CORRESPONDENCE.

New Zealand Herald, Volume XXIV, Issue 8062, 1 October 1887, Page 3

CORRESPONDENCE.

FREE TRADE. TO THE EDITOR.

Sia, —Your contributor " Enlim" hat made a number of statements from time to time which are no doubt satisfactory to himself. Some very lengthy articles have been written by him to prove that we do not send seven million sovereigns home every year to pay for our imports, receiving a somewhat less number in return as payment for our exports. We have also been told by "Enlim" that the fact of our imports exceeding our exports by any considerable amount need not cause any alarm, because no money changes , bauds, these matters balancing themselves by a system of exchange arranged by our bankers. How would the same argument apply to the business transactions of two merchants ? In your issue of September 24 "Enlim" tells us that our annual imports* ana exports are just now about equal, say £7,000,000. He goes on to tell us " that had we imported £10.000,000 worth of commodities instead of £7,000,000 we should have required to have exported £3,000,000 ext'a." If figures mean anything this is an admission that the former statement of balancing accounts when the debit was always on the wrong side needed correction. During the period of 10 years, 1874 to 1884, our imports averaged £7,729.000 per annum, and our exports £6,190,000, leaving a balance of exchange against the colony of over £1,500.000 oar annum, and for the ten years over £15,000,000. To substantiate his statement "Enlim " should have explained the reasons why oar exports did not increase to the amount of oar imports during that period. It is hardly necessary to say that these figures require our careful attention.

The best authority on this question is the | late Professor of Political Economy at the Cambridge University, the flight Honourable Henry Fawcett, M.P., D.C.L., F.R.S. In his valuable work on freetrade and protection he says :—" India and America have to pay England for interest on loans | £30,000,000 per annum. Hence the amount ot the expoats to England from America f and India mast not only be sufficient to pay for the goods imported from England, but must also be sufficient to pay the interest on the capital invested there. Those countries which are largely in debt to foreigu nations must export more than they import." It has already been shown that our exports of gold, wool, wheat, mutton, kauri gum, timber, &0., do not pay for the goods imported. We should also remember that the annual interest owing by this colony for public and private loans obtained from England is about £3 000,000, and to maintain our solvency we must either increase our exports or decrease our imports to that amount. How is this to be done Freetraders would say, throw opeu our ports and supply the people with cheap goods. Cheapness is, however, only a relative term, "for if tho working man ceases to earn wages, of what use to him Are the low prices of commodities he has no longer the means of paying for ?" In other words, the cost of living is to be measured not by what we pay for the articles we consume, but by the amount of income we possess, out of which the payment has to come."

At the close of the civil war, America ws»s in a position somewhat similar to this colony,

if not worse. Burdened with debt, her trade paralysed, and currency depreciated, the prospeots were very discouraging.. Fortunately for America, her statesmen decided on a protective policy, and from comparalively small beginnings her manufacturing industry is now the greatest in the world. By establishing and fostering industries for which all the oircumstanees and con* ditions are favourable, we can reduce oar imports and leave a surplus of exports to pay the interest to our foreign creditor, thus placing the colony in a sound financial position. The increasing popularity of a system of protection lies in the prosperity it has given those countries which have already adopted it. It has resulted in the successful establishment of a varied number of prosperous industries. • It has provided a steady and profitable market for the farmers, and steady employment has been found for , the men and youths of the country. The adoption of freetrade would mean the very reverse. Large quantities' of farm produce would be saleable only at nnremtjnerative prices, our population would stuadily de« crease, and the ranks of the unemployed in our midst would .be very considerably increased,— am, &c., Thomas Allen.