The Lyttelton Times. WEDNESDAY, APRIL. 28, 1869.

Lyttelton Times, Volume XXXI, Issue 2593, 28 April 1869, Page 2

The Lyttelton Times. WEDNESDAY, APRIL. 28, 1869.

Thu apcctal commissioner of revenues in the United Stales recently laid before Congress a report o'i the financial coauiaca cm the country which has attracted considerable notice in Eng* land and elsewhere. An analysis of this report, especially those portions bearing on the labour question in AjßMhea. and the protective tariff aystM, has been given by the Philadelphia correspondent of Tit Hme*. It is to tori analysis, as we are not in pop—ion of the report itself, that we vito to daect public attention. Pro*

teotion has been fairly tried in the United States, and the experience thus sained may be of service in New Zealand at a time when the question of encouragement to native industries is occupying the minds of those who take an active part in the government of the colony. The American commissioner points out, as one important result ot the civil war, that while it loft the country with unimpared resources, and actually i increased products, it at the same time i created a condition of affairs so ; peculiar that there was hardly a simple i domestic article or product, agricultural or manufactured, on behalf ot j which the claim, either directly or inJ directly, had not been made within the , last two years, that it could be produced I to greater advantage or profit in some other country than the United States. This is a very sweeping condemnation of the protective tariff in force in America, but the commissioner is prepared with facts to prove all that he has advanced. He traces the causes of the effect we have just mentioned to three agencies, themselves the rei suit of the civil war —irredeemable paper currency, unequal and heavy taxation, and a limited supply ot skilled labour. With regard to labour and wages, the commissioner furuishes us with a few facts. He says that the average increase of price from 1860 to 1867 in groceries and provisions was 88, per cent, iu dry goods

I and clothing Bo‘, per cent, mei o/ per per cent, and house rente 65 per cent, being a general increase in the living expenses of a family of 75 per cent. Wages have also increased, but not in this proportion, the pay for unskilled mechanical labour having increased 50 per cent, and of skilled mechanical labour 60 per cent. Unmarried men are better off than families, the increase in the price of articles consumed by them not having been so great as the increase in articles needed by families. He regards it as a fact, however, established by incontrovertible evidence, that the condition of the working men and women in a majority of the manufacturing towns ot the United States is not so good at the present time as it was previously to the war, although their wages were greater, measured in gold,in 1867-Sthan they werein IS6O-1. The average weekly wages of unskilled workmen in IS6O-I were 6 dollars -4 cents, and in 1567-S, 9 dollars 54 cents. To confirm the conclusion he has arrived at, the commissioner ob-

t»mea returns irora a large numper oi manufacturing towns, and he distinctly affirms that on the whole, whether reckoned in money or in flour, the working men and women of the country do not receive as much in return for their labour as before the war. The whole issues of free trade and protection, says the commissioner, have lost all practical importance in the United States, as the country must have a large revenue. This being necessary, he thinks there is no serious objection to distributing additional taxation in such a way as to favour those branches of industry amenable to foreign competition. But this, so far as we can see, is all that the commissioner, in face of the facts adduced, could allow himself to say ou

the protectionist side. The basis of the existing Customs tariff in the States is an Act of IS6I. which has been amended eleven times, so difficult is it to satisfy the demands of those who cry out for protection. The rate ot duty it imposes has averaged for the last three years 4S per cent.: add to this freights, insurance, and commissions. which in themselves constitute a natural and unavoidable tariff, and the average amounts to 10 or 15 per cent, more. The duties were largely increased in ISG4 and ISdo, to compensate home industry for the inland taxes; but in IS&> the inland taxes were repealed on almost all domestic products without change in the tariff. This is equivalent to a farther minimum increase of 5 per cent,, while ou liquors it is 40 per cent. Yet these rates, the highest ever levied by any civilised nation in modern times, do not check importation? or satisfy the claimants for protection. Since the termination of the civil war. revenue itself has been svstematicallv made subordinate to the protection o: private interests in levying new duties. The commissioner tells us that everv interest which has been strong enough, or sufficiently persistent, to secure re presentation at 'Washington, has received a full measure of attention, while every other interest that has no: had sufficient strength behind it to prompt to action has been imperfectly treated or entirely neglected. In the great departments of wool and iron, for instance, it is found that the duties on all the leading products hare been carefully increased, harmonised, and adjusted in a great degree in accordance with the wishes of those interested

