PROHIBITION OF IMPORTS.

Press, Volume LXVIII, Issue 20572, 14 June 1932, Page 14

PROHIBITION OF IMPORTS.

TO THB lU>ITO3 Of TUB PBESS. Sir,—l thank "Interested" for his letter of the 11th, and for the interest he is taking in the subject. There are some vital principles invoked in this correspondence, and great caie is necessary in framing the answers. First, let me protest against the implication of inefficiency which is put forward as a reason lor our manufacturers not being able to compete with overseas goods in spite of high duties and landing charges; also the statement that manufacturers take advantage of duties to raise prices to consumers and to oppress workers. Neither of these accusations is justified. They are the sort of , general condemnation which comes only from those theorists who know nothing about manufacturers or manufacturing conditions in this country. Taking first the question of the price of flannel. This was per vard wholesale before the war, and is Is 3d now. The diiference is accounted for by higher wages anil better quality, as stated in my earlier letter. The wasies liare increased over 50 per cent, since pre-war time. Exact figures can be given. Second, duties on apparel. The figures given by Interested" as duty on apparel are correct: but the difference between production cost in the United Kingdom and in New Zealand fully accounts for the need of this duty. Duty and landing costs at 80 to 90 per cent, are still not an adequate protection to the Mew Zealand manufacturer for many lines ; and this is through no fault on his own part. Only those who have had experience can know of the low production costs which the New Zealand manufacturer has to contend with, lie does not know the art of sweating his workers at starvation wages and ol producing goods the appearance or which conceals the poorness of their quality. Large overseas factories run on mass production lines with piecework rates and no awards and no apprenticeship and female labour restrictions are able to dump their surplus and end-of-season's goods at almost any price on this market. There is even' worse than tliis. Under the fierce competition of Continental goods, which until lately have come duty free into Great Britain, English factories have been forced to produce goods under sweated conditions that for a civilised country are appalling. The East End of London produces one-seventli of the footwear made in the United Kingdom, and the Denning enquiry of 1929 into the boot and shoe industry showed that men, women, and children worked for incredibly long hours in garrets and cellars, to keep themselves from starving. The public hears from time to time of the results of these "song of the shirt" conditions; for instance, of a shipment of shoes selling at a price which would not pay for the material in New Zealand; of children's cheap clothing; the 3s 9d trousers from Italy; boots, which when opened are found full of leather scraps: shodd\t'.veeds that tear to pieces, etc., etc. Now there is the Oriental menace-, women's blouses at 3s 3d and less; shoes from Japan imitated in rubber and now being offered to indentors at 3s 6d per pair. ; " : The third question—how to make np revenue lost through shutting out imports. The answer is that the loss will be more than compensated by general prosperity and by income tax. The crux of the whole matter is whether, as a matter of principle, we should import these goods' which wc could make ourselves or whether tho work and wages they represent should be given to our own people; that is, to ourselves. Which of these courses will pay best in tho. long run ? Can this country ever recover, and progress unless she take 3 the latter course and develops ! her secondary industries? These industries cannot be established while cheap imports are allowed to restrict the all-too-small home market. It is either cheap imports and :i/> work or local production and won: and wages for all who are capable ot working. We cannot have our cake and eat it. The final question is. to what extent we must import in order to balance exports in the exchange market. Fattoo much stress seems to be put upon this matter, and it has been used as an excuy-'for excessive importation. In ten years from 1921-30, wc threw our trade balance on the wrong side bv £27,198,000. Exports were short of imports, plus overseas interest, by this amount, and this financial falling behind is certainly a contributory cause of the present monetary tightness. Wo can go a long way towards curtailing imports before a nossible drop in tho I exchange will hurt the exporter. . . Let "Interested" and others who are concerned for the country's welfare ponder on these matters, for upon nation's decision, whether to imnorfc or +o maW ourselves, depends the fate of New Zealand for many years to come. —Tours, etc., F. L. HUTCHINSON, A Vice-President of the Canterbury Manufacturers' Association. June 13th, 1932.

