LOCAL INDUSIRTES.—No. 11.

New Zealand Herald, Volume XVIII, Issue 6051, 9 April 1881, Page 6

LOCAL INDUSIRTES.—No. 11.

AN ENQUIRY INTO THE MEANS OF PROMOTING THEM.- THE CAUSES THAT HINDER THEIR PROGRESS. THE JIELVSURES INDISPENSABLE FOR TIIEIR SUCCESSFUL ESTABLISHMENT. NEW MANUFACTURES PREVENTED BY HIGH WAGES. A great many reasons have been cited why protective taxes should be imposed on im. ported goods ; reasons varying widely, according to the points from which their respective advocates have viewed the question ; and we might draw out a comprehensive list of such reasons — and then by means of "Long arguments verbosely spun" sift thein philosophically till we had gathered up the few grains of truth that undeniably exist at the bottom of any formulated beliefs to which men are found to cling tenaciously. But it will lead to more practical results if we take the-pleas actually set forth by men who have thought they would be benefited by protective taxes ; and having disposed of these we may then glance at other reasons, based on views not so directly supported by motives of self-interest. One often-stated reason then is, that colonial manufacturers cannot possibly compete with foreign goods freely imported, because the wages in the colony are so high that after paying them there is no profit left. This, though it looks like a question of unduly paid labour, is in reality not such ; it is wholly and solely an employer's question. To prove this to the many employers who have urged it, will necessitate our being, perhaps, a trifle prolix: but a question of this kind cannot be made clear without a little close study of economic principles. The elements necessary for production are stated scientifically as Land, Capital, and Labour. In considering the question, however, of a manufacturing industry, it is necessary to extend and modify the meanings attached to the words, and call the elements Raw Material (used in the manufacture), Capital (to support the workers till a return i 3 obtained), and Labour. These three must, of course, be in conjunction before manufacturing production can take place at all. : For successful competition the prosecutor of a productive (manufacturing) enterprise must have the command of elements yielding greater advantages than his competitor can command. That is, he must have cheaper material, cheaper money, and cheaper labour than his competitor, if he is to draw tr ide his way; or, if one element is dearer, another must be cheaper, so as to keep the total cost of his productions below that at which his competitor can supply them.

; If he be a large manufacturer of boots, in a country where money bears a high rate of interest, and where labour is dear, ho^ must obtain his leather very cheaply. Or, if the leather is dear, the wages of - his men must bo low. If the leather ho uses happens to be imported from the very country he is competing with, it will be dearer than his foreign competitor would have to pay for it by the amount of freight and charges on it, and he must, therefore, take something off his men's wages. If he cannot do this, then he must forego his own profit, or give up the competition. " But," he would reply, "that is exactly why I want a protective tax p .t on. Impose a duty on the imported boots, and I shall be able to charge a price that will just leave me a profit, and so enable me to get a bare living." The reply is : " There are two reasons why a Government would refuse to lay on a tax for such a purpose. The first is that, for the sake of giving you a bare living, your customers would all have .to pay more for their boots than they could procure them for from abroad, and as it happens that about fifty men wear boots for every one shoemaker who makes them, fifty men would be unnecessarily deprived of part of their living in order that you should get yours. The other reason is this : It is pretty evident, from the number of men who persist in carrying on your trade in spite <>f the protestations as to its being a losing business, that it is not such a very distasteful business after all; so that, the fact of a higher prise having to bo paid for boots would draw more shoemakers into local competition with you, and keep your profits down, and you would, in the long run, not be benefited by the tax at all, while the whole population would still be paying a higher price than they need do for one of the first necessaries of modern comfort." If the industry, however, be one to which the last reason does truly not apply—that is, if it is neither'an attractive nor a self-supporting one—and it is a question between the protective tax, or an abandonment of the trade, then the latter alternative is the only one legitimately open. And the real reason for this is, that the industry has been started in a country for which it is not (yet) suited. Nothing can continue to exist when the elements of its existence are wanting; and while two of the elements, the dear money and the highpriced raw material, constitute insuperable difficulties on their side, the workmen will not set the thing right by accepting a lower scale of pay than the current rates. The rate of wages they can command is indirectly but none the less positively regulated by the amount of capital available in the country, to employ the limited number of labourers obtainable, for carrying on the many simpler forms of industry that a new country affords. The high rate of wage 3 that forms the standing difficulty with which those have to contend who are attempting to initiate new manufactures, arises from, the fact that there are other businesses that are favoured with special facilities so exceptionally advantageous, that high wages can be got by the workers in them, and yet a profit left to the employers; and thei'e are still other businesses in which the worker can be his own master, and enjoy both wages and profits as well. And the transition is, in many cases, very easy from one business to another. A shoemaker, a fitter, or a cabinetmaker, who cannot get full wages at his own trade finds it easy to dig gum, to chop trees, or to work as a saw-mill hand. He may, perhaps, discover in himself greater aptitude for earning money in a business that needs little learning, than he had for commanding a price in the trade to which he has served his apprenticeship; and he may prefer a comparatively independent, open-air life, to being cooped up in a factory; therefore, while he may always be ready to take the chance of a " spurt" in .the trade he belongs to, he forms one of a class largely existing in the colonies, of men of versatile powers who can float about, so to speak, from one trade to another, and so keep the wages on something like a level in all. The easy trades thus regulate and control the rate of wayes that can be demanded in the more difficult trades; and the only chance for those who find high wages the insuperable obstacle to establishing their new industries will be, to wait till the openings in the easier and more profitable trades are filled up in consequence of an increase in the number of general handicraftsmen throughout the colony. It may seem hard to be told that the trade which a man lias been educated to conduct— (and which from his own conscious power, and from his knowledge of the nature of the trade, lie feels to be feasible) —is not wanted, and cannot be carried on ; and it may be a great puzzle to the artisans who can command when at work the highest wages in their profession, but who have not the versatile power or the desire to turn to other trades when their own fails —to bo told that they are not wanted in the country ; but our premises show that a protective tax in favour of their particular industry would not help them ; for the only effect of a protective tax would bo to draw more local competitors into those trades by giving them the appearance of being able to yield a profit; and the new competitors thus drawn to the trade would keep down or annihilate the expected profit. Both competitors would sti:.l find the element of low wages wanting, for, as has been shown, the imposition of an import tax to raise the emoluments derivable from the protected trade, could have no cffoct in i lowering the rate of wages, and thus remov- ! ing the one insuperable difficulty; for the rate of wages is governed by quite different influences. Those who have started such unsuitable trades in the country, and who, from having their capital invested in them, are forced to strain every nerve to keep them going, are only able to do so by acting on the principle of that Spartan mother who, when her son complained that his sword was too short to reach his adversary, exclaimed " add a step to it, my son ! " If the elements of success fail them, they struggle to make up for the lack by foregoing all profits themselves, by using extra personal skill, and by fighting their difficulties with indomitable Spartan pluck. There are, it is most true, other means whereby some of them continue to exist as they do, and are not completely crushed ; but these sustaining causes will afford interesting matter for consideration later on. Economist.