which must proceed on the assumption that the preferences are to be effectual?

The discussion is more suited for farmers and speculators than for economists, or for the masses of electors who have now to pass judgment upon it. But it is one of the inevitable penalties of a protectionist policy, in posse as well as in esse, that we must all become speculators. The Government is being constantly asked to do something in expectation of purely speculative and contingent results, such as speculators-and speculators alone--are accustomed to anticipate.

It is amazing to see, by the way, the cocksureness of some of our protectionist friends. The keenest speculators, I believe, are never quite so sure of anything future, after they take every pains to be right, as many people who are not acquainted with the speculators' problems are about their answer to the present question when they have taken no pains at all.

The proposition before us then is that a duty of 28. per quarter on wheat imported from foreign countries, and duties of 5 per cent. ad valorem on other articles of agricultural produce, except maize and pork and bacon, which are specially omitted as the food of the poorest, will have for effect partly to increase the home production and partly and chiefly to increase the production in the Colonies, so that the Colonies will be great gainers, the people of the United Kingdom will be less and less dependent on foreign countries for their supply of food, and the Empire will be in the end selfsustaining. What we have to enquire into are the pros and cons of this speculation.

On the preliminary point of the gain to the Colonies on the existing production, I may refer to my former article. Even with a duty of 58. per quarter on wheat, and corresponding or 10 per cent. duties on other articles of agricultural produce, it was shown that the immediate bounty to the Colonies at the expense of the people of the United Kingdom would not be more than about 1,200,000l. for wheat alone, and 4,000,000l. at the outside for all articles including wheat, and that these sums would not materially increase the general purchasing power of the Colonies,1 whose aggregate income might be taken as 1,200,000,000l. Now the bonus is to be something much less material. Instead of 1,219,000l. for wheat it is to be two-fifths of that amount, 28. instead of 58. per quarter, or about half a million only, and about 2,000,000l. only on all articles put together. These are the amounts about which the present pother is raised. People with 1,200,000,000l. annually to spend are to have their average incomes raised by one-sixth of a hundredth part, and their increased purchasing power, it is supposed, is to be sensibly felt 'Always including India.

in the United Kingdom, where the people have an aggregate income of close upon 2,000,000,000l., although this small increase of purchasing power may be directed in part only upon the productions of the United Kingdom itself.

There is consequently no immediate gain to the Colonies of any particular value in the proposed preferences, especially no immediate gain that will at all stimulate the trade of the United Kingdom. What extension of agricultural production is probable either at home or in the Colonies ?

For answer, I would submit that apart from the risk involved in all speculations which would make the speculator hesitate the risk of war, or money panic, or political uncertainty, as Lord Salisbury specially feared in this very matter-such bonuses on future production or extended future production are not sufficient to count materially to the farmer in any part of the world. His business is altogether too rough and depends on too large chances for sums of this kind to affect his calculation of future profit and loss. Let us see how they will look in the concrete to a farmer who is already working at a maximum, with no capital or labour to spare for experiments, taking wheat as the leading article. An English farmer having say twenty acres of wheat producing four quarters per acre, or eighty quarters in all, will at 308. per quarter receive 120l. If he gets 28. per quarter extra through the preference, he will receive 1281. instead of 120l., and for this he may be more or less grateful as a windfall, but still not particularly grateful, as the ordinary fluctuations of quantity produced and price-which may easily be 20 per cent. or more-far exceed the bonus of 8l. If he should contemplate extending his cultivation by one-fourth, which would be a great change, what he would have before him would be that instead of getting 30%. for the produce of an additional five acres or twenty quarters, he might get 321., a difference of 21., which would hardly enter into his calculations at all if he could only be sure of the 30l. An English farmer with twenty acres of wheat has to be guided by much larger differences and considerations. Take again a Canadian peasant farmer with about ten acres of wheat growing twenty-five quarters at a maximum price of 208., giving him 251. at the end of the year. He will be thankful enough for 21. 108. extra on his present production; but suppose he contemplates increasing it by one-half-which he would do even now, if he could, as wheat is his cash crop-the proposed stimulus would enable him to look forward to receiving for the produce of his additional five acres, or twelve and a half quarters, the sum of 13l. 158. instead of 12l. 108., a difference again not great enough to affect him much, because the 127. 108. would induce him if anything could. A speculative Canadian farmer on a large scale would necessarily be in a similar position. For 140 quarters, the average produce of about fifty-six acres of wheat, which

seems to be the usual amount allotted to wheat by Manitoban farmers, the maximum price now receivable would be perhaps 140l., to which the preference of 28. would make an addition of 14l. Clearly if satisfied that he can look forward to 140l. or any such sum in average years, the Manitoban farmer or any other speculator would not alter his procedure by the prospect of other 14l. He does what he can now to capture the 140l., and he cannot do more. The inducement must be very strong indeed that will increase the present strain when every motive exists already to add to the production.

Nor is it a mere matter of guess-work what the action of individual farmers will be regarding an addition of 28. to the price of wheat. In the last eight years the Gazette average price of wheat has risen from 228. 10d. and 23s. 1d., the prices of 1894 and 1895 respectively, to 268. 9d. and 288. 1d. in 1901 and 1902, having been still higher in 1898; but the area under wheat in Great Britain only rose from 1,417,000 acres in 1895, the lowest point, to 1,726,000 acres in 1902, falling back to 1,581,000 acres in the current year. This is after a much greater rise in price than 28.

