INDUSTRIES AND MANUFACTURES COMMITTEE (REPORT OF), TOGETHER WITH MINUTES OF PROCEEDINGS AND EVIDENCE.

Appendix to the Journals of the House of Representatives, 1887 Session I, I-05

1.—5.

1887. NEW ZEALAND.

INDUSTRIES AND MANUFACTURES COMMITTEE (REPORT OF), TOGETHER WITH MINUTES OF PROCEEDINGS AND EVIDENCE.

OEDEE OF REFERENCE. Extract from the Journals of the Souse of Bepresentatives. Tuesday, the 3bd May, 1887. Ordered, " That a Select Committee be appointed ; to consist of Hon. Major Atkinson, Mr. Garrick, Mr. Jones, Mr. Bracken, Mr. Peacock, Mr. Bruce, Mr. Dargaville, Mr. Hatch, Mr. Moss, and the mover; to consider how manufactures and industries may be encouraged: with power to call for persons and papers, and to report from time to time ; three to form a quorum."— (Hon. Mr. Ballance.)

EEPOET. The Select Committee appointed to consider how the manufactures and industries of the colony may be encouraged have the honour to report that the time at their disposal has not permitted of their going fully into the subject, but they have taken some oral evidence, and have received much valuable information by way of correspondence, which is attached hereto ; and they venture to express a hope that their labours may be followed up by a similar Committee next Parliament. Ist June, 1887. J. M. Daegaville, Chairman. That the Committee, on reconsideration, recommend that the correspondence on industries and manufactures be not printed this session. 2nd June, 1887. J. M. Daegaville, Chairman.

MINUTES OF PROCEEDINGS,

Wednesday, 11th May, 1887. The Committee met, pursuant to notice, at 10.30 a.m, in Committee-room J. Present: Hon. Mr. Ballance, Mr. Bracken, Mr. Bruce, Mr. Dargaville, Mr. Garrick, Mr. Hatch, Mr. Jones, Mr. Moss, Mr. Peacock. The order of reference having been read, On the motion of the Hon. Mr. Ballance, seconded by Mr. Bracken, Besolved, That Mr. Dargaville be elected Chairman. On the motion of Mr. Peacock, Besolved, That the Committee meet on Thursdays, at 10.30 a.m. On the motion of the Hon. Mr. Ballance the Chairman was requested to communicate with the various industrial associations, chambers of commerce, agricultural associations, farmers' clubs, manufacturing companies, ironfounders, mining associations, private mauafacturers, &c, throughout the colony, with a view to ascertaining what evidence each would desire to submit to this Committee. On the motion of Mr. Moss, Besolved, That, pending replies to the above communications, the Committee begin its inquiry with the iron industry, taking what evidence is available in Wellington. The Committee then adjourned until Thursday, the 19th May, at 10.30 a.m.

Thubsday, 19th May, 1887. The Committee met, pursuant to notice, at 10.30 a.m. Present: Mr. Dargaville (Chairman), Hon. Mr. Ballance, Mr. Bracken, Mr. Bruce, Mr. Garrick, Mr. Hatch, Mr. Jones, Mr. Peacock. The minutes of the previous meeting were read and confirmed. Mr. E. W. Mills and Mr. E. Seager attended, and gave evidence relating to the iron industry, which was taken down by a shorthand reporter, were thanked, and withdrew. Mr. N. Eeid and Mr. C. M. Luke were also in attendance to give evidence. The Committee decided to take their evidence at the next sitting. The Committee then adjourned until Friday, the 20th May, at 10.30 a.m. I—l. 5.

1.—5

2

Friday, 20th May, 1887. The Committee met, pursuant to notice, at 10.30 a.m. Present: Mr. Dargaville (Chairman), Mr. Bruce, Mr. Garrick, Mr. Hatch, Mr. Jones, Mr. Peacock. The minutes of the previous meeting were read and confirmed. Mr. C. M. Luke, ironfounder, attended, and gave evidence, which was taken down by a shorthand reporter, was thanked, and withdrew. Mr. N. Reid attended, and, after some remarks from the Chairman, was requested to attend at some future day, of which due notice would bs given him. Bcsolved, That the boot, shoe, and leather industry be considered at the next meeting. The Committee then adjourned until Thursday, the 26th May, at 10.30 a.m.

Thuesday, 26th May, 1887. The Committee met, pursuant to notice, at 10.30 a.m. Present: Mr. Dargaville (Chairman), Mr. Jones, Mr. Peacock. Owing to the pressure of other Committee meetings on the members present, the meeting adjourned sine die, without doing any business.

Wednesday, Ist June, 1887. The Committee met, pursuant to notice, at 11 a.m. Present: Mr. Dargaville (Chairman), Mr. Bracken, Mr. Bruce, Mr. Jones, Mr. Peacock. The minutes of the previous meetings were read and confirmed. liesolved, That the correspondence selected by the Chairman be printed. Resolved, That the following report be presented by the Chairman to the House : " That the Committee report to the House that the time at their disposal has not permitted of their going fully into the subject, but they have taken some oral evidence, and have received much valuable information 'by means of correspondence, which is attached hereto ; and they venture to express a hope that their labours may be followed up by a similar Committee next Parliament." On the motion of Mr. Brace, a unanimous vote of thanks was accorded to the Chairman, and the Committee then adjourned.

Thuesday, 2nd June, 1887. The Committee met, pursuant to notice, at 10.30 a.m. Present: Mr. Dargaville (Chairman), Mr. Bruce, Mr. Garrick, Mr. Hatch, Mr. Peacock. The minutes of the previous meeting were read and confirmed. Mr. Peacock moved, That the Committee, on reconsideration, recommend that the correspondence on industries and manufactures be not printed this session. On the question being put, the Committee divided. Ayes, 3 .- Mr. Bruce, Mr. Garrick, Mr. Peacock. Noes, 2 : Mr. Dargaville, Mr. Hatch. Carried. liesolved, That the resolution be reported to the House, The Committee then adjourned sine die.

