MR ARK WRIGHT ON PROTECTION AND FREETRADE.
In the course of bis address at Bulls, of Wednesday laat, Mr Arkwright said people often asked why, if Free Trade was suca a good thing, England was almost the only nation which had adopted it. The answer was aim pie ; in other countries it was only people's pockets that were affected, ia JSngiand the question appealed to their stomaohs, and thd stomach was a more sensitive organ even titan the breeches pocket. Whan a man was haagty aud food was dear, and he knew it could be made cheaper by allowing ifc to be imported freely, it did not take long to convince him that b'vee Trade waa the ! best policy. Bat when peopie, instead of being starved, were only tnada poorer, it was not quite so easy to show them what was fide matter. The perver.od mgeauity of fiuatioiera could extra ■ money from a uian'B pioket for ii loj., timo without his iiniiug it out, aud wbeu he did begin vaguely to realigo f.hai something wad auuiaa with him he was just as likely as uol to adjp; romodies wbic 1 would make hi a v/ocdtj iuatead of b-.u^r. .';< a doub'. .-jauob of the clinging to Protection usose feaax eh© (
fact that we had not yet got rid of *j^H oli ch-lusiona about the balance of trud^Wj Tbnre were still many people who Mj^H thn notion that if our imports excee cleMßj our exports in value we mnat be payi^^H the difference in gold, and that oon JH Bequontly we were trading at a os^flH liiffc year the value of on? imports d *iH| cpi-clod fcbafc of our exporti by £BG,snU^B and he had no doubt many peoplflH thought we had to eend 86,000 sffvejM rei^na out of the country to pay th^J balance. But the truth was exaofcly tbfl reverse. 80 fßr from having to pay th^jH biknce in money, the oxcess of inipprtsM represented the profit on the year'sj brade, and was in^faot an accession -QmH wealth to the colony. That oxoesarM woulr? V much larger but for the faot Jj that we have every year to nend away H nearly £2,000,000 worth of produce for ■ which we obtain no return in the shape ■ of imports, in order to psy the interest ■ on our debt, publio and local. When ■ Mr Bruce was speaking on this subjeot I at Marton he h&d quoted the familiar I illustration of a man taking £100 worth 1 of beads and exchanging them with some savages ior £1000 worth o£ furs, I &c, in which transaction the exports y would be valued at £100, and the imports at £1000, the result being a profit of £900, less the cost of freight. That illustration showed very well the profit dorivad f rom an excess of imports, and. with their permission he would give them another : A merchant in Wellington invested £1000 in wool, whioh he sent to England, and consequently the Ouatom House officials registered an export of £1000. The wool was sold in London for £1200, and his agent invested the money in cotton goods, which were sent to Wellington and valued by the Custom House there at for whioh price the merchant sold them. He told the result of his speculation to a Protectionist friendj--,. who said, " Well, I am glad yen aref^satisfied, but if ev-uy merchant did as you have done, the colony would be ! ruined!" "How do you maka that out ? " said the merohant. "" Why, see how the balance of trade is against us," said the Protectionist, "here are ex-; porti to the value of £1000, and imports to the value of £1400; it is dear that i£4oo must havfl gone out. of the colony to pay the difference," "I dp not understand political economy," said the merchant, " but I know I have made nearly £400 by my speculation; and it seems to me that if all. merchants did the same, the colony would be getting rioher." 80019 tirn* after, the merchant again i-ivsated £JLOCQ in wool and sent it Horn-.', but this time the Bhip went to the bottom, and tbe merohant lost hh ;glooo. *lis Froteotioniat friend came to condole with him. "Yea," the merou*nfc said, *'*I have^iiad bad luck, but I suppose I ought not to mind : for if your theories are correct, the colony ia tßs gainer." '• I •lo nnj; quite oafceb your meauing," said ' tie Protectionist- " Wny, my dear fallow," said the maccbaat, " look how tbe balance of trade is iv qhv favour ; hew are exports valued at £1000, and no corresponding import? at all ; accordiik to your theory it is a clear gain to' isIOOO to the ci'ony." Che Protectionist soratohed his head, an<l begad of < hink he had not got quite to fcbe bottom ' of th^ question. There oould' be no Ibubt that, as he hid said bafore, the •■xeeas ot imports rdpreseated the profit cm the ywAr's transactions, and ha thought of all the signs of the existing depression noae was more alarming than the fact that that excess was rapidly diminishing. Pour years ago hh.Q value v;' oar iuapor.'s exoeeled our oxporfc by £378,000 ; lasfc year the excess was only £66,0^0. That showed that the profits of our trada ware disappearing, and to hi? miud is wa3 a ver.p. grave .