PROPOSED REMEDIES FOR DULL TRADE.

Te Aroha News, Volume II, Issue 92, 7 March 1885, Page 6

PROPOSED REMEDIES FOR DULL TRADE.

There has been in England a furbishing of ru3ty old weapons, to fight that ancient enemy, depression of trade j and the faith in these antique tools has reached New Zealand. What we want to cure our commercial evils is Eeciprocity, otherwise known as Fair Trade. These names were at first taking with some minds. Their euphemism was pleasant and soothing. But after being bandied about for 8 or 9 years, and subjected to much rough usage, they are now no more euphemistic than the term Protection. Everyone can see with half an eye that all three names describe one and the same thing. Mr J. C. Firth comes to the aid of his fellow agriculturists with two propositions. One i« Free Trade between the colonies. This ecbeme is a good one, and one of which might be soon consum mated if men o£ influence would put their shoulders to the wheel and take a real interest in the matter. The other project, and it forms the essence of his recent de liverance, is thus described in his own words •.—. — "England requires a very large annual importation of wheat, meat, cheese, butter, and other agricultural products, to supply the wants of her population. With differential duties imposed on these articles, which are produced by foreign nations —at no distant date tbe colonies and India would, in the main, supply her wants. Reasonable duties thus levied on the produce of foreign nations, whilst similar produce from all parts of the Empire were admitted free, would stimulate India and the colonies into a progress and prosperity to which they have long been strangers." The above sentences have a very encouraging sound ; as Fluellen would say, "Thece are prave ! ords ;" but their simple fault is they will not bear analysis. Stated in plainer language they read thus: Prioes iv England are to bo raised by a diminution of the supply ; the colonies are to benefit and prosper, owing to the rise of prices. The diminution of supply is to be brought about by a Customs duty, which will causo prices to rise, and it will be worth while once moro to practiso agriculture vigorously at Matamataand elsewhere. For if prices do not rise, how better off than now will the colonies be ? We have then an import duty to keep out the objectionable foreigner and a rise in prices. Now, who pays the duty ? Not the foreigner, certainly. But the hapless British consumer. And who suffers by the rise in values? That unlucky wight, the British consumeragain. Ho has thrust upon him two extra burdens ; in simple English, he is robbed from two pockets at once for the benefit of antipodean farmers. If he submits to such treatment, he is a bigger fool than even Carlylo suspected. But more remains behind. Increased prices would help someone else besides the colonial producer, viz., the British landlord. That is to say, the very man who has for many generations been enriching himself at the expense of the rest of the community, is to have another lift in the scale of wealth. The fact is, under a system of Protection, somebody has to pay, somebody is robbed to enrich somebody else ; and Mr Firth seems not to care who the victim is so long as his class reaps an advantage. Let the following fact speak for itself. In 1845 there was a differential duty against foreign sugar in favour of the British colonies- It \\ as high enough to enable British plantation sugar, though 16s per cwt. higher in price than foreign sugar of the same quality, to monopolise the home market. In that year the British consumer paid £3,000,000 more than he would otherwise have paid, without benefiting either the public exchequer or himself. (Bastiat's " Sophismes Economiques," edited by E. R. Pearce.) Mr Firth seems to have been soundly frightened by that old bugbear of increasing imports and decreasing exports. Surely it is high time, after so much has been written on the subject, that tho venerable fallacy was left to slumber peacefully in a dishonourable grave. England, croak the alarmists, is buying more than she it selling ! Quite true ; the symptom is a good one, not a bad one. The total imports of the United Kingdom in 18S2 amounted to £430,639,092, and the total exports to £327,649,972, leaving a balance in favour of imports of £105,959, 120. It is this balance which frightens the unthinking. But it is a fact to be proud of. It is a measure, a sign, of English wealth. It shows how riches are increasing in England ; for of what does it consist ? First, o£ freightage paid by foreigners for the use of English ships, for England is the carrier of the world. This freightage is computed to amount to at least forty-five millions a year. Then there are merchants' profits, insurance premiums, ; interest on capital, and last, but greatest of all, income from foreign investments, for England is the great money-lender of the world. This incomealone has been reckoned to reach over fifty millions per annum. These items make up tho excess of imports over exports, and ought to make the economist smile instead of weep. But Mr Firth would seem to suppose that this flow of wealth into England is a dangerous fact, and that the process should be reversed. But that will never happen while the carrying trade of the world is in British hands and British capital enables foreign governments to exist. The reader who would like to see some authoritative utterances on the point just dealt with could not do better than refer to Chapter 111. of Part 111. of Professor Cairnes's " Leading Principles of Political Economy Newly Expounded. " The subject has also been discussed times enough in Cobden Club pamphlets. Mr Firth quotes some figures to show the deplorable state of English trade with America. The writer wishes to be allowed to bring under Mr Firth's notice the following instructive paragraph from an article by an American, Mr William Henry Hulbert, published in the " Nineteenth Contury" for December last. Mr Hulbert says: "The official returns of the exports of the United States show that during the fiscal year which ended on the 30th of June, 1884, the exports of domestic merchandise from the United States to all parts of the world fell off in value 79,258,780d015., as compared with the experts for the year ending 30th of June, 1883. Our exports of machinery fell off nearly a million dollars ; of general manufactures of iron and steel more than a million and a quarter of dollars. There was a good deal of gunpowder burned in 1883-4, but the value of our exports of it fell off a quarter of million of dollare. The value of our exports of flax and hemp fell from $547,111 in 1882-3, to $67,725 in 1883-4 ; our exports of agricultural implements declined during the last year more than a million dollars in value ; our exports of cotton goods, coloured and uncoloured, more than twelve hundred thousand dollars. Clearly Protection does not aevelope the manufactures of the United States. It 'protects' the manufacturers [which is quite a different thing) against md at the expense of the consumers of the [Jnited States." There are other instructive facts in the lame article which those who believe that Protection has made the United States

rich and prosperous, would do well to ponder. The present writer is abjo to quote from a business letter, received in Auckland by last mail, an extract whose meaning lies in precisely the same direction. The letter in question is from a firm of wholesale stationers, and is dated San Francisco, January 13th, 1885. The uuthor says: "We have tried several times to build up a trade with New Zealand, Australia, etc., but found, on account of the heavy duties placed on all imported goods, that it was useless to try and compete with European countries, especially with England, which has no duties, comparatively speaking, at all." So it appears that the United States have not "protected" the paper trade to the pitch of competing with Free Trade countries. It is a curious fact, which will require some ingenious explaining away, that tho party now uppermost in the United States are not altogether satisfied with Protection, and are inclined to try again the Free Trade system undor which they prospered amazingly before the war. It is hardly likely that England will assume what America eeems likely to cast off. No; let us have intercolonial Free Trade by all means ; but let us not delude ourselves that England is going to hamper herself with Protective duties to please us. Lee us (if we want to maintain a character for sanity) have something more sustantial to trust in than an ignis falmis, a Will-o'-tho-wisp. J. D. Davis. Auckland, February 23, 1885.