F.—6.

44

These extracts and the final resolution of the Conference serve to show the spirit in which Canada, Australia, and New Zealand and the Mother-country approached the consideration of the matter. I do not propose to go into financial details, as in my opinion it would be out of place to do so at present. Without proper estimates and a good deal of investigation it is not possible to say what subsidies will be required ; but, personally, I do not think they will be so large as the figures that have been mentioned from time to time. The matter is now being examined by the Governments concerned, and when the reports are published they will doubtless contain data as to the cost of the service and the assistance that will be required. Among the criticisms levelled at the all-red route, it is urged that it is not needed ; that there is already communication between the different parts of the Empire concerned ; and that it will prejudice the interests connected with existing enterprises to establish other competing lines with State aid. That is all very well, so far as it goes, but is it an argument which should induce us to neglect other routes between the different parts of the Empire —routes which have their own advantages, are likely to benefit the countries affected ? I think not. Nor need we assume positively that it is necessary to form a new company or companies. If an arrangement is possible among the existing companies by which the present services could be improved on the Atlantic and on the Pacific, they would certainly,be able to make out a strong case for special consideration. It seems to be the idea of some people that the all-red route is merely a scheme for company exploitation. Its introduction under official auspices at the Imperial Conference must be regarded as a rebuttal of any such assertion. The one consideration is the improvement of the means of communication between the different parts of the Empire, by taking advantage of an alternative route which has not yet been utilised to the extent its importance deserves and the interest of the Empire requires. There is another kind of criticism which has a certain weight with some people, although I am glad to think that they are not a numerous body. They say, " Why should we help the colonies to improve their communications ? They tax our goods, and they contribute nothing towards the Imperial expenditure of the army and navy, and we are always lending them money for one thing or another." Now, all that is very plausible, no doubt, but will it bear the test of examination ? In the first place, anything that brings the colonies closer to the Mother-country benefits not one part of the Empire alone, but the whole of it—that should go without saying. The money for new ships would be raised in the United Kingdom, and would provide, it is believed, a good investment for those who lend it. The ships would be built here and thus benefit a large number of people. Additional communication means additional trade, and the United Kingdom would share in it to a greater extent than any other country. It would lead to a greater movement of people to the various dominions. It would relieve the congestion at home, bring more land in the colonies under cultivation, and necessarily create additional consumers and customers for the products of our manufactures. It is true that the colonies tax the imports of the Mother-country —or, at any rate, a part of them. But in Canada, New Zealand, Australia, and the Cape a preference is given to such imports. In Canada the value of this preference— that is, the difference in the sum payable under the higher scale of duties and that payable under the preferential tariff—means a gain of over £1,000,000 per annum to British trade. On the other hand, I think it will be found that some of the articles imported into this country, coming from the colonies, are taxed rather heavily. But, be that as it may, and admitting that the United Kingdom is a country whose fiscal policy is based on free trade, I believe I am right in stating that no particular gain is derived by the colonies from the fiscal point of view if they are placed on precisely the same footing as any foreign country. The general policy of the United Kingdom is to treat alike the foreigner and the British subject living outside its limits. In the great self-governing colonies, or most of them, British goods are admitted on more favourable terms than those of their competitors—to the great benefit of British capital and labour. That being so, I venture to think the United Kingdom has the advantage. It is true that the colonies do not contribute largely in a direct way to the naval and military expenditure of the Empire. But the self-governing colonies at very considerable expense keep up their own military establishments, which must form a part of the military organization of the Empire in the event of any great war. It is the present policy of the Home Government to leave the colonies to organize their own defensive forces. In New Zealand, Australia, and Canada no regular troops of the British army are now to be found. Their places have been taken by local regiments. Canada has even taken charge of what were formerly the great naval stations of Halifax and Esquimalt, and also finds her own cruisers for the protection of her fisheries and other national purposes. The out- % lying portions of the Empire are not oblivious of the fact that they owe much to the British navy. If they have not contributed largely towards its expenses it has been for the very good reason that they cannot at present afford it. All the revenue they raise has so far been required for the development of their resources. If their funds had not been so used, would their position have been, with a white population of about 13,000,000, what it is now, and would they have been able to buy produce and manufactures from the United Kingdom to the extent of about £80,000,000, which forms the total of our annual export trade with them to-day ? The debts of the colonies have been largely incurred for enterprises which are usually undertaken by private capital in older countries ; and all these debts have to be met. Many of the works are of public and Imperial importance. The Canadian Pacific Railway, for instance, costs Canada about £1,000,000 per annum, representing interest on the cash subsidies to the company, on the value of the completed works handed over, and on the value of the millions of acres of land transferred as part of the transaction. W e must bear these and other similar facts in mind when discussing contributions from the colonies for naval, military, and other expenditures. But they are advancing, by rapid strides in population and revenue, and the time must soon come when they will in some form or other take a greater share than they do now in the government and administration of the Empire, so far as it affects the general community. They may be relied upon then to take their full burden of the responsibility which will fall upon them, and to bear