INTERCOLONIAL RECIPROCITY.

New Zealand Mail, Issue 49, 30 December 1871, Page 5

INTERCOLONIAL RECIPROCITY.

We have been favored by the Hon the Colonial Treasurer with the following copy of a Memorandum forwarded by him.to His Excellency the Governor on a Circular Despatch from the Right Hon the Secretary of State for theO ©lonies on Intercjlonial Reciprocity: —

The Colonial Treasurer has carefully studied the circular despatch, dated the 13 tb July, 1871, from the Right Hon the Secretary of State for the Colonies to Sir George Ferguson Bowen, on the subject of intercolonial reciprocity. He recognizes the consideration which has induced his Lordship to set forth at length the views of her Majesty's Government on the subject; but he is unable to discover in those views reasons for withdrawing the recommendation already given, that the colonies should be at liberty to make reciprocal tariff arrangements. The despatch was brought under the notice of the Assembly, and the special attention of the House of Bepresentatives was called to it ; but no member expressed a wish that the subject should be reconsidered.

The Secretary of State does not, in his despatch, mention that the -position of New Zealand differs from that of the neighboring colonies. He treats of them collectively : but there is reason to believe, from previous communications, that his Lordship is aware thut there is no law which prohibits the New Zealand Assembly imposing differential duties. Although such a prohibition is contained in the Constitution Acts of the Australian colonies, it does not find place in the New Zealand Constitution Act, the provisions in that act being confined to a a prohibition against passing any law infringing treaty arrangements between Great Britain and foreign powers. Probably Lord Kimberley did not think it necessary to refer to the distinction ; because, evidently, as long as New Zealand alone possesses the power to impose differential duties, she cannot enter into reciprocal arrangments with her neighbors. Still it is important to remember she has the power, both because she might find it convenient to use it outside the Australian group, as the British American colonies have used a similar power, and also because it may fairly be claimed that the power possessed by New Zealand ought without delay be granted to the Australian colonies, including Tasmania. There are some incidental passages in Lord Kimberley's despatch, which, if grouped, might lead his Lordship to reconsider the views he has expressed. 1. There are allusions to the absence of any urgent need of dealing with the matter. 2. Throughout the despatch, it is contended that the proposal of recipro' city is made in the interests of protection. 3. The desire is indicated to encourage a customs union. 4. The admission is made, that an act similar to the measure the colony desires to pass, was one of the first acts of the Legislature of the newlyconstituted dominion of Canada in its opening session; " that it was passed in the expectation that at no distant date the other possessions of her Majesty in North America would become part of the dominion ; " and that '' the assent of her Majesty's Government to a measure passed in circumstances so peculiar and exceptional, cannot form a precedent of universal and necessary application." These four references, taken in connection, are unusually suggestive. The act passed by the Legislature of the dominion, to which Lord Kimberley refers, was, in respect to the clauses permitting reciprocity, similar to the act of 1866, passed before the dominion was constituted .- and that again was copied from a former act. In these acts, clearly the provision wa3 made from a genuine desire to permit suitable reciprocal arrangements; but Lord Kimberley states that in 1868 the provision was made in the expectation that other provinces would join the dominion, and that the assent of her Majesty's Government was given in consequence. It may be assumed that Lord Kimberley uses the word " expectation " in the sense of desire. It was not necessary to make provision for remission of duties in the case of those provinces wbich became partof the dominion, for the fact of becoming part would have caused the duties to cease. It must be concluded that Lord Kimberley wishes it to be understood that the provisions in the act passed since the constitution of the dominion were made with the view of encouraging other provinces to join, or of preventing obstacles being thrown in the way of their joining, and not upon the grounds which previously, for a long period, led to similar legislation in the different North American provinces. Ihe words " circumstances so peculiar and exceptional," clo not apply to the legislation, for that was of a traditional character, but to the desire of the dominion and of her Majesty's cfovernment to encourage and promote a further union of the British American possessions. This desire constituted what Lord Kimberley terms " the circumstances so peculiar and exceptional." But for that desire, where was the urgency ? and if there was urgency in the British North American case, why is there not urgency in the case of Australasia, in the presence of a similar desire to encourage a customs union or a confederation ? The actual results in Australasia lead inferentially to the belief that the dominion authorities and her Majesty's advisers were correct in considering the matter urgent in the interest of confederation, although the proof is only of a negative character. The mere power to make reciprocal arrangements might not in itself be sufficient to induce confederation ; but Australasian experience leads to the belief that it would tend to prevent the gro vth of obstacles to confederation. In the absence of the power desired by the Australasian colonies,

