the economic situation of our country in all its aspects and to determine a policy for the future. We are engaged upon these matters at the present time and will be so engaged during the coming year. On the present occasion we propose to hear the views of the other Delegates, to take part in the discussion of subjects in which we feel we can legitimately assist, and on other subjects to keep an open mind, learning from the deliberations how best we can improve our economic relations with the other nations here represented. We will then return to our country so that, in consultation with our own people, through their representatives in the Dail and through the associations directly concerned in economic matters, we may work out our policy for the well-being and prosperity of the Irish Free State and for the development of its economic intercourse, to our mutual advantage, with the nations whose representatives I have the pleasure of addressing.

OPENING SPEECH BY MR. WARREN.

Mr. President, my Lords and Gentlemen, as the hour is progressing I do not propose at this moment to go into any details as far as our participation in this Conference is concerned. I am reminded of an axiom that sentiment and business cannot go together profitably. I do not think that axiom can be applied in this particular case, because I am firmly convinced that this business, combined with Imperial sentiment, will lead to very, very good results and much more business.

Newfoundland's Benefit from Trade Facilities Act.

Mr. President, I want to take this opportunity of expressing the gratification of the people of Newfoundland to the British Government for giving us an opportunity of availing ourselves of the privileges of your Trade Facilities Act. That Act has had a marked effect on our local productions in Newfoundland and has given us such a start in the development of our water powers that I do not think that we shall in the future look back with any feelings other than those of satisfaction at the undertaking. The introduction of capital, as has already been pointed out by those who have preceded me, is very necessary. Under that Act we obtained all the capital we wanted. We are now starting fresh industries of a similar nature as the result of your Trade Facilities Act. England is not one of our markets, but we have products which you can buy. Later on during the Conference I propose to point out some of these to you.

In conclusion, Mr. President, I would like to emphasise one point that you made, and it is this: I do hope that any resolutions that are passed by this Conference will be translated into action.

OPENING SPEECH BY MR. INNES.

I am very grateful for this opportunity of saying, on behalf of India, a few words at the opening of this very important Conference.

Special Character of Conference.

There have been Imperial Conferences before and these Conferences have passed important resolutions on economic subjects. But this Conference has a special character of its own. It has been summoned definitely for the purpose of considering economic questions. All of us who will take part in the discussion of these questions have some special connection with the trade of the country we represent. It is our ordinary day to day business to watch the movement of our country's trade, to try to disentangle the causes which make for prosperity or depression, to study the distribution of trade and to do our best to ascertain why the channels sometimes flow freely, sometimes are sluggish, and why they tend from time to time to alter their direction. And since we devote so much time to study of this kind, I am sure that there is not one of us who does not realise the difficulty of the problem. The main and more superficial factors are usually plain enough. But in the vast complex system of international trade, there is the interplay of innumerable factors, many of them very obscure, and most of us know, probably by bitter experience, how difficult it is to forecast the effect of any action in regard to trade which a Government may take. Reactions are apt to be set up, often in the most unexpected quarters, and long views are necessary. For the action which seems wise at the moment may prove to be the reverse when its full effects have had time to declare them. All these are commonplaces, of course. it is just because we are so familiar with considerations of this kind. that the conclusions of this Conference should be so valuable. Further, the considerations I have mentioned necessarily appeal with special force to those of us who are connected with the Government of India.

Position of the Government of India.

In India, until quite recently, the Executive Government was solely responsible for any action it might take, and its responsibility therefore was peculiarly heavy. Now we have made a considerable constitutional advance, and I am glad to say that the Executive Government is assisted by a Legislature which is mostly elected and which has large powers. To that extent the load of our responsibility is lightened. But even so, everyone will recognise that a special measure of responsibility rests upon an Executive Government which still does not depend for its existence on the will of the people as expressed by a legislature elected by the people. I take it that in our deliberations on every subject each of us will have to consider first what is in the economic interest of the country he represents. We shall then have to consider the interests of the Empire as a whole and how far the interests of our country can be brought into accord with the general interest. And always it will be necessary to bear in mind what is politically possible in our own countries. Interests of course do not always coincide. That would be too much to expect in so far-flung and so diverse an Empire. But I look for nothing but good from a frank interchange of views, informed, as they will be, by a sense of our common ties, and, as far

as India is concerned, I can assure you, Sir, and the Conference, that we are here with every desire to help.

General Economic Outlook.

I need not state the problem. You, Sir, have already done that. Behind all our discussion stands the spectre of Europe, particularly of Central and Eastern Europe. In large areas of Europe, formerly among the most prosperous of the world, we see the exchanges disorganised, credit impaired, purchasing power reduced, and the whole mechanism of modern trade gravely injured. That is one side of the picture. On the other side we have great countries intact, or almost intact, willing and able to produce and sell, some their manufactures, some their raw materials. They are suffering from loss of markets, and they are unable to buy as much as they did before the war because they cannot sell so much. That is the trouble. We are all suffering from it in a greater or less degree, but I think that we are all agreed that the country which is suffering most is that country to which we all owe so much, namely, Great Britain. Every one must look with sympathy upon her appalling unemployment problem. Every one must admire the way in which she has tackled the enormous economic difficulties bequeathed to her by the war. Personally, I have had a good deal to do in the last two years with the purchase of railway and other material for India. I have been astonished at the way British manufacturers have brought their costs of production down. They could not have done it without the co-operation of their workmen. They are having a hard struggle, but since British capital and British labour have shown such determination to overcome the difficulties with which they are confronted, I have no fear myself but that they will win through.

