UK, HL, “Second Reading”, vol 215 (15 May 1873), cols 1998-2011
By: UK (House of Lords)
Citation: UK, HL, “Second Reading”, vol 215 (15 May 1873), cols 1998-2011.
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Order of the Day for the Second Reading, read.
The Earl of Kimberley, in moving that the Bill be now read the second time, said the measure, which had already been considered in the other House of Parliament, was intended to amend the existing law with respect to Customs’ duties in the Australian Colonies. As their Lordships were probably aware, by the Act 13th and 14th Victoria, cap. 59, the Colonial Legislatures were prohibited from imposing differential duties as between the colonies
and the rest of the world. But this prohibition had aroused considerable agitation, and an active movement against it was commenced in 1867, when the colony of New South Wales represented to the Home Government that it ought to be removed. The demands made in the representation from the colony did not meet with the approval of the Duke of Buckingham, who was at that time Secretary for the Colonies. In the same year the Legislature of Tasmania passed a Bill imposing differential duties; but on the advice of the noble Duke the sanction of the Crown was refused to that Bill. Subsequently a conference of all the Australian Colonies was held in Tasmania, with the view of bringing about a Customs’ Union of those Colonies. When he (the Earl of Kimberley) came into office, and the matter was brought officially under his notice, he adopted the same view as that which had been held by his predecessor. After a further resolution come to by a Conference held in 1870, the subject was taken into consideration by Her Majesty’s Government, and he addressed a despatch to the Governors of the Australian Colonies. He might mention that New Zealand was in a different position from the Australian Colonies, because, in the case of New Zealand, there was no prohibition in the New Zealand Constitutional Act against the imposition of differential duties. As the Australian Colonies continued to urge the removal of the prohibition, Her Majesty’s Government had come to the conclusion that it would not be wise any longer to resist the demands made by them to enter into such Customs’ arrangements with one another as they might think fit in respect of the productions of the various colonies. Accordingly, this Bill was prepared. It consisted of only three clauses. The first was merely the “short title” clause, and the second the “interpretation” clause. The third and main clause empowered the Colonial Legislatures to regulate duties. The Legislature of any one of the Australian Colonies, was for the purpose of carrying into effect any agreement between any two or more of those colonies with each other or with New Zealand, to have the power from time to time to make laws with respect to the remission or imposition of duties upon the importation into such colony
of any article the produce or manufacture of or imported from any other of the said Colonies, or the produce or manufacture of or imported from New Zealand. But no new duty was to be imposed upon, and no existing duty was to be remitted as to, the importation into any of the Australian Colonies of any article the produce or manufacture of any particular country which was not to be equally imposed or remitted in the case of the importation into such colony of the like article the produce or manufacture of any other country. Considerable difference of opinion existed in these colonies on the subject of Free Trade. Her Majesty’s Government were quite alive to the interests of Free Trade; those interests all parties in this country had now at heart; but if we made this question of differential duties one of the right of the colonies to govern themselves, we might retard Free Trade in the Australian Colonies rather than advance it. It was highly probable that the Australian Colonies would at some future time follow the example set them in British North America, and form themselves into a great confederate Union. He thought that such a Union would be beneficial to these several colonies, the divisions between which were in some cases only imaginary lines. That, however, was a question quite outside this Bill. On the present occasion he thought it better not to go into questions as to the expediency of the policy of the colonial governments in respect to their local affairs. As we had given the Australian Colonies self-government, it was perhaps better that in matters of Customs’ regulations we should assume that those colonies knew their own business better than we knew it. In conclusion, he should only express a hope that this Bill would be used by the Colonial Legislatures for the purpose of removing any artificial barriers to trade. He was confident that those colonies had nothing to fear in any competition with other communities.
Moved, “That this Bill be now read” 2a.”—(The Earl of Kimberley.)
