THE FISCAL QUESTION.

Press, Volume LXIII, Issue 19139, 24 October 1927, Page 11

THE FISCAL QUESTION.

TO THE EDITOR 01 THE PBE3S. Sir,—l hare read with very much pleasure and approval your leading article of October 6th under the caption "Tariff Problems," and must compliment you on your courage in tackling the vicious system of protection,' ivnicli has, hitherto, claimed Hie support of most people in the Dominion, though light'* seems to bo slowly dawning. Every professor of political economy knows that the protectionist case is riddled with fallacies, but then everyone is not an economist, otherwise the policy-would.never have been tolerated, if it were generally recognised (mere lip service is not enough' that foreign trade is a matter of exchange, tho numerous Mutt-theories which do duty for "argument" amongst the advocates of tariff walls would soon droop and die. The idea that imports mean the sending of money out of the country, when all that happens is that money's worth comes in and money's worth goes out, would cease to have any vogue, and its twin argument that in patronising foreign goods we are employing foreigners at the expense of our own workers would no longer be used. Clearly, if trade is exchange, the foreigner must employ us before he can get paid. I notice a plea is made for protection on the grounds of combating foreign monopolies. Even if there is anything in the point, a protective tariff is not tho remedy. Far better to grant the local industry affected a State bonus, rather than a charter to tax the people privately. The bonus system will not advance prices of the industry's products and will therefore not react against other industries in the way tariffs always do. h would also be less liable to abuse. For instance, it is better to pay a New York policeman a stated! sum for doing his duty rather than let him pay lifm^clf. by levying on the citizens on his own account. But the claim re foreign monopoly should not'be swallowed whole. .Faked statistics have been put up by Australian protectionists claiming to show that the price of Really made agricultural machinery is lotaer in the Commonwealth than is duty fr.ee price. I have boforcjTie sworn evidence proving that unfair comparisons were made; machines of different weight, quality, and equipment being used disingenuously fnr the 'purpose of deception. Also, the price at the Commonwealth factory was compared with the prices free to the consumer's nearest railway station or port, in-New Zealand. A pertinent question is, why cannot the Australian makers capture the New Zealand market? However, my chief reason for writing this letter is to point out that the fiscal question.is not fundamental. There is the direst poverty and misery in free trade and protectionist countries alike. Although the tendency of free trade is in the direction of more wealth and more profitable employment, and the tendency, of protection is in the opposite direction, the ultimate result of both policies is very much the same to the great mass of the people. The reason is because a small class of the community,, the landowners, is in a posi-. tion "to appropriate the advantages which come to' a country through 'free trado and, for that matter, in any other way. If free trade were adopted with the result, as. is likely, that the farmers' earnings would greatly increase, 'no permanent benefit would accrue to the workers generally. The fact that farmers were making good money would soon become known. People would bid for their properties. Land agents would get busy. Land values would rise and eventually be pushed up by speculation, .in which farmers themselves' would join, -rto the breaking-point, then would come the slump; • with things "as you were. Farlngrs, who .were,, also landowners, would temporarily benefit, but their sons, wishing to, take up land, immigrants and others likewise, would findl all the advantages of free trade, or other beneficial system, would he capitalised in tho price of laud. /*" ose who drew prizes in the land lottery would come into the cities and retire on their gains, and they, and they alone, would come out on top. the land question is fundamental, and the element of gambling must he eliminated before any permanent good! can result. Land speculation cannot be ousted so'long as private property in land obtains. The remedy is to bo found in the collection by the .State of the full rent of all the land of the Dominion. This system must exclude all. improvements of whatever kind, dealing with the bare land only. It cannot he put into full operation ma dov, but should he gradually, brought into force by increasing the land values tax, and repealing, pari passu, all other taxes.—Yours, etc., Auckland, October 20th.