A Protective Policy
Lyon and Blair, Printers Lambton Quay, Wellington.
It is only necessary that the writer should explain that, in the following pages, he has merely expanded the notes of a lecture which he had prepared upon the subject. He has done so in much haste, and, he is well aware, very imperfectly, in consequence of his going to a distance. He trusts, however, that at this important juncture, such an important question will receive the careful attention it deserves. His brethren of the press, as well as the public, he hopes, will appreciate the motives which alone animate him in assuming a position of so much prominence, for they are none other than the welfare of the country.
May 20th, 1880.
Mr. President And Gentlemen,—I propose on this occasion to enter upon a brief exposition of the principles underlying a truly protective policy. Difficulties, I am well aware, we shall have to encounter, but I trust however formidable they may appear at the outset, they will be found to melt away as we proceed with the discussion. I will endeavour to confine myself as much as possible to general principles, such as may be dealt with upon something approaching to a scientific basis, and formulated into something approaching to an economic theory. Such a definition of a protective policy should therefore be equally applicable to any new country, emerging from the purely pastoral to the agricultural and manufacturing state. In this colony I venture to say, moreover, that many causes contribute to elevate this question into one, both of much urgency and of great importance, and the time seems specially opportune for such a discussion.
At the very outset, permit me to say, that I have no sympathy whatever with the extreme views of the ultra-protectionist school, and I am persuaded that much mischief and no good can arise from such ill-judged advocacy, We should endeavour to let daylight in upon the subject; to promote enquiry; to disarm hostility; and above all things, "let our moderation appear unto all men."
In endeavouring to establish a scientific basis for a protective policy, we are cast very much upon our own resources. The great masters of political economy are held, by those whose appeal to authority on this as on so many other questions, to be against us. Our position is assailed and sometimes thought to be demolished by such appeals. But, Sir, those great writers wrote under circumstances, and in a condition of things, with which we have little in common. Political economy is not, moreover, an exact science. What may be true for any particular period or in any given conditions, may not be true for all time, and probably will not be true in a condition of things having neither analogy nor parallel. At this end of the earth, many problems are presented to us, which can never be solved by any such appeals to authority. They are, such as we ourselves must resolutely endeavour to solve, and a protective policy is one of these. We are in the position of the architect who visits some ancient ruins, he may discover much that may be eminently suggestive—here an entablature chipped and broken—there the fragments of some splendid capitol—here a broken column, there an arch in ruins. The finished structure must, however, be evolved out of his own page 4 consciousness, and so too at this end of the earth, practical statesmanship should be distinguished not merely by a careful study of the past, but specially by a complete mastery of the new condition of things around us, and wise legislation should be specially directed likewise to such measures as will best promote the welfare of these colonies under such altered conditions. The colonial statesmen who exclusively looks behind, like the pair-oar boatman steering by objects astern, will continually fall into mistakes; he must take his stand upon the bridge and carefully look ahead.
Before proceeding further, it will be necessary to enquire, what is free trade? What do we understand by a phrase so common? Let us survey the world as it ought to be. How vast and multiplied are its productions, all contributing to the necessities and luxuries of mankind. Nature, how beneficient; the gratuitious gifts of the bountiful Creator everywhere free! The air we breathe, the glad sunshine, the rain descending on the just and on the unjust ! Man cannot fetter such universal benefactions. The bounteous earth too bringing forth her stores in rich abundance, and in such infinite variety; the tropical regions pouring forth their choicest luxuries to enrich the inhabitants of colder climes; the north stretching forth her hands to the south, the south reciprocating such unfettered interchanges. The oceans' highway everywhere free to the commerce of the world, the remotest regions freely interchanging their natural productions. A beautiful picture! That is free trade. What a grand and beneficient interchange of the world's productions, commerce running too and fro on the earth and ocean, as freely as you visit your neighbour in the next street or your friend in a neighbouring city. That is probably what is meant by free trade. Some such magnificent panorama floats before the imaginations of her enraptured disciples; but do we posses it? Again, survey the world as it is, and what do we discover ? That modern invention, the custom-house everywhere; free trade nowhere. Great Britain affords, we are told, a noble example of free trade. Strange, anomaly however, she extracts over forty millions annually, by means of customs duties, out of the pockets of the people. A coast-guardsman maintains his solitary watch at each mile of her coast; her cruisers everywhere; "no thoroughfare" written in great letters over every port, and at the mouth of every river. Is this our boasted free trade?