Earl Grey I have no intention of giving your Lordships the trouble of a division on this Bill, but I cannot allow it to pass without expressing my own disapproval of it, and pointing out that it is a new step in that policy which is
fast converting the connection of the British Colonies with the mother country into a merely nominal one instead of a living bond of union. If the Colonies and the United Kingdom are in any true sense to form one Empire, it is obvious there must exist some single and paramount authority to ensure that on subjects of general and common interest, all the separate communities that form the Empire shall act in concert, and shall co-operate with each other. Each distinct community may properly be free to act for itself in its own internal administration, but unless all are subordinate to the Imperial Authority where the general interest is concerned, there is no Empire. But among the subjects which are most clearly of common concern—next to their joint defence against aggression—comes that of a common commercial policy. This till of late has been universally held to be so obviously true as to be beyond dispute. In the early days indeed of our colonies, the opinion held both here and throughout Europe was that colonies were only valuable for the commercial advantages to be derived from them. The mother country insisted on a monopoly of supply to the colonies, and they in return were allowed either a monopoly, or the privilege of supplying on better terms than other countries certain articles of produce to the Parent State, the right of regulating the manner in which this intercourse was carried on, being exercised without dispute by Parliament. The judgment with which it was used was often questioned, but that the power properly belonged to Parliament was never doubted. And when at length there came a change of opinion as to the wisdom of the old system of colonial trade, when it was discovered that the advantages it professed to afford to both parties were illusory, while the burthen imposed by it was heavy, and it was therefore swept away, and the system of free trade was established in its place, it was not oven imagined that the Imperial Parliament and Government were to forego their old authority of settling what was to be the commercial policy of the whole Empire. On the contrary, it was considered that the policy of free trade would be deprived of much of its advantage if it were not consistently followed throughout the Empire. In treating with other nations for the purpose of
obtaining the advantage of free commercial intercourse with them, it was obvious that the Imperial Government would act with far more weight when speaking on behalf of the whole Empire than only for the United Kingdom. And to the colonies it was of peculiar importance that there should be identity of commercial policy for the whole Empire, because if the interests of these comparatively small communities were to be separately discussed with large and powerful nations, they would not have commanded the consideration that they do as parts of the British Empire. Accordingly, when colonial protection and monopoly were swept away, Parliament and the Government took measures to ensure the adoption of a free trade policy in the colonies. It was with this view that the clauses it is proposed partially to repeal by the Bill before us were introduced into the Australian Government Act of 1850. The object of these clauses was to prevent the imposition of duties inconsistent with the principle of free trade by the Colonial Legislatures. They were left free to raise revenue duties by Customs duties, but subject to the condition of not contravening the rules of free trade. There is no difficulty in distinguishing the duties which fail to comply with this condition; they are those which tend to divert labour and capital into other channels than those they would naturally seek as the most profitable, in the absence of artificial restrictions. It follows, therefore, that duties ought to be imposed not with reference to the place from which the taxed articles are brought, but to the articles themselves, and on this ground the clauses of the Australian Government Act of 1850 which my noble Friend now proposes partially to repeal, required that different rates of duty should not be imposed on the same articles when imported from different places. But the Imperial Parliament in prescribing this as the commercial policy of the whole Empire showed its consideration for the colonies by not requiring that where differential duties already existed they should be repealed—it only prohibited the imposition of such duties for the future. But my noble Friend and others contend that the operation of this restriction imposed by Parliament on the powers of the Colonial Legislature is inconvenient in practice and prevents
the establishment of that freedom of commercial intercourse which ought to exist between the different Australian Colonies. The absurd and mischievous impediments thrown in the way of the commerce of these colonies by the duties they levy on each other’s produce, or the evils arising from this legislation, have been described and are urged as a reason for our assenting to this Bill. There can be no doubt that these evils are quite as great as they are described to be. It is impossible to exaggerate the absurdity of the existing system of inter-colonial duties, and the mischief that it produces, especially in the intercourse between Victoria and New South Wales. To have different systems of Customs duties, and, as a consequence, to establish a line of custom houses on the land frontier of two colonies so situated was the very height of absurdity, but this Bill is not necessary to get rid of it, nor will it afford the slightest facility for adopting the only real remedy. As long as the two colonies have different tariffs, and tax importations at different rates, the inconvenience now so justly complained of must continue. The only effectual remedy for it would be, that all the Australian Colonies—or, at all events, those on the mainland—should adopt one uniform tariff