IMPERIAL PREFERENCE.

Timaru Herald, Volume CVI, Issue 16232, 30 March 1917, Page 9

IMPERIAL PREFERENCE.

To t!ke Editor of tibe "TOiaa/ru Herald."l Sir, —In the "Tiinaru Heraid" of ( February 20th, we were told that .Lord < Balfour's committee on after trade policy has unanimously recommended the British Government to adopt Tm- i perial preference as the foundation of its future economic policy. In your, leading article on the subject you say : "It was a matter of argument before vthe war whether British prosperity was caused by freetrade or in spite of it. _ But there is no doubt , that British freetrade lias been the making of Germany." It seems strange that there Should be a doubt .as to whether British freetrade had helped or hindered British prosperity, and at the same time no doubt that British freetrade had been the making of Germany. I have always understood it to be almost sin axiom af exchanges that both parties were equally benefitted ; then what has Britain boon doing jto let Germany overreach her? But let it be clearly understood that it is not nations which' trade with na-: tions, as nations, but that -• it is a very few individuals of one nation who trade with very few persons of any other nationality,' and that, too," for their own special benefit, regardless of , any benefit or otherwise to their res- ■ pective countries. ■- It is doubtful if tariffs have anything to do with benefitting other countries at our expense or vice versa-. It "seems to r.ie that tariffs can only benefit the few individuals engaged in the trade on which the tariff is levied, and that, probably, 1 at the expense of the rest of the people. ' There is, possibly, something in our currency system which may give other countries a rfwince to benefit at our expense. Let it be femembered that' our gold currency standard as it now is, or rather wtas before- the war, has been in operation since 1844, and that up till 1872 we were the only .country which had adopted that standard except Prance, with her double .gold and ; silver standard, all. other countries having a silver standard currency. The consequence of this was that any coun- | try sending goods to Britain and getting paid for them in British money Iliad to spend that money in British (goods to send to their own country for the reason that our money was not convertable in theirs. Now in 1873 Germany adopted the goid standard, and by 1874 all other trading countries, pretty well, had followed suit, eo that, t-ij the war, when the Government, by the moraitcurium law, practically abolished the gold standard, our standard had become the international one. The I consequence of this. is that the British £ is meohajnically convertible into the [ German mark, the Dutch guildero,! American dollar, Russian rouble, etc.,' so that any one of these countries' sending goods to any of the others can take payment for them either ih, cash or goods; if in cash they oan snendit in that country where the goods they wamt are cheapest instead of in Britain, where rightly it ought to be spent,; or if it suits them better, they can keep it at home. , Now, countries vary in the general standard of living,; and ; _ as a rule, where that "standard is highest general ; prices of commodities are highest, and the country- with the lower standard of living and prices; can undersell the; higher both in the -latteris own and other markets'. Now Germany has ail- ' ways been a lo.wer standard country than Britain, and so has bfeen able to successfully compete - : agairiit British merchants in their own markets, with the further advantage, to herself, that v she could take _ payment for her • exports to Britain in British gold, v - whan it suited her, and spend the money where it paid her best to do so. Prior to 1872, as I have pointed out, Britain was practically the only country with a gold standard audi it, was, consequently, inconvertible to foreign stan-; dards; therefore, up to that year in the : case of any foreign imports paid for in British money such; money had to be used to buy British goods for export in payment for the foreign imports, and the benefits Were mutiial. In the thirty years, 1844—1874, British trade—under - that system—'increased year by. year at, an extraordinary rate togreat prosperity, in fact some thought that Brit-. ain had the commercial millenium. I have* copied a table compiled by the late C. B. Phipson in j902 which illustrates the position between those dates amd after an international stand- j ard became the rule. Here is a quotation from an article written' by Major Phipson im 1902, applicable, it seems to me, at the, present time: —"That Great Britain herself made no cliangge in her, commercial policy , or monetary system, ' has blinded her to the Changes- which' other nations have made in both, which \ changes have resulted iii levelling to j the that wall of fiscal protection which her exclusively .national currency drew round her eo long as it existed, a wiall more absolutely protective of home industries than any the wit of man can devise, and protective of home 'industries -without the slightest trace olf hostility to foreign ones." That much cannot lie said of any hostile tariffs. —l am, etc., - E. "WOOD. [Wo regret that we cannot find space for our. correspondent's tables, which go no later than the year j 1899. —Editor "Timaru Herald."]