Evening Post. THURSDAY, SEPTEMBER 18, 1930. PROHIBITORY PREFERENCE

Evening Post, Volume CX, Issue 69, 18 September 1930, Page 8

Evening Post. THURSDAY, SEPTEMBER 18, 1930. PROHIBITORY PREFERENCE

Travel, which Bacon describes as "in the younger sort a part of education," may do much for the education of the elder sort also if they have not lost the power and the will to learn. As Senator Elliott, of Australia, satisfies both these conditions, his trip to England has enabled him to make a portentous discovery, which lie regarded as so important that he hastened to communicate it to his fellow-countrymen in the very moment of his return, and which the Press Association's correspondent regarded as so important that he flashed it across to New Zealand forthwith. The result was the message which we published yesterday:—

Senator General Elliott, interviewed on his arrival by the Ormonde, said that he had made a study, while in England, of Lord Beaverbrook's Empire Trade policy, and had found that it did not include the abolition of Dominion tariff walls, but represented the principle of reciprocal preference, which was what Australian Prime Ministers had been seeking since the days of Sir Alfred Deakin.

The epoch-making discovery which, with the aid of a long journey, an open mind, and intensive "study," Senator Elliott has thus been able to make is just as thrilling as though he had told us that during his travels he had made his way to Westminster and satisfied himself that Queen Anne was dead by seeing her monument and her wax effigy in the Abbey.

When Lord Beaverbrook launched his "Empire Free Trade" policy he really meant what he said.

That policy is quite simple, he wrote in tho "Sunday Express," 7th July, 1929. It involves Free Trade. But Pree Trade would be confined to the Empire. The tariff barriers between Britain, and the Dominions would be knocked down. The barriers against; the rest of the world would be raised up.... The British manufacturer will also get the right of entering the Dominion, the colony, and the protectorate free from Customs tax, while the foreigner Trill pay for the privilege.

It was astonishing that a man who had been born and bred in Canada, had made his first fortune behind her high tariff walls, and was old enough to remember the wreck of Joseph Chamberlain's great scheme on a similar blunder should have talked such nonsense; but it did not last long. ' In a pamphlet which he published in October Lord Beaverbrook modified his policy as follows:—

(1) Continued Dominion tariffs against British goods, with higher tariffs against foreign goods;

(2) No British tariffs against Dominion goods;

(3) The imposition of new British tariffs against foreign com and meat.

This was merely our old friend "Imperial Preference" brought into the fray again with greatly increased energy, but the title "Empire Free Trade" was too good to lose, and it therefore stands. All this was common knowledge nearly a year ago, but upon Senator Elliott, who evidently does not read the newspapers, the stale news has apparently dawned for the first time in the course of his "study" in London, and he has welcomed it with the enthusiasm due to a new discovery.

Another curiosity in the fiscal terminology of the Empire is invested with a painful interest by the news from Canada yesterday. The principle of preference for British goods, which was incorporated in our tariff more than twenty years ago, and received the last of several extensions in Mr. Forbes's Budget, commands a substantially universal approval. But it is too often regarded as evidence of a much higher virtue than it really represents, and is sometimes made the subject of invidious comparisons and unjust claims. The grant of these preferences is at once a comfortable satisfaction of our Imperial sentiment and a service to British trade, but it really costs us very little and the service is not very great. The principle adopted at the outset and recognised in the latest extension is not the reduction of the tariff against the British manufacturer, but the raising of it against the foreigner. As long as this principle is observed, preferences can be granted with equal satisfaction to the local manufacturer, who gets more protec!k>n, and to the Finance Minister, who gets more revenue; while the consumer, who alone could have any right to complain, pays so little that he does not notice it or pays nothing at all. The process is well illustrated by the changes which have just been made.

During recent years, said Mr. Forbes, when he moved the tariff resolutions on the 22nd July, there has been a decrease in the proportion of British-made goods imported into the Dominion, and it is proposed to make increases in. the pre-

ference on 158 items of tho Tariff. The total number of items is 449, and the number of Hems upon which preference is granted is 295. Hence the Government proposes to increase the rato on about one-half of the items on which preference is now accorded.

These resolutions will doubtless be used, and probably have already been used, by Lord Beaverbrook's Crusaders to point a contrast between the enlightened Imperialism of Dominion fiscal policy and the selfish parochialism of Free Trade Britain. We regretted very much a few months ago to find Sir James Parr complaining that New Zealand, after granting so many preferences to the Old Country, received no better treatment in return than Kamchatka. He may now strengthen his argument by the addition of these 158 new' preferences, I yet there is surely all the difference in the world between asking Britain to exchange Free Trade for Protection in order to grant us a preference—to burn down her fiscal house in order to roast our pig—and so modify our own high tariff as to give Britain preference or an increased preference which we shall not feel. The lowest rate on the bulk of the British goods affected by our new tariff is 24^ per cent., and before the increased preference it was 22 per, cent.—-a kind of preference which the British manufacturer may be excused "for regarding as rather more like "a poke in the eye with a burnt stick." i

This painful side of the preference joke is brought home to us by the new tariff which was introduced in the Canadian Parliament by the Prime Minister on Tuesday. There are about 130 changes altogether, with most of which the principle of British preference is apparently included, but the one that interests New Zealand most related to butter, of which Canada took £2,707,669 worth from us last year. On butter the duties will be as follows:— British preferential tariff, S cents (4d) per lb. Intermediate tariff, 12 cents (6a) per lb. General' tariff, 14 cents (7d) per lb. New Zealand butter will have an advantage of 50 per cent over the most favoured of its competitors, but of what advantage will that be if the way is barred for both? If the 2d that was to have been imposed under the Dunning tariff was regarded as likely to be a dangerous blow, the doubling of it may well be fatal. Hitting the foreigner will not soften the blow. A preference that prohibits is I a cruel boon.