Effect of War on India's Trade and Finance.

With your permission, Sir, I should like now to make a few general remarks about India's trade and about the effect which the war and the aftermath of war have had on that trade and on India's financial position. Generally speaking, it may be said that India imports mainly manufactured goods and exports mainly raw materials and foodstuffs. Our imports come mainly from the United Kingdom, and our exports—and this is a fact which in India we have always to bear in mind-go mainly to foreign countries. Last year 60 per cent. of our exports, which in normal times greatly exceed our imports, went to foreign countries, only 22 per cent. to the United Kingdom. Our total import and export trade has averaged in value in the last three years £366 millions per annum. The figure is large, but it is inflated by the rise in prices, and when we revalued our trade at the prices prevailing in 1913-14 we found that in volume it had retrograded. The real loss in 1921-22 compared with 1913-14 was no less than 28 per cent. Thanks to the war and the disorganisation caused by the war, we sell less and therefore we buy less. This decrease of trade hits us in many ways. It affects most of our sources of revenue-our customs, our income

tax and our railway receipts. The war again, and the great increase of prices which followed it, enormously încreased the cost of the Administration, and at the same time it left us faced with the necessity of incurring heavy expenditure in order to restore our railways and other public services to efficiency. Taxation has been increased to an extent which a few years ago would not have been thought possible. Nevertheless for five years in succession we were unable to balance our budgets. The aggregate deficits indeed in these five years amounted to more than £66 million sterling-a gigantic sum for so poor a country. I think I may claim that India has tackled her problem boldly. We have taken as our text the dictum of the International Conference at Genoa in April 1922 that one of the essential requisites of economic reconstruction is a balanced budget. As I have said, we have increased taxation, and in many of our import duties I think that we have reached the limit of productiveness. With the help of Lord Inchcape, we have cut down. expenditure drastically. Thus for the current year we have been able to balance our budget, and as a result I think I may claim that India's credit stands high.

Private enterprise is engaged in the same painful process of retrenchment and reconstruction. The brief boom which followed the war was a period of unhealthy speculation and company promoting. Many of these companies have already gone under; others are having a hard struggle to keep their heads above water, and there is at present not much inclination in India to put money in new industrial enterprises.

That, Sir, is a brief and very inadequate outline of the effect of the war on India's trade and India's finance. Things are undoubtedly better than they were. There seems every prospect of good crops for the second year in succession, and that is a matter of first importance to the peace and prosperity of India, where twothirds of the population live on the land. What we want now to set our finances right is a real revival of trade.

Policy of Discriminating Protection recently adopted in India.

I do not wish in any way to anticipate the discussions of the subjects on the Agenda, but I wish to develop one or two points of a general nature arising out of what I have said. It seems to me that this Conference will not realise its full value unless we understand one another's circumstances and problems.

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I have referred to the fact that India at present exports mainly raw materials and foodstuffs, and imports mainly manufactures. I ought to mention that India is not content indefinitely to acquiesce in this position. She has declared recently in favour of a policy of discriminating protection. That is, she proposes to see whether those industries which enjoy a comparative advantage" in India require protection, and, if so, whether they should be protected. This is not the time to discuss the merits. of this policy. I am aware that it has caused some alarm in this country, but if, as we hope, the result of this policy is to increase the wealth and productiveness of India, then, Sir, those who trade

with India have nothing to fear. Already that trade is considerable in volume, but it is small in comparison with the size of the country and the population. In India we have 315 millions of the peopleroughly one-fifth of the human race, and if only we can raise the standard of living of these millions and increase their capacity to consume goods, India's potentialities as a factor in international trade and as a market are almost limitless.

India Britain's Best Customer.

I have already said, Sir, that the course of India's export trade is somewhat special. In 1921, 86 per cent. of New Zealand's exports went to the United Kingdom, 76 per cent. of South Africa's exports and more than half of the exports of Australia. India sends little more than 20 per cent. of her exports to the United Kingdom, and that, as I have said, is a fact which we in India have always to bear in mind. I now wish to bring out a striking fact regarding India's imports. As everyone knows, we make no discrimination in our import duties. At present our tariff is purely a revenue tariff, and it is the same for all. Nevertheless, India is by far Britain's best customer. She takes a greater proportion of her imports from the United Kingdom than any other Dominion. Her imports from Britain in the last three years have averaged annually £129 million sterling. That is, she has bought in this period from the United Kingdom as much as the three great Dominions of Canada, Australia and South Africa combined. It is a noteworthy fact, Sir, that this great trade is the result solely of the millions of British capital spent in India, of long-established and very perfect trade shipping and banking connections, and of careful study of the requirements of the Indian market. Most of these imports are manufactures, and in spite of the difficulty with which he has to contend, the British manufacturer has practically recovered his pre-war predominance in this part of India's markets. Before the war he supplied 76 per cent. of India's purchases of manufactured articles; in the year ending March last he supplied 73 per cent. And this wonderful result has been attained by what is, after all, the main thing in business, namely, perfect organisation and strict attention to economy in production.

New Development Schemes.

But it may be said, Sir, "That is true-India is already buying much-but cannot she buy more?" I have no difficulty, Sir, in answering that question. I have just explained our financial position and have pointed out that we have recently had drastically to cut down the cost of our administration. But every thinking person in India is agreed that what India wants is a bold constructive. programme of development, in order that full use may be made of her great resources. Large sums have been set aside for the rehabilitation of her Railways, and I hope that we may be able to embark on some new construction. On railway material alone we spent, last year, almost entirely in this country, more than 8 million sterling. Other development schemes are in contempla