A SCIENTIFIC TARIFF

Dominion, Volume 11, Issue 249, 9 July 1918, Page 6

A SCIENTIFIC TARIFF

HOW GERMANY SCORED IN THE PAST MR. G. B. LAURENSON ON' TARIFF REFORM Mr. G. B. Laurcnson, of Christ-church, ex-president of tho Industrial Corporation of Now Zealand and of the Ironmasters' Association, who was a visitor to Wellington on Saturday, was interviewed by a Dominion representative on a subject of national importance—the advantages to bo gained from having a Customs tariff that could be readily adjusted to meet any change in conditions, as opposed to a stiff, hard-and-fast tariff such as wo havo in New Zealand. Mr. Laurcnson said that a scientific tariff was ono that was so framed that it acted in the direction of increasing industrial enterprise; it protected tho manufacturer and the consumer, and could bo/used either in a friendly or a hostile manner towards othor countries according to the trend of mutual relationships. Ho had been forced to that inevitable, conclusion after the study ot at least sixteen foreign tariffs, embracing those of Bulgaria, Canada, the United States, Germany, China, Japan, France, Italy, etc. If we dealt more particularly with the German tariff it was on account of the fact that Germany had absorbed all the best points of other tariffs, and had applied them to the development of her own internal trade. The German tariff contained three main headings—firstlv, a general tariff; secondly, a preferential tariff; and thirdly, a most-favoured-nation clause. The first represented a tariff for revenue and protection purposes; the .second for the benefit of those countries which allowed comparatively free-entry for German goods; and the third was designed as a weapon to force other countries to'give special consideration to Germany s shipping interests. When one considers how great a pull that amounts to in the world's, trade, and remembers that all Gorman shipping"was subsidised by the Government, one is quickly able to grasp tho strength and mobility of the berman tariff and its potoncy in trade. On the other hand the United Kingdom was practically Customs free. Her ports were free; her trade was free for thoso who could supply,-and her Navy, was in existence for the purpose of keeping open and making safe all. trado. routes lor Jew and Gentile alike. Opposed to this generous world-wide freedom was the Hun-secret, deceitful, and spving-even into the Kings Palace - aggressive, treaty - scorning and treaty-breaking-using our freedom for its serfdom, our humanity for its Belgium, and- our struggle for the weak for its "might is right"~and .we had never 6een itl , If such were the case, pur only cliance in New Zealand was to develop present resources, and prospect a 1 possible resources, so that we could Uvo secure within our own borders, developing our latent wealth, and employing our own people. "To show," said Mr. Laurenson, how other countries developed their industries-, let mo give you a few illustrations. If a snip trading in Chinesewaters requires a now boiler and gets it in Scotland, tho shipping company concerned is charged 20 per .:cnt. ad valorem on the amount expended before tho ship is allowed to trade again in Chinese wateis, the samo being a chargo by the Chinese Customs. In Germany dutiable goods piocccding from States that treat German shins and products loss favourably than thoso of other nations, may. in addition to the duties provided in the tariff, bo burdened with a surtax not exceeding twice the tariff rate .ropqsed on such goods or else, a Burtax equivalent to the total value of the goods themselves. Tree goods may, under the same conditions, be taxed with a duty not exceeding 50 per cent." Mr. Laurenson interpreted ft scientific tariff to be a measure (1) for Hie increase of industries; (2) the protection of the manufacturer; (3) the protection of the consumer (who is never protected except in Germany); (4) for getting material not available within from outside; (o) to enable a country to get the best possible trading conditions for trading in outside ports. The first, goes without saying. The second—assuming that the existence of an industry is in danger of extinction through any cause, such as cheap lahour, dumping, subsidies, and such like, tho whole should be placed before ft tariff board (it is a commissioner in Germany), and if the board were satisfied that any or all of tho conditions eon-plained of were operating, he could at once Increase the tariff to meet tho case. To protect the consumer, if it ;ould be proved to tho satisfaction of the board that a manufacturer, under tho protection of the tariff, had unduly increased prices, tho board could remove all or part of the duty, and so bring tbout the required redress. As to number four, that was arranged under the preferential heading of the 'ariff, so that supplying countries would get certain advantages for such goods as it was lesired to introduce. As 'to' the ifth (to secure the best trading condi;ions)—under the most-favoured clause of ,he German tariff that was secured, bolauso it was enacted that any nation disiriminating against German shipping should not receive the benefits of the dause, and, of course, vice versa. To show how rapidly the German tariff | sould act and re-act for the benefit of jermany against another country, Mr. Laurenson gave the following illustration, tn 1905, two years before the enactment )f the New Zealand preferential tariff, :he percentage of'free goods from Germany was 23.40 per cent, of tho whole, ind of dutiable goods from Germany 76.60 lev cent. In 1913 the former (free goods) vas 49.22 per cent., and the dutiable joods 50.78 per cent, showing, the vast lifference before and after New Zealand mposod her preferential tariff. During ;hat period Germany actually increased ier exports to its from ,£274,279 to £687,935. The United States, on the ither hand, although highly protected, lid not, in the same period, increase hor Jxports in anything like the same proportion, as her freo and dutiable ratio 'eniained practically the same. Tho esson'to bo learned was that a tariff to )o efi'cctivo must bo elastic and adjustible to meet tho - varying conditions of :he world's trade. : Mr. Laurenson said that he had merely mtlinod the subject, and said that before iny tariff became law the best inlelli;enco. business experience, and the most ;arcful consideration should he brought :o bear upon the whole question. It vas high time tho Government took the matter in hind and sot up a tariff board )r commissioner to review our trado, and the possibilities of its expansion, and annulate a scheme for making the tariff ilastic, co as to meet tho questions which must, and will, arise on the termination if tho war. Mr. Laurenson said, in re'erring to one phase of tho tariff ques;ion, that in one year the Canterbury' College engineering class had turned out ibout twelve higlily-credentialled and ible engineers. In less than two years inly one of those twelve was left in New fcahtnd. One went to Borneo; one to Bangkok; one to Australia; one to tho strails Settlements: and others to different parts of the world; and, tho education of those men was largely paid for >y the people of Now Zealand. Had wo >et.n under an elastic tariff (such as is low suggested to be sot up), manufacturng, to be moderate, say, one-half of our mportations, we could have found cmiloyment for that trained intelligence, nstead of it being allowed to drift away :o other countries'more intent upon developing their resources than was New Zealand.