It is not surprising, therefore, when regard is had to the extent and extra ordinary characteristics of the oversea countries subject to the British Crown, that the zollverein ideal has taken a prominent place in British polities. And it is not impossible, from the point of view of precedent, that Canada, though continuing a British possession, should join a foreign nation, such as the United States, in an Atnerican zollverein. Thus, since 1867, the Grand Duchy of Luxembourg has been recognised as politically a neutral territory, but nevertheless, for com mercial purposes, it is yet included in the German zollverein. Again, in 1898, the then independent Republic of the Orange Free State entered into a customs union with the British South African colonies ; and afterwards, by a convention agreed to in March 1903, the successor of that Republic—the present Orange Inver Colony —became a member of a re-established general customs union between all the British colonies and territories of South Africa, including Basuto land and the 13eclitianaland Protectorate. It must not be forgotten, however, that in this South African zollverein, as in its German prototype, there were no import ditties between one another of the constituent territories, the essential object of the association being mainly the adoption of a common tariff of import duties as against the rest of the world. Now, almost as a natural sequence, the colonies of the Cape of Good Hope, Natal, the Transvaal, and the Orange River are uniting, as from May 31, 1910, in a Legislative Union under the name of the Union of South Africa. Customs unions identical with the political confedera tions to which they correspond, such as those of the United Kingdom, the United States, Switzerland, and Austria-Hungary, need only to be referred to in passing. They are of a character that can teach nothing of material import ance in a discussion of the zollverein issue as now before the public.
It is sufficient, for present purposes, to note at this point of our inquiry the conclusions which must inevitably be drawn from a consideration of the thre going facts, which present the salient features of a zollverein, or customs union, comprised of more or less independent units. There is obviously a tendency towards the union, as extensive as possible, of independent foreign states, the object being the abolition of tariff restrictions as between the anociated states themselves, and the presentation to the rest of the world of one enlarged and more powerful fiscal unit. Such a union may include countries which are actually the possessions of states not parties to the union, and, therefore, a state which desires to retain wholly a possession likely to be incorporated in a foreign zollverein is bound, of necessity, to afford it some advantage equivalent to that offered by the possible zollverein. Fiscal union may reasonably be regarded as but
a stepping-stone to political union. The British colonies are themselves, where it is geographically possible, inclined to resolve themselves into customs unions.
In addition to the foregoing, it may be added that the general fiscal policy of the British colonies is that of protection, a statement abundantly proved by the tariffs of Canada, Australasia, and British South Africa. And further, it may be hazarded that those colonies enjoying in any appreciable degree the advantages of self-government, are inclined to revert to the British colonial policy in vogue until the period of the domination of the principle of frce-trade—a policy of preferen tial tariffs with the mother country. That policy was such that those colonies had up to the period mentioned enjoyed advantages over foreign countries in British markets for many of their products, and in return they had often submitted to trade restrictions imposed by the Imperial Parliament. Canada unhesitatingly led the way in this respect by granting certain tariff preferences to British imports, and this she did in the fa.ce of a foreign opposition which for some time bade fair to end in a tariff war between Germany and Great Britain. But such a war WaS quite impossible. Germany was faced by the inexorable conditions of her own existence as a commercial power, and by them, more in fact than by purely politi cal considerations, was forced to restrain her opposition. Then, too, the Colonial Conferences of' 1887, 1902, and 1907 were made the occasions of striking indica tions of the feeling of the colonies on this question of preferential tariffs. In that of 1887, Cape Colony proposed a plan of preference, including an incidental scheme of imperial defence, which was urged as tending to " establish a feeling on the part of the colonies, that whilst they were paying for the defence of the empire, they were at the same time enjoying in British markets and inter-colonial markets certain advantages which foreigners did not enjoy. That would establish a connecting link between the colonies mutually as well as between the colonies and the empire also, such as is not at present in existence, and which might further develop by-and-by into a most powerful bond of Ulli011." Ill the Confer ence of 1902, resolutions were passed which counselled the colonies to give pre ferential treatment to the United Kingdom, and urged the United Kingdom to (I() likewise witli .regard to the colonies. And the colonial premiers there assembled undertook to reconnnend their respective governments to adopt such preferential tariffs. Now other colonies have joined Camada in preferring British imports. In March 1903 the South African Customs Union Convention was agreed upon, and very noteworthy are Articles III. and IV. thereof :—