THE Maoriland Worker DECEMBER 15, 1910. THE IRON INDUSTRY.

Maoriland Worker, Volume 1, Issue 4, 15 December 1910, Page 1

THE Maoriland Worker DECEMBER 15, 1910. THE IRON INDUSTRY.

The Ironmasters and Ironworkers of New Zealand are asking for a protective duty of 30% to 33%, and sent a deputation to wait upon the Minister of Customs. " The workers , representative s stated that they were satisfied it was not intended to increase the cost of products to the consumer, nor were they trying to increase their wages. ,, —Newspaper report.

It is difficult to conceive of more economic folly being expressed in so short a compass. Protection aims at giving a manufacturer a better command of the local market, by excluding or handicapping his outside rivals. Expei'ience has shown that when an industry becomes practically a monopoly, by excessive " protection," or by manufacturers in the same line of business entering into combination, healthy competition ceases, and the consumer is charged exorbitant prices. Apart from an increase of employment, labour receives no benefit at all; and the general public is " fleeced " all the time. There is no industry in which this can be more strikingly shown than in the iron industry. Sworn evidence before a Royal Commission in Australia in 1906 showed that a, stripper harvester could be manufactured in Australia for £30 to £38, and the landed invoice price of American strippers was £38 10s., including profits. Farmers paid £85 for these machines; wages in the iron industry were exceptionally low; and the Australian market was being flooded with American-made machines. It had been claimed repeatedly that protection would enable good wages to be paid. The New Protection proposals aimed at effecting this. In 1906 the Australian Parliament passed two measures for this purpose—the first increased the duties and fixed the prices of certain agricultural machinery, and the second imposed a license on all agricultural machinery not manufactured under conditions of labour considered fair and reasonable by both Houses of Parliament, or by the Commonwealth Arbitration Court, or by any State industrial authority.

But a flood of applications for exemption immediately set in, and Mr. Justice Higgins, the President of the Arbitration Court, selected one of the most important as a test case, and delivered the famous " Sunshine Harvester Decision." The judge stated that the Legislature 'had not laid down the general principles on which he had to determine whether wages were fair and reasonable, or the reverso. He felt satisfied, however, ths.t it- was not intended that the remuneration should be what employees will accept and what employers will give if left to the usual but unequal contest, " the higgling of the market, " for labour, with the pressure for bread on one side and the pressure for profits on the other. The standard the judge laid down was, therefore, " the normal needs of the average employee regarded as a human being living in a prcsumablj 7, civilised community," and he proceeded to fix t-ha

hours and wages accordingly. Thus closed the first chapter of the history of the New Protection.

13 at the decision was strenuously opposed, and ultimately the Act on which it was based was held by the High Court to be contrary to the Constitution of the Commonwealth, and a direct interference with matters reserved exclusively to the States. Later a Royal Commission was set up to enquire into the conditions of the harvester manufacturing and importing trade, and the report published about the middle of last year, was a very interesting contribution to economic literature. It showed that the American International Harvester Company had employed the usual "trust" methods to capture the Australian market, and that the danger to colonial producers was undoubtedly real and imminent. But if a practically prohibitive duty were imposed, it was admittedly necessary to protect the consumer against exorbitant prices charged by a local monopoly thus liable to be created. The workers' interests were supposed to be conserved by the New Protection, which insisted on fair industrial conditions. But, in spite of these efforts, the Majority Report of the Commission stated that much more needed to be done, and it recommended " the complete transfer of industrial control to the Commonwealth." One can well imagine how this frank advocacy of the nationalization of the iron industry met with furious opposition in certain directions., but the point to be considered now in New Zealand is that our treatment of the problem must necessarily begin where Australia has, for the time being, left off. No Government—not even the present Ward Administration—will be foolish enough to impose a 30% duty on the strength of an irresponsible statement of the economic absurdity quoted above.