MINUTES OF EVIDENCE.

Thursday, 19th May. (Mr. J. M. Dabgaville, Chairman.) Mr. E. Seageb examined. 1. The Chairman.] You are engaged in the iron industry?— Yes. 2. This is a Committee for obtaining information as to what course should be adopted for stimulating and encouraging this industry. We should be glad to have you tell us in what direction our inquiries should go?—I may state that at the present time the iron industry is in a very languid condition from many causes. We cannot fully employ the workmen that are to be had. There are plenty of skilled workmen, but there does not appear to be a sufficient amount of work to keep them in employment, not at the present rate of wages, and considering the price we get for work done. 3. You say, then, the trade has been in a languishing state?— Yes; I do not remember it ever being so languid in Wellington. 4. What is the cause of that ? —lt' appears to be scarcity of work; that is, work at a price which we can undertake to do it for. We cannot employ men at any remunerative work. 5. Is that owing to stagnation in trade or to importation?—To importation in a great degree. A great many things are imported into Wellington which we can make here if we have a remunerative price. 6. What class of work do you refer to?— All bridge-work; all classes of steam-engines and boilers —boilers, I think, we can make as well in Wellington as they can be made in England, We have both the appliances and the workmen. 7. These articles are still being imported?— Yes; these articles are still being imported to a very large extent.

3

1.—5,

8. Under the old tariff they came in free?— Yes; nearly everything connected with the iron trade comes in free. We have no protection whatever. 9. You know, I suppose, that under the new tariff there is 20 per cent, ad valorem duty imposed on many of these articles ?—lf that tariff be carried it will give us an opportunity of improving, and the iron trade would be in a flourishing state, because we shall be able to employ men on remunerative work. The great bulk of money in the iron industry is paid away for wages. If you take a steam-engine that will cost £100, £85 of that will go for wages, and the other £15 for raw material. This money would be retained in the country and spent here by the workmen receiving wages. If you import an engine, say, for £100, £90 of that money goes out of the country. 10. I would ask you whether you could suggest any particular direction in which articles might be exempted from duty in aid of encouragement to local industry ? —Most of the raw material comes in free now —all that the foundry uses. What is really wanted is some protection so as to make an imported engine landed here cost the same as the colonial-made engine. They can land an engine in Wellington from England 20 per cent, less than we can make it: we pay 50 per cent, more in wages to our workmen. The class of men to whom we pay 10s. a day would get about ss. a day in England. 11. Mr. Bracken.'] Where does your profit come in ?—There is no profit. 12. Mr. Hatch.] You have stated that while you can make an engine for £100, which will leave no profit, it can be landed here for £80 : where do the wages go to ?—lt goes to the Home maker ; he gets all the benefit. 13. Who gets the profit between the £80 and the £100?— It goes to the importer and the manufacturer. If made in the colony it would go to the encouragement of industry and labour in the colony. 14. But you say that a boiler from England can be as cheaply made here as it is there ?—Yes; any large boiler we can make quite as cheap. ' 15. Then your remarks do not apply to boilers? —No ; boilers being more bulky cost more for freight. 16. Then by putting on 20 per cent, on engines and machinery the consumer would not have to pay a "larger price for such articles ?—Yes ; he would have to pay a little more in proportion. 17. Mr. Feacock.] Then it would really cost the consumer or person requiring such machinery a fifth more ?—lt would in some cases, not in all. He might get it for something less. There would still be competition for the local manufacturer to contend against. 18. If competition will make it less, on whom will the lessened price fall ? —On the consumer. 19. Who will bear the loss if the seller does not get his 20 per cent. ? —I do not exactly understand you. 20. If 20 per cent, is not got by the seller he must lose something. Who will have the benefit in the event of competition lessening the price to the consumer?— The loss would be shared between the profit of the manufacturer and the wages of the labourer. 21. Mr. Garriok.] You say that the iron trade is in a languid state? —Yes. 22. And that there are many men out of employment ? —Yes ; there are a great many men out of employment. We are losing all the young men who were learning the trade. They are drifting out of the country for want of employment. There are a good many young men who learnt the trade under me who have gone from Wellington. 23. When trade is slack, do the wages vary: are the men paid any less?— Not as a rule. 24. I suppose the Union keeps up the price ?—Yes ; it keeps up the price. If the price is not kept up the men leave the country. We work short time in order to keep our men together. 25. Does the importer of engines cut the prices of engines as against the manufacturer?— Yes. 26. Does the manufacturer cut his prices and regulate them according to the prices of the articles made in the colony ? —I cannot speak from experience. 27. Would the importer have any effect on the manufacturer at Home ?—Yes ; that might be arranged. 28. Have you any personal knowledge that it is arranged?—l have not. 29. But you are aware that importers do cut prices as against manufacturers ?—Yes. 30. Do you think that a moderate duty would have the effect of employing all hands ?—Yes. 31. On full time?— Yes ; on full time, with full employment. 32. Hon. Mr. Ballance.] Have you any idea of the number of engines which are made here in the course of the year, either in Wellington or in New Zealand? —I have not considered that. 33. Have you any idea of the number imported as compared with the number made here ?—I have never taken that into consideration. 34. Is there one-half of the number imported made in the colony?—I should say more. 35. Three-fourths?— Yes; all the smaller engines are made here. 36. I am speaking of engines manufactured here?— Yes. 37. Then you think that three-fourths or more of the engines imported could be made here at the price? —Since the direct steamers have been running competition has become keener. Engines can be telegraphed for and sent out to the colony almost as quickly as they can be made here. The increased facilities have increased the competition. 38. You say that the wages at Home are 55., while here they are 10s. when in Ml work ?—Yes; we have never been working short time before now. 39. Have you any idea of the number of men employed in the iron trade here ?—lt varies very much. Sometimes I have as many as 100, 110, or 150 men; but at the present time I have not above twenty. 40. Do you take apprentices ?—Yes. 41. Does the Union regulate prices? —The Engineers' Union does not interfere with shops. 42. How many apprentices have you now ?—Six. 43. Six out of the twenty employed?— Yes.

