit the whole.

There are, of course, "Little Australians" just as there are “Little Englanders"; but I am convinced that there is a more widespread appreciation of the meaning and importance of Imperial

Unity among Australian and Canadian Liberals than appear to exist at present in the Liberal party of Great Britain. And this is all the more to be regretted because the Colonies owe to the Liberal party the grant of those free institutions which have provided them with the means for a national development, which can only reach its highest point while they remain independent but integral portions of a great Empire.

Thus we arrive at these conclusions:

First, that a Preference given by Australia to British goods and British ships would

(a) Arrest the decline of British trade with the Commonwealth;

(b) Stimulate its growth; and

(c) Secure the Australian carrying trade to British ships. And, secondly, that a Preference given by Great Britain to Australian products would

(a) Develop the resources of the Commonwealth by giving new outlets for produce and encouraging settlement and population; and

(b) Increase the value of our home market, both to the Australian manufacturer and the British, who received a Preference.

Estimated only in money these mutual gains are great. Estimated, as they ought to be, by their value to the Empire, they are incalculable.

The only event which could upset these calculations would be a refusal by foreigners, in a spirit of retaliation, to buy our wool. As already mentioned, Great Britain cannot under the present conditions of trade consume more than about onehalf of the wool which is our principal export. The remainder, until England wins back the woollen trade which she has lost, must be sold abroad. If, then, Germany and France can supply themselves with wool from other sources, our attempt to aid Great Britain by Preferential treatment might recoil upon us with disastrous consequences.

But there are no present indications that the bogey of retaliation can materialise. Australian wool is of such a special quality that experts like the Hon. Samuel McCaughey, the "wool-king," who is a vice-president of the New South Wales Preferential Trade League, feel no alarm at the possibilities of foreign competition; while our experience of the commercial policy of protected countries justifies the belief that if it were possible for Germany or France to obtain their wool elsewhere they would have done so long ago. Both these countries for the last ten years have been setting an example, which has been

followed by the rest of Europe, and done their utmost to destroy Australian trade. We used to do a considerable trade with Germany in tinned meats. The import of these has been prohibited. We can supply in ordinary seasons an unlimited quantity of frozen mutton. Germany's new tariff puts a duty on this product of 2d. per lb. ; and lest this should not prove prohibitive, sanitary and port regulations have been made in the pretended interests of public health, but really directed to prevent trade. France, in pursuance of a similar policy, puts a duty of 1d. per lb. on mutton, and makes tinned meats pay the same amount in duty and other charges. In fact, we have practically no trade in beef or mutton with any European country except England.

But perhaps the most striking illustration of the spirit in which these duties are imposed is furnished by the contract between the German Government and the Nord Deutscher Lloyd line of steamers. The severe competition of this company and its influence in developing German trade with the Commonwealth are matters of general knowledge. But it is perhaps not so widely known that this heavily subsidised company is prohibited by the terms of its contract with the German Government from bringing into German ports from Australia fresh or frozen meat, butter, dairy produce, or cereals.

Yet some persons declare, in the name, forsooth, of Free Trade-forgetting Adam Smith's fine maxim, "Defence is of more importance than opulence "-that it is a matter of indifference to Australia whether we trade with Germany or with our Motherland. Surely the foolishness of dogmatic pedantry could go no further!

But even if Germany had the will to retaliate upon Australia by shutting out our wool-a course, it may be remarked, which would at once transfer her woollen manufactures to England— while the Empire holds together she has not the power. Those who try to scare us by the bogey of retaliation do not at all realise the strength which England possesses in the magnitude of her market. Germany is far more dependent upon Great Britain than Great Britain is on Germany, and could not afford to run the risk of quarrelling with her best customer over such a comparatively petty affair as the import of Australian wool. The figures which illustrate this position have been so recently given in the National Review that they do not need to be repeated (see National Review, September 1903, " Economics of Empire"); but the relative positions of Great Britain and the other Powers as buyers and sellers should always be remembered, because it is a guarantee of safety to us against reprisals.