134 SUGAR 



to prohibit the importation of bounty-fed sugar. This 

 appears to have arisen from some curious superstition 

 on the part of the British Government that a duty might 

 be regarded as contrary to the principles of free trade, 

 but that prohibition could not fall under that 

 stigma. 



If this was the idea it shows a curious want of grasp 

 of the subject. A bounty destroys free trade in the 

 country which receives the bounty-fed commodity, 

 because the producer of that commodity is at once 

 placed in a position of favour as compared with his 

 competitors who receive no bounty. The foreign pro- 

 ducer is practically protected by his bounty in British 

 markets if his sugar is allowed to be imported in open 

 competition with sugar which receives no bounty. The 

 effect is exactly as if the bounty-fed sugar were admitted 

 free and the other, receiving no bounty, were struck 

 with a duty. To eliminate this inequality is the sole 

 object of the countervailing duty. It is, in fact, a duty 

 on bounties, not on sugar. It accepts the bounty for 

 the benefit of the whole nation of taxpayers by putting 

 it into the Treasury, and leaves the sugar to compete 

 with all other sugar on equal terms. Therefore, under 

 a system of countervailing duties we do not lose the 

 benefit of the bounty, we do no injustice to the bounty- 

 fed producer, and we save the consumer from the danger 

 to his interests arising from the effect of bounties in 

 discouraging and eventually destroying his natural 

 sources of supply. None of these arguments can be 

 used in favour of prohibition. 



The Convention expired in 1908 and had to be renewed. 

 The British Government, generally so simple-minded 

 and easily over-reached, did a crafty thing. Five years 

 previously they had yielded to the reasonable demand 

 of the foreign governments who, for thirty years, had 