The American tariff aims at universal protection, and in this, according to the commissioner, lies its chief defect. All products, he remarks, so through seven! stages of progress, in which the finished product of the one becomes the raw material of the other. Of the peculiarities of the American protect!re system, the commissioner gives some striking instances. In ISfi-l the manufacturers of spool thread ascertained that fine English thread was being imparted as yarn under a 35 per cent. duty, and afterwards spooled in the United States, thus evading the duty on spooled thread. The tariff was amended, and a duty of 4 cents was imposed on each skein or hank of S4O yards, and in addition thereto 30 per cent, ad valorem, which amounted to prohibition. But it was soon found that the fine cotton threads or yams thus excluded were needed for many other purposes than sewing thread, and that some of them could not at that time be manufactured under any circumstances in America. They were essential for the manufacture of elastic fabrics, for braces, gaiters, and other products, and these manufactures would hare been utterly ruined were the duty collected. After this discovert, the treasury practically nullified the duty by its interpretation of the law. ** **>t A building

interest, the commissioner says that protection has broken down under the attempt to protect copper, cordage, canvas, &c., and that the universal taxation has so extended to every branch of production that if ships available for foreign trade were furnished to hand without cost, their use must be exceedingly limited, for the reason that the high prices of all domestic commodities would effectually prevent that exchange with foreign countries which in itself constitutes commerce. So with reference to lumber, the duty on which is equivalent to 25 per cent. The demand for lumber increases steadily, and the prices of the cheapest varieties have advanced since 1861 about 100 per cent. Foreign lumber being absolutely essential to the requirements of the country, it follows that the duty is paid wholly by the consumer, and that the price of the imported article regulates the price of the domestic product. In other words, a tax on the importation of lumber becomes also a tax upon the consumers of the whole domestic product, with the difference that in the one case the proceeds of the tax go into the national treasury, and in the other benefit private interests exclusively. For every dollar that goes into the treasury on this account, the people pay seven. Perhaps the most remarkable instances of the eflects of protection are those which relate to salt and pig-iron. The former is burdened with a duty of 100 to 170 per cent, and the producers demand even further protection. Salt manufacture in the United States is practically a monopoly in the hands of two great companies, who have made enormous profits under the present duty, and the interests of the country demand a decrease instead of an increase. On pig-iron the duty is 9 dollars gold, or over 12 dollars in currency. It costs, to make a ton ot pig-iron in the United States, not more than 26 dollars currency, and in some furnaces not more than 24 dollars, yet the selling price of two classes of pigiron in the markets of the United States for the last year has ranged from 37 dollars to 42 dollars per ton in currency. Thus the manufacturers of pig-iron, to the detriment of the rolling mill interest, and to the expense of every consumer of irou, from a rail to a ploughshare, and from a boiler plate to a tenpenny nail, have realised continued profits which have scarcely any parallel in the history of legitimate 'industry. The commissioner gives the returns of one set of furnaces in the middle States, showing a yearly product of 33,000 tons on a capital’of 450,000 dollars, sold at a profit of 10 dollars to 13 dollars per ton ; that is, on a capital of 450,000 dollars, a yearly profit of from 350,000 dollars to 455,000 dollars. The result of protection is that the cost of all domestic products is so great as to preclude the possibility of exchange in kind with other countries. The majority of the articles which foreign nations produce the Americans must and will have. What these nations want and the Americans produce cotton and a few other articles excepted —they can buy cheaper elsewhere. The consequence is that the people of the United States are obliged to pay for such foreign manufactured articles as they must and will hare, either in the precious metals, or, what is worse, in unduly depreciated promises of national payment. This the commissioner illustrates at length by examples of the course of American trade with foreign nations. In discussing the remedies which he considers necessary, the commissioner recommends changes of a radical character in the system of taxation. high!v commending the systems of Great Britain and France, aud saying that the nation adopting them might confidently anticipate a very large influx of capital and manufacturers from beyond its own borders, thereby rapidly increasing its wealth and development, and possible, as an ultimate result, compelling other States to adopt the same liberal and enlightened policy as a measure of defence and protection. ’ Among the ends to be aimed at in a reform of the laws relating to taxation, the commissioner lays special emphasis on a reduction in the cost of national production. with a view of enabling the products of American industry to compete on terms of greater quality with the products of foreign nations than is now the case. 2fo legislative protection, be says, can restore the producer in America to a level with foreign competition. The productiveness of industry is one of the most essential elements of national prosperity, and is that which gives England her superiority over the Continent. He asks if American labour has no superiority even to English, and says the protection it needs is sagacity, energy, economy, and the use to the utmost extent of its natural advantages. These the tariff legislation has hitherto neutralised. It has raised the price of cod and raw material, and has offered bounties to incompetence and bad management. It I has destroyed foreign commerce bv i preventing exchange in kind. It has repelled the immigration of skilled i labour. In short, what the country needs is a tariff looking first to the attainment o: public revenue, and not primarily to the furtherance ot mere private interests.