FREE TRADE.
ITS PRINCIPLES EXPOUNDED. ARGUMENT IN SUPPORT. “The Way of Free Trade” was the subject of a lecture delivered last night by Mr. C. G. Bottrill, M.A., under the auspices of the Taranaki Chamber of Commerce, when'about thirty attended, including several ladies. Mr. T. C. List (president of the Chamber) was in the chair, and briefly introduced Mr. Bottrill. The subject of free trade, said Mr. Bottrill, was a highly controversial one and one of perennial interest. Free trade was a definite policy, not a laissez faire system and was defined thus by Professor Nicholson: “The essence of free trade is equality and uniformity in the financial treatment of Home colonial and foreign produce of the same kind.” A Government could lay an embargo on commodities for moral, political or industrial purposes and this did not destroy the status of free trade.
Turning to protection, he said this term had been defined by Plehn, himself a protectionist, as “a scale of duties so arranged as to prevent importation, wholly or in part, and to raise the price of commodities from abroad, the production of which it intended to encourage within the country.” This meant in short the application of the doctrine of sovereignty to political economy. In tracing the history of protection in England, and in Europe particularly, the speaker said the system was founded on an economic fallacy. Preference briefly meant what we were prepared to pay for the measure of our Imperial sympathies and had been first introduced by Colbert, the French Finance Minister in the time of Louis XIV.
The case for protection, ps used by its advocates, was set forth by the speaker and discussed seriatim. The protectionist advanced the infant industry argument, but it was a question whether it really paid to establish and “nurse” such industries, which were, in any case, established against our fellowcountrymen. Each country should be self-contained, especially in view of war, said the protectionist, but the speaker contended that this was completely impossible, and, if the argument were extended, it really meant the abolition of foreign trade altogether. We should protect home industries we were told, •but to> what extent did we? The argument that always prevailed was what was the cheaper article, the speaker citing the case of German pianos. Again we were told that we had to protect highly paid labor from the competition of poorly paid labor, but if our wages were “efficiency wages” there was no need for this. It was only when our wages were above this level that protection was needed, but at present wages were not above this level.
The argument that by a protective tariff we could retaliate against foreign countries was one of the most potent causes of war, as the history of Europe during the greater part of the last two centuries had shown, and was one of the greatest disruptive forces within the Empire. The expedient against dumping byV applying temporary protection resolved itself into two parts, for we had to consider both commercial and political dumping. In the latter instance the lecturer believed the case for protection was adequate and the expedient necessary.
“Does the exclusion of foreign goods mean more local employment?” asked the lecturer in dealing with the case for free trade. He was of opinion that, it did not, as employment depended on the amount of capital available. Industry was limited by the available capital, which the Government could direct and not augment, and it was a question if we had yet had a Government which could direct industry to the best advantage. The old rule that exports pay for imports applied and if imports were blocked by a high protective tariff, then the balance of trade was adversely affected and exports would be blocked also. The bolstering up of trade by protection was useless. •,Britain, under free trade, had shown a marked expansion, industrially and commercially, whilst France, a protective country, had not shown the same expansion. “Look at the United States” some people said in speaking in support of a protective tariff, but it had to be borne in mind that the States was a vast continental area, containing within its borders practically everything a nation desired and most of its trade was internal. It was there that her prosperity lay and not in her external trade. Free trade cut down the price of an article to the consumer, -whereas protection was designed primarily to raise prices. Protection, too, set up vested interests which Were hostile to the removal of duties once these were imposed. But perhaps the most potent argument, against protection was that it meant the diminution of our feveign trade and the elimination of the carrying trade, upon which our prosperity had been built up, and which had enabled Britain to import more than she exported and yet be on the right side of the balance.
Summing up, the speaker claimed that New Zealand was designed by nature and by her geographical position to be a producing and not a greg.t manufacturing country. We should, therefore, concentrate on our primary producing industries, which returned the greatest national profit. In framing and altering the tariff those so doing went to the manufacturer, but no appeal was made to the consumer. The speaker said he did not advocate wiping out protective measures holus bolus, as that would be disastrous, but a fairly long period should be allowed to make New Zealand, as he hoped to see, a free trade country. This would allow the necessary readjustment of industry so that capital should not be lost, the worker starve, or the community in general suffer undulv.
The interest aroused by the address was shown by the number of questions asked and answered, after which a hearty vote of thanks was accorded Mr. Bottrill by acclamation, the chairman speaking in eulogistic terras of the value of the lecture delivered.
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Taranaki Daily News, 3 August 1922, Page 4
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986FREE TRADE. Taranaki Daily News, 3 August 1922, Page 4
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