We are told, however, that customs duties are imperative; her Majesty's Government must be carried on; and at this point we approach the question of a protective policy. The free-trader, you will observe, consents to such a violation of his principles for purposes of revenue for it is palpable that every restriction upon commerce is an infraction of the principles of free trade, pure and simple. Accepting then this violation of free trade principles as an inexorable necessity of State, we proceed to enquire what are the fundamental principles involved in levying taxation for purposes of revenue exclusively. Such commodities are selected as (i.) inflict the least inconvenience upon trade and commerce; (ii.) are least liable to evasion, fraud, or page 5 adulteration; (iii.) are the least expensive in their collection; (iv.) and in their incidence reaches equally and fairly every class of the community. These are the special characteristics of a fiscal policy having exclusive reference to revenue. It will be found, however, that many commodities included in the tariff of free trade Britain, as well as these colonies, can hardly be ranged under such general principles. We thus reach another distinction, namely, duties levied for moral purposes; and, still another, the taxation of luxuries. If then the free-trader so easily reconciles himself to such manifold violations of his principles for purposes of revenue, or for moral purposes, or to tax the poor man's luxuries, we trust to be able to convince him that yet another important purpose may be subserved in the process of imposing duties for revenue necessities, namely, the fostering and encouraging of local industries and manufactures. This brings us to another question: What is protection? Sir, I deplore the name. It is most unfortunate, as identifying us with that odious state of things which obtained in Britain when the food of her people was rigidly taxed, when the raw materials entering into her teeming manufactures were taxed, when her colonies were forbidden to trade with other countries, or manufacture for themselves, and when the consumers were taxed for the benefit of the producers, who became monopolists. Do we desire to revert to such a condition of things? Is there anything in a protectionist policy, as understood in these colonies, or in America or Canada, which possesses the least semblance of such an odious fiscal policy? Except the name, Sir, there is nothing in our aims having either analogy or resemblance to such a state of things as obtained under the protectionist policy of Great Britain. I desire emphatically to avow myself as much as ever a free-trader in the sense in which the term was employed in England thirty years ago. I have no recantation to make, no political theories to renounce, no perversion to deplore. If the condition of things in these colonies was the same as obtained in England at the period when she emancipated her commerce from such odious restrictions as the Corn Laws, and the Navigation Laws, I trust I should be found as earnestly as ever with the free trade party. As I proceed, I hope, however, to demonstrate that the questions we have to discuss are altogether different, and relatively as important.
Well then, Sir, it being conceded that taxation for purposes of revenue is a necessity; and that for moral purposes and, for the purpose of reaching luxuries, some departures from the fundamental conditions, which ought to be regarded by the financier in imposing taxation for such a purpose are justifiable, we advocate the inclusion of local industries and manufactures among the latter. Permit me here to point out, also, that for no reason whatever, except the liability of our legislators to blunder, such fundamental conditions as I have alluded to are almost universally disregarded; and, even for revenue purposes, a multitude of goods are included in the tariff of all the colonies which in no sense fulfil such elementary conditions.page 6
Except so far as these conditions are infringed, it does not matter one whit to the tax-payer by what process or upon what commodities he contributes his proportion of the revenue. The one thing important is, that he shall have no unnecessary taxation imposed upon him; and, so long as the amount to be raised remains the same, it is manifest surely that it cannot matter to him whether it is imposed upon the clothes he wears, or the food or liquor which he consumes, or whether, indeed, the precise amount being ascertained, a direct poll-tax would not be equally agreeable to him. This opens up a wide field for discussion upon which at present we are not called upon to enter; the one important point being this, namely, that the amount to be contributed by the community being accurately ascertained, it is of secondary importance by what process or what the commodities chosen upon which such taxation shall be levied. If it can be shown, however, that, by choosing one list of commodities rather than another, you can thus incidentally promote the growth of local manufactures, what objection can be urged to such a treatment of the fiscal policy of any country? This is what, Sir, we propose to do. We desire no additional taxation; we ask not that one portion of the community shall be taxed for the special benefit of another portion—the consumers sacrificed to the producers. This is one of the transparent fallacies which those who oppose us are never weary of affirming with needless reiteration; and I shall esteem myself fortunate if I can in some measure deliver a protective policy, such as we desire, from such palpable misapprehension and misrepresentation.