retaliatory tariffs of a protective character have grown up ; and the way to confederation, or to a customs union, has in consequence become more difficult than it was when the power to make reciprocal arrangements was first asked for, or than it would be now if the power had been granted. The inference is that those who in the case of British America deemed the matter urgent, were right; and that the Secretary of State, desiring a customs union on confederation of the Australasian colonies, can only deny that the matter is urgent, on the assumption that it is too late to deal with it, because of ths disposition which has been shown to impose hostile intercolonial tariffs. Several of the protective duties now in force in the colonies owe their origin to feelings of self-defence or retaliation. The most ardent free-traders have admitted that the tariffs of some colonies have forced protective duties on others ; so that the absence of reciprocity has actualty fostered protection. Therefore, in respect to the four propositions, it can be said, that in the interest of a customs urjon or of confederation there was urgency, because the power to enter into reciprocal arrangements would, in all probability, have prevented the fresh obstacles to union which have grown up; and that, in the interest of free trade, reciprocity was desirable, because its absence has encouraged protection. No doubt, it may be argued that special reciprocal arrangements are in their nature opposed to free trade; but the test of the theory would be the practice : and if that practice were principally confined (to quote his Lordship's justification of the acts of Newfoundland and Prince Edward Island) to " a limited list of raw materials and produce not imported to those colonies from Europe," it might readily be understood that, in respect to other articles, the absence of retaliatory tariffs would tend in the direclion of free trade. It is not desired, however, to contend that with powers of reciprocity the'-e would necessarily be free trade in Australasia, any more than, with similar powers, free trade has been the rule in Canada. It is merely contended that in some of the Australasian colonies the desire for free trade has been stamped out by prohibitory tariffs, which have owed their growth, partly or wholly, to the absence of that power of reciprocal arrangement so unaccountably withheld from Australia, whilst its urgency was admitted in the case of Canada. The question naturally arises why Lord Kimberley should only compare the proposed legislation with that of the period subsequent to the formation of the dominion. If he would compare it with the precisely similar legislation of the British North American provinces prior to the dominion, he might admit not only that when the dominion was formed the legislation was required to encourage other colonies to join, but that the legislation and the friendly intercourse which grew up under it had something to do with the establishment of the dominion, and that, therefore, it was conducive to a desirable result.

The Colonial proceeds to comment on the various questions which Lord Kimbsrley states the proposal before him raises :—lst. " Whether a precedent exists in the case of the British North American colonies for the relaxation of the rule or law now in forca ?" His L>rdship admits the precedent, but qualifies the admission, first, as already mentioned, by contending that the act of the dominion was passed under peculiar and exceptional circumstances; and second, in the case of the Prince Edward Island and Newfoundland Acts, by contending that " as dealing with a limited list of raw materials and produce not imported to those colonies from Europe, they are hardly, if at all, applicable to the present case." It has already been shown that the " peculiar and exceptional circumstances" can only mean, the circumstances calculated to induce the colonies affected to join the dominion, or the prevention of obstacles which would preclude their joining ; and those circumstances are precisely ot the nature which her Majesty's Government, in the desire to encourage an Australasian customs union or confederation, should not deem exceptional. In respect to the Prince Edward Island and Newfoundland Acts, it may with propriety be assumed that the- Australasian colonies will exercise the powers they ask for with the same judgment, moderation, and discretion which the two North American colonies have shown. Those colonies possess the power sought by the Australasian colonies; they exercise it without their acts being reserved for her Majesty's pleasure ; but in the case of the Australasian colonies, the power is withheld, and when they ask for it and cite the precedent, it is not to them a satisfactory answer to be told, in effect, that the precedent need not ba dwelt upon, because the colonies enjoying the privileges have used it sparingly. No doubt Lord Kimberley did not wish directly to urge this plea ; but throughout his Lordship's despatch, and indeed at the base of all his objections, is the supposition that the colonies, if they possessed the power of entering into reciprocal arrangements, would use it in a manner injurious to the interests of Great Britain. But it is singular that Lord Kimberley should give two instances only of British American legislation of the kind, and that he should assign to that legislation the character of " dealing with a limited list of raw materials and produce not imported to these colonies from Europe." There are other acts of the British American provinces of a similar nature, but which leave to the Governor in Council to determine the articles to be admitted. Indeed, it is difficult to understand on what grounds Lord Kimberley considers the two clauses which he quotes from the Newfoundland act to have the character he assigns to them. The clause quoted from the Prince Edward Island act professes to deal with " raw materials and produce," but includes several manufactures. The clauses from the Newfoundland act do not even pro*

