To sum up all I have to say on this subject—­I do not for a moment suppose that Universal Free Trade—­even if the adoption of such a policy were conceivable—­would inaugurate an era of universal and permanent peace.  Whatever fiscal policy be adopted by the great commercial nations of the world, it is wholly illusory to suppose that the risk of war can be altogether avoided in the future, any more than has been the case in the past.  But I am equally certain that, whereas exclusive trade tends to exacerbate international relations, Free Trade, by mutually enlisting a number of influential material interests in the cause of peace, tends to ameliorate those relations and thus, pro tanto, to diminish the probability of war.  No nation has, of course, the least right to dictate the fiscal policy of its neighbours, neither has it any legitimate cause to complain when its neighbours exercise their unquestionable right to make whatever fiscal arrangements they consider conducive to their own interests.  But the real and ostensible causes of war are not always identical.  When once irritation begins to rankle, and rival interests clash to an excessive degree, the guns are apt to go off by themselves, and an adroit diplomacy may confidently be trusted to discover some plausible pretext for their explosion.

In a speech which I made in London some three years ago, I gave an example, gathered from facts with which I was intimately acquainted, of the pacifying influence exerted by adopting a policy of Free Trade in the execution of a policy of expansion.  I may as well repeat it now.  Some twelve years ago the British flag was hoisted in the Soudan side by side with the Egyptian.  Europe tacitly acquiesced.  Why did it do so?  It was because a clause was introduced into the Anglo-Egyptian Convention of 1899, under which no trade preference was to be accorded to any nation.  All were placed on a footing of perfect equality.  Indeed, the whole fiscal policy adopted in Egypt since the British occupation in 1883 has been based on distinctly Free Trade principles.  Indirect taxes have been, in some instances, reduced.  Those that remain in force are imposed, not for protective, but for revenue purposes, whilst in one important instance—­that of cotton goods—­an excise duty has been imposed, in order to avoid the risk of customs duties acting protectively.

Free Trade mitigates, though it is powerless to remove, international animosities.  Exclusive trade stimulates and aggravates those animosities.  I do not by any means maintain that this argument is by itself conclusive against the adoption of a policy of Protection, if, on other grounds, the adoption of such a policy is deemed desirable; but it is one aspect of the question which, when the whole issue is under consideration, should not be left out of account.

[Footnote 59:  Subsequently published in The Nineteenth Century and After for September 1910.]