THE GREAT PROBLEM.

New Zealand Mail, Issue 1649, 7 October 1903, Page 54

THE GREAT PROBLEM.

DISCUSSION OF FISCAL QUESTION. THE CURRENT OF PUBLIC OPINION IN BRITAIN. All th© more important of the August fpeutrn, 7.i nea which have just come to hand resemble each other in the space and prominence which they devote to the dsreat question which has been raised by |f r Chamberlain, and iB being discussed -Bdth an earnestness betokening the powerful hold it has taken upon the public mind, the magnitude of the issues E* 'oh it has raised, and the immense inno© which the adoption of Mr Chamlaintof proposals ia expected to ©xgroiee upon the future welfare of tha isritisk nation. THE WORKMEN'S POINT OF VIEW. This is ably and lucidly set forth by M. M. Barrie in the “Nineteenth Cenftury." He argues that Great Britain has not got freetrade, which implies Free exchange; and! inasmuch as nearly all imports • are free, while nearly a'll Exports 'are taxed, there is no such thing as free-trade between that country arid other nations; and as foreign labour is trot excluded from the former, there is a surplus in the British labour , market, which aggravates a state of things that fg in other respects fatal to the. producer. who finds the product of his labour subject to the competition of the whole world. Passing on to the interests <xf the workers as liable to be affected by a ta<x on food, he shows that, at the Very outside, their •expenditure does not exceed <£400.000 000 annually, while that of the other classes .may be put -down at £1,200,000,000. so that. “while the worker. undler a preferential tariff, would receive in his wages the ’whole. of fche increase of the prices of commodities, be would pay, in buying his commodities, pne-fonrth of “that amount back again, leaving him a net balance to the good of three-fourths of the total increase. ’ FREE-TRADE IS EXTINCT This forms part of the thesis of “Galoh as" in the “Fortnightly Review/’ who maintains that neither it nc/r protection is any longer a matter of political principle, either at Home or abroad, but is Something that must be determined by the amount of business advantage to he Secured' by either system. But what the democracy .in Britain believe in, like democracy in all the colonies, is “in hitting back.”. They believe in retaliation from a national point of view. They believe in the expediency of a tax on foreign manufactures from the comraerOial point -of view.” Nothing, “Ca'lchas” asserts, wild ever convince the British working man that those who 'tax his competitive power to death ought to have free entrance into the markets of Great Britain; while, as regards Britain beyond the, seas, the writer urges that “the only possible force that can tuarya any permanent influence in the direction of lowering tariffs in the great self-governing colonies is the prospect of preferential treatment in the greatest of fcho world’s markets for colonial products.” As to the practical effect of a tariff based upon this principle, which might increase the price of the 41b loaf One half-penny, and raise the price of beef and mutton, between a halfpenny and a penny per pound, “Calohas” estimates that it would add .£2.000.000 annually to the exports for the first few years of this operation of the scheme. “According to the law of tire wider market. this would represent a gain of much greater signifiewtoe to the prestige and confidence of British industry. Combined with the concurrent tariff upon foreign manufactures at home, the stimulation of national enterprise and national output Would be mere remarkable than anything We have known since the first half of the seventies.” Finally, the writer arrives at the conclusion that “when democracy once understands the nature of the real issue, the necessity of transferring taxation from tea and sugar to bread and meat is not lilcelv to prevent it from arranging to buy its food from all those! who are willing in return to buy still more of its goods.” THE FISCAL POLICY OF GERMANY. This is the subject of an article in the “Nineteenth Oenturv” bv Mr Otto Eltzbacher, whose name sufficiently denotes hiis oirigin, though not his nationality, and who enters into a comprehensive review of the economic history of Germany from the close of the Napoleonic wars down to the present time, and describes the influence of her more prominent writers on fiscal science upon the minds and policy of her statesmen, the greatest of whom was of opinion that “freetradte -in Britain wa,s an excellent thing —-for Germany, and he did not like to see that happy state of affairs altered.” In confirmation of Bismarck’s dictum, the writer proceeds to remark that at this hour “Germany lias had about half a century of almost uninterrupted protection, and Great Britain has had about half a century of uninterrupted freetrade.” Sixty years ago Germany was a poor agricultural country, impoverished by a succession of wars, without capital, colonies, coal or a mercantile marine or national navy. Now, writes Herr Eltzbaeber, “she has become so wealthy and powerful that she competes with u.s in all markets, and presses us hard even in our homo market; she has the swiftest ships on the ocean ; she is paramount in some of the most important industries, and she can even afford 1 to emulate Great Britain’s fleet after having created for herself the strongest army in the world. She has been able to introduce an immense scheme of workmen’s insurance against accident and old ago, rr'der which Genian workmen have received ,£l2O 000,000 between 1885 and 1800. a schema which we are told. Great Britain cannot afford, and she is cabn.lv contemplating and preparing lrarself for a tariff war against this country and the United Slates.” In view of thi3 remarkable progress which Germany has made during the period and under the policy referred to TPtzbaohev points out that the tbno has arrived whan British statesmen should con-