1.—5

4

44. When you had 110 men, how many had you then? — That was the time when I was manager for Mr. Mills, at the Lion Foundry ; I think there were about twelve or fourteen. 45. Do you think that there is the same demand for engines as there was at that time ? —Yes ; there is more. 46. Then the demand is increasing?— Yes; the demand is increasing. 46a. Although the manufacturing of them has fallen off?— Yes; we are dwindling down. We were better off in every way ten years ago than we are to-day. 47. Mr. Bruce.] I understand you to say that you employ a less number of men, at present rates, in the trade owing to the importations of these engines?— Yes. 48. You also say that ten years ago the trade in Wellington—that is, the colonial trade—was in a much more flourishing state ?—Yes. 49. Notwithstanding the fact that the demand for machines has largely increased ?—Yes. 50. How do you reconcile these statements : was there protection then ? —There w-as more work done in the colony. I was about that time mauager of the Lion Foundry. I was there for five years, and we never had less than from 100 to 120 men at work. We used to do a great deal of bridge-work. Most of the work we did then is now imported. 51. Why is it now imported ?—Owing to the greater facilities that exist for importing. 52. Is there much difference in the freights charged now as compared with ten years ago ? — No ; but the facilities are so much greater. You can get a machine from England now almost as quick as we can make it. 53. You say that your ideal standard of wages is 10s. a day?— That is what is paid. 54. And I understand you to say that, in order to give men that 10s. a day, you require 20 per cent, to be put upon imported machines such as you can make ?—Yes. 55. Of course that means so much more cost to the consumer? —Yes. 56. Mr. Bracken.] In case the 20 per cent, were adopted, how many extra hands might be employed in Wellington in the iron trade ? —I think that the whole of the hands could be employed. There would also be many more facilities for doing work. A very great deal of work would be done locally that is now imported. 87. Would there be an inclination to import, irrespective of the quality of the article likely to be obtained from the local manufacturer ? —My experience is that, if we could produce the article for the same money, we should get the preference. 58. Mr. Bruce.] In the event of your men being willing to work for 7s. 6d. a day, would that have the result of giving you the same advantage as the 20 per cent, would give ? —They would not work for 7s. 6d. 59. lam not saying anything about that; but, supposing they were willing to do so, would that have all the result which you expect from imposing this 20 per cent. ?—No; I do not think it would. 60. Hon. Mr. Ballance.] Supposing you had a very much larger trade and larger business, could you manufacture at a less, price ?—That is where the competition would come in ; competition would encourage many to go in for machinery. 61. If you had a larger quantity of machinery you could reduce the price? —Yes; that could be done if you had plenty of trade to keep the men going. 62. Then the 20 per cent, would not have the effect of an increased charge to the consumer ? —No ; the consumer would get the benefit of price from the larger quantity manufactured. 63. Does the rule in this trade hold good, that the larger the quantity made the less the price ? —Yes. 64. Would any cheapening by means of the larger quantity be the effect of more machinery, rather than a matter of labour ? —lf we had a lot of anything to make in our business we would introduce machinery to meet the demand; but we do not get the opportunity. If labour was cheapened the consumer would also have the benefit. If there is a greater quantity of machinery a greater quantity of the article in demand can be made : this reduces the price, and the consumer gets the benefit.

Fbiday, 20th May, 1887. Mr. C. M. Luke examined. Witness : Before making any remarks, I should like to be allowed to say that I am rather what would be called Fairtrader than Freetrader or Protectionist. 65. The Chairman.] The Committee would like to hear your remarks for the purpose of this inquiry?—My opinion is that our industry must be assisted to a certain degree. Our-experience in the iron trade, so far as engineering is concerned, has been this : that there has been a considerable falling off for a long time, but this falling off has intensified within the last six or twelve months. In my opinion, what has brought this on is getting large quantities of goods from Home. We are brought into contact with great markets which are too powerful for us to compete against. The members of the Committee may not be conscious of this fact, that Germany is doing her best to bring in machinery and iron-ware. Already there is a considerable proportion of it imported into the colony. Owing to extensive hours and the cheap rate of labour there, it is impossible to compete against a market of that kind. This takes place to a very much larger extent, owing to the importations from England, with all her perfect machinery and appliances. We think that the amount of tariff anticipated by the Colonial Treasurer is a fair amount, and meets our case thoroughly. In our opinion, it would not be wise to put on prohibitive duty, for that would only encourage the building-up of large monopolies ; but the amount of the tariff, say 20 per cent., should be such as would enable the industry to exist in a healthy way, and to a large extent meet our own requirements. I should also say that there is another serious aspect of the question from this point of view, namely, that for some years past we have been training up a number of young

