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the holding of a general meeting of delegates in London in the spring, when resolutions might be submitted which would raise the point of difference. If the majority agreed with the Duke, he would, of course, retain his position as president and deal with the funds and policy as he thought fit, while Mr. Chamberlain and his friends would retire. If, on the other hand, the majority declared for Mr. Chamberlain, it would be open to the Duke to review his position in connection with the association. At the same time Mr. Chamberlain made it clear that he did not urge this course, his opinion being that they might go on as they were, the funds being dispensed impartially to those local associations which were in need of them and which continued to support the Government. To this the Duke replied that he did not intend to suggest that the Liberal Unionist organisation should be violently broken up. What he had in his mind was that neutrality on the fiscal question was difficult to observe and had an almost paralysing effect on them. He promised, however, to try, with Mr. Powell Williams, to find some solution of the difficulties. In his next letter, dated December 22, Mr. Chamberlain called the Duke's attention to his advice to Unionist electors, which had created a new and embarrassing situation which could not be maintained. Unless the Duke had taken this step with the intention of breaking off all relations with the Liberal Unionist Association, the position could only be regularised by a vote approving his action, and passed either by the Council of the Central Association or by delegates, as suggested in his previous letter. The decision of either of these bodies Mr. Chamberlain was prepared to accept. The Duke replied on January 2 that he had done all he could to avert the violent disruption of the association. Mr. Chamberlain's assumption that the issue he had raised was one upon which men might be content to differ and yet act together seemed to him untenable. The differences between them were not less vital than those which separated them from Mr. Gladstone in 1886, and the natural consequence of this situation appeared to him to be that the association should recognise that under present conditions its existence was no longer necessary, and should be dissolved with as little recrimination as possible. He could not, he concluded, be a party to a proceeding which could have no other effect than that of dividing the association into sections, neither of which would have a right to assume to represent Liberal Unionist opinion, and if this course were insisted on he would have no alternative but to resign the office of president. Mr. Chamberlain's last letter, dated January 4, 1904, expressed his conviction that the existence of the association was still necessary to the success of the Unionist cause, and for this reason he would strongly deprecate its dissolution. The decision was one for the members themselves, and he therefore proposed, on his own responsibility, to call a general meeting to consider the situation and decide on the course to

be taken. This general meeting was called for Wednesday, February 3.

This correspondence naturally intensified the expectation of a Liberal and Free Food coalition, and much was said subsequently as to a dinner and reception at which the leaders of the two parties were to meet. Sir Charles Dilke intimated (Jan. 25) that he, as an independent Liberal, would prefer such a coalition Ministry to a Liberal Ministry proper, but, though the dinner and reception were given by Lord and Lady Wimborne at Wimborne House on February 5, the coalition did not follow.

Mr. Balfour attempted to define and defend the position of the Government in an address to his constituents at East Manchester (the first since he had become Prime Minister) on Monday, January 11. After a brief but significant assurance that in the event of a Russo-Japanese war Great Britain would " to the full carry out all her treaty obligations in regard to any of her allies,” he went on to the fiscal problem. He declared that the fiscal controversy to-day presented only a superficial resemblance to that of fifty years earlier, that the terms used were misleading, and that he himself was aiming at a Free Trade ideal-better relations with foreign countries and a closer union with the Colonies. With his customary dialectical skill he brought out seeming inconsistencies in the recent speeches of Mr. Asquith and Lord Rosebery, and defended his own position. Incidentally, he gave an emphatic contradiction to the “amazing legend” attributed to Lord George Hamilton that he had brought down two pamphlets to the Cabinet in September, representing alternative courses in fiscal policy. He would not go beyond the position taken up at Sheffield, because, to secure a closer union of the Empire, Canada would have to modify her Protective system, Great Britain to submit to the taxation of food; a tax on food was only justifiable as a means to Imperial union, and the acceptance of either position must be a slow process; and, in conclusion, he appealed to the Unionist party to learn from ecclesiastical history that an organisation once destroyed could never be repaired, and assured them that the Home Rule question was only temporarily in abeyance.

