INDUSTRIAL DEVELOPMENT.

Temuka Leader, Issue 1608, 16 July 1887, Page 3

INDUSTRIAL DEVELOPMENT.

TO THE ELECTORS OF GLADSTONE.

ECONOMY OF LABOR.

The second proposition laid down in the extract quoted from J. S. Mill is, that it is a waste of resource to employ capital and labor on manufacturing goods which we can import cheaper than we can produce them. That is correct if the conditions necessary to make it correct are present. The correctness or incorrectness of these fixed laws which regulate international trade, depends on the conditions of the things they govern. If you turn a man upside down you will not try to cram his head into his boots. In the same way when the conditions of things are turned upside down the economic laws which govern them, miist be turned upside down too. To illustrate the meaning of this I will suppose that the population of this colony is profitably employed in digging gold, growing grain, and producing wool and mutton. These are the articles they export, and the industries are so profitable that one man's production can buy a ton of iron which is required to make tools, etc. Now these men take it into their heads to say, " There is iron lying dormant in our hills. Let us dig it out, and manufacture it, and let us protect this industry against imported iron." They adopt this policy, and go to work, and it takes three men to dig and manufacture the ton of iron which the labor of one man bought before. Tou will see that the doctrine laid down by J. 8. Mill would be correct in this case, and that protection would lose the colony the labor, of two men for every ton of iron which she required. Now what is the condition of this colony at present? Are we utilising our labor profitably? So far as we can hear digging gold is not a very profitable employment taken all round; farmers are complaining that their industry is not paying very well, and the sheep farmer murmurs that the low prices has brought him to the verge of ruin. It is possible, I think, to find more remunerative occupations than either of these. Besides this thousands upon thousands of men are crying out from Auckland to the Bluff for employment, and the Government have spent thousands of the people's money upon giving these men work. It has been admitted on all sides that most of this money was wasted because the work for which the men were paid was unproductive, and it would have been just as well to have given it to them for doing nothing. Thus not only did the colony lose the labor of these men but it lost also the money spent on giving them unremunerative employment. By the principles of political economy the loss of these men's labor, and the amount of money unremuneratively spent on them must be added to the price of the imported goods which they might have made if engaged on them. And if this were added to the other losses at present sustained through ourinsane efforts to uphold the doctrine of Ercetrade, I feel certain that it would be cheaper to make our own goods than import [ them. If it is true, as J. S. Mill says,

that it is bad economy to waste labor by getting three men to manufacture a ton of iron while one man's labor might buy it, it must be bad economy also not only to let labor go to waste through want of employment, but also to waste public money on giving it unremunerative work. According to the very doctrines of Freetrade, as laid down hj its high priest, it does not suit the condition of this colony whatever way it is looked upon. Ido not know one reasonable argument in its favor, although in my own humble way I have looked into the question closely, and if John. Stuart Mill were living in New Zealand at the present time I feel certain he would willingly endorse every word I have written. He would be inconsistent if he refused to do eo.

NEW COUNTRIES

I now come to consider the dif erence between an old and a new country. The old country has had its various, branches of industries in full operations for centuries, experience and practical knowledge has enabled it to utilise its advantages to the fullest extent. A new' country has none of these advantages. It stands in the same relationship to an old country as a poor man • stand* to a. man of capital. The poor man may have abilities, he may be the cleverest man .of the day* but unless ,he gets a helping hand from kind friends he remains a ragged hewer of. wood, and drawer of water; the rich man can help himself. It is so with this colony. 1 She wants assistance to develope her resources, and that assistance can be given by a judicious system of protection. Let me illustrate what I mean. Let ua suppose that there is an industry in this district long established, The proprietor of it has got his machinery and plant in full working order, and experience has taught him how to utilise them to the best advantage. The whole country has been accustomed to do business with him, his trade is established, hundreds of people are in his debt, and the money due to him from his customers is flowing in daily. Now let another man start with the same goods at the same price: what chance will he have ? None. All things being equal, unless there is , plenty of room for the two of them, the new man must quit the field. How frequently has this been the case with New Zealand industries ? How often have they been crushed out pf existence, after considerable outlay of capital and labor, by the imported article, when a little Protection would have enabled them to have lived and thrived. Is this sense ? Even John Stuart Mill would have protected these industries. Twenty years ago there was a proposal before the New Zealand Parliament to put on Protective duties of some kind or another, and a passage in John Stuart Mill’s Political Economy was quoted in support of it. I do not know the exact facts of the case, but this is what happened. Sir Edward Stafford wh»,was leading the Opposition, and a rank Freetrader, wrote to England to Mr , Mill ,to interpret this passage in favor of Free-' trade, and the following is an extract from the reply which Mr Mill sent to him

“ The protecting duties which I thought might sometimes be advisable in a young country for the purpose of ascertaining by experiment the suitability of its circum» stances for the naturalisation of foreign branches of industry are duties expressly imposed for a limited time, not exceeding a few years—say, from five to twelve, according to the case—and to cease peremptorily at the end of the period, unless it could be conclusively shown that the facilities given by the duties had been fairly used, but required some further and still more strictly limited time to make | the experiment a fair one,” Mark now the 'language used by Mr Mill, He would favor protecting “ the naturalisation of foreign branches of industry ” —that is, industry which is not indigenous of the soil at all. If' Mr Mill would have protected such industries, what would he have done for purely native industries ? Would be send hides to England, and bring them back in either boots or leather ?' Would he send the beautiful wool of this colony to England, and bring it back half wool half shoddy cloth? Would he import apples while the apples of the country were lying rotting on the ground? He would not. He had sense in his head; he was able to form a correct opinion; he could reason from cause to effect, and he would do nothing which would he inconsistent with, common sense. Mark again that when Mr Mill wrote this we had not to find £4,000,000 a year for interest; there was plenty of employment far the small population of those days, and, therefore, the more cogent reasons which I have given for protecting native industry now had then no existence. If Mr Mill favored Protection under these circumstances, is it not allowable to say that if the exact position of the colony had been represented to him he would have favored Protection ? I have no hesitation in saying he would, OVER-PRODUCTION. Another figure which has filled a large space in the Freetrade movement is John Bright. About five or six years ago he was consulted by the Freetraders of New South Wales as to the advisability of protecting industries, and he replied, of course, that it would bo a ruinous policy, because it would lead to many industries starting up; there would be over-production; there would be many out of employment, and things would be worse than they are now.

I will not go into the question of over-production, further than to say that the brightest intellects of the. day have come to the conclusion that there is no such thing as over-production; that.it is due to a contraction in the spending power of the people, consequent on too great an appreciation of gold. A book might be written oh this point, but after all it comes to this : that experience teaches us that a depression occurs once in. every seven years, and that many industries have consequently to run. half-time during these times. To make John Bright’s idea of over-production stronger, let us suppose that in this colony the depression would occur more frequently, and once in every five years bur factories could only run half-time. That would be a calamity, certainly ; hut, if it is a calamity that once every five years our machinery would only run half time —or say for the whole year they Would cease to run—find me language that will express the misfortune of never seeing the machinery running at all ? Half a loaf is better than no bread, it is said* but here we are told it is better to have no bread hit all than be reduced to half a loaf every five or seven years. Ibe thing is preposterous, childish, peurile, silly—but this bright idea jmanated from an English manufacturer whose interest it was to disjourage colonial thrift. J. M. Twombt,