<iy coot otu . Now, if Protection was saob m good thiag a 8 we were fcold, why not o«ry it but thoroughly? Why not prohibit the imp jrtation of goo is altogether ? Then we should indeed open a field for local industry, for everything ■-V 6 use would have to be made ia the colony. But how would our agricultural population fa,re ia that case? Vh»t would beooiud of our ex port trade ia wool, for instanod? We mast be oiid i'H our produce in some ehapa, and now was that payment to be made if we vofusnd to take goods ia oxohauge for jars ? Perhaps aotaQ people thought vq sb m\d be paid ia gold. Ha did not ■< is oc what use gold would be to ua if We ojuld not exchange it for the things r .ve rt-quired, but, putting that aside, we conli not anforoa paymjafc ia gold, for i>)ld would not be a conFoaiout form of piymeut to our chief ou^DOJiar, England. U New Zealani W(»s fha only country vhiou pro Juo^d w>jl wa ooald iuaist oa j'oceinng payment id any shape or form we pleusyd, in gold, or silvar, or threa« penny pieces if wa had n fancy for them ; but we hid no monopoly, and if we did not allow our oaetooasra to gay us ia the manner most onvaaieqt »to ihem thay would nil take oar products ut all. A. prohibition of imports then would involve a total cessation of axports, and would sioaply maan ruin to ilie agricultural part of the community. I3ut did it uot ocoac fco them feh'<*t Pyor«otioa w^a only an iacOinple£e form 1 of aad that it must have p'reissiy 6ha aacne effect 1 ! in a modified Ingres ? If Prohibiuon would destroy our export . trade, Proteofcion would onpple it; if Proaibitioa wjold rain U3| Protection would mike U3 f oorer ; and che in are nearly Pi-oteotioa was owied io complete Prohibition, so ia precigaly iae s Kue degr^ j . would >mr impoverish* uenfc appro .0 ;; 0 oouiplete rain. Some pjopls faa':i d tiafi the manufacturing population •vhich would spring up under 'i Protective dyatena woull m*ke up for c!ie loss of forego ti-ade, Mr IJAllance, >vho was aivoc l\g Protection with .ill the z'3al of a co \ >erfc, seeinecl to have 1 owe idea of this sort. Ia \ speech vhioh he addressed to the Protectionist Association a'o Wellington ha drew a picture of a community iv which all the different occupation w-ould exactly balance each other, in which th?> f avzaera ■vould be the customers of ths manu% tiicturer, aad thsminaf icturera in their turn would consume all the produce of he farmers ; a aort of system, in ah j; ., under which in Borne unexplained \y : everybody would become rioh at onu axponse of ovary b.'dy else, This fanoy picture reminded him of that remarkable island, tba inhabitants of which were described by an American travel* er as being mill-tempered and industrious, and earning an honest though, precarious livelihood by taking in saoh other's washing. A Jitlle reflection would show ihe absurdity of auch notions. We produced wool and cora sufficient for a population of millions, whoreas under the most complete aysi tern of Protection our manufacturing population oould not exceed the email nuuibiT of persons necessary to supply tb.6 700,000 iv habitants of the colony. Under Free Trade wo might have the teeming population of England for oar customers ; surely id would bo throwing away the substance for the shadow to shut ouriolves oat irom that market and look for compemsation to the few thousand ar'.isam who would find era* ployment in our incnb vau'tvJ local iudusfrios. Oue gea>.\t argument i Q favour of Protection was thai it would. create frs3h openiags for iabour, aui ao would benefit tha working classes. It ohai wev3 co, ho should consider that a -:ry t - oucl casa had b<-on laada out £" O r it. I'o looked upon Jha woii-duing of the working classes as the' auraat sign of the pxa^norily 0? & tialion^ h.<jl\
could not consider a nation prosperous, ' whatever might be the amount of its accumulated wealth, if the working men, who constituted the moat numerous section of the oommunity, did not share in that wealth. But he denied that Protection would tenefit them iv the smallest degree. Let them imagine a traveller returning: to the colony soon after the adoption of a Protectionist * polioy, while the looal industries were in the first bloom of their prosperity. He would be delighted to see that new trades had sprang up, each employing j. a number of hands, and he would pro* bably say to himself, " Well, at any rate Protection has created a demand „ tot labour, and it must be a good thing for the working men." But if they looked a little closer they would see that * no new demand for labour had been created, there had been merely a dis* placement of labour. The quantity pi labour employed would have been in* creased in one plnoe, but only by diminishing it in another. Once move he would ask, where did the money come from which maintained theße protected ■ industries? If the Colonial Treasurer couldydraw money out of a magic purse he could really create new openings for labour, without interfering with those already existing. Bat he could not do so ; if he wished to lavish money on local industries he could only do it by the prosaic process of extraoting it out of the pockets of the taxpayer. Would not that money have employed exactly the same amount of labour if it had been left where it was? A thousand pounds would command labour to