on sound commercial principles; that they should divide equitably the revenue arising from the Customs duties so regulated, and then abolish all restrictions upon their trade with each other; that they should, in short, form a customs union. But to do this, the Bill now before us is not necessary, and, unfortunately, it is not what the colonies desire. We learn from the Papers before us that their mutual jealousies make it quite hopeless that a customs union should be established as has been suggested. An in-judicious system of protection has been adopted by some of these colonies, more especially by Victoria, and their real object in asking for this Bill is to be enabled to keep up and extend this vicious system with greater facility than at present. And I would remind your Lordships that the protective system of Victoria, which this Bill is meant to encourage, is especially directed against British industry. Duties are now imposed in that colony, of which the design and the effect is artificially to force into premature existence in that colony the
manufacture of certain articles, which but for these duties could be more cheaply imported from this country. This Bill will enable the colonies to carry this pernicious policy still farther than at present; for instance, New Zealand may obtain the privilege of sending timber and corn at low duties to those Australian Colonies that require them, while on the other hand the sugar, wine, leather, and woollens of these colonies may be enabled to find a market in New Zealand by being relieved from protecting duties imposed there on these articles, when of British manufacture or the produce of Mauritius or of France. Nothing can be more fatal to the permanent connection of these colonies than such a system; nothing more injurious to the maintenance of amicable relations by the colonies with each other, for your Lordships will observe that it is directly calculated to foster all those petty feelings of commercial jealousy which it appears from these Papers are so prevalent among them, and lead to such unwise and mischievous measures. Under the provisions of the new law it will be possible—and I fear the power is not unlikely to be used—for one colony to obtain special advantages at the expense of another in the markets of a third; the wheat of Tasmania or of South Australia may be placed under a disadvantage as compared to that of New Zealand in the ports of Victoria. And those colonies in which certain branches of production are thus artificially created or stimulated by protesting duties will really be losers instead of gainers by the boon supposed to be conferred upon them, because these trades, like all artificial trades, would be uncertain and exposed to the risk that sooner or later the burthen of maintaining them would be found so heavy as to cause them to be deprived of the protection on which they depend, and to be put an end to with heavy loss to all concerned in them. My noble Friend (the Earl of Kimberley) I am aware agrees with me in these objections to the protective policy of the colonies, but he says that we ought not to impose our own opinions upon them—that they may fairly claim to be allowed to judge for themselves what is best for their own interests. I cannot concur in this view of the subject; and I should wish to know if it is to be
acted on, in what manner the Queen’s authority is to be maintained at all? If that authority is not to be upheld, by requiring the colonies to conform to the general commercial policy of the Empire; if the Imperial Government is to have no voice in determining upon the commercial measures of the colonies, and we are even to allow them to impose protective duties more hostile to British interests than the duties of most foreign nations, it seems to me that it will become a very serious question whether it will be well to maintain the connection. My noble Friend says that the colonies may seek to dissolve it if we refuse to allow them the liberty in that matter which they desire. I have no fear of this; they derive too substantial advantages from belonging to the British Empire to make it likely that they will wish to separate from it, so long as the authority which the Imperial Government may properly claim is wisely used for the benefit of the whole Empire. But let me point out to my noble Friend that there is another side of this question; if the reins are to be thrown down altogether, and no authority at all is to be exercised by the Imperial Parliament and Government, will not the connection be reduced to a responsibility for the defence of the colonies which may prove very onerous to us? And is it not probable that the people of this country may say, “If we are to exercise no power over the colonies, nor to derive any advantage from them, we decline to incur the responsibility of protecting them?” It is quite true that the Bill now before us is not the first measure which has been taken in derogation of what I believe to be the sound policy of asserting the authority of the Imperial Parliament to decide on the commercial system of the whole Empire, and to prohibit the adoption by any one of its dependencies of any measures that would conflict with it. Not only the Australian, but the North American Colonies, have been allowed in the last 20 years to adopt measures open to just objection on this ground. I believe this to have been a great mistake, and that if from the first the Home Government had clearly pointed out to the Colonial Legislators the evils of a protectionist policy, and had firmly declared that this was a policy they could not be allowed to adopt so long as they formed part of the British
Empire, that decision would have been cheerfully submitted to. Past mistakes have made it more difficult to take this line of conduct now, but still I believe that there was no real necessity for making so dangerous a concession as that involved in this Bill, and I deeply lament that by bringing it forward another step has been taken in a policy which I must repeat that I regard as leading to the disruption of all real ties between England and her Colonies.
