THE BEST- PAYING BUSIN SS FOR THE COLONIES. £1,000,000 STEELING A-YEAR FOR NEW ZEALAND.

Daily Southern Cross, Volume XXVI, Issue 3926, 23 March 1870, Page 4

THE BEST- PAYING BUSIN SS FOR THE COLONIES. £1,000,000 STEELING A-YEAR FOR NEW ZEALAND.

(COMMUNICATED. ) In a general way, it may be said that all agree in the opinion and believe that the establishment of manufactories of all kinds here would prove a great boon to the province. They would furnish congenial and profitable em loyment for thousands chat are now, and may otherwise remain, comparatively idle and unproductive. The competition for the raw materials, and for the supply of thi« market with the fabrics manufactured, would produce a rise in the price of 001, flax, &c, and a corresponding fall in the fabrics such as blankots, flannels, tweeds, &c; and the more mills the more competition and benefit bo tbe artisan, producer, and consumer. That the manufacturing industries are essential to the permanent prosperity of the colonies appears so evident that it is unnecessary to go into detail on this point; and, is I have headed this article a la Barmiin for the purpose of getting those who do not take the papers to read but to look at to see if there is anything new or interesting to them, or that directly affects their personal interest, I will not impose upon, their good nature by going into detail, but be as brief as possible, bel'eving that I have them at least started to read and think about what does indirectly, if not directly, affect the interests of every one in the colony. I will indulge the hope that they will spare a few moments more to read on. The establishment of manufacturing industries in our midst, being a matter that so directly and materially affects the permanent prosperity of this province, and the welfare of eve yone in it, it is certainly surprising that manufactories have not been established here before now, and if it is not done soon it ! can only be regarded as additional evidence that we deserve the name we get, of being the most sleepy, slow, apathetic, and unen terprising set of people that ever left the shores of old England ; and in this may be seen a trace of the principle that has caused the mother country recently to leave us in disgust to our fate — to work out our own salvation, as the colony that will not try to help itself does not deserve assistance. It cannot be argued that we are too young, or that the natives have prevented U 3. The Canadas and Western States, peopled by the same race and from the same nation, had their carding machines at work as soon as they had wool for them. At the same time they too were fighting, with unequal numbers, a far more numerous and more warlike native enemy, driving them back from, and reclaiming, a far more extensive country, long before they had formed a community with half the population, wealth, or pretensions of Auckland. They have set us a good example in this respect, and if we desire to prosper as they have done we shall show our wisdom in following it. Neither can it be admitted that we have not the skill or capital necessary to establish manufactures successfully here. It is well known that we have in this city not only all the skilled labour required, but also practical manufacturers that are and have been engaged in manufacturing elsewhere, and with capital and enterprise sufficient to carry out the undertaking. But the fact of their not having done so is evidence that circumstances are not as favourable to its proving successful here as elsewhere. It la admitted by all those acquainted with the subject that New Zealand is naturally at least as well qualified for manufacturing as any country in the world. We have coal and water in abundance, for supplying the motive power, and a climate and soil second to none for the production of variety, quantity, and quality of the raw materials ; and with the capital, enterprise, and skill, could manufacture or import the machinery of the latestimproved and nearly self-operatmg description, that would enable ug to produce quantity and quality. But will it pay, under existing circumstances ? That's tho question. It would require an outlay of at least £10,000 to start a woollen-mill, that would produce the quantity ttiat would reduce the cosb per yard to anything hke a paying price, or that would enable the manufacturer to hold his own and sell his tweeds in this market in competition with the importer of English goods, saying nothing of the imported imitations of his own tweed*, or shodds'-, unions, &c ; and no man carea to invest £10,000 in a business _ where the chances are against his even holding his own, I when he can get 10 per cent, for his money by simply lending it — secured by mortgage on real estate — without the risk or anxiety of a harassing business. But, say some, the Government have promised a bonus of £1,000 for the production of the first 1,000 yards. Granted. Twenty of the honourable members of the Auckland Provincial Council have been very liberal in their views in fa-'ourinj the appropriation, at this time, of £I,' 00 for this pur- ! pose, as an inducement for some one or a company to try it. But this would only be for the first one, and as it would only be interest on the capital invested for the first year, what about the second ? The manufacturer would have to expend about £10,000 more for stock and wages; and if the ■ 1,000 is necessary the first year to pay him interest on the 10,000, and he manages