Next day, however, speaking at a luncheon in Manchester, Mr. Balfour hinted at another means—whether supplementary or alternative was not quite clear-of promoting the union of the Empire. He urged Unionists to meet new circumstances by new expedients, and, while claiming that the party was a party of fiscal reforms, advised them to regard, as far as possible, the feelings of the weaker brethren. With regard to closer union with the Colonies, he dwelt on the possibilities afforded by the new Committee of Imperial Defence, which ought to be and would be turned into a bond of union, so far as matters of defence were concerned, between the Mother Country, India and the various portions of the Empire. They were trying to

make the Imperial note not a matter of vague phrases but a practical matter. Finally, in a speech in the evening on Army reform, he disclaimed the interpretation put on his reference to the national defences after the election of 1895 as a kind of “character” given to the efficiency of other Administrations,

The net significance of these speeches was obscure. It was plain that the Prime Minister was trying to keep the party together, and to moderate the zeal of the Chamberlainite section; but it was inferred by his opponents that he was in sympathy with their aims and on the whole with their means, and was withholding his full co-operation merely as a matter of policy. Sir Henry Fowler at Wolverhampton (Jan. 12) and Sir Henry Campbell-Bannerman at Maidstone (Jan. 13) commented severely on the uncertainty of his attitude, the latter also laying stress on the danger of political corruption involved in Mr. Chamberlain's policy, and stating that the Liberal party would gladly accept the co-operation of the Free Trade Unionists, but they must be free to amend the Education Act and preserve the existing discretion of magistrates as to licensing. It was noted that he made no mention of Home Rule.

Mr. Chamberlain, meanwhile, on January 11, at a dinner of the Birmingham Silversmiths and Jewellers' Association, briefly alluded to the South African war and its results. If there was lack of preparation, it did not, he contended, become those who opposed all preparation for a necessary war to cast a stone at him. After a brief reference to his statement as to the importation of jewellery from Morocco, of which much had been made by the Free Traders, but which he ingeniously used to show the need of examining statistics, he went on to repeat his usual arguments.

Mr. Chamberlain completed his Tariff Commission a few days later by the inclusion of thirteen new members, of whom the most important were Sir Charles Elliott, a distinguished Indian ex-official; two representatives of Colonial interests—Sir Westby Perceval, Tasmanian Agent-General, and Mr. J. G. Colmer, formerly of the Canadian Office in London ; and two of banking -Mr. Vicary Gibbs, M.P., and Mr. Littlejohn. These brought up the total to fifty-eight. It was announced that a special sub-committee would be appointed to deal with agriculture, and that Mr. Percy Hurd, late editor of the Outlook, would assist Professor Hewins in the secretarial work.

The commission held its first meeting on Friday, January 15, at the Hotel Metropole, London, when Mr. Chamberlain delivered an address defining its aims. It was intended (1) to stimulate the national invention and industry by giving it greater security ; (2) to place the Government in a position to deal on better terms with foreign nations ; (3) to encourage trade within the Empire. To secure these results the country must abandon the superstition that tariffs should be solely for revenue. As to the prediction that a Protective tariff would make the rich richer and the poor poorer, the comfort of life was more evenly distributed in Protected nations than in Great Britain. In conclusion, he explained the special treatment of agriculture as due to the complexity of interests involved, and the non-representation of labour as due to the fact that the commission represented not classes but trades.

On January 18 Mr. Chamberlain closed his first campaign in favour of fiscal reform with a speech at the Guildhall of the City of London. “There can be no question," said the descriptive report in the Times, “ that he intermits [his campaign) now on the highest level he has yet reached, and that the achievement of his closing speech was worthy of the great beginning in Glasgow.” About 4,000 hearers were admitted by ticket, it being impossible to satisfy more than a fraction of the demand, and the enthusiasm of his welcome was immense, drowning a band which was struggling to perform the National Anthem.