5

1.—5

men who have now gone through their apprenticeship in workshops in the colony. Trade has fallen off to such an extent that there is no work for them. The result has been that hundreds have drifted away—most of them to Victoria, not a few to America, and a few to New South Wales. My own views on these questions, if I am permitted to express them, are that the country should be anxious to keep its own population. A country that has hitherto expended so much money in bringing people here ought to be in a position to stimulate labour. 66. That is the object of the whole thing. We all agree with you in those views. But let me recall you more especially to the particular industry with which you are connected. We do not require you to speak as to Free-trade or Protection in the abstract, but of your experience in your own trade? —I will give it to you. Some three or four years ago we started the industry of building steamers. We have built two. The trade four or five years ago was in a more prosperous state than it is to-day. Our average number of hands was from ninety to a hundred, but during the last six months we have had to discharge about fifty of that number. We have discharged thirty-six within the last two months. In addition to that we are working short hours to keep the few people we have remaining employed, and to avoid their drifting away from us. In this class of skilled labour it is necessary to keep them together when trade gets bad. This presses heavily on the manufacturer. My experience is that the trade has fallen off two-thirds within the last four years. 1 believe that four years ago the output of engineering-shops alone in Wellington would amount to £70,000 per annum. From what I know and can gather from other shops Ido not think that last year it much exceeded £20,000. 67. In what direction do you think that relief might be given or your business stimulated?—l think that an amount of duty equal to 20 per cent, would assist us so materially that we should be able to carry on successfully. I believe that it would give such a stimulus generally to the trade that it would be an increasing and growing trade, instead of, what it is now, simply a dying business. 68. Are there any matters of detail connected with the trade to which you would like to refer? —I should like to refer especially to the manufacture of engines and boilers. 69. Will you tell us briefly how you think that part of the business might be encouraged?—■ At present and for some time past engines and boilers —I refer more particularly to engines and some other classes of machinery—have been imported here to a large extent. I believe with the assistance of 20 per cent, we could produce articles of equal value; such articles as would meet the warts of the public generally. It would afford considerably more labour to the working-men, and build up a more healthy industry for the future. 70. In the manufacture of engines and boilers, what proportion does the cost of labour bear to the cost of material ?—The cost of labour for the average run of machinery would be something like 85 per cent. 71. And the raw material, how much ?—Only 15 per cent. Take an imported engine in competition with that at the price of £100, 90 or 95 per cent, of that money goes back to England. That appears to me to be a more serious leakage than the interest upon the ioans. 72. Mr. Bruce.] What is your particular line : are you engaged in the manufacture of boilers and engines for small iron steamers ? —Yes; our industry is built up of various branches. First of all there is the foundry, where the casting is carried on. At present we have one of the largest shipbuilding plants in the colony. We have built a steel ship, classed Al 100 years at Lloyds—the "Maitai"—l believe equal, if not superior, to anything of the kind turned out south of the Line. This is a struggling industry, and owing to the depressed state of the trade there has not been a demand for such work. I may remark, further, that there is the forging department, where forging of every kind is carried on. We have also an auxiliary department for the manufacture of cookingranges and for other descriptions of work. 73. You state that your business was in a comparatively flourishing state four years ago?— That may be a small limit; say, from three to six years ago. 74. You attribute the depression to the increased facilities of communication with Europe and the competition of German and British industries, which tend to throw you out of the market ? —Yes. 75. I do not wish to ask you any questions affecting any general principles ; I wish to enter into matters of detail with reference to your trade. What are the wages you pay your men compared with those paid in Great Britain to men in the same trade ?—I should say that the rate of wages as a whole here is something like, or nearly, three times as much. In some manufacturing towns in England the wages of the mechanic is about a guinea a week; to the same class of men we pay something like 10s. a day, that is, £3 a week. 76. Then, in order to give these men three times as much, you are willing to make the consumer pay 20 per cent, more for what they want you to supply ?—I think that 20 per cent, would meet all the difficulties of the case. I would advocate such a duty being put on because I believe it would be a satisfactory arrangement for the country at large. 77. You attribute the depression in trade to the two things I have mentioned. Does it not occur to you that there is great depression in all industries and all occupations all over the colonies, and that, owing to this circumstance, the consumer will be less able to pay 20 per cent, now than at a more flourishing time ?—I believe it would so revolutionize trade that it would be better for all sides. 78. With reference to large engines a letter has been read, and we have it in evidence that large engines cannot be made here ?—I may reply that I believe we have facilities for making engines up to 100-horse-power as easily as for 10-horse-power. 79. But not 1,000-horse-power? No. 80. Mr. Hatch.] Do you mean to say that this 20 per cent, would be charged to the consumer? -—I do not think so. 81. You answered Mr. Bruce so? —I think the Committee should understand that the question put was, whether the colony was able to pay 20 per cent, more in a time of depression. What I