the second year to hold bis own, and makes say five per cent, interest on the capital (>( > 20,000) invested, he must then allow this live per cent, as a sinking fund for the depreciation, at ten per cent, per annum, of the value of plant (£10,000), and thus indirectly he 1 ses £2,000 ; so that, even though he should receive the £1,000 in the first year, he would lose at this rats £10,000 in tho five following that he might have made if he had invented his £20,000 at ten per cent, interest. We next come to the encouragement offered by the present import duty, k, which, including freight and all incidental charges between the English exporter and the colonial importer, amounts to about ten per cent, ad valorem ; to which if we add five per cent net profit, with which the British manufacturer is satisfied, would make a margin of fifteen per cent, in favour of the Auckland manufacturer ; although wo know that some twelve or fifteen of the largest manufacturers have failed within as many months, from which it would^ appear that they are not realising their five per cent. , and one result is that many of their f/oods find their way out here, and are sold frequently by auction for less than the cost of production. The difference in the price of wool here and at home cannot be considered as a protection, as the British manufacturer is able to purchase inferior foreign wools at much lower prices than the colonial wools sell here, saying nothing of the shoddy out of which goods and even imitations of colonial goods are made, so closely resembling the genuine that none but the most experienced could detect the difference, and these are imported and sold here for less than the genuine article, manufactured solely of NewZealand or Australian wool, could be produced for at home. And, as already stated, in accordance with the law of supply and deraand, the probabilities are that the price of wool here would rise with toe extra home demand for it. The abundant supply of it here cannot be regarded as any advantage for the manufacture of the medium grade of goods, such as are required for tfie great bulk of the labouring community. Again, all consumers claim the just right of purchasing their goods in what appears to be the cheapest market ; and as those unacquainted with the manufacture are unable to dig- J tinguiih between the genuine and the imitation article except by the price and a few weeks' wear — and as the ola-established English manufacturers have facilities for manufacturing the inferior claBS of goods, I and finishing them in a superior manner, ' making the imitation so perfect in appear- , auce that even good judges are liable to be imposed on if a good price ia asked ; and if a fair price for quality is aske&vthe difference in price is so great that the consumer is in- I duced to take the imitation inpref erence to the genuine, and chance the wear ; and as imitations of colonial manufactures are now made

in England, imported, and sold here at a, profit for less than they can possibly be produced for in this co'ony at present, and even valuable goods are frequently imported here and sold *t auction for even less than they can possibly be produced for in England — all this operates very heavily against the colonial manufacturer ; and, until there is some proapect of a change in this state of affairs, it is unnecessary to say there is little hope, encouragement, or protection for the manufacturer here ; and, as no one would recommend or support the same means of shoddy manufacturing here as a protection, we should have to depend upon patriotic patronage for fifty per cent. And as we haye shown that the only protective difference between the English and iSTew Zealand manufacturer that can be taken into account is a'^out fifteen per cent, in favour of the latter (that is, for tha same quality and class of goods, if all other things were equal), it now remains to be shown whether the difference is sufficient to warrant the undertaking here, now, under existing circumstances, or whether there are other circumstances to be taken into account that equal or over-balance this apparent advantage arising from distance, interest, and other circumstances. Owin^ to ttie abundance of capital in England, it is only worth about three per cent,, and the English manufacturer is satisfied with five per cent, net interest on the capital mvested. Here money is worth ten per cent, to start with, simply to invest in first-class securities — in mortgages on real estate ; and no one would be disposed to invest it in any business without an apparent certainty of tifteen per cent. This consideration alone is sufficient to prevent the flow of Auckland capital in this direction. Again, wages are at least double, an- 1, as this item would constitute here about thirty per cent, of the capital, it would make fifteen per cent, more against the Auckland manufacturer, and as the capitalists and artisans would not be disposed to favour a reduction in interest or wages this could not be altered at the will of the manufacturer, so he would have to commence at a disadvantage of thirty per cent, in these two items alone, to which may be added five per cent, to bal nice difference in cost of supplies — dye stuffs, oils, &c, — and five per cent, at least to balance want of benefits arising from concentration and other difficulties attending the establishment of a new industry in a new country ; and we have a total disadvantage of forty per cent., from which