I now proceed to state what are the fundamental principles to be regarded in any fiscal policy, which recognises the importance of encouraging local industry. They are:—
1st. The exemption from duties of raw materials entering into all local manufactures, and any part or parts of the manufactured article entering into the completely manufactured article. On the face of it, this is a purely free trade principle, yet, nevertheless, it is being constantly invaded. Confining myself exclusively to general principles, and purposely avoiding details, I merely remark that anyone with any knowledge of the subject will at once discover that colonial tariffs almost universally ignore such an important principle. Many industries which might be nourishing, have languished, or altogether vanished, in consequence of including a host of articles coming under this head in such tariffs for no conceivable reason, except the mistakes of colonial financiers, who thus invade a most important and fundamental principle common alike to a free trade and protective policy, and traceable to no policy whatever. The principle conceded, that it matters nothing to the tax-payer, per se what goods are selected for revenue purposes; let us have free trade in every commodity, entering into our local manufactures, and how immensely such remissions would benefit a host of industries, increasing production and competition, and consequently cheapening all such commodities to the consumer.
And, Sir, the 2nd proposition which we take up as fundamental in dealing with a protective policy, and by far the most page 7 important is this, namely, that customs duties should be levied upon all commodities, such as we can produce ourselves of equal value, as compared with the imported article. Mark, I beg of you, this important definition, for it will be found that it plays a most important part in any exposition of a truly protective policy. The articles to be protected must, you will observe, be as good and as cheap as the imported article. It will follow, therefore, that no muster what duty is imposed upon corresponding manufactures coming from abroad, we do not in consequence enhance the prices of such commodities, for local manufactures, as good and as cheap I venture to say better and cheaper, take the place of the imported article. The growth of local manufactures, and increased local competition, is a principle universally admitted by political economists, as operating infallibly in cheapening the price, and improving the quality of all such commodities. The precise duty to be levied in such circumstances is of small consequence to the consumer, for he substitutes the local article, trade revives, increased capital is invested in manufactures thus being established on a firm basis, and local productions as cheap and good, take the place of those, the importation of which are correspondingly depressed.
The financier, in levying duties for protective purposes, has thus two well-defined principles to guide him in the operation. About the first, there can be no question. About the second, we who profess protective principles, are, I trust, equally agreed. The financier in framing his tariff, aided by local knowledge of our manufacturing industries, will discover that there are a vast multitude of commodities which already fulfil the latter condition. He will be amazed probably at the extent, the quality and cheapness of a multitude of manufactures already being established in spite of clumsy and in discriminating legislation, and he can have no difficulty in applying such a test in every instance in which it is sought to include any manufacture in the protected list. He will discover also that such a manipulation of colonial tariffs, even in those colonies which have made the greatest progress in manufacturing industries, will only touch one fifth of the revenue from customs. It can never therefore, be very embarrassing, and as the process of substituting local industries is necessarily a matter of time, he can rely upon such increased duties producing at least no less during the first year, notwithstanding that importations will be largely diminished. With such data as a single year's operations afford, he need fear no financial disturbance, for he can easily compensate the revenue by selecting some other commodities for revenue, or increasing the amount of duty upon such commodities as obviously best fulfil the conditions upon which all duties for revenue purposes should be raised. It is surely clear to you, Sir, that on the one hand the people pay no more by way of taxation, the revenue gets no less, and such a solution of the problem of a protective policy, as applied to new countries, is as free from objection to the financier who must provide ways and means to carry on Her Majesty's Government, as to the public at large page 8 who contribute not one farthing more to the revenue than heretofore by such important and highly beneficial customs reforms. The neighbouring colony of Victoria is often erroneously cited as a shocking example of the consequences of a protective policy. But Sir, I venture to say, from ample opportunities