REFORM OF THE TARIFF

New Zealand Herald, Volume LXVII, Issue 20596, 21 June 1930, Page 16

REFORM OF THE TARIFF

FOSTERING IMPERIAL TRADE. A NEW ZEALAND ANOMALY. DUTY ON STOCK FOODS. [ny TELEGIUrn.—own correspondent.] WELLINGTON, Friday. Opportunity was again taken by Sir George Elliot in his address at the annual meeting of the Bank of New Zealand to continuo his advocacy of reciprocal tariff arrangements between Britain and the Dominions. He introduced the subject by referring to the increase in the .Australian tariff, remarking that it was to 1)0 hoped that New Zealand will not bo forced to follow her example, except, porliaps, on foreign goods of a luxury nature. Any great rise in our tariff would have serious consequences by its effect on the trade of the United Kingdom, which buys the great bulk of our produce. He suggested that more lasting benefit would bo secured by persuading the British people to abandon a policy that has already been discarded by every other nation on earth. " Probably there would be little difficulty in arranging for reductions in colonial customs tariffs in exchange for a small protective duty on at least some of the raw materials and foodstuffs imported into Britain from her own overseas dependencies," he continued. " The assured market that such protection would provide would be of inestimable advantage to the colonies, and would so stimulate production that in a short period of time prices would probably reach levels tending to reduce rather than increase the cost of living in Britain. Economic Unity. " As regards Britain, one might hope to see her export trade increased, unemployment lessened, and impetus given to the fine ideal of an Empire united into one homogeneous economic whole. If Governments throughout the Empire brought to bear on this vitally important question half the zeal they expend on matters of infinitely less value, substantial results must surely follow." It was to be hoped that the Imperial Economic Conference in London in September will attempt to find some solution to the greatest problem that faces Great Britain and every outlying dependency—how to increase and extend inter-Empire trade and commerce. As an illustration of what may be achieved within the protection of protective duties, Sir George Elliot mentioned the dairying industry in the United States. Ten years ago the duty on imported butter was 2j cents a pound; it lias been successively raised to 8, 10, and now 15 cents a pound. According to Hoard's Dairyman, there are 1,250,000 fewer cows in the United States than 10 years ago, but the productivity has been so greatly increased that the industry supplies with dairy produce a population 13,000,000 greater. Moreover, the domestic price of butter has been so far. reduced that, if all protective duties were removed, importations from overseas could not compete in price with the local article—except on rare occasions when weather or other conditions might affect the position. Increasing Production. In contrast with this experience, Sir George Elliot directed attention to the fact that the dairying industry in New Zealand is being hampered by apparently unnecessary customs dutieS. " Dairy farmers in New Zealand are no doubt doing much to improve the productivity of their herds by more scientific cultivation of the soil, by use of'artificial fertilisers, by herd testing and by care in tho selection of sires; but little is heard of attempts being mado to increase the milk yield and to prolong the lactation period by the judicious use of artificial concentrated cattle foods," he said. "In the United Kingdom, and oven more in Denmark, these concentrated foods are being increasingly used with excellent results, particularly when the growth of grass is beginning to diminish. It has been, I think, conclusively proved that by adopting this mothod the yield per cow has been raised considerably, in some instances doubled, at a cost which leaves a high margin of profit to tho farmer. " Concentrated cattle foods are sold with specified and guaranteed food values and are manufactured from products such as cotton seed and cotton seed oil, linseed, copra, other nuts, etc.—all of which are grown within tho Empire." As nono of tho ingredients used is produced in Ne\v Zealand, except a small quantity of linseed, the Government might well consider tho abolition of the customs duty at presont levied on all artificial cattlo foods imported into the Dominion. The abolition of the duty would, without doubt, encourage the use of a product that is giving remarkably beneficial results in other parts of the world.". Importations of foods for animals in 1929 comprised only £7573 for chaff from Australia (compared with a few hundred pounds in the previous years) and £8413 for all other foodstuffs, as against £11,770 in 1928 and £6488 in 1927. The total of £8413 comprises linseed and oil cake, calf meal and a miscellaneous variety ranging down to birdseed. Almost the whole of the imports are from the United Kingdom, the preferential tariff rate of duty being 20 per cent., and the foreign rate 40 per cent. GOVERNMENT BORROWING. EFFECT ON BANK'S FUNDS. DEBENTURE ISSUE ARRESTED. [BY TELEGRAPH* —OWN CORRESPONDENT.] WELLINGTON. Friday. The effect upon monetary conditions of the Government's action in raising the rate of interest on Treasury borrowing from S' s to 5£ per cent, was tho subject of several references in the annual address by (lie chairman of tho Bank of New Zealand. Referring to tho bank's offer in October of £300,000 of long-term mortgage debenture stock at per cent., Sir George Elliot said ' applications for £102.550 were received but as the Government then issued a loan in the Dominion at 5? per cent., the bank withdrew tho balance. Whenever tho market becomes favourable a further issue to meet the requirements of the department will bo made. He also stated that the Government loan had resulted iri the withdrawal of a large sum from the bank, contributing to tho contraction of deposits, which led to the raising of deposit rates in February and April. Sir George Elliot mentioned that it was understood that a considerable amount of Australian money had been invested in tho Government loan.