ask for the universal application of free-trade, and would yield nothing to those who regard such questions of trade to be not a science but a policy* to be adapted to circumstances, a strong case is already

* That free-trade is regarded as a policy to be adopted or rejected according to the necessities or supposed necessities of communities, is well illustrated by the actions of the various Australian colonies in their trade regulations. In New Zealand and Tasmania, islands, each under one government, the revenue is made up chiefly by customs duties; and in New Zealand they have been lately increased. In South Australia also, the chief port being insulated and not capable of being used as an entrepôt of trade, with other parts of Australia, ad valorem duties have for some time been imposed. The case of New South Wales, again, is entirely different. The port of Sydney possesses a large trade with the interior, for most of which there is so sharp a competition with other ports that it has even lost a portion of its trade. Sydney also has a considerable coasting trade, to which the same remark applies. It was not necessary, therefore, to try the experiment of protection to see the consequences of it, although the government had for a few weeks enforced a protection tariff. Business men saw that it would involve diminished trade, and thereupon, without troubling themselves with abstract theories, came to the conclusion that protection was unsuited to New South Wales in its present state, and voted against it. The ministry, too, were unpopular, and this helped to defeat them. In Victoria, however, protection is as popular as free-trade is unpopular in its sister colony; yet a protectionist ministry held the reins of power for more than a year in even New South Wales. 'It is fortunate,' says the 'Sydney Herald,' 'that the protectionist scheme in Victoria was not launched till ours was disposed of. Had they established their protection tariff, pushed as we were for revenue, we would have been in greater danger of being drawn into it.'

made out in favour of customs duties in countries thinly settled and possessed of little wealth, where the expenses of collection would equal or even exceed the sums realized. But the question in Canada is not entirely between direct and indirect taxation. They seem not unwilling to give protection to certain manufactures so far as to encourage their establishment, but only to such as, being firmly rooted, would stand without any further assistance. They reason thus. We, they say, have the raw material, the wool and the flax for example. We now pay all the cost and charges on these to England and back; packing, carting, wharfage, insurance, freight, &c. both ways; we send the food to feed the manufacturers. Our products, as those of all agricultural countries, are of great bulk, and the expenses of transit enormous. If we can get the capital, the machinery, and skilled labour established in our own country, we shall save all the expenses just enumerated. We shall economize much labour in new fields of enterprise for those whose inclinations or habits better qualify them for manufactures and the arts which they foster, and for those, never an inconsiderable proportion of any people, who are incapable of profitable employment in any other pursuits. We shall add another population to the agricultural; we shall secure customers

at our own doors in the numerous manufacturing communities in our midst for the products of our gardens and fields, now unsaleable. Protection will make us at first pay a higher price for these wares, but experience has proved that competition in our midst will bring down the price again. But even if

it should not, we are compensated in the better markets for our products, in the lessening of our taxes by the increase in our population; one kind of manufactures will beget another, and these again others; commerce will multiply, and with commerce another population will be superadded. England, as a purely agricultural country, could not support more than 5,000,000 souls; her manufactures add another 5,000,000, and commerce another five. But another consideration, not very distinctly defined nor often expressed, is ever present in the minds of her statesmen and scholars. War may come, as it comes to all nations; few generations pass away without carrying with them sad memories of its devastation. War may come upon them in their weakness and in their infancy, and they may be shut out from all the world, as were the old thirteen colonies, and as are the new Confederate States, without the manufactures necessary for defence and for domestic purposes. Admitting the doctrine of the disciples of free-trade, that protection checks a nation's progress, how small

an ill would this be in comparison with what the Southern States, and especially the old colonies, suffered when first they began their struggle for all that a people hold dear. In the midst of war with a great and warlike nation, and with their ports blockaded, they created their most necessary manufactures. While learning to make the cannon and the musket, the powder and the ball, they were training the men to use them; they were making at the same time an army and a navy, and laying the foundation for the most necessary manufactures.

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CHAPTER VIII.

COST, DEFENCE, AND ADVANTAGES OF COLONIES.

Report of Select Committee of House of Commons on Colonial Expenditure, 1861-Classifications-Navy chiefly to Defend British Commerce-Expense would be greater if no Colonies -Military Posts-Vast Trade with Colonies with little Cost -British America: its Population, Defence-Erroneous Opinions on Expenditure-Foreign Relations of ColoniesContrast between old and new- -United States an Aggressive Power-Colonies if cast off-Mother Country and Colonies -Profits of Trade enormous-Fields for Surplus Population -Capital and Labour more Productive-Trade greatest with Colonies Defences. Pp. 89-128.

THE Imperial expenditure for colonial military and naval purposes contained in the Report of Mr. Mills' Select Committee is that for 1860. The dependencies of the British empire are there divided into two classes :

1. Those which it is stated may properly be called 'colonies,' the defence of which is undertaken mainly for their own protection, though they may in some instances contain within their boundaries posts held for Imperial purposes. To this class belong the