Viscount Canterbury said, that if he thought the passing of this Bill involved the abandonment of the principle of free trade, or that it would tend to loosen the ties between the colonies and the mother country, he would be no advocate of the measure. If the colonies having the right to impose Customs duties as they thought fit was to be taken as an abandonment of the principle of free trade, then the abandonment had taken place long ago; for some of the colonies had long since imposed duties in direct violation of the principles of free trade. As the noble Earl (Earl Grey) himself had stated, some of them had imposed restrictive duties—very high ones. When these were sanctioned by the Crown did the Government of this country abandon the principles of free trade? This Bill did not touch foreign trade. If the Bill were one to enable the Australian Colonies to impose differential duties on articles coming from abroad the case would be different; but, putting New Zealand aside, the difficulties arose not in respect of different countries, or even different communities, but in respect of different parts of the same colony, or of colonies separated from one another only by imaginary lines. What this Bill would allow to be done in a legitimate manner had hitherto been done in an illegitimate manner. The difficulties first arose some time about the year 1860, when there were such disputes in connection with the collection of duties en the River Murray Boundary, between New South Wales and Victoria, that tumults and disorders occurred and bloodshed was apprehended. To put an end to that state of things, the two Governors of New South Wales and Victoria entered into an agreement whereby, on the annual payment of a fixed sum, the collection of duties on that boundary was abrogated for a certain number of years. And
this arrangement was acquiesced in, although it was not exactly sanctioned by the Secretary of State. A like question arose in 1866. During the interval a Bill had been passed by the Victorian Legislature which provided, not for the collection of differential duties, but that the Governor might by an Order in Council admit articles imported across the River Murray, duty free; and this Bill was assented to by the Crown. Under this provision he had himself, as Governor, signed an agreement with New South Wales for the continuance of the system of fixed payments which had been in existence for six years, and the Governor of New South Wales signed another similar agreement, and that agreement being embodied in a Bill was passed by the Legislature, sent home, and received the Royal Assent. He could assure the noble Earl (Earl Grey) that if the Crown were to interfere with such arrangements, the intervention, instead of promoting good will or strengthening the bonds of union between the colonies and the mother country, would have a wholly contrary effect. Their Lordships ought not to form exaggerated notions as to what this Bill really proposed to do. If it gave, or even if it held out, the slightest hope of hereafter giving power to the colonies to impose differential duties on articles exported from abroad, he should oppose it to the utmost. He held that in regard to all commercial and other Treaties the Imperial authority ought to be and must be paramount; but the present measure dealt only with the internal trade of the Australian Colonies, and placed them beforehand in the position they would occupy if they were united under federal bonds. The terms on which that union was to be completed—if indeed it should ever be completed—were surely matters on which the Australian Colonies ought to be consulted, and it was not impossible that some of the Legislatures might claim particular powers in regard to their own taxation. At all events, no one could say this Bill in any way touched foreign trade. As regarded New Zealand, he admitted it did not stand in exactly the same position as Australia proper, although the relations between New Zealand and the continent of Australia were very much more intimate than many persons would suppose, considering the distance which intervened
between them. He could not think, however, that the inclusion of New Zealand in any way altered the character of the Bill, which, in his opinion, was one of purely colonial and local interest.
The Earl of Carnarvon said, that although the Bill passed through the other House almost, if not entirely, without discussion, the three remarkable speeches delivered this evening proved that the measure was one of great importance from a colonial point of view. He thought the remarks of the noble Earl (the Earl of Kimberley) were less forcible than the arguments formerly set forth in his despatches:—while the House must have felt how weighty was the warning of the noble Earl (Earl Grey): and he thought their Lordships must have listened with great satisfaction to the speech of the noble Viscount opposite (Viscount Canterbury), who brought into the House such a matured experience of these countries as few Colonial Governors had ever possessed, and whose practical knowledge must always be most valuable whenever a colonial question arose in that House. As for the Bill itself, he regarded it as an important movement in commercial policy—it would absolutely change those commercial doctrines which had been persistently acted upon for many years, for it gave the colonies in this particular Australian group the power of imposing differential or preferential duties for or against one another. The matter did not at all touch foreign trade; but as these several countries were each to have the power of arranging their Customs’ duties, and were each connected with the mother country, if difficulties should arise in their mutual inter-communication, he did not see what would be the position of the mother country in reference to them. He should have preferred that the Bill had not been introduced, but it was impossible to read the Correspondence without perceiving that the Colonial Governments had brought considerable pressure to bear on the Home Government in reference to this subject, and that little alternative was left to the Government except to accede to some measure like the present. There were two conclusions which he deduced from the position of this question. The first was the fallibility of modern philosophy, which predicted that free trade and the non-imposition of differential duties
