I will submit a proposition to the House as a broad, general rule.  I daresay the Leader of the Opposition may rake up some ingenious, hard case in conflict with it; but as a broad, general rule I believe it will be found true to say that there is no power in a Government to impose indirect taxation outside the limits of its territorial sovereignty.  Although I am quite ready to admit that, by sudden and unexpected alterations of the tariff, temporary advantage might be gained, and some share of the wealth of other people and other countries might be netted for this or that set of traders within your own border, in the long run the whole yield of any tax, export or import, will come home to the people of that country by whom it is imposed.  It will come home plus the whole cost of collecting the tax, and plus, further, the inconvenience and burden of the network of taxation which is needed.  It will come home to them, if they be consumers, in the quantity, quality, or price of the articles they consume, and, if exporters, in the profit, convenience, or reserve power of the business which they conduct.

There is no parity between the sacrifices demanded of the Mother Country and the proposals of preference made by the various Colonies.  To them it is merely a fresh application of their existing fiscal system.  To us it is a fiscal revolution.  To them it is a mere rewriting of their schedules to give an increased measure of protection to their home producers.  To us it is a tax on food, and, as I assert again and again, upon raw material, and thus upon all the industries of these islands.  If the Conference has established one thing clearly it is this, that none of the great self-governing Colonies of the British Empire are prepared to give us effective access to their own markets in competition with their home producers.  That was established with absolute clearness; and even if they were prepared to give us effective access to their home markets, I submit to the House that, having regard to the great preponderance of our foreign trade as against our Colonial trade, it would not be worth our while to purchase the concession which they would then offer at the cost of disturbing and dislocating the whole area of our trade.  Therefore, we propose to adhere, and are prepared if necessary to be censured for adhering to our general financial system, which is governed by the rule that there should be no taxation except for revenue, and based on the commercial principle of the equal treatment of all nations, and the most-favoured-nation treatment from those nations in return.

Important as are the economical arguments against a preferential policy, they are in my opinion less grave than the political disadvantages.  On other occasions I have addressed the House on the grave danger and detriment to the working of our Colonial system which must follow the intermingling of the affairs of the British Empire in the party politics and financial politics of this country.  To establish a preferential system with the Colonies involving differential duties upon food is to make the bond of Imperial unity dependent year after year upon the weather and the crops.