EMPIRE FREE TRADE.

Matamata Record, Volume XIII, Issue 1134, 30 June 1930, Page 5

EMPIRE FREE TRADE.

WOULD IT PAY ?

Address by Mr. F. B. Stephens.

The question whether Free Trade r '._ -within the Empire and Imperial Preference were practical politics or not was discussed by Mr. F. B. Stephens, tutor-organiser of the Workers’ Educational Association, in his first .lecture to members, of the Morrinsville branch on Saturday evening. Mr. G. H. Pirrit presided over an attendance of about 30. Mr. Stephens said his subject was of special importance in view of the forthcoming Imperial Conference which the Prime Minister would attend. In considering a- tariff system for the Empire to give preference to Empire produce the question to consider was: To what extent can the Empire be made self-supporting, and what advantages would be gained from a self-contained Empire ? While Imperial economic untiy was desirable, it was in opposition to the resolutions in favour of a tariff truce supported by Britain at the League of Nations meetings. Americans drew attention to the fact that while the Dominions act as separate nations in League of Nations affairs, they adopt the attitude of colonies when advocating Imperial preference. He mentioned this to show there was another side to Imperial Preference and Imperial Free Trade bdsides -that which we were accus- - toftied to consider. The chief reason why Imperial 'Preference was advocated was the sentimental consideration that members of the same nation should grant preference to other parts of the Empire. Of more importance was the ' consideration: “Is it a policy of profit' for the parts of the Empire?” If Imperial unity was to/ result in a loss of profit it could not ‘be regarded as desirable, as profit was stiff the basis of industry. The whole case for Imperial Preference depended on whether the Empire was self-supporting. The question was whether Britain would be willing to give preference to the Dominions in cases which were of value to them. If Britain drew all her supply of food and raw materials from the colonies the imposition of a tariff on foreign imports would not result 'in an increase in price. However, Britain used a certain amount of food and materials from foreign countries and a tax on these would result in higher prices for food in Britain and an outcry from the working classes. Of the wool used in Britain, 79 per cent came from the Empire, but the 1 -' foreign wool was of a texture that Britain must have it for certain j purposes. Half the wool produced 1 ■' in the Empire was exported to foreign countries. If Britain shut out foreign wool that wool would go ' elsewhere and oust wool from the colonies. The only effect would be •to reduce the price of wool outside the Empire and increase it in the Empire. Very little cotton was produced in the Empire. An at-

tempt to give preference to Empire \ cotton would certainly increase the 1 cogt of cotton to British manufacfacturers. As Britain produced most of 'the rubber of the world there was no need for preference for Empiregrown rubber. Almost half the wheat imported into Britain came from countries outside the Empire, and if preference were given to wheat from the Dominions the cost to British consumers would be increased. At present a portion of Australian wheat went to other countries besides Britain, but if / foreign wheat was shut out of Britain it would be diverted to other markets and would oust Empire wheat.

Owing to distance from Britain, Australia and New Zealand could not compete with the Argentine in supplying chilled beef. The Empire supplied 60 per cent of the mutton imported into Britain and the rest came from' South America. However, it seemed that Australia and New Zealand were producing mutton to their full capacity and to give them a preference would .only increase the price of South American mutton which the British consumers had to buy. The, Dominions supplied 40 per cent of Britain’s imports of butter. It appeared impracticable to give preference to Empire butter, as the Dominions ■ could not supply all the: butter required by Britain, and the only result would be to increase the price in Britain. The was no escape from the position that preference to food and raw materials from the Dominions would result in a rise in prices in Britain. Erom a business point of view, ImPreference was not a business , disposition, and was unlikely to be

a matter of practical politics. Arrayed against the forces of Empire Free Trade were the British industrialists, who wanted cheap materials, the Dominion industrialists, who could exist only behind tariff walls and finally the popular feeling in Britain against any change which would make food dearer. Farmers’ Opinions.

Captain F. Colbeek said he wished to correct the impression that the Farmers’ Union had ever advocated Imperial Preference at the expense of Britain. The union wanted to abolish the present protective duties on British goods imported into New Zealand, so that the preference would be reciprocal. The union believed that Free Trade would act best over the whole world, but as this was impracticable at the present time they regarded reciprocal Imperial Preference as the next best thing.

Mr. Stephens said the Dominion Prime Ministers at the last Imperial Conference had suggested that Britain should give preference to their primary produce without their abolishing protective duties which hindered British manufacturers.

Captain Colbeek (scornfully): Oh,: thpse are not farmers; they are poli- , ticians. (Laughter). j Mr. A. Topham inquired if the . cost of stock foods would fall if the j tariff were removed, or whether overseas manufacturers might not j raise the price again after the New j Zealand-made article had been put j off the market. ... .... I

Mr. Stephens said it was well) known that manufacturers some- j times dumped goods on to a market j at less than cost price until they had < captured the market, and then j raised the price. It all depended j whether one company or district had j a monopoly of the supply. If there j were competing manufacturers the j price would be kept down. j Mr. A. Ross asked if Mr. Stephens j thought the tariff raised the general j standard of living of the community, j In his opinion the tariff in New Zea- , land lowered the standard of living of the farmer by increasing his j costs and did not benefit anyone in j the towns.

Mr. Stephens said that a tariff usually raised the standard of living of those behind the tariff wall without raising the standard of other classes of the community.

Captain Colbeek instanced certain New Zealand woollen mills and boot factories which were in a bad financial condition in spite of a high' protective tariff, and he thought the furniture factories were about as bad, although they were protected.

Mr. Stephens pointed out that in the case of one woollen mill quoted the cause of its misfortunes was that the company had been floated in 1921 and debentures had been issued at 8 per cent instead of 6 per cent and machinery had been bought at peak prices. Mr. Barrowclough said Mr. Stephens had dealt with Imperial Preference from the point of view of England, while the Farmers’ Union had considered it from the point of view of New Zealand. The idea was not that Britain should give them preference, but that they should give her preference. Mr. Ross thought a duty on foreign butter imported into Britain