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 interests, the Colonies became a source of pride and strength to the Mother Country.

But this is no isolated example. History shows that the States of former days which tried to maintain oversea Empires based on exclusive trading perished, largely owing to such exclusiveness. They withered away because they insisted on acting on the belief that an Empire cannot be kept together on sentiment and on the ties of race, language, and common institutions, but must have the material bond of preferential trading.

The evil effects of a preferential system, as exhibited in the case of the British Empire, are patent to all who will examine the facts. That system led not only to bad trading, but to political relations which were full of friction and of danger. As a nation we are apt to forget our failures, whether in battle, in diplomacy, or in business. Hence it happened that very few people were aware till the fiscal controversy overtook us that only sixty years ago we had a complete system of Colonial Preference. We greatly favoured colonial products in our markets, while they gave us a position of privilege in theirs. The results were as deplorable from the commercial as from the political standpoint. So completely forgotten, however, was this fact that when the new Preferential policy was first launched it was held to be a completely new and original Imperial device. We can hardly wonder, however, that the nation chose to forget its original Imperial fiscal policy. An incident so eminently unsatisfactory, and so full of friction and confusion, was naturally ignored. In endeavouring to trace the evil effects of the preferential system which once ruled the trade relations of the Empire, I shall not go so far back as the period when that system was in full force, and when we enjoyed 'the monopoly of colonial buying and selling,' and maintained the principle of 'the prohibition and discouragement of colonial manufactures.' Mr. Chamberlain no doubt hinted to the Colonies that it would be a friendly act if they would be content with such manu-