of comparing the several colonies, in none are the necessaries and luxuries of life, either cheaper, in greater abundance, or more universally enjoyed. Nor is the taxation in that colony greater by a single shilling in consequence of that policy I venture to refer you to Hayter's statistics, if further proof is needed to demolish such a transparent fallacy, and you will find that for the ten years subsequent to the introduction of her protective policy, the taxation per head was less rather than more, as compared with the ten previous years. It is the fashion to trace every mistake of her government to her protective policy, and the recent depression from which the trade and commerce of the world was suffering, is ignorantly fastened upon the protectionist party. Such critics forget that Victorian preeminence was the result of her marvellously rich gold fields, which are being gradually exhausted. Extending his enquiries the calm and impartial observer will discover that other causes, scarcely less important, have been operating prejudicially to the progress of Victoria. Chief among these is the earth hunger of so many capitalists, who have so successfully defeated almost every measure to settle the people upon the lands, and concurrently with such a depressing element the greater facilities afforded by the neighbouring colonies, whose immensely larger territories must ever divert a considerable portion of her agricultural population. Add to these the continuous drain upon her resources for her coal supplies; and he will be forced to the conclusion that but for her protective policy, by means of which she has achieved a position more unrivalled and more enduring than her gold producing preeminence, the condition of Victoria would have been a very deplorable one.
3rd. There is still another condition to which I desire briefly to allude before leaving this part of my subject. It is the protection of such commodities as afford some prospect of being successfully introduced among ourselves, but have not yet fulfilled, and may never indeed fulfil, the condition of value as compared with the imported article. Much of course may be said in any young country with considerable reason in favor of such a proposition. I myself have never insisted upon it however. If the articles coming under this denomination take the place of imported goods, which are either cheaper or better, you at once involve a protective policy in the whirlpool of objections from which I have sought to deliver it. And, after all, if carefully considered, the number and value of such productions are of small importance compared with the vast multitude of manufactures comprised in the other definitions, which alone I regard as fundamental in dealing with a protective policy. There is imminent peril of going too far by a single hair's breadth, and I venture to say the more you ponder the matter, the firmer will be- page 9 come the conviction that such a condition weakens our position, creates suspicion and hostility, and whilst labouring for the shadow, we create such misconception that we are in danger of losing the substance. The natural productions of all our colonies are numerous and important; they enter into a vast multitude and by far the most important manufacturing industries, and under favourable conditions they are such as can be produced as cheap and good as the imported article. To force artificial manufactures is to complicate most needlessly the whole question, and to diminish what, but for such unwise and premature advocacy, appears to me to be absolutely overwhelming and unanswerable arguments. I, for one, Sir, will not thus imperil this great question, and I speak to you "as unto wise men, judge ye what I say."
Manufactures—the raw materials, entering into which are local productions.
Manufactures—the raw materials, entering into which are imported, as also any part or parts of the manufacture article, entering into the completely manufactured article.
Raw materials, entering into our manufactures which are local productions.
Raw materials entering into our manufactures which we import.
In the practical application of a protective policy, difficulties, if any, should now present themselves. If, however, the two principles upon which I have already laid such stress are kept carefully in view, difficulties will vanish. They afford a test of easy and prompt application, and I venture to say will meet every conceivable case. Those commodities coming under the first division are obviously woolens, blankets, clothing, boots, leather, saddlery, woodware, candles, doors, paper and other manufactures, the raw materials of which we produce in abundance and of great excellency. These are our wools, hides, tallow, timber, flax, and other natural productions. I hold, therefore, as an axiom in dealing with a protective policy that all such local manufactures as fulfil the one conditon of value should be rigidly protected. "What are they? It would be in vain for me to attempt to answer such a question,—but whatever they are, so long as they fulfil this condition they may claim to be placed upon the protected list.