would be chief features in our colonial policy; for our Australian Colonies, with the most democratic forms of Government, had within a few years, utterly repudiated both doctrines. The second conclusion was that, owing to the great discoveries of the gold fields, the growth and prosperity of these colonies had been unexampled, that no one would see what the end of it would be, and that their growth increased the political responsibilities of those who governed them. The tie that bound them to this country was like a silken thread, but he hoped it would be proved as time went on that the bond, however, slight, would still be sufficient to sustain our relations—what was wanted—and it was more wanted on their side than on ours—was that amount of political, self-control moderation, and abstinence which would retain those relations unimpaired. We had handed over to them almost everything necessary for their self-government, and we could only hope they would use their power wisely. Under this Bill they would assume really new powers, which, if temperately, wisely, and sparingly used, would, he apprehended, produce little and perhaps no great change in the relations between them and us; but, on the other hand, they were powers which, if intemperately, or violently, or immoderately used might bring about serious complications and difficulties from which he should shrink with dismay. The Blue Books abounded with the most ardent professions on the part of the colonies of their loyalty to the Crown and their devotion to this country, and he did not believe that in any part of the world there was more genuine and hearty allegiance than was to be found there; but, in spite of all this, difficulties might arise, and it was the business of statesmen to foresee and arrange them. He hoped and believed that in the long run we should be able to reconcile what had hitherto been deemed to be irreconcilable—namely, the freedom of the colonies and their dutiful allegiance to the mother country.
The Earl of Belmore, while he fully concurred in the opinion that freedom of trade was essential to the general prosperity of these colonies, considered that the time had come when the colonies should have the power which this Bill proposed to give them. It carried
out a policy which he bad recommended some time ago, when Governor of New South Wales. He did not agree with the opinion that the granting of the powers proposed in this measure would break the ties which bound the colonies together or that it would in any way weaken their attachment to this country. It had been said that the desire for protection would be increased in the colonies by this measure. It was true that in Victoria there was a strong desire for protection; but on the other hand in New South Wales there were many public men who were really free-traders at heart, and who would adopt the free trade principle if they saw how the revenue of the colony could be raised in accordance with it. Three years ago attempts were made to repeal ad valorem duties in New South Wales, the present chief Minister of which was a free-trader, and it was probable another attempt would be made next year.
The Earl of Kimberley said, that in these colonies there was a free trade as well as a protectionist party. He did not wish to draw invidious distinctions; it was only fair to say that South Australia had never adopted a protectionist policy, and that in New South Wales there was a very strong free trade party, and it was probable the ad valorem duties might be repealed. No doubt it would be an immense b advantage if we could have one commercial policy throughout the Empire; but the arguments in favour of that policy had not produced the desired effect in the colonies, and he was by no means convinced that any argument would produce that effect. On reference to the printed Correspondence they would see that the Minister of one of the colonial Governments said that no attempt could be more hopeless than to induce self-governing colonies to adopt the same opinions upon free trade that England happened to entertain at the moment. He did not think the House would be surprised that he had come to the conclusion that no advantage would be gained by prolonging a controversy which was sure to become acrimonious in its character. He had come to that conclusion with reluctance. He regretted extremely to see the colonies embarking in a course—which was not, in his opinion, a wise one—of making bargains with each other founded on principles of
reciprocity; but he did not think this was a question of paramount importance on which they should place an absolute veto on the wishes of the colonies. To interpose a veto was a very serious measure indeed. These communities were growing powerful; they were self-reliant, and displayed all the independent feelings of Englishmen. He believed they entertained a real, sincere loyalty to this country; but care must be taken not to transform that spirit of cordial loyalty into a feeling of opposition, and even of dislike to this country. He believed this Bill would be received by the colonies in the spirit in which it was passed—as a concession in the matter of their especially local and internal affairs; and they would regard it merely as a corollary to the measure passed for for our North American Colonies. Looking at all the facts of the case, he certainly did not think it would have the fatal effects which the noble Earl (Earl Grey) appeared to apprehend.
Motion agreed to; Bill read 2a accordingly, and committed to a Committee of the Whole House on Tuesday next.
Earl Grey gave notice that on going into Committee, he would move the omission of the words “New Zealand.”