The Poverty Bay Herald AND East Coast News Letter.

Poverty Bay Herald, Volume VII, Issue 1111, 2 September 1880, Page 2

The Poverty Bay Herald AND East Coast News Letter.

EVERY EVENING. THURSDAY, -SEPTEMBER 2, 1880. * The, more closely and. attentively we 5r ''peru&B'tne" 'Report of the Cominisi -^ 6iouers : %ho. were appointed to inquire into the subject matter of Local Industries, the more we are satisfied .^as?tQ;the recommendations it contains. There is not .the slightest leaven of prpjbectionist leaning or sympathy, and it would indeed appear that, if any of the members of the. Commis- ■'' sibnerg we're 4 previously afflicted Avith ''such dispositions, they have been '"effectually cured by the knowledge acquired^ $he course of their investigations. ■ The whole tenor of the Report is to the effect that there . -are" '-other and better means of encouraging local industries than the r > •: adoption of a protective tariff, means which do. not involve in their use the whale community . for the immediate benefit ofca/'few : which is ; one necessary, consequence of •Buchrfiscar^arrangementig. We confess we were very apprehensive that the ■ '^CbmmissiSn* might have fallen into the "■' v ! : e'irbr : of' conceiving that protection, a|tKpugh.esta : blished to be a mistake " for ' old cduntres, might be a good ! and useful institution to the young — r;:i&Ji;er?.qiV for. which Stuart Mill is, to some,, extent, innocently responsible as one unregarded, although qiialified statement of the ' '"'great I ' liberal political economist in favor of what we may term tentative fproteielibn^-iri a new colony has been T t seized biriwith' avidity and paraded in season and out of season by sucking disciples* of the exploded school. The question may well be asked, why should a colony put in force its "corporate resources in starting manufactures of a special type within its boundaries? If labor and capital found more i-emunerative employment ....^]ien,left alone," Ay-here is the advan- ;" r 'taged, their energies being diverted, as it were, by force to the producof goods which other countries 7!»nsupply at a lower price ? " Natural ? ' j as : ariiftble-writer on the subject remarks;- "will develop those ftlier^a Editions in' which labor and capital turn naturally to manufacture. For. instance,, in the Australian ©olohieS'at the present day there is :rav .population about half that of ' London/ yet the- country in its occupaf 'tiqri^is nearly as- large as Europe, and '^o f far asi yet occupied, is fertile, in fevery sense. -Wool-growing, cattle "ana 'horse breeding, mining, wheatS'gr'blmft'^eseaTe the branches Xi of production;' most profitable under the circumstances j and to attempt to force tbe immigrant to stay in the

port of arrival as a factory hand is to mistake altogether the true channel to success. Protection has no less evil effect in new countries than in old. Its only claim to consideration is on the assumption that the good end sought, is to be obtained by this means alone." The Commissioners, as we said, have based their Keporfc on this sound principle : that there are other and more efficient means than protection by which the objects sought may be attained ; objects which we may assume to be the fostering o£. industrial , energy, the increase oi" productive iniustry, of the results -off labor, and of the profits of capital; Protectionists can see no other way to these desirable results and bhe consequent developments of the resources/*of a, country, than the exclusion of the competition of other societies of men Outside the limits of their own community. Their first proposal is so completely in accordance with common sense, as well as sound economy, that it hardly needs a word in its recommendation ; and we are glad to note that in the application to particular industries the Commission have not lost sight of the general fiscal issues involved. For instance; in respect to the local preparation of fruits and preserves they recommend, not that the duty on sugar, which produces a considerable revenue, should be altogether remitted, b>it that a rebate of. duty should be : made, •on sugar used in that industry. We., mention this as an : example of. ■thej intelligence and care displayed through- ) out the Report; 'which is indeed, in every point conceived with thoughtfulness and deliberation challenging the most close consideration and scrutiny. - •

On the question of bonuses we entirely agree with the Commissioners in. the principle, but are unable to approve or- the manner in -which they would appear to desire to give this principle; eftect-r^-a manner which, to our mincl^ is likely to defeat the object aimed at, and is indeed practically antagonistic "to the very principle upon which such.-a scheme can justiably be adopted. Duly regulated systems of bounties are indeed means specially adapted to the circumstances of young jsbcifties, and are in accord with the*brue£theory of Government -interference, f- JoHtf : Stuart Mii,L says "that Government is in. duty, bound to db "those things which I . are made incumbent on it by the helplessness pf theqjeQple in such a manner as shall ite^S is)t to increase and perpetuate, lw*b correct such helplessness ;" meaning that the assistance of Government must not be a substitute for man's own labor, skill, and prudence, but shall, if possible, insure to him the road to success. The responsi-' bility of success or failure, should be left entirely with the individual. If in originating a new industry he is successful, the community in fact repays to him in the shape of a bonus part of those new profits which his enterprise has enablec the community to enjoy. The basis of a true bounty system, in fact, is that . there are pecuniary risks incident to the initiation of new industries, and it is good judgment on the part of the community, as represented by the governing power of the State, to set up some premium to induce enterprise to run the risk, although the risk, as we have said, is really borne by the individual in the event of failure. A successful industry yields profit to the initiator, but it also in so doing of necessity yields profit to the community at large, and, as observed by a lecent ■ writer on this subject whom we have before quoted and to whom, indeed, we are indebted for the gist of our argument on this head, " The system of true bounties is the addition by the community, out of its share of the profits pf something to the profits which ]%i&mately fell to the individual." 3zjia- iutroducer of the industry thus gains'; more than his due share, of profit, -and "Is, thus enabled to run a greater tisk. At the same time, if loss ensues* the community does hot suffer 4isw, body. The Comraissionrrs express the opinion that the strongest '.inducement to enterprise.wouldbeaguarantee of 5 per cent, on the oxitlay for four, five, or six years, according to the nature of the undertaking. It will be observed that this differs altogether from the system of true bounties, in that the State runs the risk, under all circumstances, of having to pay 5 per cent, on the capital invested in new industries, which would thus be exceedingly likely to be started as pure speculations on the strength of security of interest for a time, however badly the enterprises might ultimately turn out. Considered financially, such scheme could not safely be entertained, as it would involve an indefinite annual liability on the Treasury, and the extreme proability of a large unremunerative expenditure of public money. Under the true system, as we have pointed out, payment is only by results ; if the industry succeeds the payment is made, but. is sure to be a hundredfold compensated to the community by the immediate and future advantages of the establishment of a new field for labor and the investment of capital.