deduct the advantages arising from distance and home interest (to balance English five per cent, profit) amounting to fifteen per cent., and it leaves a clear disadvantage of twenty-five »d valorem, saying nothing about the odds of the bottle against shoddy and imitations and other advanta es of England in this market, which might be safely set down at as much more, making a total of fifty per cent, ad valorem of a disadvantage against the New Zealand manufacturer in the competition with England for the supply of this market under present circumstances. That is, England does as well by selling her fabrics at two shillings as New Zealand at three shillings per yard — that is, fifty per cent, on cheap goods ; but on the better class of goods, such as are now imported and sold at four shillings, if an ad valorem tariff of twenty-five per cent, was added, they would cost at least five shillings. From the above it will be seen that to enable the colonial manufacturer to prosecute the contest for the supply of this markot on equal terms with England he would require to start not only with equal machinery, and skill, and produce, quantity and quality equal to the English manufacturer, but also legislative protection to the following extent : —An additional ad valorem tariff of twenty-five per cent. on all goods that come in compatition with those that would bo made here ; an ad valorem tariff of double that amount on all shoddy importations ; and absolute prohibition of all imitations bearing the colonial manufacturer's trade mark — which might he a peculiar sel* virlge, or heading, or end piece woven into the goods manufactured here, to prevent imoosition on those wlioae patriotism would lead them to try to advance the interest of the colony by patronising colonial industries even when prices and qualities were equal. The enactment of some wholesome protective laws would tend no I only to stimulate the industries here, but would also affect the revenue somewhat as follows : — Allowing that only one-half of the quantity of goods now imported and consumed in this colony were manufactured here, ml that the remainder wore imported, that half would pay say twenty per cent, more than the total amount now obtained from the whole of it i that is, instead, of receiving from, this source the sum of £250,000 by means of the five per cent, cubic measurement duty on the goods valued at £5,000,090 sterling imported annua'ly, the half of that amount, paying; say twenty-five per ad valorem, would yield '♦ye time" the amount of revenue— or £1,000,000 sterling more per year. Now the question comes, Woull such measures be beneficial t > the colony at lar*e? ! We have shown that the establishment of 1 manufactures in our midst is a great desideratum ; that they are absolutely essential to our future and permanent prosperity, and that they are not likely to be successfully established unless through the assistance of legislative protection; and, therefore, we can only conclude that they would be not only beneficial, but that some such measures are absolutely necessary to the successful establishment of the manufacturing industries here. It may be argued that such measures are not prudent or practicable, and objected to as being very oppressive on the great bulk of the labouring community and the consumer generally. There is a show of reason in this, but we think a little reflection will satisfy the intelligent unprejudiced mind that the oppression, if any is more fancied than real ; that a protective tariff does not necessarily require to be oppressive, at least not for any lenth of time — as instance, the recent rapid increase of the development and progress of the manufacturing industries in the United States under the fostering protective encouragement of a ninety-five per cent, ad valorem tariff. As such measures would be designed not for the benefit of the few, or any one claas, but to foster the native industries and raise the revenue for the benefit of all — more of which than is now found necossary should not be used for our government — th^ b lance would revert indirectly to the taxpayer in. the shape of national or colonial institutions for the benefit of all. And again, as these indu -tries could be established by co-opera-tive companies with large nominal capital in thousands of shares, all with means could take shaves, and those without would find means of employment. To manufacture half we consume would employ thousands, and require the investment of hundreds of thousands of pounds. We will illustrate by supposing a case of a company or set of companies for different manufactories with an aggregate nominal or paid up capital of £300,000 divided into aa many shares, and that each individual of our 300,000— the population of this coloiy— should take one share each, or that the Government held in trust one-half or twothirds, more or less, of all the stock not taken U p W private individuals. The benefits that might then arise would be shared alike by those who afforded the protection, or in pro. portion to the respective interests held, and the interested numbers thus secured would guarantee success without oppression, At ft would simply amount to tb.it, that it would be indireotly taking the £1,000,000 out of one pocket and putting it in the other, and at the same time be a meaaa of furnishing profitable employment to thousand*, and de» veloping the manufacturing industries, the wealth, and resources of the colony.— R. H.