1.—5

6

understood Mr. Bruce to mean was that it would be better able to pay that duty when times were flourishing. I was asked whether I could go into the argument—to explain my views upon a policy of that kind. 82. The Chairman.'] He appears to have got you to say whether the colony would be obliged to pay 20 per cent, more for these goods, in order to enable the manufacturer to pay three times as much wages as are paid at home ?—What I thought was that I was willing to put on this 20-per-cent, duty to assist the industry; but I did not mean to say for a moment that that 20 per cent, would be put on the price of goods to the consumer. 83. Would you raise your price to the consumer? —I believe the price would not be raised; the competition would so regulate the prices that the consumer would pay very little more than at present. 84. You said that 85 per cent, was the proportion of wages paid for an engine to cost £100 made in the colony ; does that include the manufacturer's profit ?—lt includes the maker's profit. 85. Mr. Garrich.] Do I understand you that, when speaking of 20-per-cent. duty, you would have nothing differential as regards the material used, such as nuts and bolts; would you impose the duty upon everything but nuts and bolts, or would you put the 20 per cent, on everything ? — My own feeling would lead me to think that nuts should be admitted free; coach and engineers' nuts and bolts to a certain size should be admitted. 86. For the reason, I apprehend, that it would cost more to produce them here than the article is worth ?—Yes ; considerably. 87. Now, as between the prosperity of four or five years ago and the depression of to-day, is there any depreciation or reduction of the rate of wage to the skilled workman ?—There is no material depreciation ; there has been, in some cases, a slight reduction, but for a short time only; but an inappreciable reduction. 88. Skilled mechanics, practically, refuse to work for any depreciated wage, without regard to time?— Yes ; the facilities open to them to go to Victoria, where the wages are high, enable them to carry out their views with regard to the rate of wage. 89. May I infer from that that skilled mechanics would rather be out of employment on what is called " strike " than consenting to any lowering of wages, as a rule ?—I rather think they would ; but for some years there has been no disposition to interfere with wages at all, but on some slight cause the men have left their work. 90. Is there any differential rate between the Government workshops and private establishments ?—Wages are about the same; if anything, they are a little lower in the Government shops. 91. Have you taken into consideration at all, in allowing for the operation of causes which have led to the present depression, the inability to employ capital in productive industry ?—Yes ; I think that is one cause, and perchance the high rate of wages in the colony is a great bar to more capital being employed in manufactures : but this is beyond our control. 92. In there any recognized rule of profit in your trade similar to those under which mechanics contend for a certain rate of wages :is there any certain rate of profit ? —I may say there is not. Formerly we had what is termed rates for labour, that is, if we sent a number of men to a place there was so much for them per day. But the system of contract has produced such competition that we are contracting at the lowest prices and cutting down to iess and less, while wages keep at the old. standard. 93. Three or four years ago was there a recognized ratio of profit, and, if so, has it become less now ?—To all intents and purposes the ratio of profit varies, while the rate of wages remains the same. Ido not think that 20 per cent, will increase the charge to the consumer. I think it will rather have this effect: that persons, instead of sending Home for goods, will get prices in the colony, and that competition will regulate the prices. If we had sufficient work, at a little advance on present prices, we should do very well. We are suffering more from want of sufficient work than from the low rates. 94. Would not that want of work arise from the fact that persons cannot get a return for their capital ? —lt does not so much apply to our trade. 95. What do you consider, in your trade, is the cost attached to importing an article?—Do you mean to include freight and charges ? 96. Everything? —I should say that in our line of business it would be from 15 to 20 per cent. 97. More than that, would it not be?—l think not for heavy machinery, which does not take up much room. 98. What is the freight on boilers—heavy boilers ?—That is different. Boilers take up a great deal of room, and most large boilers are made in the colony. May Ibe allowed to explain that the effect of competition on prices is to leave-little or no profit attached to the article. This competition is brought about, to a large degree, by the small amount of trade doing. 99. Mr. Peacock.] In the event of 20 per cent, being put on, you say that competition would bring down prices, that the consumer would not have to pay more ?—He might have to pay a little more, but he would not have to pay 20 per cent. 100. Twenty-per-cent. is looked at as a large duty, larger than we have been accustomed to ?— Yes. Hitherto we have had no assistance at all. 101. Suppose that, by putting on a large duty, you stimulate your trade, and competition becomes brisk, then, you say, that the result of that competition will be to bring the prices to nearly what they were before the duty was put on: would not that lead to a further duty, in order to keep up the rate of profit ?—I do not think that prices would be brought back to what they were before the duty was put on. What I say is that there would be a great deal more work to be done. There might be a small increase in price, but the increased amount of work would give the engineer his profit. 102. If a duty were put on so as not to cause undue stimulus, what then would be the effect ? —I think if you put on anything less than 20 per cent, the importation will be as large as it is to-day.

7

1.—5

103. You think that the importation will still remain, even with 20 per cent.?—No; I do not say so. I said that if less than 20 per cent, is put on it would not give the stimulus. 104. Your idea of the duty to he put on is to make it prohibitory to importation?— The 20 per cent, would give such a stimulus to trade that there would be no need to import. 105. If the competition produced by the stimulus would have the effect of reducing prices nearly to what they are at present there would still be a loss : the 20 per cent, would not be a gain. Who would be the loser; would the loss fall partly on the manufacturer, or the wages of the workmen, or on the public ?—The competition would cause the employment of more labour ; there would be a larger production, and consequently there would be more labour employed ; the profits would come out of the increased work done. 106. But, if the profit of the manufacturer is reduced by this competition, he would have to content himself, would he not, with less ?—I do not quite understand you. 107. If 20-per-cent. duty were put on he would have 20 per cent, more than at present in the way of profit. But you say that in the course of events competition will bring down prices, so that the consumer will not have to pay much more than at present; the profit would largely decrease ?— No ; instead of one hundred men two hundred would be employed; the wages would not be greater, and the profits would come from the increased trade. 108. You mean that the larger the work the manager would be able to content himself with less profit, and that the profit he would ultimately get would not be too large?— Yes. Mr. B. W. Mills in attendance and examined. 109. The Chairman.] We are desirous to hear your evidence upon the subject of this inquiry, Would you, in the first place, like to make a general statement ?—I would say, as a preface to any remarks that I may make, that I have already devoted two nights and a day to the tariff questions (on a committee of the Chamber of Commerce), and this circumstance has rather encroached upon the time that I could devote to this particular subject of industries and manufactures. But, speaking of the iron industry, specially in regard to its connection with engineering, boiler-making, and blacksmiths' work, I have an intimate acquaintance with these branches of it by reason of my connection with the Lion Foundry in this city for nearly a quarter of a century. I am of opinion that the iron industry is pretty well protected at present. Ido not think that those engaged in it really lay claim to much protection. I think that, with the tools and machines used in it coming in free, and the raw materials such as sheet-iron, copper, and other metals used being still free, there is no demand for any large measure of protection. But lam not quite clear as to one or two important items. I refer to bolts, nuts, and rivets, which, while they are free and not to be disturbed by the new tariff, yet the new tariff says that wrought-iron in any stage of manufacture shall pay 20 per cent, ad valorem. Of course, bridge-work consists of bolts to a great extent. There appears to me to be an anomaly here which ought to be settled. I may state to the Committee that I have at present no connection whatever with any engineering establishment or foundry. 110. Mr. Joaes.} Do I understand you that these articles you have just mentioned are dutiable? ■ —It is stated that wrought-iron in whatever stage of manufacture shall pay duty. I pointed this out to a gentleman connected with the iron trade, and there appeared to be some doubt about it. My impression is that all carriage-bolts, engineers' bolts, and nuts and rivets should be admitted free. 111. Mr. Garrich.] Why should small nuts be admitted free ? —Because they are to be employed in the industry itself ; bolts and nuts for bridge-work are totally different from carriage bolts and nuts. These would be imported here whether the duty was on them or not, because they are necessary for work to be done : they are made in great quantity principally by machinery; the cost of making them here would be excessive. 112. Do I understand you that they cannot be made perfectly in the colony ?—The large ones can but not the small ones. The labour necessary would be very great. If 20-per-cent. duty were imposed they would still be imported. Many of them are not even charged by the cwt., but by the gross. 113. The Chairman.] As you read the present tariff these small bolts are liable to duty ?—I put the question at the Customs yesterday morning and was told they were free. 114. But you cannot understand how, when it is stated that iron-work for bridges shall be free, and yet that wrought-iron in any stage of manufacture should have to pay 20 per cent, how wrought-iron rivets are included ? —I think they should be free; perhaps they are free; but what I say more particularly is that the doubt should be settled. 115. Mr. Jones.] Do you think it probable that any manufacture of bolts, nuts, and rivets might be started in New Zealand?—l do not see why it should not. 116. Would it be expensive? —I do not think that it would be; but Ido not think" it would give much employment to labour. It is wholly done by machinery. 117. Which would be wholly employed in that work ?—Exactly so. 118. Could one such factory supply all New Zealand?—lt could do so if got up to sufficient extent. 119. Mr. Bruce.] It appears to me that you are in favour of admitting small bolts free, and I understand you to say that you would be in favour of protecting the larger ones ?—Yes; I think in respect to the larger ones there is a fair amount of labour expended on them in proportion to their value. 120. But is it not a question of degree only : would not the larger nuts come in more cheaply ? 121. Mr. Jones.] It is not a question of size, is it? —My contention is that all engineers' bolts and nuts, carriage-bolts, and nuts and rivets should bo admitted free. 122. Would that cover all agricultural implements ?—Yes; it would include the bolts and nuts in their manufacture.

