The Dominion. FRIDAY, JANUARY 20, 1911. A STRANUE DOCTRINE.

Dominion, Volume 4, Issue 1030, 20 January 1911, Page 4

The Dominion. FRIDAY, JANUARY 20, 1911. A STRANUE DOCTRINE.

There was one passage in Sir Joseph Ward's speech at St. Kilda which, if it had not come from the Prime Minister and Finance Minister, would have been merely amusing. He had been referring to the increase of £810,000 in the revenue for the last twelve months as "a wonderful evidence of the revival of trade," and he proceeded: let there were somo people who said that the accumulations of money, in the country were indicative, of stagnation and of a want of confidence in the Dominion. 01 course tho country could not go 011 year after year adding to its industries by leaps and bounds, us it had been doing lor tho last filteen years, if New Zealand were to doublo its factories tomorrow what would they find? Tho proprietors would be tho first to declaim against over production. It would bo impossible to sell the goods, and consequently tliey would not lie ablo to pay tho recognised scale of wages to their employees. It is, of course, recognised by every '• competent person wno has no political axo' to grind that the great amount of capital lying in the banks without earning interest is an indication of want of confidence on the part of potential investors. Mil. Harold Beauchamp, chairman of the Bank of New Zealand, said as much, and said it with regret, at, the annual meeting of the Bank last June and again at the. half-yearly meeting in December. But, indeed, it requires no more than an ordinary sharo of common sense to sec that just as it is better that men should be working than that they should be idle, so it is bettor to have available capital utilised in some form of production than to have it locked up. Sir Joseph Ward, however, chose to assume for the purpose of the moment that the manufacturing industries are the only, possible investments in Now Zealand. Ignoring the great unused or half-used areas of Crown and Native lands, forgeting the unexploited mineral wealth, tho undeveloped water-power, the undeveloped fisheries, he asked the truly startling question: What would happen if New .Zealand were to double its factories to-morrow 1 Now, we do not hold ourselves bound to imagine tho consequences of every impossible eventuality that it pleases Sir Joseph AVard to suggest, but we may point out that his own answer to his question (we have quoted it above in full) is curiously onesided. What he calls "over-produc-tion" would, of course, make the particular products chcaper. That is probably what the Prime Minister meant when he said it would bo "impossible to sell the goods." But does nobody benefit by . the cheapness of commodities? We'almost shrink from sotting down anything so obvious, but it seems necessary to say that cheapness is good for the consumer. The whole community consists of buyers of'the output of the factories, and the employees are only a small section of the community. Hence, cheapness of commodities benefits the majority. Besides ■ (as . Sir Joseph Ward seems to forget) tho workers in every industry are buyers of the products of most of the other 'industries. If all tho factories were doubled, and "over-production" resulted, the woollen mill employee would get his boots and shoes, his clothing, his furniture, his soap and candles chcaper than before. And even if his wages were reduced ho would not necessarily bo worse off. If Sir Joseph Ward's wild vision of overproduction were realised to tho fullest conceivable extent, and it became impossible to sell anything, it is to be presumed that everything would be given away. In that case, wages would be a matter of indifference, but wo should all be very well off. Tho root of the absurdity in tho Prime Minister's argument is, of course, that he forgets the consumer. That is the usual mistake of Protectionists. Tho consumer is their Mrs. Harris, but so far from it being the fact that "there's no sich a person," it would bo more correct to Ea.v that there is nobody else. Incidentally we might set beside the. Prime Minister's statement, that this country, for the last fifteen years, ha 3 been "adding to its industries by leaps and bounds" tho figures given by Mr. J. A. Frostick at the meeting of the Canterbury Employers' Association this week. Mr. Frostick showed that out of sixteen industries affected by foreign competition eleven had during the last 1 four years failed to keep pace with

the increase of population, two had just held their own, while two had considerably improved. The figures expressed the number of population to each person employed in the several industries. In such a comparison important factors, such as the increase, if any, in the use of laboursaving appliances, are left out of account, but even so nobody could scrutinise Mr. Fuostick's figures (we gave them fully last Wednesday) and say that our industries were "increasing by leaps and bounds." Compared with the grand forward movement of the public debt, for example, our industries are rushing backwards at an awful speed. Slit Joseph Ward, even on his own implied theory that our manufactures nmst not become too large, need not take any special steps just yet to stop their growth. There are other aspects of tho subject that we shall discuss another time; but in the meantime.it is instructive to note this now contribution to our Knowledge of that interesting thing "Wardism." Sir Joseph Ward saw that everybody was noticing the stagnation of local investment, and commenting upon it. A reply was neccssarv. His first, which is always his final, thought' to say that the existing condition is good, grand,' glorious, something _to be thankful for. So ho said, in effect, that industrial stagnation is good—that it is a good thing wc are not producing more. That what he said was not only ludicrous, but opposed to what he said yesterday and will say tomorrow, did not trouble liim. He had to say something, and in'such cases he will say anything. That is' "Wardism."