in any system. This body would study transport questions as a whole, and working in conjunction with it would be the internal transport boards of the different parts of the Empire constituted much as our new Road Board is to-day.

The Board of Transport would be armed with subsidies from the whole Empire; the amounts could be agreed upon and revised from time to time, just as the four Governments concerned easily reached an agreement as to their respective contributions to the Pacific Cable. The internal transport boards would assist in the reduction of freights, with information, the promotion of through bills of lading, and the development of the different systems of transport and accommodation generally. The subsidies would be given for the definite purpose of reducing freights in inter-Imperial trade below the level of the freights charged by shipping in the trade of foreign Powers. The position of a foreign Power, say Germany, might then be illustrated thus: If she tried to rival us in the Indian trade there would be a German subsidy, whereas we would have a British plus an Indian subsidy. It is true that America might do again what occurred in the case of the shilling duty on wheat, when the railways reduced the freights by an amount balancing the duty, so affording a characteristic example of the producer paying. In that case we shall enjoy even cheaper transport for trade to our Empire from a foreign country without any subsidy from ourselves, and the tendency will be for the interImperial transport charges to go still lower. The Board, being experts, will be easily able to gauge in a rough-and-ready way, if there is a compulsory publication of classifications and tariffs charged by the shipping, whether the rates offered are sufficiently lower than those of foreign trade to justify a subsidy. I am fortified in this belief by the evidence given before the Royal Commission on Subsidies by members of the Shipping Rings. The Royal Commission also considered the late Sir Robert Giffen's suggestion that foreign ships should be excluded from the coasting trade of the Empire. This is the plan followed by America in excluding all foreign ships from trade between the Atlantic and Pacific coasts of the United States. The objection to so sweeping a change is its tendency to lead to monopoly, with the further evils of the displaced shipping going to develop foreign trade and the cost of our transport being enhanced. The Commission came to the more moderate conclusion that means should be taken to obtain the removal of foreign laws and regulations which exclude

One great authority said: 'I think that the standard you have to go by as to whether our rates are reasonable is the price that is paid in other trades where liners carry on this business.' As to comparing our trade with another he said: 'You can to a certain extent, you cannot altogether, but you can in a rough-and-ready way.' That is all that is required.

the British shipowners from the "coasting trade," and that if need be, regulations for the admissions of foreign vessels to British and Colonial trade should be used to procure reciprocal advantages for British shipowners.' While much can be said for this view, the governing principle is lost sight of-viz. that the provision of cheap transport is the supreme object of good government. It seems that the first rule should be that foreign ships which call at a British port may compete in the imperial coastal trade, provided they carry goods at a rate which, on comparison with their other freights, offers no preference to the foreigners.


To realise the situation we must remember that the great dominions think, live, and breathe in terms of transport. We may think it an illustration of the changes transport has made in the habits of our people that the hop-pickers of Kent are drawn all the way from Ireland, but in Canada men travel two thousand miles every year to reap the harvests in the western fields. Canada owes her position entirely to a policy which is the very antithesis of Radical laissez faire. The determination to build her railroads from Atlantic to Pacific, so that three of them will stretch across by 1914, is the reason that she is not a mere tributary to the American railway system, or a congeries of States within the Republic. All the colonies know well how the bulk of British subsidies have gone to mail steamers carrying trade, population, and capital to foreign countries. They will take one item alone, such as emigration, and reason somewhat like this. In 1878 the Registrar-General calculated that each individual was worth 1591., since he made that average clear profit in his life. An adult who has received all the costly preparatory education is worth even more, and therefore the loss of a million adults by emigration in four years is an immense loss to Great Britain and a corresponding gain to other countries. It is not the fault of British laissez faire that the gain has not been almost entirely to foreign countries. Then the mind of our cousin, who, as I have said, thinks, lives, and breathes in terms of transport, will turn to the exodus of capital which Mr. Asquith regards with so much satisfaction. Since 1869 four-fifths of the railway construction of the world has taken place, and since then Great Britain has been fighting for her industrial life. The railway booms in the United States and Europe of 1869-72 brought Great Britain temporary prosperity and terrible reaction. Her capital was waiting for its interest to be paid out of the future prosperity of rivals. The railway booms in India and Canada brought no such disasters in their train. Her empire has ever been her best market, and her self-governing

colonies give her three to eleven times as much trade per head of population as the best of her foreign customers. Knowing, then, that cheap sea-roads feed all the internal industries and transport facilities, the mind of Greater Britain eagerly turns to cheapening those sea-roads. South Africa was willing to spend 500,000l. per annum in fighting the Shipping Conference. The Crown Colonies' protest against the tyranny of the Shipping Conference has become almost a bore, and they, too, would spend large sums to obtain cheaper freights by fighting the combination of liners. This would simply mean internal warfare of British colonies against a British industry. How much better is harmonious combination than internal dissension; and, if the worst comes to the worst, and the offer of subsidies fails, then it will still be true that the pressure of an empire is more effective than the blows of a colony.


