AUCKLAND, MONDAY, OCTOBER 5, 1868.

New Zealand Herald, Volume V, Issue 1517, 5 October 1868, Page 3

AUCKLAND, MONDAY, OCTOBER 5, 1868.

We noticed a short- time ago a debate in fclie Legislative Council on the New Zealand Tariff. A select committee was appointed to consider this tariff, and report to the Council upon the subject. That report has been laid upon the table of the Council. The subject with which it deals is one of no small importance, for it refers to the mode of taxation adopted in the colony, and we all know what a very great influence is exercised upon the industry and prosperity of a country by the system adopted in raising the public revenue. A calm consideration of the actual facts connected with various countries, in various stages of development, and under varied conditions, will convince most persons that no cut-and-dried system of taxation is alike suited to every country. A very influential Financial lieform Association in England has long labored to convince the people that direct taxation would be a great boon to the nation generally. The great cost of indirect taxation, the great number of people who are employed to collect the taxes, and are thus lost to other and productive occupations, the smuggling, the illicit distillation, and the cost of preventing both aro dwelt upon ; aud in contrast to all this is placed the simplicity aud cheapness of the collection of direct taxes. They also argue that a system of direct taxation would tend to economy in another way, inasmuch as it would cause persons to take a much more lively interest in the government of the country, and through their representatives keep a greater check on the national expenditure. But while most of these things are very clear, the difficulty is to initiate a system, of direct taxation which shall be easily collected, and which shall be equitable in its nature, and not liable to be evaded by unscrupulous persons. This difficulty prevents direct taxation superseding indirect taxation, and will probably to do so for a very long time to come.

Seeing, therefore, that the revenue of the country must be raised chiefly by indirect taxation, it becomes of considerable importance to consider how best it can bo raised, how it will be most equitable, how it will least interfere with the profitable industry of the country, and indeed how it may best serve to extend that industry, and make it more profitable to an increasing number of people. THiat is called (though by a misnomer) the free trade policy of Sir Robert Peel and his followers, is based on this great principle of benefitting the manufacturing and commercial industry of the colony, believing that the agricultural interest would surely be benefitted if manufactures and commerce were extended. The way which was found best adapted to England was to remove as much as possible all excise laws which interfered with manufactures. Glass, paper, and so forth, were thus greatly relieved by the removal of restrictive and vexatiotfs laws, and the manufacture was greatly increased. To enable British manufacturers to produce their wares as cheaply as possible, duties were removed from the raw material which they converted into manufactured goods. It was clearly the highest wisdom to adopt this general principle as regarded England; she had plenty of capital, of coal, and iron, of manufacturing skill, of cheap labor. She had moreover a large commercial marine, ready to bring her the products of other countries, and to take to them in return her manufactures which she was able to sell cheaper than could be done by other nations. It is therefore the great policy of England to secure as much trade with the other parts of the world as possible, as much sale, that is, as possible, for her manufactures, as much employment as she could for her merchant navy.

The principle referred to above we believe to be right when altered in particulars to suit the exigencies of particular countries. England had for a long time protective duties. Taxes were imposed not simply and solely to bring in revenue, but to prohibit foreigners outselling English manufacturers and English farmers. Navigation laws were enacted with the similar object of throwing as much employment as possible into the hands of English shipowners and English aeamen. And by this system, various industries became firmly rooted. and naturalised in the land ; the people became skilful in respect to them, and English ships at length outnumbered those of nations which once had the principal ocean-carrying trade of the world. And not until it was felt that relaxation of protection laws would be for the benefit of the English people, did her statesmen attempt to repeal these lawß.

The report of the Select Committee of the Council has referred generally to some of the principles of taxation, but it has by no means exhausted the subject. The Committee, while alluding in very general terms to the practice in England, as referred to in the preceding part of this article, seems rather afraid of being considered in the light of an advocate for protection; but it quotes from Mr. Mill to show that even on the strict principles of economy it may be wise, under certain circumstances, for countries situated aB are these colonies, to subsidise, for a time, either by direct money grant, or by heavy import duties, certain branches of industry. These would be such as the natural productions of the country would favor. Thus it would be folly to have protective duties on manufactured or other articles which could not be easily made or grown in the country, after the first difficulties of starting their manufacture had been accomplished. But there may be many industries which might be naturalised in a country in a comparatively short period, were the customs' tariff so arranged that it would fall heavily on certain imported goods. It may, in the long run, pay a State very -well indeed to forego some tern-

porary advantage to secure a permanent one—to secure the naturalization of a manufacture, just as it may pay to spend money in acclimatising foreign plants and animals. Mr. Mill states—" The only case in which, "on mere principles of political economy, " protective duties can be defensible, is •when " they are imposed temporarily (especially "in a young and rising nation) in hopes of " naturalising a foreign industry, in itself " perfectly suitable to the circumstances of "the country." Otngo_ is following the example of an Australian colony and is endeavouring by this means to naturalize the woollen manufacture. There are several conditions of success in New Zealand so far as that manufacture is concerned, viz., a suitable climate, plenty of coal and water for motive power, a heavy import duty, though not imposed for protective purposes, and the raw material of a superior quality in great abundance. The other great requisites are skilled labor at a fair price, and capital ready to embark in the business. The success for a considerable number of years of the small woollen manufactory at Nelson is a practical proof that the manufacture will pay in New Zealand. Our high customs' duties, though imposed not for protection but for revonue, will not be an unmitigated evil if they do something I toward encouraging local manufactures and local productions of articles we have hitherto purchased from abroad. And they ought to have this effect, and indeed are having it at the present time. The manufacture of 1 of soap, caudles, and leather, for instance, is now carried on to a considerable extent in the colony, as also that of beer. And the prosperity of the colony will be on a wider and firmer basis as these local industries can be multiplied, and increased employment of a varied and remunerative character be found I for both labor and capital.