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 the growth of the Colonies and strengthening the foundations of our own national finance and trade-supremacy is the primary essential. Preference, in a word, is the point from which all further evolution must unfold. Repeating the expressive biological term, it is the 'growing spot' of Imperial federation.

XIX.

Le revenu c'est l'État. That maxim has been ignored in one vital respect by the framers of our commercial policy. Modern British statesmanship seems to have overlooked the fact that such a problem as that of relative power exists, and that the most important changes in relative power occur most usually in peace through the operation of economic causes. The bearing of this reflection upon free imports and the fixture of national finance is profound. It is not paradoxical, but simply true, to say that, within the British Empire, the people of the British islands are the only class of mankind who do not enjoy commercial equality. Home enterprise may be as efficiently repressed by domestic taxation as by tariffs abroad. The classical economists agreed that the former factor should be taken into account in considering whether absolutely open ports should be conceded. A merchant must allow for his taxes. Compared with his competitor abroad, he does not get the same benefit from nominally equal profits unless he is as lightly taxed. A foreign rival less severely burthened than is the British taxpayer may be enabled by that fact to undersell the latter in his own market.

Follow out this thought. The Trafalgar Centenary reminds us that we are still carrying the immense financial weight of the wars that won the Empire. In the Napoleonic struggle, under Pitt's blindly heroic system of war finance, we pay not only for the defence of our own liberties, but for the freedom of Europe. The subsidies to our allies, though their own interests were more imminently at stake than ours, form part of the heavy heritage which presses upon us. While Napoleon waged his wars without leaving a penny of debt, and