When the Radical party realise that the cry 'Your food will cost you more' recoils on themselves, they will be thrown back on dry-as-dust diatribes on the heresy of subsidies. It may be conceded that throughout the world most subsidies have been of a somewhat dubious character. Speed is its own subsidy leading to a quick turnover of cargoes, or it is a luxury which those who want it can pay for. Subsidies for the possession of ships are about as unsound, except for war-transport requirements, as subsidies for the possession of ploughs. They have been given on a mileage basis, so that ships could make a profit without a cargo just as under the old fishing subsidies a profit could be obtained without a catch. At present we give subsidies to the ten per cent. of our steamers carrying the mails, the aristocrats of the ocean, mainly to get them to their destination a day or two quicker. The result means but little to the food or wages of the toiling millions; but the cargoes, which mean everything, earn nothing by way of subsidy. It is not even sought in a mail subsidy to prevent preferential rates to foreign trade, as is the practice of rings to which the subsidised ships chiefly belong. In America these rings are illegal." The laissez faire system, so beloved of Radicalism, has resulted in a system of preferential rates in the United Kingdom for foreign trade, and in the transport charges to England being the highest in the world. In England itself, by rail, the rates are double almost anywhere

Note.-The 'ring' in practice pays a rebate to all merchants who for a year ship entirely by the ring. This rebate amounts to a percentage of the customs duty. Competition is driven out and the ring dictates freights except to countries where the laissez faire system does not exist. The profits thus go partly to the shipowners and partly in customs duties to foreign countries.

else. Yet England offers the cheap refitment of a great shipbuilding country endowed by Nature with splendid ports, and coal and iron close to the sea instead of several hundred miles inland as in Germany. She offers full cargoes of coal and manufactures outwards, and food and raw material inwards. She should have the cheapest freights in the world, and laissez faire gives her the most expensive. A policy of subsidies for preferential freights will, I am convinced, offer a successful cure.


It may be said this question was gone into by the Select Committee on Shipping Subsidies, a Committee appointed in the days when Free Trade dogmas still reigned supreme. Incidentally I may point out that no fewer than three shipowners prominently identified with shipping rings were members of this Committee, whereas the only position a shipowner could properly claim is that of a witness submitting expert evidence in his own interest. The Committee, however, did report that foreign subsidies had benefited foreign and injured British trade, and that subsidies to selected lines tend to restrict free competition and so to facilitate the establishment of federation and shipping rings, and therefore that no subsidies should be granted without Government control over maximum rates of freight and over this combination of subsidised with unsubsidised owners to restrict competition.' In addition they recommended a subsidy for establishing a fast direct line to East Africa. In other words, they were prepared to repeat the mistake of the subsidy for a service to Jamaica, the partial application of a principle which, if it had been applied to the whole Empire, would have suffered no discredit. They, however, assert that subsidies are the minor factor, and commercial skill and industry the major factors, of the recent development of the shipping and trade of certain foreign countries, and notably of Germany, where, for example, the granting of through bills of lading via the State railway has had an important effect.' One notices here a confusion of thought, for the through bills of lading by the State railways are a direct subsidy conferring the inestimable boon of cheaper transport on German trade. In addition, so closely is the principle of granting subsidies only for services rendered followed in certain foreign countries that in Germany, Austria, and Norway, they are only given on condition that the freights cannot be altered without Government permission. The German Government also insists in many cases on goods being carried by weight and not by measurement, thereby gaining for the German manufacturer an enormous advantage for articles occupying space out of all proportion to their weight.


Preferential railway rates are not the only form of subsidy resorted to by Germany, as in some cases exemption from Customs duties is given, notably in the case of shipbuilding materials.


The apparent stumbling block to the proposed policy is British agriculture. A great industry, which Sir Reginald Palgrave estimated some years ago had depreciated in value by a sum considerably over double the National Debt, British agriculture has been well nigh ruined by the cheapening of all transport outside England. Wheat coming to England from Chicago encountered in 1866-70 an average freight charge of 15s. 11d., and in 1901-4 of 3s. 11d. per quarter. While this reduction to one-fourth of former charges went on from America, the English farmers' charges increased to double. And now,' I can imagine the agricultural interest saying 'You are going to cheapen transport to the Canadian farmers, so that we are going to be worse off than ever.' My answer is that it is laissez faire which has half-ruined agriculture. There are no limitations to the principle of cheap transport as the foundation of prosperity in a nation, and consequently what is good for external trade in this direction must be good for internal trade. Relief from rates, and the other proposals in Unionist policy, must be supplemented by the clear recognition that the country is the natural market for the towns, and vice versa, and to develop this trade we must have cheap transport, storage and markets. Home agriculture has been so neglected by transport that the amount of trade between country and town is trifling compared with what might actually be done. Some indication of how this is to be effected may be briefly set down:

1. The development of road, canal, and coastal trade in rivalry with the railroads. As one of the greatest railway chairmen we have had said at a meeting of the London and NorthWestern Railway shareholders, the sea and canals do more to bring down railway rates than any competition among the railways themselves.' The deliberate policy of rival Powers has been to induce the heavy traffic to go by water. Under laissez faire the only deliberate policy triumphed, and the railways, possibly to their own detriment, killed much of the canal traffic and forced the heavy goods along their own systems.

2. The right to allow a system of transport to lie derelict, or even to be limited below its capacity, must be subject to regulation.

3. Concessions can be given to the railways in the form of relief from taxes and rates, in return for reduced rates on agricul

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