Hawke's Bay Herald FRIDAY, FEBRUARY 12, 1904. PROTECTION AND THE WOOL TRADE.

Hawke's Bay Herald, Volume XXXIX, Issue 12679, 12 February 1904, Page 2

Hawke's Bay Herald FRIDAY, FEBRUARY 12, 1904. PROTECTION AND THE WOOL TRADE.

The .bearing of Mr Chamberlain’s proposals on the woollen industry is a matter of much importance to the colonies. Professor J. H. Clapham has an interesting discussion on the subject in the last number of the “Independent Review.” Although his treatment is purely from the Freetrade side it contains much interesting material, and is worth the consideration of all connected with the growing of wool. After referring to the admitted decline in the number of workers employed, which, however, he says is caused by the improvement of machinery, which has increased the relative output, he quotes an Austrian expert for the statement that the consumption of wool in England has been rather faster during the last decade than in France or Germany. In spite of the French duty of 16 to 22 per cent, ad valorem, two million pounds’ worth of English goods went into France last year. After pointing out the large export of yarns to Germany and of “tops” to foreign countries, the writer sums up the present as situation as follows:—““lnternational competition in the trade is so keen, i that the three great European exporting countries all have difficulty in finding markets. All suffer alike, and all must continue to suffer, from the development of the industry in once backward lands. The French export figures for the past twelve years are less satisfactory than our own, and the German are little better. Cheap wool is essential to all, therefore Germany, though she taxes food and timber, admits wool free, and yarn nearly free. France taxes yarn smartly but only ventures on a modest surtax I’entrepot on certain non-European wools that

come to her through European mar kets."

Going on to discuss various contingencies of the fiscal proposals he contends that under a preference on colonial wools, although the tax would fall on a small proportion of the present bulk of imported wool, specialties would suffer, difficulties would arise in adaptation, and the whole level of prices would be raised. Taxation of yarns would be harmful, if not disastrous. But it is piece goods which the Protectionist is most concerned about, and on this subject Professor Clapham observes, “A modest duty of say 10 per cent on ‘finished’ goods would have a very short life, if imposed with intent to protect the trade. As an avowed revenue duty it might live a little longer; but as a protective duty it would not protect enough and would have to be raised. Some kinds of women’s finery would cease to come from France; perhaps some cloths and felts and hosiery would stop coming from Germany. ' But when the balance came to be struck, it would be found that while the prices of various articles had risen to the consumer, English manufacturers had not received that effective protection which would secure for them the home market. The French woollen manufacture is highly efficient; French duties are equivalent to 20 per cent, on the value of the goods, yet French imports declined very slowly for many years after the return to Protection. The Home markets can only be secured by great solid duties. The country may have them if it likes. If it has them, it must in common justice apply them all round; which will mean so far as the woollen manufacture is concerned, dearer wool and dearer yarn, dearer dyestuffs, dearer machinery, and either higher wages, or less efficient work people. And retaliation. It is a popular word in some parts of Yorkshire. It seems so simple to clap a tax on Roubaix goods if the French will not buy enough from Bradford. If not on Roubaix goods, then on wine. The American case is less simple even to the sanguine Protectionist. America sends no woollen goods to be taxed. She is peculiarly well situated for tariff warfare. She ignores the wishes of other nations however free—in Mr Balfour’s sense—their power of negotiation may be. France and Germany are just as eager as we to get their goods into the States. They are at liberty to negotiate, retaliate, reciprocate, but that did not stop the Dingley tariff on textiles; for America is not so easily bullied. Retaliation means an occasional tariff war, and a tariff war always means an infinite

disorganisation of trade, but very seldom a reduction of duties below their

ancient level when peace comes. A tariff war with Germany would he particularly unpleasant for Yorkshire; it would endanger the splendid export trade in yarn.” Finally as regards an Imperial preferential arrangement Professor Clapham is free to admit that the colonial markets would be worth preserving, if a quasi-monopoly could be obtained without serious dislocation of trade elsewhere, and with permanent results. But he does not pretend to believe in so comfortable a hypothesis. “As the colonies arrive—and they must—at the stage when woollen manufactures begin to take root, may not our argument be repeated in defence of a new colonial protectionism? And shall we be in a position to threaten the withdrawal of the agricultural'preference? I believe that if we set to work on these lines, colonial markets will remain open just as long as there are no rising colonial manufactures; and that is the worst that can happen in any case. Only, if England continues to say that Freetrade is good, the colonies may in time come to agree with her; and we may move towards Freetrade within the Empire. But should England say that she has tried Freetrade and found it a failure, she will put a fresh strain on colonial loyalty, if she' asks the colonies to give up indefinitely the apparent good, Protection, in return for the not very great advantages in her own market, which are the utmost that she can offer.” The foregoing view of the fiscal problem puts very well the Freetrade point of view wth regard to one of the chief English industries, and one in which this colony is vitally interested. We do not think the argument conclusive. But it is well to realise the difficulties which face any attempt at tariff reform, and Professor Clapham helps us to do that in one direction at all events.