Mr. Chamberlain expressed his regret that no resolution was to be submitted to the meeting : the more so because he was told that the arguments which might be successful in other great centres would have no influence there. He did not accept that view. He had pointed out that fifty years ago we altered our fiscal policy with the definite purpose of securing Free Trade with all the nations of the world. But we had never had free exchange; we had had free imports instead, which was a very different thing. Under this system, competition with our trades and manufactures had increased, and was altering its character to our disadvantage. Meanwhile, the prosperity of other countries which had not adopted this fiscal religion was advancing more rapidly than ours. Then he had urged that the future of this country depended mainly on its continuance as the centre of the Empire, and that every nerve should be strained to maintain that position. The City might be the clearing-house of the world, but its supremacy would be gravely imperilled by any serious decline in the national industries. In illustration of this, he pointed to the history of Holland, Venice, and the Hanseatic cities. The question was whether the policy of free imports, which might have been beneficial for us in the original circumstances, was still good now that circumstances had changed. He denied that the Board of Trade returns for the last year had, as was alleged, destroyed the basis of his contention. They showed that there had been a decrease in our exports to foreign Protected countries, and though that had been concealed by an increase in our exports to our Colonies, the increase of foreign exportations to those Colonies was still greater. He held that to maintain our Imperial position we must maintain our Imperial trade, and that unless we changed our policy our foreign trade would disappear. He analysed the trade returns of Germany to show that her export trade was increasing more rapidly than ours, and dwelt on the fact that, in spite of trade prosperity, there had been in 1903 a decline in

employment in this country. He cited various statistics to show that there was more steady prosperity in Germany than in this country, and closed with an eloquent appeal on behalf of the cause of Imperial union. “We have still,” he said, “a too provincial, perhaps I should say a too modest, spirit. In the great revolution which separated the United States from Great Britain the greatest man whom that revolution produced, according to my judgment, was Alexander Hamilton. He was soldier and statesman: and he left a precious legacy to his countrymen when he disclosed to them the secrets of union and when he said to them: 'Learn to think Continentally. And, my fellow-citizens, if I may venture to give you a message now, I would say to you : ‘Learn to think Imperially. I ask from you no serious sacrifice. I ask you to be worthy of your past; I ask you to remember that the future of this country which we all cherish so much lies in the future of the British race." We were to think of the Colonies, he continued, as they are now in their youth, as they will be in their manhood, and developing beyond anything we can hope for the Motherland. “ Think of them as they are ; think of them as they will be ; share and sympathise with their aspirations for a closer union ; do nothing to discourage them, but show your willingness to co-operate with them in every effort they make or propose. So, and so only, can you maintain the traditions of the past, the renown of this Imperial City, and the permanence of that potent agent for peace and civilisation which we call the British Empire.”

At the overflow meeting in the Guildhall Yard, where Mr. Chamberlain was a good deal interrupted by a few of the audience, he laid stress on the growth and union of the Empire, and declared that he wanted “that Britons all over the world should learn the lesson that they should treat each other better than they treat any one else.” At this meeting a resolution in favour of fiscal reform was moved by Lord Claud Hamilton, seconded by Major Coates, M.P. for Lewisham, and carried by an overwhelming majority.

Mr. Chamberlain's speech was communicated by electrophone to the Albert Hall and the People's Palace, and read out in both places to large audiences during its delivery at the Guildhall. It did not, however, produce all the effect that was hoped. It was pointed out that it did not deal successfully with the financial and banking objections to the scheme, and his references to the prevalence of a higher rate of interest in London than Berlin and Paris—for which one of the audience instantly assigned an obvious cause, the South African war, somewhat to the discomfiture of the speaker,-to the multiplication of foreign banks in London, and to Mr. Schuster's paper on the banking aspects of the proposal, showed an imperfect appreciation of the difficulties involved. Hostile critics, moreover, declared that the speech showed lassitude, and that the audience, though sympathetic, was inclined to be critical rather than enthusiastic.

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