268 ENGLISH SAGA

capital was sunk in the Empire without any continuing return.
A great deal of it was lost in inflated share values which could
only have been justified by years of patient development.1 Such
losses aroused deep-seated and subconscious distrusts. The
imperial financial bubble of the 'nineties left a nasty taste in
the mouths of men who might otherwise have wished well
to a broad plan of social development for the ill-distributed
populations who shared their allegiance.

But there was a deeper cause for the failure of the first attempt
to use British capital to develop the imperial heritage. Backward
and scantily populated territories can only be turned to profit
by a far-sighted use of credit. Under a system of private enter-
prise such credit can not be afforded unless there is a reasonable
certainty of an expanding and stable trade sufficient to repay
initial expenditure. Except as a quick gamble in share values,
investment in the British Empire seldom offered such certainty.
For so long as Great Britain stuck to Free Trade, its government
could not with the best will in the world afford sheltered markets
to young Empire industries. Other nations, wishing to foster
the growth of national industries, were able to grant protective
tariffs and bonuses. The economic faith of the British forbade
their doing so.

In 1897 Joseph Chamberlain, trying to develop a long-
neglected empire by parliamentary grants to agricultural in-
stitutes and schools of tropical medicine, received an offer from
Canada of a tariff in favour of British goods.- This was followed
by a resolution of the Colonial Conference in favour of imperial
preference. But without reciprocity in the home market to
increase the colonial capacity to purchase British goods, such
one-sided preference, however generous, could be no more than
a gesture. All that the Colonial Secretary and his chief, Lord
Salisbury, could do was to exempt the British nations overseas
from the operations of the amost favoured" nation clause by
which free-trading Britain regulated her commercial treaties.
This ensured that if ever the British people should abandon
the policy of free imports and be ready to offer tariff preferences
to their imperial kinsfolk, they would not be forced to pass on
such preferences to every other nation with.which they had
made a treaty,

1 "In 1920 the chartered shareholders received, after thirty years, their first dividend.
It was sixpence."—5. £. Mfflin, Rhodes, jtfj.