Empire is a fine balance which can quite as easily be upset by an excessive claim on the mother country as on the colonies. Great Britain has given self-government to her colonies, but she asks in return self-government for herself. But self-government becomes the shadow of a name if our finance is to be regulated by the desires and interests of distant lands. It is not any longer contended that preferential duties on behalf of our colonies will be of any advantage to ourselves. These duties are rather defended as an Imperial act of generosity-a sort of return for services rendered. They are even represented as a new invention in Imperialism.

As a matter of fact, the proposal is a step back to the system of sixty years ago. It is a stale device which was abolished by our forefathers. Those who wish to look before they leap should read again the first letter in Lord Grey's 'Letters on the Colonial Policy of Lord John Russell (1846'52) '-a volume which still embodies the ripest wisdom in the structure and government of the British Empire. Lord Grey describes in this letter the struggles against this very fallacy of preferential tariffs. It was the last survivor of the protectionist beliefs, and was so strongly held that when in 1842 Lord Grey moved a resolution against even new 'protecting duties in favour of colonial produce' he was defeated. Lord Grey thus states the proposition he put forward in that debate :

'Duties ought not to be levied on the importation of any articles which would meet in our market articles of the same kind produced in the colonies and not subject to an equal amount of taxation.'

At the foot of the page he adds this interesting note :'It does not appear to me at all inconsistent with the idea of the unity of the British Empire that no attempt has been made to unite its several members, divided as they are from each other by the diameter of the globe, in one fiscal system.'

He considered that the time had come to end the system of colonial monopoly and establish fiscal freedom.

'I considered it to be no less for the real and permanent interest of the colonies themselves than for that of the mother country that industry should cease to be diverted from its natural channels and a useless burden to be imposed on the consumer by differential duties, levied for the purpose of favouring colonial produce in our markets, and our produce in the markets of the colonies.'

These are notable words, which may well be pondered at the present moment.

Those who resisted Lord Grey's motion used an argument which should give some of our Imperialists pause :

'Not only those who still adhere to the opinion that the former policy with respect to colonial commerce was the right one, but many of the most eager advocates of the principles of free trade, concurred in arguing that, if the colonies were no longer to be regarded as valuable on account of the commercial advantages to be derived from their possession, the country had no interest in keeping these dependencies, and it would be better to abandon them, thus getting rid of the heavy charge on the country, especially in producing the requisite amount of naval and military force for their protection.'

That is to say, if the colonies are not a profit to us they may as well be dropped. It is an argument we do not often hear nowadays, but might it not be heard again if we revived the fiscal relation? Against this Lord Grey put forward a weightier and more enduring reason for the existence of the Empire :

'I consider, then, that the British Colonial Empire ought to be maintained, principally because I do not consider that the nation would be justified in throwing off the responsibility it has incurred by the acquisition of this dominion, and because I believe that much of the power and influence of this country depends upon its haying large colonial possessions in different parts of the world."

But he laid down the rule of non-intervention which has dominated our policy ever since :—

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The country has no interest whatever in exercising any greater influence in the internal affairs of the colonies than is indispensable either for the purpose of preventing any one colony from adopting measures injurious to another or to the Empire at large; or else the promotion of the internal good government of the colonies by assisting the inhabitants to govern themselves when sufficiently civilised to do so to advantage, and by providing a just and impartial administration for those of which the population is too ignorant and unenlightened to manage its own affairs."

Such is the law of the British Empire as laid down by its mighty founders, in regard to this question of fiscal preference.

But these proposals, whether for closer military consolidation or for fiscal preference, are but the vanguard of a larger movement. The enthusiasm which they call forth is only a fragment detached from the great ideal of Imperial federation, which has for so many years been the dream of so many English politicians and thinkers.

Nothing has been more clear than that the colonial

premiers of Canada and Australia-whose authority is necessarily supreme in this matter-have set their face against any closer linkage of the Empire as a whole. Why is this? What is the meaning of this instinctive shrinking from any closer central control? It is not want of loyalty or attachment to the home country. It is not aversion from the root idea of the British Empire as a combination of British authorities and powers. It is simply that each of our great colonial systems is already engaged in solving the problem of federation in its own continent. The federal system of Canada is not yet complete; the federation of Australia is in its first infancy; the federation of South Africa has not begun. Local federation must come before Imperial, and until local federation is complete, Imperial federation must remain a dream and a desire.

If we would realise the truth of these statements let us look round the British Empire, and try to form an idea of its present condition and stage of developement.