fess to exclude manufactures from the list j and the first of those clauses, instead of not dealing with goods imported from Europe, proceeds to the length of exempting from duties the articles mentioned, being " the growth, produce, or manufacture of the United Kingdom." In respect to the second question, " Whether her Majesty's treaty obligations with any foreign power interfere with such relaxation ?" i.e , the rule or law against differential duties, the Colonial Treasurer observes, that Lord Kimberley admits the correctness of the view taken by New Zealand. It is a matter which should create much satisfaction, on broad and enlightened national grounds, that the right of her Majesty's colonies to make between themselves arrangements of a federal or reeiprocal nature, without conflicting with treaty agreements, has . been recognised. It would

have b"en demoralizing to the young communities of Australasia, had they been taught to believe that reciprocal tariff arrangements between the colonies were inconsistent with her Majesty's treaties with foreign powers, but that they could over-ride the spirit of such treaties by the subterfuge or evasion of a customs union. If, for instance, it be a wrong to any foreign power that New Zealand should admit free of duty any produce of New South Wales, while for like produce from any other colony or country a duty wou dbe demanded, the wrong would be just as great if, by Imperial legislation, such free admission were legalized through a customs union. It should clearly be impossible to vary a treaty by the legislation of only one party to it; and seeing that New South Wales and New Zealand were originally one colony, with one tariff, and may by Imperial legislation become so again, it is evident that if such a result can be brought about without the infringement of Imperial treaties, any terms of more modified arrangement, for example, as the free admission of only some goods, would not be open to objection on the score of bad faith "with foreign powers. Lord Kimberley admits that the quoted paragraph of the Zollverein Treaty has no application to the case of arrangements between different colonies- Its object seems to be to prevent the colonies making such reciprocal arrangements with the United Kingdom of Great Britain and Ireland as from time to time may be found desirable. A provision of this nature is at least open to the objection that it is coi stmtly liable to be infringed. In the act of the Canadian dominion already referred to, and which, from what Lord Kimberley writes, appears to nave been under the special consideration of her Majesty's Government, there are provisions whim beyond question conflict with the quoted paragraph in the Zollverein Treaty. The list of free goods in the schedule to the act, comprises two items which are. to be free if of British produce or manufacture. The clause quoted by Lord Kimberley from the Newfoundland act, which makes free of duty the articles mentioned, " the growth produce, or manufacture of the United Kingdom," also conflict with the provisions of the Zollverein Treaty. Again, the argument which the Colonial Treasurer has used between the colonies, applies as between the colonies and the Imperial country. Why should a foreign treaty contain a provision tending to preclude the union of different parts of the empire ? If Great Britain were to confederate her empire, it might, and very probably would, be a condition that throughout the empire there should be a free exchange of The arguments in favor of a customs union between colonies have as much force in their application to a wider union embracing the whole empire. Either the Zollverein Treaty would prevent this, or the necessary legislation would make the quoted clause inoperative. The effect, if not the intent, of the stipulation in the Zollverein Treaty is to make Great Britain hold the relation of a foreign country to her colonies.

It is appropriate here to urge on the Secretary of State, sirce he has the subject under his notica, not to confino his consideration to the mere question of intercolonial arrangement. His Lordship entirely refrains, in his allusion to the British American acts, from noticing that they contain not only a discretionary power to admit colonial articles free, but also to admit, under similar conditions, articles from the United States. Great as is the distance between the British American and Australasian colonies, the vast limits of the United Spates bring that country into ready communication with Australia as well as with British America. It may be for the interest of the Australasian colonies, just as much as it has been that of the British American colonies, that arrangements should be made to admit free, articles from the United States or from some other country. It is desirable that the Secretary of State should define the position of the Australasian colonies in this respect. Are they to be denied the power which for a long period the British American colonies have uncontrolledly exercised? That power gives them the right to make reciprocal arrangements with their American neighbor ; for only on the ground of the arrangements being reciprocal, would they fail to be infractions of the •* most favored nation" clauses of British treaties with foreign powers. The Australasian colonies would value similar po.vers. The third aad fourth questions raised by Lord Kimberley are sufficiently analagous to make it convenient that they should be considered together. They are : —" Whether a general power should be given to the Australasian Governments to make reciprocal tariff arrangements, imposing differential duties, without the consent of the Imperial Government in each particular case ?" and " Whether on grounds of general Imperial policy, the proposal can properly be adopted ? " The Colonial Treasurer submits that these questions really raise the issue, whether, in the original constitutions granted to them, the

