PROTECTION IN NEW COUNTRIES.

New Zealand Times, Volume LXVIII, Issue 3506, 8 August 1898, Page 2

PROTECTION IN NEW COUNTRIES.

John Stuirt Mill's well-known exception to the universal application of freetrade principles, viz. that import duties for protective purposes might be permissible iu new countries in order to begin industries naturally suitable, which has been made to serve the purposes of both freetraders and protectionists, is dealt with by Sic Egbert Griffon, the eminent statistician and ex-chief of the British Board of Trade, in an article published in the “ Economic Journal ’’ for March, Taring Mill’s sentence as it stands in the pages of the “ Principles of Political Economy," the essayist seeks to supply the answer to the pertinent question “ whether in fact manufacturing industries can be promoted to any material extent in really new countries, so as to give that variety to their economic regime which protectionists contend for.” The first point he seeks to establish is that the supposition that a nation which devotes itself raain'y to agricultural pursuits has a population which is all agricultural or almost all agricultural is erroneous and unfounded. He illustrates the point and emphasises his position thus: “If anyone follows the dis- • tribution of population throughout the World generally it will be found that a common model of distribution in an agricultural country to which the United States conformed lately, and to which such dissimilar countries as Ireland and India still conform, gives 60 per cant, of the population to agriculture and 40 per cent, to other pursuits, including building, tailoring and millinery, transportation, distribution and the professions. In some of the Australasian colonies the agricultural proportion is even less, the rural population being only 45 per cent, of the total. Tue idea that in an agricultural population the people are almost all agricultural is thus, to begin with, entirely wrong, for only about half are agricultural.” In New Zealand the proportion of the rural population to the total would be about 45 to 50 per cent, at any rale that the nou-rural population is large is manifested by the strong efforts that are being made to place the people on the land. Dealing next with the manufactures of an agricultural country. Sir Robert points out there are rainy which are necessarily local. Among these may be classed the trades of the blacksmith, wheelwright, printer, saddler, j carpenter and plumber. “Consequently,” i observes Sir Eobert, “ there is not only '

variety of industry even in an agricultural j country, but there are natural manufactures which it cannot be without. The only manufactures which are in question, therefor©, when we speak of protective import duties to set them up are manufactures of a certain kind, tho leading manufactures of the world, which, owing to the great production and other causes, need not be local in their character ; and these manufactures, it is clear, can only be a small part of the industry of any country where they are for the Home market alone.* 1

The import statistics of New South "Wales and Victoria are analysed, and it is that if all the manufactures imported by these colonies were locally made instead they would not employ more than sto 7i per cent, of the population. The imports of manufactures into New South Wales are taken at a value of .£6,000,000* and into Victoria of .£4,000,000, and estimating that not less than half consisted of manufactures which for climatic and other reasons could not be made in New South Wales or Victoria, the other half could by a “ regardless -of - expense ” policy be replaced by home production, but such a policy would greatly enhance the cost to the consumer, and, by tending to decrease consumption on account of tho extra cost, defeat its purpose very largely. The two colonies named represent the extremes of fiscal policy, and Sir Robert Griffon points out that both tariffs have failed to set up factory manufactures. He says : “ Neither country has factory manufactures—those that are not of a local character—to any sensible extent. According to the ‘ Year Book* of Victoria for 1895 the hands employed in factories, workshops. &0., in 189 t were just about 40,000* the total population of the colony being about 1,200,000, and the occupied population, it may be assumed, being about 500,000. In other words, the manufacturing population, so-called, is less than 10 per cent, of the whole number of breadwinners.** In New South Wales, out of a population of almost the same magnitude, the factory hands numbered 42,751. Thus the freetrade country, being in like economic conditions, has much the same factory manufactures as the so-called protectionist country. And in neither case are the mmufactures of a description other than those naturally suitable to a new country, which are independent of a protective tariff. The experience of New South Wales and Victoria is therefore in accordance with what a common-sense consideration of ,the question would teach us,** Sir Egbert Giffen has given the protectionists and freetraders another bone to pick, but it is doubtful whether either New South Wales or Victoria will abandon their present ‘'settled” policies. In this colony* while the tariff is intended to protect where possible, its primary object is for revenue purposes.