DIPLOMACY 135 



persistently urged that they could not be bound by treaty 

 to abolish their bounties until Great Britain undertook 

 that they should no longer have to compete on British 

 markets with bounty-fed sugar. Having at last secured 

 the abolition of the bounties, the British Government, 

 at the earliest opportunity, turned round and declared 

 that they were about to readmit bounty-fed sugar to 

 their markets. The foreign governments were in a 

 position of great difficulty. They had no desire to 

 revert to the ruinous system of former days and they 

 had to give in. 



Russian sugar, with its bounty, was to come in without 

 let or hindrance. There was a great flourish of trumpets. 

 The system of restricted " importation " was to be 

 abolished. This was really all moonshine. The world 

 produced 14,000,000 tons of sugar, and we consumed 

 one million and a half. There are at least 12,000,000 

 tons (the rest goes to the United States) from which we 

 were free to make our selection. There was, therefore, 

 no restriction. Russia, it appears, after sending her 

 usual exports to Finland and Persia, had an average 

 surplus of about 40,000 tons, some of which might 

 come here. What is this drop in the ocean of 

 14,000,000 tons ? As it happens, Russia had then no 

 surplus. So much for restriction of imports. 



There were loud cries, when the Convention was 

 coming into force in 1903, that the price of sugar would 

 be raised enormously. Great political economists, with 

 a turn for mathematics, sat down and calculated the 

 exact figure. Our consumption, they said, was 1 ,600,000 

 tons, and the bounties were 5 per ton. Multiply the 

 consumption by five and you get 8,000,000. Behold 

 the loss to the British consumer ! They were not 

 aware that price is governed by supply and demand 

 and by nothing else. But, nevertheless, the figure was 