colonies should have been allowed so much discretion as to fixing their own tariffs ; and, if this be the issue, the Treasurer admits that much may be said against the discretion which has been granted. The exporters of Great Britain are, no doubt, largely affected by the nature of the colonial tariffs ; but it can make no difference to them whether New South Wales and New Zealand exchange their produce free under a special reciprocal arrangement, or by virtue of an act constituting them into provinces with a federal union. The actual duties affect the exporters, and not the question whether those duties are the result of federal constitution or reciprocal arrangement. In failing to assert the right to control colonial tariffs, Great Britain does nob take advantage of her power to consolidate an immense trade, from which she and her dependencies might equally benefit. But it must be observed that, if the right were asserted, it would logically iollow that the colonies should enjoy some share, either by representation or consultation, in deciding the policy by which they would be affected. Lord Kimberley writes:—"Her Majesty's Government are alone responsible for the due observance of treaty arrangements between foreign countries and the whole empire ; and it would scarcely be possible for the Colonial Governments to foresee the extent to which the trade of other parts of the empire might be affected by special tariff arrangements between particular colonies." The remark as to the trade of other parts of the empire might be applied with as much cogency to the actual tariffs fixed by the colonies as to the special arrangements entered into between them. Lord Kimberley, recognising the difficulty which Great Britain would have in dealing with the matter, points to the want of local knowledge which her Majesty's Government would labor under. The same want of information would equally affect the ability to decide the colonial tariffs, unless, _ in either case, there was available the assistance of colonial representatives. In short, Great Britain must logically do one of two things—either leave the colonies unfettered discretion ; or—if she is to regulate tariffs or reciprocal tariff arrangements, or to make treaties affecting the colonies—give to the colonies representation in matters affecting the empire. In other words, she must apply in some shape to the empire that federation which as between tho colonies themselves her Majesty's Ministers constantly recommend. To urge the right of Great Britain to regulate these matters under present circumstances, is to urge that the interests of tho colonies should be dealt with in the absence of the requisite knowledge of their wants and requirements. In one passage in his despatch Lord Kimberley infers that reciprocity in reality means protection; and, agoin, he writes Majesty's Government are bound to say that the measure proposed by the Colonial Government seems to them inconsistent with those principles of free trade which they believe to be alone permanently conducive to commercial prosperity, nor, as far as they are aware, has any attempt been made to show that any great practical benefit is expected to be derived from reciprocal tariff arrangements between the Australian colonies." There could not be more, striking evidence of the disadvantage under which tho colonies in their present circumstances would labor, if the treatment of their fiscal interests were left to Her Majesty's Government, than is supplied by tlv>se observations of the Secretary of State. " The measure proposed" may be used to do no more than that which, as already observed, bis lordship in the case of Newfoundland and Prince Edward Island seems to consider unobjectionable. It may be used to make similar arrangements to those which were introduced in the treaty with France, devised by the late Mr Cobden, the apostle of free trade. It is true that it has been said that that treaty was not a free-trade treaty, but it undeniably was made in the * interests of free trade. Again, " the measure proposed" may be used to bring about that customs union to which Lord Kimberley is not averse ; and, as already shown, it may be used to stop those retaliatory tariffs which impede free trade and stimulate protection. In fine, it may be used to encourage the exchange of the productions of the temperate and tropical portions of the Australasian colonies, without even remotely affecting the interests of British exporters. If, in commenting upon Lord Kimberley'a despatch, the Colonial Treasurer has appeared to travel beyond the immediate questions referred to in it, he has scrupulously abstained from doing so to an extent greater than he has considered necessary for the purpose of representing to Lord Kimberley that, although the New Zealand Government still adhere to the desire they have expressed, they do so for reasons which are not calculated to create unfriendly feelings between the Imperial country and the colonies. Such Lord Kimberley deems to be the tendency of the present question, although his lordship very considerately does the Government the justice to believe that it is their desire to preserve the friendly feeliner now existing on each side : and it is with the view to prove that such is the desire, that the Colonial Treasurer, whilst expressing the adherence of the Government to their former opinions, has endeavored to show that those opinions have not the unfriendly tendency suggested ; but that, on the contrary, their full and free discussion may lead to a determination to make yet more intimate, and more subservient t:> mutual welfare, the ties which bind together the Imperial country and the colonies.

A public meeting was held at Featherston on the 22nd inst, S. Carkeek, Esq, in the chair, when a School Committee for the district was elected, after which the meeting adjourned until the 6th inst.