Ttl V3K EDITOR Or THE VBT.SS Sir, —Your correspondent, Mr I<\ L. 'Hutchinson, states in Iris letter of June lltli, that "Free Trade in practice is contrary to the inherent rights of a people to their own industries, so far as they are able to' develop them, and to the right of a people like the Ausr tralians or New Zealanders, to establish a higher standard of living than, that of other countries." This, according to him, is the modern teaching of ' economics. It may be; but emphatically it is not "new economics." It is the latest fashion in our present effete system of economics. The above attitude of mind is the result of regarding money as wealthy whereas money is only a medium of exchange and wealth is the amount of potential consumable goods. That is to say, the amount of consumable goods that we could produce if all our industries? and all our men were working on full time, together with the amount of goods which could-be produced abroad with less economic effort, and which have been imported in exchange for our surplus production. Under a thoroughly sound financial system it would not matter a tinker's malediction at what price foreign goods were imported, so long as our industries could produce enough surplus to pay for them, because it must be remembered all imports are paid for by exports, always have been, and always will be, except, of course, when coin or bullion is shipped in payment, which is very rare nowadays. The [point is, however, that the financial system is not sound; otherwise it would be an advantage for the people of this country to import anything from abroad that coiild be produced -with less econ- ; ojnic effort than here. Becognising the point that wealth is the volume of production ready to pass an to consumers, I no matter whethor it is made here or abroad, anyone cup see that to erect tariff walls would only be biting our noses to spite our faces. It seems absurd to worry about Free Trade and. import restrictions and such like superficialities when our Stone Age financial system <loes not give: Our home market the purchasing power to buy

anywhere near the whole of our production. It must be remembered that if we have not got' tlic purchasing power to buy the whole of our production before any of it is exported it will be impossible to pay for both the imports (which have been exchanged for. our exports) and the unreported pai't. Mr Hutchinson would be doing more to ease the situation if ho concentrated oil the consuming end of industry instead of the producing, and aimed at giving us a linancial systan that would give us enough purchasing power to buy the products of our industries. According to his letter, we can produce scores of secondary industry products with less economic effort than would bo needed t« produce and land them here from abroad. Then why all this fuss about Free Trade? The problem, as in every other country, is that we have conquered in the field of production, only to be slain in the field of consumption and the only road back to prosperity is by conquering in tho latter field. ' I would like to correct Mr Hutchinson when he says that "the new economic theories" abandon Free Trade as unsound and impracticable. His letter does not even hint at anything suggesting "new economics." He may thinlc it does, but he is only repeating the latest ideas in fashion with the old economists. . When he has started to talk about giving the people of this country the necessary purchasing power he will be talking "now economics." I agree with him wlisn he says that "a home market is a priceless asset," but it is only a priceless asset if it has sufficient purchasing power; and that sufficiency of purchasing power must be enough for us to consume tho whole of the products of our industries, including our exports, and not as it is now, when we have not enough to buy even the unexported part. When our home market is able to be satiated with our own products, then, and only then, should we concentrate on foreign markets. The reason why our men and women are idle and out of work, and hopeless in a land of plenty, is that their .work is not wanted. Their work is not wanted because all the goods required to satisfy our shrunken homo market can be produced without their assistance.

Ur Stevens is right when lie says that money is not sent out of the country to pay for imports. Unless gold or bullion was shipped, money never has been sent overseas and never will be. Our imports are always paid for bj" our credits abroad, and if Mr Hutchinson knows of any other method, it would be enlightening to know of it.—Yours, etc.,

TREVOR 0. L. ARMSTRONG. Nesv Brighton, June 13tli, 1932. TO THE EL 17 OR Of THE THZSS Sir,—Mr .F. L. Hutchinson's exposition of the new economics, which seem to bo nothing more than the very old one of building a tariff wall round the home market, is interesting, but not always convincing or logical. It was recently l-eported that when Mr D. C. Davie »isked the Manufacturers' Association ior permission to address them on Douglns Social Credit, Mr Hutchinson was responsible for a motion offering him teii minutes in which to state his case. This appeared to me to bo either a crude joke or a gesture of contempt. I would liko to ask Mr Hutchinson if he has made even' a brief study of Douglas Social and whether he is-aware that i t is the only branch of economics which attempts to solve the problem, .so vital to industry, of maintaining purchasing power on something like an equality with production ?—Yours, etc., STUDENT. June Illh, 1932.