1.—5

8

123. Mr. Bruce.} I think the witness contends that these small rivets should be admitted free because it would cost too much to make them here under existing conditions ?—That would be so; they would be very costly to make. 124. Then, in reference to the larger bolts upon which you would admit a protective duty, would not they come more cheaply for the public if admitted free also : is not the difference one of degree and not of kind ?—The cost of bringing a hundred tons of ironwork here from England is very considerable. I think it is but fair to encourage local industry. The labour would be excessive if required to be employed on these small bolts in the colony, which are made in large quantities by machinery at Home. 125. Suppose, for the sake of argument, a hundred tons of these small bolts were made in the colony, how much extra would the public have to pay for them ? —I think they would have to pay 100 per cent, more unless the proper machinery were here for making them. 126. Then, in the case of a hundred tons of the larger bolts, supposing they were made in the colony, what would be the extra cost ?—My opinion is that they would scarcely want protection. The machinery, the cost of labour, of material, and the cost of bringing it out would be as great as the cost of making. At the same time, as I have said, consideration should be extended to local industries. But the cost of bringing things to the colony is frequently a protection in itself. I have often had to tell my customers that they will get a boiler or an engine made equally well here— quite as well, and quite as cheap, as they could get it from Home. Besides, a great deal of work can be done in the colony so reasonably that it scarcely requires protection. I should like to see all work possible done in the colony. There is a great number of young men who have learnt their trade in the colony, and there are adequate appliances here, so that a great deal of work could be done in the colony which is now imported. I am an importer myself, so that I speak to a certain extent against my own interest. 127. Mr. Garrick.~\ Can you explain the enormous difference in importing rolled girders upon the price in the colony ? —Upon the price paid for these girders from New South Wales. Do you refer to rolled girders ? 128. Yes ? —These are all imported from Wales or Belgium; they cannot be made in the colonies. We can do work as well and cheaply here as in New South Wales. 129. Mr. Jones.} You propose to put on 5 per cent?—l should like to see a large proportion of the work that is now done out of the colony done in it. It needs very little protection to enable that to be done. 130. Mr. Bruce.} I wish to ask one more question in reference to this, for ihe same answer will apply over a variety of articles: You admit that small rivets should not be protected. The advantage of that you say would go the public. You assume that the larger ones should be protected, because they can be made in the colony. Does it not resolve itself into a question of degree, and not of kind, that the public, if they have to pay 5 per cent, upon the larger, will pay £5 additional for every one hundred pounds' worth that arrives in the colony more than is imported ? —I do not think so : if duty were imposed upon the smaller bolts and rivets, they would still be imported; they are made for industrial purposes, for the use of engineers, &c, in putting their work together. What would cost you about Bd. per pound to import, would cost you Is. €d. per pound if made in the colony. 131. The answer to my question is scarcely brought out. I think Mr. Mills will admit that, if he places a duty, as he has already told us he would do, on the larger ones, they would just cost so much more than they would assuming there was no duty. Do you admit that if you put on 5 per cent, they would cost £5 more for every £100 expended ? —Certainly they would if imported ? 132. Mr. Hatch.} What is the proportion of the cost of the rivets to the cost of the boiler?—■ About 10 per cent. 133. Mr. Peacock.} I wish to ask a question bearing upon the objection stated by Mr. Mills to the effect that it would involve a large amount of labour to make the small bolts in the colony, whereas at Home they are made by machinery. Is it a question of machinery chiefly?— They are made chiefly by machinery at Home ; but if they were to be made here the labour required would be excessive, as there is not the machinery here. That excessive labour would add to the cost. As these things are used almost wholly for industrial purposes, I think it would be an injustice to impose duty upon them. In any case they would still he imported. 134. The Chairman.'] Then as to tools and machinery ?—I think that tools and machinery should be admitted free. 135. Mr. Peacock.} Mr. Mills seems to think that we are inquiring into these matters with reference to the tariff? —No, Ido not understand it so; only in regard to its bearing upon industries. My opinion is that tools and machinery required in the development of important industries- —our timber and woollen industries, wood- and iron-work for engineering and shipbuilding, &c.—should be admitted absolutely free. These are industries which absorb a large amount of labour, using up the timber, wool, and indigenous products of the country. I think there should be no doubt about such articles being free. 136. The Chairman.} As a matter of fact they are admitted free at present ?—Yes. 137. Not only under the old but the new tariff?— Yes; I am merely recording my opinion as having had to do with many important industries. 138. Then you do not desire any alteration in that respect ?—No. 139. Hon. Mr. Ballance.} You have referred to the kinds of machinery that you would admit free; do you refer to any machinery now charged duty ?—I think not; only that in the new tariff it states that all ironwork, at whatever stage of manufacture, and machinery shall pay duty. 140. Are you referring to the tariff?—To the new tariff now. 141. lam not referring to that, but you think that all machinery employed in the development of industry should be admitted free in order to encourage industry ?—Yes. 142. What is your opinion in regard to machinery which is itself an industry—machinery that