pre* oisely the same extent whether you left It in the pockets of the taxpayers, or whether you colleoted it and concern trated it into one place. In the last oase you created a demand for labour in one place, but at the same time you had diminished the wage-paying capabilities of the taxpayers by precisely the same amount. Indeed, the money would employ more labout if you left it to follow its natural channels; for when v it was collected by means of taxes in order to encourage artificial industries it "did not all reaoh its destination; Bdme of it was lost on the way. Taxes Were not collected without expense, which we might safely put at not less than one per cent, of the amount collected; so that JBIOOO which would employ labour to its full extent if left in our pockets would only employ £990 • worth if artificially diverted, the balance would go into the pockets of Government officials. They could no more increase the sum-total of labour ' employed in a country by establishing tax«supported industries than they could " ; increase the weight of a bag of wheat by pioking a number of Bingle graius but of one end and putting them back : at the other in one handful. He would ; ask them to consider one point more. Suppose this colony was shut in by natural barriers to oommerce ; that it had rocky coasts and inaccessible harHours, so that sbips could only approach ub with difficulty and danger, what ■ would be our constant lamentation F Would it not b*, " Oh that nature had treated us as kindly as it has treated ■ .New South Wales and Victoria ! If we "only had their harbours and their foreign commerce, what progress we should make, what prosperity we should enjoy!" And if the obstacles were such as human ingenuity could remove should we spare any pains or grudge any expense to do so P But we had harbours as safe and commodious as any in the world; nature had put no ob- •' stacles in the way of our Commerce. Did it not seem, strange perversity to raise up artificial burners, and plaoe ingenious restrictions on that foreign . .;■ trade which, if Providence had denied , it to us, we should have longed for as. ,V the bne thing necessary to our -pros 1 * perity P So far he had spoken of hia ; objections to the Protectionist tendency of Sir J. VogePs proposals, but he obto them equally as a means of collecting revenue. Sir J. Yogel complained that the revenue seas falling off. and said he must raise the duties in order to make good the deficiency. But on the contrary, if the revenue was . falling off, he believed it was a sure sign that the. datiss were too high ■'-•' already. Experience had shown that if Customs' duties were raised beyond a /.certain point they checked importation, -■'-" and consequently the' revenue fell off, ... and he was convinced tbat we had already reached that p^int. i^o far, .from raising the duties, he believed our true polioy would be to lower them ; and that although we should have to provide for a temporary loss of revenue, it would soon recover its elasticity, and we should obtain larger returns than uncffer our present high scale of duties. ButTiis obief objection to the proposed tarifi-'was taat ** would greatly increase the hardens of the poorer classes of the « oomniunity. If they examined the -.position of the taxpayers ia this colony (they would find that while the richer people paid less than they would in England, the taxation of the poorer classes was far heavier in the colony, -*X% man with a large farm, over 300 acres -say, was lesß heavily taxed than a man in a corresponding position at Home; because, though the public taxes were heavier in the colony, the local rates, 1 which fell entirely on land, were much lighter. But when we came down to the email settlers and working men, we should find that their burdens were .heavier beyond all comparison than they would be in England. A working : . man in England paid no taxes at all, : except the duty on tea, Of course if he drank beer or spirits, or smoked, he paid ,' ... taxes on bis liquor and tobacco; but tea was the only necessary of life which -... was taxed. But here a man in the same position was taxed for nparly everything ho used ;' so much so that it waß^doubtful whether the benefit he i J#rtvetilir'6ai- the higher rate of wages \Twas not almost nullified by the increased o** price of the commonest necessaries of life. Yet Sir J. Yogel not only proposed to increasa the existing taxes, but, with an ingenuity worthy of a better oause, he had actually discovered a cum her of articles which had hitherto eecaped, and which were now to be taxed for the first time. Before we consented to this we trust insist on economy and careful administration, and he thought it was clear that we need not expect them from our present Government.
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MR ARKWRIGHT ON PROTECTION AND FREETRADE., Wanganui Chronicle, Volume XXX, Issue 11597, 20 September 1887
MR ARKWRIGHT ON PROTECTION AND FREETRADE. Wanganui Chronicle, Volume XXX, Issue 11597, 20 September 1887
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