Of the second class, the raw materials of which we import, or any manufactured parts of which we import, entering into the completely manufactured article, there surely need be no difficulty either. Here we reverse the policy, and while laying duties upon the completely manufactured articles, admit the raw material as well as any manufactured parts which we do not ourselves manufacture entering into the completely manufactured article, duty free. Of the latter their name is legion. There are an infinite variety of such specialities entering into almost all page 10 our manufactures which at present we import. The time will come, however, when under such a regime as a protective policy contemplates, enterprise will largely reduce the list of such manufactured parts of the completely manufactured articles coming in. How simple then to transfer any such article under such circumstances to the protected list. Fulfilling the one condition of value, what can it matter to the local manufacturer what is the amount of duty imposed; he supplies himself in this market with the same article equally good and cheap, and thus the process goes on till, in a few years, we shall be amazed at the multitude, the perfection and the cheapness of all such productions. Surely also all such improved appliances and new inventions as are imported for the purpose of improving or extending such local manufactures, should likewise come in free. This is how a nation may well and wisely develope her productive powers and increase the wealth and happiness of the people.
The two remaining divisions call for little explanation. Nevertheless if the foregoing general principles are of any value they should be capable of easy application here likewise. Of raw materials which we produce—our wool, hides, tallow, timber, coals, hops, chicory, grain and some others—some at least are such as require no fiscal measures to prevent their being interfered with injuriously. Others again—timber and coals for instance—may fairly claim to come under the operation of such a policy as I am expounding. As I said before, if our principles are sound they are of universal application, and it follows that if timber or coals or any other local productions fulfil the condition of value, no harm but much good may result from a duty placed upon such commodities coming from abroad. The whole controversy hinges upon the one word value. That once settled, what can it matter to the consumer what duties are levied upon timber or coals or other articles coming from abroad so long as those substituted locally are as good and cheap. The importance to the country, however, of such a fiscal policy in accelerating the development of our own productions, the accumulation of local wealth, and in widening the area of our labour supply and consequently increasing the circulation of the wages of labour, and of skilled labour (so much more valuable than unskilled) can hardly be overestimated.
Of the raw materials, which we do not produce, entering into our manufacturing industries, such as iron, tin, sugar, and other lines, these of course should come in free. A difficulty may present itself in the matter of sugar; an article which has always been held as specially within easy reach of the financier for the purpose of taxation, but even in such a case a drawback should be allowed in this as in every case where dutiable goods are employed bona fide for manufacturing purposes. It will follow, moreover, that as local development progresses that even iron, or tin, or sugar, may come to be reckoned among colonial productions, and fulfilling the one condition of value may claim to be brought under the operation of a protective policy. There is no finality in such a process. We recognise only one dominating principle operating in this and the generations that will come after us, until the plentiful resources of this grand page 11 country are transformed into boundless wealth, ministering to the luxuries, the convenience, and the happiness of mankind—it is progression.
And now, Sir, I will endeavour to deal with some of the more prominent objections so persistently urged againt the adoption of such a fiscal policy. The most prominent is, that we tax one portion of the community for the benefit of another, the public at large to enrich a few favoured producers. That such an objection should survive is a palpable evidence of the widespread misapprehension of our principles. To those acquainted with the results of such a protective system in other countries it can have no force whatever. In America, for instance, her own manufactures have entered very largely into universal consumption; and writers of undoubted authority are unanimous in their testimony to the fact that such protected goods have been enormously reduced in price and improved in quality as a consequence of her protective policy. To any one, moreover, acquainted with the operation of such a protective tariff there is in this no cause for astonishment; it follows as the night the day. Local competition, an enlarged trade, greater skill, improved appliances, are all elements brought into existence by such a policy, and better value is an infallable consequence. If this policy, too, is so vicious, how account for Canada at length, after much controversy, following the example of her more prosperous neighbour ? I can speak, after much experience and close observation, of the operation of such a tariff in Victoria; and I unhesitatingly affirm that there, likewise, her protected manufactures are better value than the imported goods they have so largely superseded. How otherwise account for such a vast export to the neighbouring colonies of Victorian manufactures? Till very recently her exports of boots, for instance, to this colony was enormous, and she still exports largely in other departments of manufacture. Ask anyone engaged in the trade and he will tell you that her woolens, her clothing, and other lines, are both cheaper and better than Home manufactures. How otherwise account for such a considerable trade as she does with New Zealand? Here she competes with all the world on equal terms, and were her protected manufactures not better value than those of other countries the trade would be a sheer impossibility.