9

1.—5

is manufactured ?—I should like to see it protected in a reasonable way. But the machines I refer to cannot be made to advantage here. They are made from patterns made at great cost; they are wade for all the world, not for any particular place. I allude to moulding-machines, mortising-machines, and the like. They are articles of a special description, requiring special skill. 143. I should now like to have your opinion with regard to engines ?—I think they should have a reasonable amount of protection. 144. Engines are largely made in the colony? —Yes, they are. 145. Up to what power ?—I have made them up to sixty-horse-power. 146. Marine engines?— Marine engines and other classes. 147. Will you state how many foundries in the colony are capable of turning out engines of large horse-power?—l should think about from ten to fifteen. 148. Have you any idea of the number of hands employed by these foundries ?—I cannot say, but I should imagine about a thousand—quite that. 149. Employed in this particular industry?—ln the engineering industry generally very much more than that. Of course there are many foundries which Ido not deem capable of turning out very large and heavy work. The large shops would employ on the average more than a hundred men. 150. What is your idea as to the comparative value of engines made in the colony and engines made in the Mother-country ?—I am of opinion that we can make as good engines and boilers as any that can be imported from England. I can speak absolutely as to that, for I have seen a good deal of the work. 151. That refers to boilers ; what of engines ?—I refer to boilers and engines. 152. Can you refer to any industry lately started here in the iron trade ? —Do you refer to corrugating and galvanizing iron ? 153. No, not particularly; I refer to any class of machinery that has been made lately. I suppose that generally there has been a great development in this industry ? —Generally there has been great improvement; better tools have been imported. 154. Can you tell the Committee if any experts have been brought from Home ? —Possibly in connection with the work of locomotives there have been, for the special work connected with locomotives can hardly be done by an ordinary engineer ; or, I should rather say, it could be done, but not as it should be. 155. Good men have been engaged who learnt their trade at Home?— Yes ; but there are many young men being taught in the colony. 156. Taken on as apprentices?— Yes, taken on as apprentices. I can point to many young men, several of them in first-class positions, who were brought up to their trade in the Lion Foundry. I could name from a dozen to twenty who have much confidence and responsibility placed in them, thus showing that such young men can be educated and taught their work in an efficient manner in the colony. 157. Has the subject of technical schools for young men in the colony engaged your attention ? —I cannot say it has much, but I quite approve of them. I think it would be an excellent thing to establish them. 158. I suppose the best purely technical instruction they would get would come from the journeyman ? —Yes; but there might be some higher class of teaching desirable. 159. You mean for the purpose of theoretical knowledge ?—Yes. 160. Mr. Bruce.] You said you would admit tools and machinery free for the same reason, I presume, because they would cost as much if made here as the duty amounted ? —As a matter of fact, if a trial were made to manufacture these machines in the colony, it would add to their expense to an extent that would be prohibitory. 161. Then you consider that a duty on tools would be prejudical? —I think so. 162. You said, in answer to a question put to you by the Hon. Mr. Ballance, that you rather approved of a technical school ?—Yes ; I believe it would be an excellent thing. 163. You said that there were about a thousand men engaged in the iron trade? —I think lam far below the mark. 164. I wish to get at this —namely, why you should approve of technical schools for the manufacture of machinery which you say must be imported from the Mother-country ? —I think it is a wise thing to do, to have the young men that are to be brought up in the colony to know their business thoroughly, and therefore it seems to me desirable to give them every information concerning it. 165. But, on your own showing, you would protect that industry to give these men work ?— I have already said that an engine can be built here as well and as cheaply as it can be imported ; boilers can be made even more cheaply, for the freight, &c, is so great that they do not require protection, the charge for freight being a protection in itself. 166. Do you include steam-engines?— Yes; but here I should say that very large marine engines—such as would be required for the " Kaikoura," for instance—you could not get such large engines built in the colony. What I maintain is that anything that can be done in the colony can be done well, but beyond a certain size not at all. 167. Still it involves a question of cost to the consumer; in effect you say that you are not in favour of protection because you can import cheaper ?—I said I should like to see this industry protected to a small extent. 168. You admit that already there is a certain amount of protection ?—I think it deserves a little protection, although the cost of importing is, to a certain extent, a protection. 169. You mentioned 10 per cent. ; in effect you admitted that to make machinery successfully here you require such protection ?—I do not know that I said that. What I meant and intended to say was that it would be a kindly thing to do to give an industry employing such a large amount of labour assistance to some extent. That is the feeling I have towards this industry. lam an 2—l. 5.