In such a survey there is happily no need to discuss the issues of such an event as the South African war. Here we are concerned with results, and the only question we have to ask is-Has the war brought South Africa any nearer to that process of South African federation which is the necessary preliminary to Imperial federation? No candid observer can say that it has. Let us admit that the war has brought Canada and Australia nearer to us through the common sentiment that it evoked. Its effects on South Africa could not but be disintegrating. It has increased the division of races. It has reduced the number of loyal Dutch to a lower point than ever before in our history. It has alienated temporarily, but we hope not permanently, the majority in Cape Colony. It has completely upset the political equilibrium at the Cape, and it has produced a formidable movement, supported by the High Commissioner, though opposed by the Colonial Secretary, in favour of reducing the Cape to the level of a Crown colony. The debates in the Cape Assembly and the extraordinary position of the Cape Ministrydependent for their existence on the will of their own Opposition-do not imply any certainty that our King Canute can say to the tide, Thus far and no further.' The Progressives the English Loyalist' party-seem bent on suspension, and the only supporters of representative government are the Ministry and the Afrikander Bond. Whatever opinion we may have on these events, it is impossible to

maintain that they have in themselves brought any nearer the day of that most desirable consummation, the voluntary federation of a group of self-governing South African colonies. Good sometimes comes out of evil. But at present there is every sign that the South African war has postponed rather than accelerated the day of South African federation-and with it the federation of the Empire.

Let us turn to Australia.

The federation of the Australian colonies was achieved on July 9, 1900, when the Australian Commonwealth Bill received the royal assent. The federal Parliament was opened by the Prince of Wales in the summer of 1901, and a federal Government, with Sir Edmund Barton as premier, has now been in power for over a year. How does Australia stand at this moment?

It is passing through all the maladies of infancy. During this year the Australian Parliament has been absorbed in a gigantic struggle over the first great task of the federal Government the Tariff Bill. In that measure Sir Edmund Barton has simply been carrying out the first duty of a federal ministry, which might perhaps have been better performed by a federal convention-to federal convention-to establish the finance of the new Commonwealth on a federal basis. The Commonwealth Act abolishes all the inter-state custom dues, and establishes one common exchequer and one common customs system, though the distribution of revenue is proportioned to the State debts and the State needs.

Sir Edmund Barton's view is that the financial needs of the Commonwealth can be met only by a high customs tariff, and he has therefore raised the tariff to a high protectionist standpoint. This has developed a free trade opposition of amazing strength, which has fought the Bill with great persistence and energy, and has forced the Government to modify their proposals in several points-as for instance by abolishing the tea duty, a very embarrassing loss for the various States. The last phase of the struggle has been a conflict between the Senate and the Assembly. The Senate, which possesses far larger powers of finance than our House of Lords, suggested sweeping amendments. The Assembly rejected them, and the Senate again sent them

down.

The points at issue have at last been settled by a general display of British common sense. If the deadlock had continued there would have been no other possible issue than the rejection of the Tariff Bill by the Senate and a prolonged

fight between the Houses, under the interesting provisions of the Act governing such a contest.*

This struggle over finance illustrates not merely the close division between parties in the Australian Parliament, but the jealousies between the newborn States and the central power. The Senate is elected by the States, and its opposition is doubtless due quite as much to jealousy as to any fixed belief in the policy of free trade.

The central Government possesses authority over the States on no fewer than thirty-nine matters,† and it is likely that the same jealousy may be felt in regard to many of them.

Among these powers of the federal Government, perhaps the next in importance to the control of finance is the right to regulate the immigration or emigration of inhabitants. The cry for a white Australia has always been very powerful in the south of the continent, and it has now resulted in a federal Act virtually excluding Kanakas, Malays, and Japanese from the continent. The result is that Queensland, faced with the loss of all the labour with which she runs her great sugar and pearl industries, is seriously discontented.

It is difficult, indeed, in Melbourne and Sydney to realise the labour problem of a tropical country like Queensland. The labour party throughout Australia has always shown the spirit of continental exclusiveness a perfectly natural feeling, but one which is likely to bring it into conflict with Imperial policy. Before the federation each colony dealt with this question in its own way and according to its own needs. In some colonies, such as Victoria and New South Wales, there was no particular damage done by the spirit of racial exclusion. They were white colonies, and could be run by white men. But Queensland lies within the tropics, where white labour is practically impossible. The Kanaka labour has given rise to grave abuses and requires strict regulation. Nobody could quarrel with any steps that the central Government might take for this purpose. But the federal Government has not been content with this; it has resolved to drive out Kanaka labour altogether. Queensland, it is true, is to receive a bonus for her sugar industry

* See the 57th clause. First there is a Dissolution. Then if the deadlock still continues there is a joint meeting of the Houses, and the question is decided by an absolute majority of both.

See 51st clause.