The Temuka Leader TUESDAY, OCTOBER 22, 1889. INTERCOLONIAL FREETRADE.

Temuka Leader, Issue 1959, 22 October 1889, Page 2

The Temuka Leader TUESDAY, OCTOBER 22, 1889. INTERCOLONIAL FREETRADE.

In commenting •» the proposal to institute Ereetrade between • the Australian Colonies recently, we stated that wealthy English firms would establish joint industries in these colonies if such a policy were adopted. There can be no doubt on this point. It happened in the case of America, Previously to that country adopting a policy of, Protec r , tion it got all its goods from England,' but when the change was effected English firms found that they could not pay the duty and compete with local production. So they, got over ,the difficulty by building factories in the United Sthtei ' if ‘ the Australian Colonies put on a Uniform protective tariff the same thing woiild occur. English manufacturers would be bound to follow the trade to these colonies, and the result would be a great influx of capital and population. But there are more than one way of looking at it, so far as we in New Zealand are concerned. There can be no doubt but such a policy increase the sum of colomal prosperity as a whole, of that we are perfectly satisfied, but the great" question is, How'would it affect New Zealand ? It is our opinion 'that in some respects it would do us a great amount of good, while in other ways it would do us harm. It would, for instance, improve the prospects of farmers, so far as grain is concerned. If we could .plac'd our grain free, of duty in the markets, while all other countries wouldhave to pay protective duties, we should 'have a imonopoly, and henceforward there Would be no danger of- California Wheat- bringing ! flown prices. Our cheese and many other products would also have a similar advantage, land in this way we should benefit by it enormously. iOn the Other hand, we could never compete with Tasmania in the production of . fruit, jams* etc., and thus these industries would be pretty well the little protection they have that keeps them alive at present. Our coalfields, too, would scarcely stand the competition with Newcastle; and in some other repecta we should be placed at a disadvantage. But the great point is, What are our prospects as regards the larger industries ? Let us suppose the proposal is adCpted, and that delegates from English firms are in these colonies, looking out for places in which to establish their industries, which of the colonies would they be likely to select P There can be no doubt that New Zealand offers many inducements which none of the other colonies possesses. We have a magnificent climate, more suitable to the constitution of Englishmen than any of the other colonies; we have immense water power, and we have extraordinary natural resources, which ought to tempt them to establish themselves here. But we have not two things: we have, not sufficient population, and we have not done a great deal in the way of industrial development so far. These two considerations would, weigh very heavily against all our natural i < advantages. The capitalist looking out for an investment never looks to healthfulness of .climate so much as to the probable percentage his investment will yield, and a large ■ population is the best guarantee he can have in that respect, Victoria and New South Wales have larger populations than we have, besides the fact that they are parts of. a vast continent, while this colony only consists of two little islands. The probabilities are therefore in favor of the supposition that the capitalist would establish himself somewhere on the large continent in preference to these islands, and that in the way of increasing pppui, cion we would not gain a great deal by : the • change. Victoria would in all probability gain most. Protection has enabled her to establish industries, and now her various factories are in full working order. She has, too, the command of capital, and would he able to control our markets if Ereetrade existed. Victoria would thus have a great advantage over the ether colonies ; the start would not’be fair, and on these grounds we do not think the time for the change has yet arrived. What we want is a few years of next door to prohibition in this colony, to enable us to start factories of our own. Once we had them started and.in good working order, we believe that henceforward we could heat any of the other colonies in the competitive race. Owing to the climate our workmen could do more work, and the fertility of our soil would render the cost of living cheaper here than anywhere else. If our rulers were wise they would adopt the suggestion we have thus thrown out, and by the time the colonies are ready for reciprocating we should be ready to take our own part. THE NEW LOAN. The New Zealand Government purpose floating a loan of £-2,700,000 in order to pay off some old debt which is falling due. The rate of interest paid on the old debt at present, is 5 per cent., and the loan is to be floated at 3| per cent., making a saving as we are told of 1£ per cent. Prom this H per cent,, however, the cost of the operation must be deducted, as well as the amount below par at which the debentures will sell; We are told

it is expected they will sell at £95 per £IOO debentures, and that means a dead loss to the colony of five percent. This at compound interest would absorb | per cent, for some twelve or fourteen years. Then the expenses of floating the loan will be considerable, so that at best it is absolutely certain we Bhall gain only 1 per cent by the transaction. However, that would mean a saying to , the colony of £27,000, and is not to be despised, but it is no use, as the Government and their organs are doing, to try to magnify this into proportions which it will not reach. Of course .the Government cannot be blamed for it if it does not effect the saving they it will. We have no fault to jfind yrith them for it, further than that they might as well tell people 'the truth, and not try to delude them by throwing dust in their eyes in this way. One objectionable jaction of the Q-overnment in connection with it is the attempt to float it just now whea money is extremely dear in England... By selecting the present for their operations they are jeopardising its success and failure would have a very bad effect., However, if the loan floats at 3| per cent, we shall gain considerably by the transaction, and it will open the way to future loans being raised at an .equally moderate rate.