1.—5

10

importer, and it would suit me better to import the article. You must therefore give me credit for sincerity. 170. I would say presumably that machinery—l will not specify any particular machine—would require, according to your evidence, a protective duty of 10 cent. I should gather that from what you told the Committee. Ido not want you to commit yourself to actual accuracy, but such was the drift of your remarks ?—No ; I do not think that is the case. 171. Very well, then, let us take a case : if you put a duty of 10 per cent., does it not mean that the man who buys the machine will have to pay extra upon the cost of making it ?—lt does if imported. 172. Mr. Hatch.] I would ask whether the machines you allude to are not patent ones, embodying the whole ingenuity of the world?— Not because they are patent. As a matter of fact, many of them are ; but putting a duty upon them will not enable them to be made here, because they are made from patterns that are themselves very expensive. The small demand for them in the colony would have a prohibitory effect if a duty were put on them, and I think it a pity to burden the industry with additional cost. 173. In speaking of machines, do you mean engines?—No ; Ido not. The fact of admitting the raw material was a sufficient protection for them. The same in the case of boilers, the freight upon which operates as a protection. Those machines to which I refer would not be bought by the general public. They would be regarded as tools for the purposes of manufacture. They are:not articles of commerce. 174. Hon. Mr. Ballancc] You said that 10-per-cent. duty on engines or machinery would add to the cost : would the manufacturer of engines in the colony put on 10 per cent, to the cost here ? —No ; I did not use that word; it was put into my mouth : but I thought, if a little protection were given, it would not be an unfair thing to a very important industry. I think that machinery is being made and work done at too low a price, and the industry does not thrive as it should do. 175. You look upon a 10-per-cent. duty as a mere stimulus given to the local manufacturer?— It would be so ; it would be an encouragement, no doubt. 176. Then you think that, if 10 per cent, were given, competition would keep the price down ? —Yes ; I think the competition is so great that work is done, as a rule, at a lower price than it should be. 177. In other words, profits are tending to a minimum? —Yes. 178. Through competition?— Yes; through competition. 179. You said it would suit you better to be an importer. Are you aware of the profits of all the parties : the profits of the manufacturer and the importer ?—The profit of the importer is generally a commission of from 5 to 10 per cent; all carriage has to be added and borne by the user. 180. Have you any idea of the amount of wages to be expended in the case of an engine that would cost, say, £1,000: that is, what proportion of the £1,000 would be spent in wages?—l think quite half. 181. In the case of the profit of the manufacturer ?—ln labour alone it might possibly be more, but say half. 182. What would be the proportion for the raw material ?—The raw material would be about one-third. 183. Now, take the case of an imported engine, what would be the proportion of the manufacturer's profit at Home ?—I should imagine that the maker of engines at Home would have from 15 to 20 per cent, profit. I know that the larger makers are not content, if they make large engines for a steamer, to cost, say, £10,000, unless they get 25 per cent. We do not get anything like the profit in New Zealand, that they get at Home. 184. Mr. Peacock.] I understand you to say that, if these industries were stimulated by a duty, competition would bring down, the price to very much the same as if it had been imported ? —No; I did not make that remark; but I agreed that a duty would stimulate the industry, and I thought the competition was so great that the work was done here in the colony at a minimum. 185. If the price by competition were brought down to what it would be if the article were imported, would not that involve the lowering of wages ?—I think the workmen in New Zealand are capable of taking care of themselves ; as a matter of fact, wages have not been brought down. 186. To the consumer you say the price would be so low as to involve the lowering of profit : would that not involve a lowering of wages? No ; but, to my mind, the manufacturers here have unwisely consented to a minimum of profit in order to get the work. 187. Mr. Bracken.] I understand you to say that, in advocating any protection to these industries, you are speaking against your own interest as an importer ?—lt is against my interest, for, as I have already stated, I could import many of these articles. But I tell my customers sometimes that they can get them made as well in the colonies as at Home, and just as cheaply. 188. Hon. Mr. Ballanca.] Do you consider that the manufacturers of any particular articles, let us adhere to engines, have any influence over the prices at Home : that is, has the manufacturer in the colony anything to do with the price demanded at Home ?—Not the slightest. 189. Do you not think that the firms which send out these articles from England regulate their price by the prices in the colony ?—I do not think any maker regards the price in the colony. If you take makers of particular machinery —Hornsby, for instance—their largest trade is outside New Zealand. In fact, New Zealand is a very small field for their operations. Egypt, France, Germany, and other countries are among their largest customers. To my mind the prices that might prevail in the colony would not have the slightest effect upon them. 190. They would not lower their price for the purpose of competing ?—I do not think so. In one kind of machinery—reapers and binders, for instance —they might do so in order to compete with America; but in the matter of engines, boilers, and things of that kind the manufacturers atHome would not recognize the prices in the colonies.

11

1.—5

191. Mr. Hatch.} In the event of wages being lowered by a protective policy, would the amount of work be increased ? —I think the skilled labour of the colony is quite able to take care of itself: there is no experience for saying that the rate of wages would be lower ; as a matter of fact, wages have not been brought down. Mr. Peacock : I was simply speaking of the possibility of a stimulus to this industry having this effect. Witness : There is only one other item to which I would refer : that is, corrugated galvanized iron. That subject cropped up in the Chamber of Commerce here. But the amount of labour requisite is so very small that it was not considered to be an industry in the sense you use the word. Everything necessary for it has to be imported. It is a mere question of dipping and corrugating the sheets. 192. Mr. Hatch.} The necessary machinery would cost about £300?— About £400. 193. Then you think that the duty imposed by the new tariff is a reasonable figure—£l 10s. a ton? —I think it is reasonable. [Approximate Cost of Paper. —Preparation, nil; printing (1,525 copies), £& 17s. Gd.]

Authority: Geokoe Didsbury, Government Printer, Wellington.—lBB7.