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At the start of the 20th century there was hardly a country outside continental Europe, which did not find their neighbours under some form of British influence. Consequently, trading between colonies and independent states extended British commercial opportunities.
Furthermore, Britain controlled the economic valuation of the world because many important trading nations had succumbed to Britain's insistence on a gold standard. Britain traded with gold as the convertible currency of Sterling. So in theory, the British could govern every aspect of the colonies. In practice, this was increasingly unlikely to continue. For example, why should Canada not have had a special trading relationship with America? But if America had special trading relations, then tariff barriers might be established to the detriment of others in the Empire. Independent colonial ambition could weaken the Empire's strongest point - economics. Subsequently, in late 19th and early 20th century Britain, there emerged the notion of empire government - a constitutional exercise in federalism. As colonial secretary, Joseph Chamberlain saw this as the grand scheme that would bring all the colonies together at some huge round table. Chamberlain was really asking the Cabinet to accept a concept of a Greater Britain.
Chamberlain believed that the British Empire was in danger of going the way of other empires. He was also of the opinion that like past imperial masters, the British could disappear to no one's great regret and be seen as having accomplished nothing more than selfish rule over a quarter of the globe. So by the end of the 19th century, the concept of Greater Britain was at least a debating point. Chamberlain's thinking went beyond the free trade policies he thought could be self-defeating and which the Treasury instinctively adhered to. In 1902 Chamberlain was saying that Britain could no longer afford to practice economic pedantry as he called free trade. Britain, Chamberlain said, had to realise that unless she co-operated with her colonies and so kept British trade in British hands, then economic disaster would follow. Empire mattered only because her markets mattered.