FREE TRADE V. PROTECTION.

New Zealand Mail, Issue 787, 1 April 1887, Page 15

FREE TRADE V. PROTECTION.

TO THE EDITOR OP THE NEW ZEALAND MAIL. Sir, —There is one aspect of Protec tion which requires examination, and to which I think little or no attention has been hitherto given, viz., the effect upon prices of great staples caused by the adoption of a protective policy. If we take, for example, the enormous export of wheat and other cereals from the United States to England, we may at once perceive the impossibility of the latter country paying for its food bill in gold. The reserve of that metal in the Bank of England has stood lately at about £l2,ooo,ooo—an amount which would be far more than exhausted by the supposed payment. England must therefore pay for its food supplies in manufactured goods. If America says we shall exclude these goods, then what happens ? Were the exclu?iou absolute, England would then be forced to say—We cannot take your cereals because we have no means of paying for them. Take them away. As the exclusion is not absolute, the result appears to be a 3 follows : England take 3 the cereals, but, as the amount of manufactures which America takes in exchange will not balance the exchange at the old prices, these necessarily fall until the account is balanced. No country can continue to buy frpm another without the means of paying either directly or indirectly. The same rule will apply to the Australasian colonies. England ha 3 to pay for the wool, gold, tallow, wheat, and other produce which these colonies send to her. If these colonies go in for Frotection, . or for heavy revenue duties largely affecting theamountof trade, downcomestheprice of produce until the account is’balanced. I do not say that this is the sole of the prevailing depression or of low prices for produce, but it appears to me that it must form a large item. The advocates of Frotection have never got rid of idea that legislation can give one nation a commercial advantage over another ; that by some dodge they may buy cheaper and sell dearer ; but tlie whole thing is a simple delusion. Suppose England were to shut out our wool, tallow, frozen mutton, and wheat, where should we be i Simply utterly ruined. We could not use a tenth part of our produce, and we could not pay a fraction of the interest on our debt. Yet, if the of the Frotectionists are good for anything, this ia what England ought to do. It is all

very well to say that England must-have wool For her manufactures, but if all the outlets fi>r her manufacturing industry are cut off, she could not take the wool, because she could not pay for it. What his happened in the United States it is quite possible suppose might take.place in England, vz , the imposition of a heavy tax upon wool and other produce The consequences of this is, with regard to the United States, that the trade with Australasia is very small, and a population of 60,000,000 takes very little of our wool. Wer.e this duty abolished an immense trade might spring up, and America prove one of our best markets. In a previous letter I do not seem to have made mvself sufficiently clear in a statement that Protection might temporarily reduce prices. If manufacturing industry ia stimulated by Protection, overproduction may be the result, and for a short time the prices of manufactured goods may be very low, because the surplus goods must be thrown upon the market to be sold for what they will fetch. This has taken place in the United States ; it is felt now by the beetroot sugar growers of Europe. But, as industries cannot continue to be carried on at a loss, the fight for the survival of the fittest goes on. jVLiiiy factories are shot up j and those which survive obtain higher and paying prices for their goods. This is undoubtedly the process through which New Zealand factories will pass should a policy of Protection be adopted. I hope that this statement is now clear enough, and can be understood by anyone.—l am, <fec., James C. Crawford. Miramar, March 6.

TO THE EDITOR OF THE NEW ZEALAND MAIL Sir,— l see that Messrs C. Hardy and Hyland, representing the wine manufacturers of South Australia, are urging that they should, endeavor to procure a reciprocal treaty whereby South Australia should export wine, etc., into New Zea’and at a duty not exceeding 2s per gallon, while in exchange New Zealand oats, barley, and timber should be admitted duty free into South Australia. I should like to point out that the climate in the North Island is admirably suited to the growth of the vine, being very similar to the South of France, and it only requires the encouragement from the Government to make a splendid wine country. The Government will lose considerably by reducing the duty to 2s per gallon, and although would possibly export a small quantity of extra oats, it would in no way make up for the deficiency in the revenue caused by the reduction named ; and as for kauri timber, it is too expensive to be used for any ordinary work. So you see South Australia will have all to gain and nothing to lose, while it will be just the opposite with New Zealand. I'hope, before pledging thr mselves to revise the tariff, the Government will carefully consider the foregoing question.—l am, <&c., Protection, North Island Settler. March 1.