TRADE AND TARIFFS

New Zealand Herald, Volume LXX, Issue 21470, 19 April 1933, Page 14

TRADE AND TARIFFS

Sir, —Evidently Mr. F. Morrill has overlooked a sentence in my reply to his letter on "The Butter Problem." He still wants know -where the revenue is coming from if we have free trade with Great Britain. The sentence reads:—"lt were cheaper" and better to collect directly, as in the case of unemployment taxation." Investigators who have made a close study of this problem estimate that for every one pound tho State gets in revenue, the consumer pays three in costs of commodities and services when all the ramifications of the system aro accounted for, whereas the cost of collection of direct income tax is but a small percentage of the total amount of the tax. My letter showed that neither wages nor volume of employment suffered under free trade. As to Great Britain, she has given free trade to others, but has not received it in return, and her present policy is designed to forco other countries to adopt less harsh restrictions against her trade, and not because she believes in protection. The Dominions are among tho offenders, and all that is advocated is that we rectify that position, and give Great Britain as good treatment as she gives us. In any event, the figures show that there is little difference in the unemployment figures in Great Britain as compared with free trade times, despite the good effects of Britain's change of monetary policy. Sir Reginald McKenna, chairman of tho Midland Bank, says:—"The clear evidence of improvement of a number of countries off the gold standard has 110 counterpart in thosu still- on gold, whose position, generally speaking, has become worse." I also explained and gave a good example to show that freo tiado means greater expansion of local industries, but on a proper economic basis, and thus more employment to workers. As to tho farmer, he was being ruined long before the exchange was controlled by tho Government, and the official spokesmen of the farmers, especially in the Auckland Province, have on every occ.asion strongly denounced the raising of the rate. Personally, I definitely opposed it in a very emphatic letter to the Hkhamj. It strikes me that even if wo give in the doubtful benefit of an artificially fixed high exchange, also the sure benefits of free trade, total derating (for roading and hospital purposes) and other assistance, these boons will sooner or later all be capitalised into higher speculative land values, and in the long run the farmer will be in the same old mess, unless the system of tenure is changed by the nationalisation of the land, or some other measures taken to stop the ultimate mopping up of all gains by speculation. T. E. McMtLLAN. Matamata.