economics and politics within the British Empire. In particular it disclosed the beginnings of imperial protectionism in the Preferences which had begun to operate in 1898. The general course of Canadian trade during subsequent years showed that, while the tariff had checked the pace of the decline which had been taking place in British imports, it had not stopped that decline, and that the general course of Canadian trade, both import and export, was flowing more strongly than ever towards the United States. This was only natural, because in many classes of raw materials and foodstuffs the United States had a virtual monopoly of the import market, while many of the special needs and tastes of Canadian consumers could only be supplied from American sources. Moreover, there was no intention in Canada to allow impediments to be placed in the development of her own rising manufactures by allowing the free competition either of British or American imports. Neither the theory nor the policy of Free Trade had any hold upon the politicians or business men of Canada, or of the other Dominions, which later came into the preferential ring. An absolute monopoly of the home market for the home producer was their fixed creed. How to reconcile this prevailing motive with a favourable market for Empire goods which lay outside home production without damaging their trade relations, import and export, with foreign neighbours, has been a problem of increasing complexity.