eider the economic position of the nation, and reconsider her fiscal polioy. THE HOME MARKET. The campaign which Mr Chamberlain has commenced is being watched with the deepest interest in the United States, where its success will necessarily entail a readjustment of economic and other conditions, in order to meet the revision by Great Britain of h®¥- fiscal policy. In America, writes Mr A. M. Low, in the “National Review/’ both protectionists and freetraders ‘‘‘'find a common ground of agreement in holding that, no matter bow profitable the foreign trade may be. prosperity in the last analysis must rest upon the individual prosperity of the great body of working men.” Their interests are best served it is shown “by protecting the home market from, the incursion of cheap competitive labour”; and although this raises prices to them as consumers, it raises their wages in a still higher degree. “The American people, American economists are fond of saying have more money to spend than any other people in the world, and that being the case it is regarded as the wisest policy to force the American to purchase Amercau made articles, even at a slight advance over what the same article of foreign manufacture could be obtained for in the United States, because the purchase of goods of domestic product gives employment to Americans, and thus provides employment and maintains wages at a high figure.” Mr Low does not anticipate that the adoption of a preferential tariff by Great Britain would have any serious effect upon her exports to the United States. “Despite protection.” he says, “the Americans import largely from Britain because it pays, and needlessly to destroy that profitable, trade would be to credit the Americans with, the wisdom of little children, ‘‘who, when they cry for a toy, are amused with a cake/ The whole elaborate theory is built, upon the supposition of American retaliation—of American retaliation because Britain has simply taken a leaf out of the Amor icon volume of economics —is too absurd to be worthy of serious oo nsklerati on.' ' AN IMPERIAL TRADE UNION. This is what Mr Percy F. Rowland, recently connected as a lecturer in economics with the New Zeal]and University, designates in “Macmillan” as the ideal set before us by Mr Chamberlain. The writer holds that some such bond as that which would be formed by preferential duties is almost indispensable if the Empire is to hold together; and in the next place he contends that “by thus securing a complete system of inter-imperial' commerce the Empire would Ire in time of peace practical]ly self-supporting, in time of war absolutely independent of all foreign supplies.” And. again, he argues that such a fiscal system as is proposed by Mr Chamberlain will provide Groat Britain with an instrument for helping her friends and harming her foes. It might, and probably would, raise the cost of some of the necessaries of life, but this “will be very much more than counterbalanced by the increase in wages which increased national prosperity will make possible.” Mr Rowland lays great stress upon the fact that after fifty years of freetrade the conditions of life of the average Home worker are the reverse of satisfactory; that whereas, twenty years ago there were 10.500 000 of acres under cultivation for cereals in Great Britain and Ireland, to-day that area lias been reduced oue-fifth. and the rural districts are being rapidly depopulated, so that, on both social and common grounds, he considers the fiscal policy of the nation should be altered in the direction proposed by Mr Chamberlain. “Despite commercial difficulties,” he writes, “despite continued droughts, despite the determined opposition of the propertied classes. Victoria has managed to secure her workers a minimum wage, sufficient to rear their families to be healthy and capable citizens, healthy in body, healthy in mind. It is only protection that enables Australian States to dispense with workhouses and afford a moderate pension to the wornout toilers of the Commonwealth.” FOOD PRICES AND WAGES. In an article in the “National Review/’ by Mr W. H. Wilson, designed to show that Britain is on the eve of a complete revolt against the doctrines of Cobden, the writer discusses the effects which a preferential tariff would have on the price of food! and on wages respectively. Supposing the tax on foreign doirn to be a.s high ass 5s a quarter, he shows that the impost would not amount to metre than three halfpence per week or 6s 0d per annum, for each male adult. As a per contra a great expansion i<s confidently expected to take place in the oxport of British manufactures to the colonies, for, ho goes on to say, “if the Canadian tariff, with its preference of S 3 per cent., has added 67 per cent, to our exports to Canada in six years, there is a reasonable presumption that a similar preference throughout the Empire, or its self-governing colonies, would add correspondingly to our trade in the next decade, which Would mean a gain of <£10.000.000 or £SO 000.000 of trade with our own kindred. That trade would: give employment to British workers, and l would certainly influence the course of wages in British industry. They follow the export curve, as cam be seen on comparing the two.” Mr WiNon. proceeds to call attention to the predictions of Mr Cleveland's party in the Presidential campaign of 1887, that protection would inctraasia the labourer’s cost of living oommiensurately with the increa.se of his wages. “The Cleveland party.” it is observed, ‘‘‘'were discomfited bv events'; wages did rise markedly; and the cost of living/® proved bv price lists not to have advanced correspondingly. The Republican policy of checking imports into the United States was resisted. with the prediction that to check imports would be to check exports. What has been the fate of that prediction P Since 1888 the United States exports ha.v© risen from <£142,000.000 tc- <£272.000,000. In other , words, the policy of curtailing imports, or, as far as possible, of placing upon them the burden of taxation:, has been a triumphant success, and there is no sign whatever that the export trade has suffered.”