The Daily Telegraph. FRIDAY, OCTOBER 8, 1886.

Daily Telegraph (Napier), Issue 4734, 8 October 1886, Page 2

The Daily Telegraph. FRIDAY, OCTOBER 8, 1886.

When trade is depressed in England there are never wanting those who are only too glad to ascribe the depression to the effect of free trade. In these colonies precisely the same thing , occurs, and all sorts of nostrums are prescribed by quacks for keeping money in the colony, and for the promotion of local industry. It is not, however, attempted to be shown that the prescribed prescriptions have been successful in other .countries jn warding , off. or in relieving depression. _On the other hand, it is a fact that during the commercial depression of recent years those countries that have adopted policies of protection have suffered quite as severely as those that have a firm belief in freetrade. Prance and Germany afford the required examples. Tho essential feature of Prince Bismarck's home policy is protection of native industry. In the foreign correspondence of the London Times the following description of German industry is given:—"Considerable apprehension is felt at the dissolution of the convention which has subsisted between German and English rail works since the international convention came to an end. This minor agreement provided that the owners of German works should not seek contracts in England, and vice versa. Now that this arrangement has fallen to the ground it is feared that England will compete with success for railway contracts in Germany. The fact that in a recent contract for steel rails at Altona the lowest German tender—that of Messrs Krupp, of Essen—was underbidden by one from England has caused absolute alarm; Hitherto owners of German works havo been able to recompense themselves for low-priced foreign contracts by keeping up prices at home." The secret of German competition abroad is revealed by the closing sentence of the foregoing paragraph. What Protection has done for the German people, says the Financial Reformer, is to increase the prices they pay themselves, in order to ensure cheap goods for their foreign competitors. For a time the process no doubt encouraged German industry, but it could be no advantage to the, German consumer to pay, in an increased price for his own rails, part of the price of the rails purchased by the foreigner. Germany, in point of fact, has madp other countries a present of a proportion of tho rails exported to them, under the delusion that it- was thereby ensuring prosperity. The process is like that of the old woman ' who lost upon every pound of sugar she sold, but was not ruined because she sold such 11 quantity. The state of trade in France is abundantly shown in apaper presented to the House of Commons giving extracts from two reports of a- Commission of Inquiry. The first part deals with the districts of Lyons and St. ! Etienne, whero the main industries are ribbons, velvet, silk, collieries, metallurgy, and gunsmiths' work—a tolerably varied .assortment. The report speaks of all these industries as suffering from a simultaneous crisis, which has already had the effect of decreasing and impoverishing the reputation; to a startling extent. So serious is the distress, that the municipality "of St. Etienne declares that it has coniQ to the end of its resonrces, and that tho State nuist now intervene. ; In oneway they should certainly do so. The change in the manufacr turn from puro silk to'mixed fabrics has increased the price of the raw material, as a customs' duty is paid on cotton yarns manufactured abroad for tho benefit of tho homo producer, whereas silk has always been admitted free of duty—an admirable illustration of the power of tho Customs House to restrict ti-ado. In all tho other trades named evidence is given ,of tho sorious depression which existed in 1884 and 1885, much of which is/permanent-in its character. Our London contemporary concludes by saying ihat wo are gljtJ (-P rjep that tho French report recommends a reduction of the customs' tariff, and says, " to reduce taxation would be to -lowpv tho cost of manual labor in the agricultural and commercial industries." Thaj! declaj-utiou is equally true jn England

as in France, but unfortunately the tendency has for some time been in* the opposite direction. If we really desire to restore permanent prosperity to our depressed industries, we- must reverse the foreign policy of the last ten years, reduce the enormous burden of taxation now levied upon the industrial population, get rid as soon as possible of our remaining customs' duties, and devote some of the resources now wasted in military and naval expenditure to the technical education of our people. It is in these directions that safety is to be sought, not in the delusions of protective duties or the fallacies of "Fair Trade."