This brings us to another prominent objection, namely, if local manufactures are as cheap and good as imported articles, what necessity is there for protection duties? This objection is exceedingly plausible, and nevertheless were it not for the protective tariff of Victoria, her industries, perfect and marvellous though they are, would speedily be extinguished. Hence the tenacity with which they cling to duties even upon such manufactures as can compete m New Zealand, and the other colonies, with all the world. How account for what appears so paradoxical? It is principally owing to speculative consignments, and the cronic state of glut, which such speculation is certain to create. Our position at the very ends of the earth renders us specially liable to such periodical over-stocking of our markets at the close of the season's trade in the mother country, for, so far at page 12 least as the bulk of such manufactures are concerned, the Indian and Australian markets are alone open to such operations. America and Canada, from their greater proximity to England are in no danger of being so drenched with goods, the balance of a season's trade, which are shipped for speculative purposes—often for the purpose of procuring advances—to the Australian colonies, and other markets at the antipodes. We need fear no legitimate trading, no fair competition, but what endangers local manufactures chiefly, is the purely speculative consignments which must be cleared, often the veriest rubbish which may have accumulated in the English markets, and which are shipped to this market, regardless of the loss which may be incurred in disposing of such surplus stock; regardless two of the paralysis which such a glut must ever inflict upon local manufactures, and the lack of employment inflicted upon the wages-earning portion of the community.
A protective tariff is the only effectual barrier we can present to such a ruinous and suicidal state of things, it effectually closes our ports against such speculative consignments, and in accomplishing such an important object we may surely claim, not only the sympathy of the legislature; but the sympathy likewise of the legitimate trader, as well as the skilled workman whose occupation would otherwise be gone. Hence is it that in protected Melbourne the import trade, so unfortunately opposed to such a protective policy, is vastly more prosperous than in free trade Sydney, which suffers not only from the paralysis of all industry; but from the cronic state of glut, which is the inevitable and inexorable consequence of her fiscal policy. Hence is it too, that her Tweed manufacture, in which years ago she attained considerable celebrity, was crushed out, while in Geelong, woollen manufactures have grown and flourished, employing large numbers of skilled workmen, and adding largely to the wages fund of the community. Tasmania likewise affords another warning example, she had a long start of Melbourne, and for a period progressed with extraordinary rapidity. But what is the condition of manufacturing industry in that colony now? Tasmania has reverted into a sheep-walk, while her offspring by the stern necessity of their existence, are driven for that employment to the surrounding colonies, which her free trade proclivities has rendered impossible in the land of their birth. Do we desire to deliver New Zealand from such an appalling fate, the peril of universal desertion? It needs no prophetic vision to foresee that to do so, we must create new sources of wealth and industry to absorb our surplus population.
This specious objection, that if our local industries are as good and cheap as the imported goods, no protection is required, is difficult to dislodge. No amount of evidence will, however, convince objectors who are wilfully obtuse. It is in vain we reason with such impracticable people, and thus it is that such a plausible argument is so persistently dinned into our ears. But is it invariably the cheapest or the best articles the public buy? Are they never hoodwinked? Are we not continally confronted with state interferences to prevent adulteration or short- page 13 weight, or other frauds? Apart even from such truisms, does not all experience teach us that trade wears for itself channels broad and deep, and the displacement of a single article makes the process of educating the public judgment, or the public taste, a most laborious and prolonged one? Is it not notorious that we wear and consume vast quantities of the merest rubbish, and are not the poor, who can so ill afford it, the greatest dupes? The legislature can, by such a simple process as I have described, accomplish more for local industries in a single session than would otherwise be accomplished by the most painstaking efforts of the manufacturing or trading classes in a whole decade. Indeed, local industries without such legislation can never, in this or in any new country, assume any formidable dimensions Private enterprise will continue in vain to struggle with over-stocked markets, speculative consignments, and a chronic state of glut. In this, as in so many matters besides, the State, by wise legislation, can exert a potent influence. And why not? If the State,—the people in their corporate capacity,—can do this or any other matter better than in their private capacity, it becomes obviously the duty of the State to do so. This is in every other matter, whatever the test or measure of a State's functions, and a State's responsibilities. And why not also with reference to that one matter—than which nothing can be of greater importance to the people—our local industries. If the objects of government are properly described as the science of national wealth and human happiness, what so eminently calculated to promote such objects as flourishing local manufactures; our own productiveness taking the place of the present wasteful and exhaustive drains'? And is not all government all that the State enforces, or at least have any right to enforce, that manifestly which it is for the people's own advantage they should do voluntarily? It is better surely that a man should not endanger his own life, and his neighbour's, or that of a whole city by putting up an inflammable structure, yet all who administer such laws are aware how difficult it is to prevent their constant infringement. The argument, if carried to its logical conclusion, means that people do always that which it is best they should do voluntarily; municipal institutions are superfluous; the State itself is superfluous; and Utopia alone is!
