conditions of trade and to the situation created at any given time by the fiscal action of others. He has no superstitious objection to using duties either to increase employment at home or to secure markets abroad. But on the other hand he does not go blindly for duties upon foreign imports as so-called Free Traders go blindly against them, except in the case of articles not produced in this country, some of which the Free Traders are obliged to tax preposterously. Tariff Reform is not one-ideaed, rigid, inelastic, as our existing system is. Many people are afraid of it, because they think Tariff Reformers want to put duties on foreign goods for the fun of the thing, merely for the sake of making them dearer. Certainly Tariff Reformers do not think that cheapness is everything. Certainly they hold that the blind worship of immediate cheapness may cost the nation dear in the long run. But, unless cheapness is due to some mischievous cause, they are just as anxious that we should buy cheaply as the most ardent Cobdenite, and especially that we should buy cheaply what we cannot produce ourselves. Talking of cheapness, however, I must make a confession which I hope will not be misunderstood by ladies present who are fond of shopping—I wish we could get out of the way of discussing national economics so much from the shopping point of view. Surely what matters, from the point of view of the general well-being, is the productive capacity of the people, and the actual amount of their production of articles of necessity, use, or beauty. Everything we consume might be cheaper, and yet if the total amount of things which were ours to consume was less we should be not richer but poorer. It is, I think, one of the first duties of Tariff Reformers to keep people's eyes fixed upon this vital point—the amount of our national production. It is that which constitutes the real income of the nation, on which wages and profits alike depend.

And that brings me to another point. Production in this country is dependent on importation, more dependent than in most countries. We are not self-supplying. We must import from outside these islands vast quantities of raw materials and of the necessaries of life. That, at least, is common ground between the Free Trader and the Tariff Reformer. But the lessons they draw from the fact are somewhat different. The Free Trader is only anxious that we should buy all these necessary imports as cheaply as possible. The Tariff Reformer is also anxious that we should buy them cheaply, but he is even more anxious to know how we are going to pay for all this vast quantity of things which we are bound to import. And that leads him to two conclusions. The first is that, seeing how much we are obliged to buy from abroad in any case, he looks rather askance at our increasing our indebtedness by buying things which we could quite easily produce at home, especially with so many unemployed and half-employed people. The other, and this is even a more pressing solicitude to him, is that it is of vital importance to us to look after our external markets, to make sure that we shall always have customers, and good customers, to buy our goods, and so to enable us to pay for our indispensable imports. The Free Trader does not share this solicitude. He has got a comfortable theory that if you only look after your imports your exports will look after themselves. Will they? The Tariff Reformer does not agree with that at all. Imports no doubt are paid for by exports, but it does not in the least follow that by increasing your dependence on others you will necessarily increase their dependence on you. It would be much truer to say: "Look after the exports and the imports will look after themselves." The more you sell the more you will be able to buy, but it does not in the least follow that the more you buy the more you will be able to sell. What business man would go on the principle of buying as much as possible and say: "Oh, that is all right. I am sure to be able to sell enough to pay for it." The first thought of a wise business man is for his markets, and you as a great trading nation are bound to think of your markets, not only your markets of to-day but of to-morrow and the day after to-morrow.

The Free Trade theory was the birth of a time when our imports were practically all supplemental to our exports, all indispensable to us, and when, on the other hand, the whole of the world was in need of our goods, far beyond our power of supplying it. Since then the situation has wholly altered. At this actual moment, it is true, there is temporarily a state of things which in one respect reproduces the situation of fifty years ago. There is for the moment an almost unlimited demand for some of our goods abroad. But that is not the normal situation. The normal situation is that there is an increasing invasion of our markets by goods from abroad which we used to produce ourselves, and an increasing tendency to exclude our goods from foreign markets. The Tariff Reform movement is the inevitable result of these altered circumstances. There is nothing artificial about it. It is not, as some people think, the work of a single man, however much it may owe to his genius and his courage, however much it may suffer, with other good causes, through his enforced retirement from the field. It is not an eccentric idea of Mr. Chamberlain's. Sooner or later it was bound to come in any case. It is the common sense and experience of the people waking up to the altered state of affairs, beginning to shake itself free from a theory which no longer fits the facts. It is a movement of emancipation, a twofold struggle for freedom—in the sphere of economic theory, for freedom of thought, in the sphere of fiscal policy, for freedom of action.

And that freedom of action is needed quickly. It is needed now. I am not doubtful of the ultimate triumph of Tariff Reform. Sooner or later, I believe, it is sure to achieve general recognition. What does distress me is the thought of the opportunities we are losing in the meantime. This year has been marked, disastrously marked, in our annals by the emphatic and deliberate rejection on the part of our Government of the great principle of Preferential Trade within the Empire. All the other self-governing States are in favour of it. The United Kingdom alone blocks the way. What does that mean? What is it that we risk losing as long as we refuse to accept the principle of Preferential Trade, and will certainly lose in the long run if we persist in that refusal? It is a position of permanent and assured advantage in some of the greatest and most growing markets in the world. Preference to British goods in the British dominions beyond the sea would be a constant and potent influence tending to induce the people of those countries to buy what they require to buy outside their own borders from us rather than from our rivals. It means beyond all doubt and question so much more work for British hands. And the people of those countries are anxious that British hands should get it. They have, if I may so express myself, a family feeling, which makes them wish to keep the business within the family. But business is business. They are willing to give us the first chance. But if we will give nothing in return, if we tell them to mind their own business and not to bother us with offers of mutual concessions, it is only a question of time, and the same chance will be given to others, who will not refuse to avail themselves of it.

You see the beginning of the process already in such an event as the newly-concluded commercial treaty between Canada and France. If we choose, it is still possible for us not only to secure the preference we have in Colonial markets, but to increase it. But if we do nothing, commercial arrangements with other nations who are more far-sighted will gradually whittle that preference away. To my mind the action of Canada in the matter of that treaty, perfectly legitimate