THE AMERICAN WOOL DUTY.

Wellington Independent, Volume XXVI, Issue 3223, 12 June 1871, Page 2

THE AMERICAN WOOL DUTY.

[From the New Zealand Mail.] In the very interesting speech recently made by Mr Justice Chapman, at Dunedin, " on con-merce and colonisation, two inferences are drawn, which, if true would decide tho question as to the economic policy which should in future be adopted as well by New Zealand as by the United States. First, that America 6tands alone in declining to accept as mathematical truths the conclusions of English economists ; and, second, that until free trade opinions more generally prevail in that country, it is hopeless to expect such a reversal of its protective policy as would be implied by its admission of our raw produce duty free. But the free trade opinions of modern English economists are not accepted by the philosophers and statesmen of the Continent of Europe, any more than they are by those of the Continent of America ; and evon if theoretically true, they might, as Beckle admits, prove practically mischievous. It is the duty of tl_l^ statesman and legislator to take in all the premises of which the political economist had only taken in a portion. In the second place, the admission of raw produce into a manufacturing country duty free would not be in violation of, but in strict accordance with, the principle of protection as advocated by Americans. We intend to show that

merino wool demands, on the principle of protection, freo admission into the United States, and that all kinds of wool could be so admitted without a reversal of her protective policy taking place. In both England and America there has been much selfishness as well as prejudice and passion mixed up in the discussion of the question, and the American senator was not. far out when he said in reference to the discussions ou the Tariff Bill, that the selfishness of the manufacturers had been very strongly manifested, and had only been exceeded by the selfishness of the importers. The narrow and selfish views of either party fcl&dd not mislead us as to those held oiiisQ-e subject by enlightened and disinterested Americans. In the celebrated letter Mr Fox addressed to the United States Consul at Dunedin, relative to the advantages which American commerce and manufactures would derive from the admission of our wool into the United States free of duty, the protective policy of the Americans was conveniently ignored ; while not ono word was said as to the effect the adoption of such a measure would have on the interests of the American wool-growers. He left unconvinced the only parties who required convincing, while he ably confirmed the faith of those who held views similar to himself, and who never entertained the slightest doubt as to the advantages which the free importation of wool would confer on the American woollen manufacturers. The Premier's remarks, so far as they went, were forcibly put, but they unfortunately stopped at the very point from which they ought to have started. The Americans required to be shown that the rule they had laid down, from considerations of national independence, of obtaining their supplies from domestic sources, required in the case of wool to be relaxed, and that in aiming to defend, by tariff legislation, the whole of their industries from the cheap capital of competing nations, they had, as regarded the wool industry, overshot the mark, as the wool duty checked the extension tof woollen manufacture, and the demand for the domestic produce. This has not been attempted by either the Premier or the Judge ; aud our aim in the present article will be, as far as we are able, to supply the omission. We shall endeavor to show that the repeal on the duty of merino wool would prove bene ficial to the American wool-grower himself, and that the abolition of the wool duty altogether would be in perfect harmony with the priuoiple of protection as defined and advocated in America. The American protectionists lay il down as an axiom that the principle of protection demands tbat such articles that a country does not and cannot produce under tho influence of a tariff shall be admitted duty free. Now, this is precisely the case with merino wool. Statistical returns, and the testimony of protectionist writers, alike affirm this truth. Notwithstanding the heavy duty on its importation, merino wool is not produced in America. The sheep which are most profitably cultivated there are those which produce, not the finest wool, but the most mutton ; and tbis condition merino sheep cannot comply with. Notwithstanding, therefore, the higher prices of such wool, it does not pay the American farmer to grow it at the price the American manufacturer could afford to pay him for it; and, consequently, the latter does not use it. As America, therefore, does not, and cannot, under the influence of a high tariff produce merino wool, it should b» admitted duty free. A duty on its importation is a violation of the principle of protection as understood and advocated in the United States. But the retention of a duty on merino wool, besides being a violation of the principles of protection, is prejudicial to commerce and highly injurious to American woollen manufactures, is not only of no benefit to the Amencan wool-grower, but on the contrary it limits the demand for Americau grown wool, and diminishes the fund from which payment for the domestic articles is made. The range of fabrication of the American manufacturer, in clothing and combining, is limited to the produce of American flocks ; and, consequently, through not having command of the merino wool for filling, he knows it is hopeless to attempt the manufacture of the best face goods, such as broadcloths and doeskins. There is no difficulty in commanding the skill in their manufacture ; the unprofitable culture of merino sheep, and the heavy duty on the importation of merino wool, alone stand in the way. But the want of merino wool not only prevents the manufacture of fine broadcloths in the United Stales, but it prevents the manufacture of other fabrics which require only a small portion of merino wool in their composition ; and consequently the introduction of merino wool would cause a demand for American grown wool to the extent of the quantity required to be worked up in those fabrics. As, therefore, merino wool is required by the American manufacturer as an addition to, and not as a substitute for American grown wool, the American wool-grower would not be injured by the repeal of the duty ; but, instead, he would be benefited by the increased demand created, and the higher price obtained for his own produce. So far, therefore, as merino wool is concerned, the Premier and the Judge might have shown that its admission, free of duty, into the. United States, would accord with their protective policy, and prove advantageous not only to her manufactures and commerce, but to her wool growers also. But it is contended wSxi much force by American protectionists that the free admission into the country of such raw materials as it cannot sufficiently or profitably produce itself, for use in such manufactures as it could there advantageously engage it, is in strict harmony with a protective policy. Mr Wells, whose able reports enjoy a European reputation, says : — The policy of England in admitting all raw

materials of manufactures duty free, is, although not so termed, undoubtedly protection in its most subtle and most effectual form." Another eminent. American economist observes : — " Free- ' dom from duties on raw materials and breadstuff's is one mode of protection." The repeal of the duty not only on merino wool, but on all kiuds of wool, would consequently be no violation of the principle of protection as above defined and recognised in the United States. In a most exhaustive report on the American wool industry, including in the term its growth as well as its manufacture, which was drawn up by the aid, and under the supervision, of the Secretary of the Association of American wool growers, it is broadly intimated that the necessity for duties on wool, as a measure of encouragement to the wool grower, has in America, as well as in Europe, passed away. It is stated that in Europe protective duties on wool are not considered necessary even by the farmers themselves, and that though the culture of Rambouillet wools was developed by protection, their excellence soon relieved them from competition, and even the agriculturists of France assented to the abolition on the duty on wool. These remarks are not made by a free trader, but by an avowed protectionist, and when read in connection with the statement of Mr Wells, that the excessive amount of the wool duties could not be justified either on tbe principles of protection or the interests of revenue, we are led irresistibly to the conclusion that the free importation of our wool into the United States — which alone is required to open a profitable and extensive trade betweeu the two countries, to the mutual advantage of both — can be effected without auy violatiou of the principles of protection, and without any reversal of either the national or the economical policy of the United States. Now we have direct steam communication with America, all that is wanted to insure the repeal of the duty on merino wool, in the. first instance, and on all woool eventually, is the general diffusion of information, like the foregoing, as to the pernicious effects on every branch of American industry, not excepting that for whose special benefit it was imposed. In our aim to diffuse such information, we trust we shall have the countenance of the New Zealand Government, and the co-opevation of the Colonial and Californian Press.