It is surely surprising that for the most part commercial men are arrayed against a protective tariff. They do not perceive how much their own interests are involved in the question. Some reforms and almost all inventions inflict tremendous temporary evils upon commerce, but in the adoption of a protective policy there is no temporary evil even to be apprehended. The merchant if he loses some portion of his trade in imported goods which come into undue competition with local industries, can compensate himself by substituting the local manufactures, which will probably be found to pay much better. If he objects that the producer supercedes the merchant, all we can say is, so much the better; it is one barrier cast down between the producer and the consumer, in itself an important free-trade axiom. Society, moreover, gains by such a conservation of page 14 energy, the prices of all such commodities are still further reduced, and you thus virtually raise the wages of every workman, for the exchangeable value of his earnings becomes greater in their enhanced purchasing power. In such increased prosperity, however, as such a state of things would assuredly produce; in the vast increase of labor and skilled labor, an immense impetus would be given to all trade and commerce. A wages-earning community, local industries thriving, and a vast sum of money freely circulating, would increase the area of consumption for such imported commodities as we shall never cease to consume; and the enhanced purchasing power of the people, in such an improved state of things, would largely increase the demand for many of the conveniences, and some, too, it is to be hoped, of the luxuries of our modern civilization.
The farmers and large landed proprietors are equally pronounced in their opposition. Strange and most marvellous anomaly ! How can they be injured if such fundamental principles as I have pointed out are wisely regarded? And perhaps no class of the community are so intensely and immediately interested in the development of local industries as the land-owners and the farmers. The mouths to be filled should ever bear some fair proportion to the acres we plough. Local manufactures would inevitably restore some such equilibrium. A local market is ever better than a foreign one; and it may well be questioned whether the latter affords any fair prospect of remunerative farming. Are there no rocks ahead for this important industry? The farmer, were he wise in his generation and less liable to be swayed by the bogies of those who have foresworn a protective policy, would be heartily with us. Of equal importance is the question of local industries to the large land-owners; for the standard value of our land, for other than pastoral purposes, is involved in this question. The productions of the soil forced into foreign competition must inevitably have a correspondingly depressing effect upon the value of our lands. Intrinsically they must approximate to the value of the lands with which we are brought into such undesirable competition. These, Sir, I believe are simple economic truths which are of universal application. The standard value of our cereals! The standard value of our lands! These are tremendously important issues, and they are involved more intimately in this controversy, than is generally supposed. Labour moreover must be found for the unemployed and the partially employed or with the revival of trade in other colonies and other countries, the process of desertion will begin. New Zealand, notwithstanding her unrvailed resources, will become discarded by multitudes. And how otherwise can we employ our people than in manufacturing pursuits? No country can maintain a large population on other conditions and, unless a truly protective policy is enforced, it will be as impossible here, as it has proved impossible in other new countries, to develope local industries to any considerable extent. We are now suffering from a period of great depression, notwithstanding our free trade predilections. Free trade, and with it free borrowing, has not saved us from such a page 15 period of depression. And is there not grave danger that such a state of things may become chronic? Are there not too good grounds for apprehending that we are on the verge of an abyss, to which many causes are conjointly contributing, and what remedies are within our reach? One potent aid, at least, will be found in establishing local industries, and this can only be accomplished by a truly protective policy. Free trade was an excellent thing for Great Britain. Who ever doubts it? It rested on the surest foundation in that country, but with us, at this end of the earth, the condition of things is totally different. In vain we seek for either analogy or parallel. For us such a policy becomes like a pyramid reversed; it stands upon its apex rather than its base.