Similarly, as far as India is concerned, we find that the imports from that country in 1902 are almost exactly the same as in 1895, viz. eight to nine million cwt., or about two million quarters, notwithstanding the rise in price.

From Australia and New Zealand the imports are also about the same, viz. less than a million quarters, both in 1895 and at the present time, notwithstanding the rise in price.

It is thus clear that a 28. rise in price will not of itself increase the wheat area or production. Per contra, in British North America, where we do find a large increase of the wheat area and wheat yield going on for a considerable number of years, we also find that the improvement has coincided with various fluctuations of price, and it seems reasonable to connect it with the obvious cause, an increased immigration into Canada, which has not wanted the stimulus of an extra 28. per quarter.

Mutatis mutandis, what is true of wheat is of course true of other articles. All the articles of farming production are liable to such changes of quantities and markets, to such accidents of disease, floods and droughts, as to make the whole business a gamble, so that a difference in the average price to be made by a preference of this sort will hardly tell. The stimulus, it will be observed, is to be much less for all other articles than it is for wheat. The exemption of maize and bacon' from duty on imports from foreign countries, so that as regards these there will be no preference, will also have a singular effect, which would probably be more noticeable in fact than it is now likely to be if the difference were greater. If other agricultural products are raised in price by the duty, will not the

tendency be for maize and bacon to rise also by 'sympathy,' just as wool, hemp, and silk rose during the cotton famine of 1862-6 as well as cotton itself? In that case, as maize and pork products are hardly at all imported from the Colonies, but come from foreign countries only, an unexpected effect of the preferences would be to stimulate the growth of maize and pork in foreign countries, and so diminish pro tanto the favour intended for the Colonies.

It has also to be considered that a preference to wheat or any one article only might have some effect, which would not result from a preference to all. Attention could then be concentrated on the favoured article, whereas there will be no temptation to do so when all receive a preference.

There is yet another practical objection to the anticipation of any extensive effect from the preferences. There are important crops which are comparatively unsuitable for the Colonies, of which at least they contribute but an inconsiderable surplus for export to the United Kingdom. Barley has already been identified by Mr. Chaplin as a crop where the advantage will be to the home and not to the colonial producer. Maize and pork have been referred to above as in the same category. So with oats, sugar, and many kinds of fruit and vegetables. A general tax on such articles from foreign countries will not be a real preference to the Colonies, and cannot therefore have the effects assumed. There is also one special case of a Colony which sends us already the maximum surplus it can produce of its principal article of export, or very nearly the maximum surplus, viz. New Zealand, which talks of improving the quality of its fresh mutton, as there is not much to be looked for from an increase of the quantity exported. As far as additional supplies of fresh mutton are concerned, New Zealand is in the position of a country which cannot produce fresh mutton at all.

It would appear then that there are grave reasons for questioning the assumed operation of the proposed stimulus to the agricultural production of the Colonies, and similar production at home. Apart from the uncertainty of all speculations which ought never to be lost sight of, the stimulus itself is small, not sufficient according to past experience or the consideration of concrete cases to induce the majority of farmers to act. Neither at home, nor in India, nor in Australia has there been any such growth of wheat consequent on a larger rise of price than 28. to lead us to expect an augmentation as the result of a preference of 28. only; while in Canada, where the area and production of wheat and some other articles have increased, the obvious cause is the immigration into new regions such as we have witnessed with similar results for many years in the Far West of the United States and in the Argentine Republic. Last of all there are several articles, such as barley, where the Colonies are able to grow but a very small surplus for export, or where they are already

up to their maximum, as in the case of New Zealand and fresh mutton, or where they are naturally not adapted to compete. If home and colonial production are to be increased by means of preferences, it cannot be by such small preferences as those that are now in question.

With this conclusion there seems an end to the dream of the British Empire becoming self-sustaining in the matter of food, but so much importance is attached to the latter idea that some additional remarks may be made. There are really two questions to be considered the prospect for wheat specially, which is interesting to Canada, and the prospect for other articles.

As regards wheat, then, the situation is that Canada, quite apart from preference, will probably increase largely its cultivation of wheat; it needs no preference to do so; but even so it will hardly take the place of all foreign countries in supplying the United Kingdom with wheat at an early date. The question is one of population and the growth of population in Canada for forty years has not been so very rapid. The figures are:

With these additions Canada at the last census, three years ago, had a population of 5,600,000, which has increased since then probably by 300,000 or more, owing to the boom in the North-West which has set in, so that at the next census it may have increased a million from the previous census, instead of the half million we have had hitherto. At the same time its net surplus of wheat for export is now about 3,000,000 quarters-it imports from as well as exports to the United States-and allowing for the increase of population being specially in the North-West, where it takes about 250,000 people to grow 5,000,000 quarters of wheat, we may assume that the surplus, allowing for an increased production of 5,000,000 quarters, and for increased local consumption, will be doubled by 1910, and another addition of 6,000,000 quarters made by 1920. Large as these figures are, they are very far from the sanguine estimates now being put forward in Canada, and still leave a great gap to be supplied by foreign countries, even if the United Kingdom obtains the whole surplus. We want about 20,000,000 quarters to displace the present foreign supply, and there is a prospect of about 10,000,000 quarters only from Canada in the next twenty years. The surplus may also be trenched upon by demands from foreign countries, Germany for instance, as well as by South Africa, which the Australian Colonies may not be able to