A.—No. 1

28

DESPATCHES EROM THE GOVERNOR OE

unable to discover in those views reasons for withdrawing the recommendation already given, that the ([Colonies should be at liberty to make reciprocal tariff arrangements. The Despatch was brought under the notice of the Assembly, and the special attention of the House of Representatives was called to it; but no Member expressed a wish that the subject should be reconsidered. The Secretary of State does not, in his Despatch, mention that the position of New Zealand differs from that of the neighbouring Colonies. He treats of them collectively : but there is reason to believe, from previous communications, that his Lordship is aware that there is no law which prohibits the New > Zealand Assembly imposing differential duties. Although such a prohibition is contained in the Constitution Acts of the Australian Colonies, it does not find place in the New Zealand Constitution Act, the provisions in that Act being confined to a prohibition against passing any law infringing treaty arrangements between Great Britain and Foreign Powers. Probably Lord Kimberley did not think it necessary to refer to the distinction ; because, evidently, as long as New Zealand alone possesses the power to impose differential duties, she cannot enter into reciprocal arrangements with her neighbours. Still it is important to remember she has the power, both because she might find it convenient to use it outside the Australian group, as the British American Colonies have used a similar power, and also because it may fairly be claimed that the power possessed by New Zealand ought without delay to be granted to the Australian Colonies, including Tasmania. There are some incidental passages in Lord Kimberley's Despatch, which, if grouped, might lead his Lordship to reconsider the views he has expressed. 1. There are allusions to the absence of any urgent need of dealing with the matter. 2. Throughout the Despatch it is contended that the proposal of reciprocity is made in the interests of protection. 3. The desire is indicated to encourage a Customs Union. 4. The admission is made, that an Act similar to the measure the Colony desires to pass, was one of the first Acts of the Legislature of the newly-constituted Dominion of Canada in its opening Session; " that it was passed in the expectation that at no distant date the " other Possessions of Her Majesty in North America would become part of the " Dominion ;" and that " the assent of Her Majesty's Government to a measure passed in " circumstances so peculiar and exceptional, cannot form a precedent of universal and " necessary application." These four references, taken in connection, are unusually suggestive. The Act passed by the Legislature of the Dominion, to which Lord Kimberley refers, was, in respect to the clauses permitting reciprocity, similar to the Act of 1800, passed before the Dominion was constituted; and that again was copied from a former Act. In these Acts, clearly the provision was made from a genuine desire to permit suitable reciprocal arrangements ; but Lord Kimberley states that in 1868 the provision was made in the expectation that other provinces w rould join the Dominion, and that the assent of Her Majesty's Government was given in consequence. It may be assumed that Lord Kimberley uses the word " expectation " in the sense of desire. It was not necessary to make provision for remission of duties in the case of those Provinces which became part of the Dominion, for the fact of becoming part would have caused the duties to cease. It must be concluded that Lord Kimberley wishes it to be understood that the provisions in the Act passed since the constitution of the Dominion were made with the view of encouraging other Provinces to join, or of preventing obstacles being thrown in the way of their joining, and not upon the grounds which previously, for a long period, led to similar legislation in the different North American Provinces. The words "circumstances so peculiar and exceptional," do not apply to the legislation, for that was of a traditional character, but to the desire of the Dominion and of Her Majesty's Government to encourage and promote a further union of the British American Possessions. This desire constituted what Lord Kimberley terms " the circumstances so peculiar and " exceptional." But for that desire, where was the urgency ? and if there was urgency in the British North American case, why is there not urgency in the case of Australasia, in the presence of a similar desire to encourage a Customs Union or a Confederation ? The actual results in Australasia lead infcrentially to the belief that the Dominion authorities and Her Majesty's Advisers were correct in considering the matter urgent in the interest of Confederation, although the proof is only of a negative character. The mere power to make reciprocal arrangements might not in itself be sufficient to induce Confederation ; but Australasian experience leads to the belief that it would tend to prevent the growth .of obstacles to Confederation. In the absence of the power desired by the Australasian Colonies, .retaliatory tariffs of a protective character have grown up ; and the way to Confederation, or to a Customs Union, has in consequence become more difficult than it was when the power to make reciprocal arrangements was first asked for, or than it would be now if the power had been granted. The inference is that those who in the case of British America deemed the matter urgent, were right; and that the Secretary of State, desiring a Customs Union or Confederation of the Australasian Colonies, can only deny that the matter is urgent on the assumption that it is too late to deal with it, because of the disposition which has been shown to impose hostile intercolonial tariffs. Several of the protective duties now in force in the Colonies owe their origin to feelings of self-defence or retaliation. The most ardent free-traders have admitted that the tariffs of some Colonies have forced protective duties on others, so that the absence of reciprocity has actually fostered protection. Therefore, in respect to the four propositions, it can be said, that in the interest of a Customs Union or of Confederation there was urgency, because the power to enter into reciprocal arrangements would, in all ,probability, have prevented the fresh obstacles to union which have grown up; and that, in the interest of free trade, reciprocity was desirable, because its absence has encouraged protection. No doubt, it may be argued that special reciprocal arrangements are in their nature opposed to free trade; but the test of the theory would be the practice ; and if that practice were principally confined (to quote his Lordship's justification of the Acts of Newfoundland and Prince Edward Island) to " a limited, list " of raw materials and produce not imported to those Colonies from Europe," it might readily be understood that, in respiect to other articles, the absence of retaliatory tariffs would tend in the direction of free trade. It is not desired, however, to contend that with powers of reciprocity there would necessarily be free trade in Australasia, any more tharj, with similar powers, free trade has been