I repeat free trade was unquestionably the best policy for Great Britain at the time. She had skilled labor, her means of distribution were unrivalled, she had coal and iron in abundance; she had indeed become a mighty work-shop, distancing and defying all competitors. England no longer needed protection, what she needed was cheap food for her people—hence the corn laws were abolished. What she needed was the raw materials of her manufactures free—hence the remission of all such duties. What she needed was an untrammeled intercourse for her Argocies—hence the abolition of the navigation laws. England depended largely upon foreign countries for both her food and her raw materials. We do neither. We have abundance of both. England had no competitors at that period for her manufacturing skill, and such cheap food and untaxed raw products, enabled her to supply the markets of the world, exchanging the raw materials of other countries for her own manufactures, thus enormously enhanced in value. Whether the condition of things are precisely the same to-day in England, and whether her manufacturing population are as thoroughly free trade as they were some thirty years ago, may well be questioned. With France, Belgium, America, and other countries entering into such keen competition, there are unmistakable signs of some modification of her policy, so far as manufactured goods are concerned. Some at least, of her advanced thinkers are giving forth no uncertain sounds upon this very question. The one thing, however, important for us is carefully to mark that the condition of things with us had never any parallel in Great Britain. We have abundance of food and raw materials, and we are subjected in the very infancy of our manufacturing efforts to the over-whelming competition of Great Britain and other countries. Doubtless our raw materials are wealth, even when exported; but it is manufacture which gives tenfold value to such raw materials. Shall we for ever part with that? Shall we never cease to exchange our raw materials for the manufactured articles of other countries, and part with that—the wages of labor—which alone gives such raw products then principal value? A protective policy would enable us to substitute our own for foreign manufactures, and many millions which by our present method are lost to the country would be thus intercepted and kept in circulation among page 16 ourselves. Can anyone object that we do not need it? Even were it possible to continue the improvident system of borrowing, entailing such burthens upon us and our children; it must be obvious that a million saved, the result of our own reproductiveness, is much more than equivalent to a million borrowed; and the retention of such vast sums circulating in the country would enormously promote the prosperity of our people. Our own productiveness would thus take the place of such inordinate borrowing, our idle population would be absorbed in an expanding trade; and this beautiful country with its marvellous resources would enter upon a period of prosperity more widespread and more enduring than any she has ever yet enjoyed.
Sir, I invite those who differ from us to examine our proposals without prejudice. There is surely nothing revolutionary or violent, or even extreme about such proposals. No one would be injured. It is the country at large that would benefit. But, nevertheless, we are taunted as if we desired to tear up the foundations of society and open the flood-gates of strife and anarchy. No such thing. If rightly considered we may fairly hope, that even extreme free-traders will eventually come to regard such proposals as the only safe, the only reasonable and rational policy for any new country to pursue.
I have thus endeavoured to explain the general principles which I respectfully submit should ever distinguish a truly protective policy. And is there anything in the contemplation of such a subject so very disturbing or alarming? Legislation in such a direction would surely be no such dreadful experiment. Will our legislature give it a fair trial? The country, I believe is ripe for it, and what commercial and manufacturing activity would be the immediate result! What a vast sum would accumulate as a welcome addition to our wages fund; what avenues would be at once opened for useful and profitable employment! We should advance by leaps and bounds; our workmen would multiply and prosper; it would mitigate the condition of things to the farming community; our lands would become increasingly valuable. What should hinder it? It is surely the right thing to do, and it is thus that "Rightousness exalteth a nation." The process is exceedingly simple, as well as exceedingly beautiful, and He who rules among the nations, would surely bless measures so entirely in harmony with the providential arrangements, and so calculated to promote the material and social progress of this fair portion of the earth. And if, Sir, there is any statemanship in our legislature, any energy or intelligence among our people, any hope indeed for our country in the midst of her anxieties and her difficulties, it is in maturing and applying a wisely protectionist policy.
Lyon & Blair, Machine Printers, Lambton Quay, Wellington.