Correspondence.

Feilding Star, Volume XVI, Issue 143, 13 December 1894, Page 2

Correspondence.

FREETRADE AND PROTECTION IN AMERICA. TO THE EDITOR »F THE STAK. Sir, — I showed in my last how that the foreign trade of New Zealand was a refutation of the leading articles of the Freetrade faith iv the matter of the excess of exports. I will now turn to Great Britain and beard the Freetrade lion in his den, " The Douglas in his his hall." It is popularly supposed that the Old Land affords quite an opposite illustration to that of New Zealand, and yet has steadily marched to wealth and prosperity. It is true that if we take the foreign commerce of the United Kingdom— the exports and imports— there is a large balance in favor of the latter ; but it is here that Great Britain is unique among the nations. Her trade with other countries ianot confined, as theirs are, to the purchase and sale of merchandise ; she lends them her money. That's where the difference comes in. It is because she has lent, and is lending so enormously, that she buys abroad more largely than she sells. In proportion as the volume of her foreign loans increases, so does her excesss of imports over imports. To fairly compare the foreign trade bf Great Britain with countries that have little or no money lent abroad, the annual interest derived from her loans to other nations has to be capitalised and added to the annual exports. Why ? Because in the exchange of products with her neighbours two sums enter into account — the gross value, and the profit made, e.g., we in New Zealand send our wool Home and get it back manufactured the value of the transaction to Britain lies solely in the profit made in the manufacture and re*sale. Suppose then that Britain's annual interest from foreign loans amounts to £100,000,000, the capital sum which that represents has to be added to her yearly exports. That done, on which side is the balance then found ? That is the secret of her prodigious increase of wealth. We may thus also see how it is that, notwithstanding New Zealand's handsome excess of exports, her yearly bill for interest (public and private) of considerably over £'3,000,000 sent out of the country is more than a counter, balance, and instead of the excess of exports being added to the national wealth it is not sufficient to put the account on the right side. Another fenillusion that Freetraders have hugged to their bosom with that blind devotion which is their chief characteristic, is that which I shall call for want of a better term— mutuality of trade. They tell us that if we don't buy abroad we can't sell abroad. The biggest fallacy of the host is this. Why doesn't it cut both ways, and why not take England as an example ? She buys abroad one hundred millions more than she sells ; aud what about New Zealand, what about the United States ? During the last thirteen years the latter has sold abroad £330,000,000 more than she bought, and her exports reached the highest point during the currency of the McKinley Tariff — a tariff that was, so Freetraders said, to shut her out of the markets of the world. I am, etc. Patriot, Feilding, December 18th, 1894.