I May say it is scarcely possible to name any industry with so many favorable and attractive features to almost every class of the community as that of the local production and manufacture of tobacco.

It calls for the investment of a considerable amount of capital within the country by the manufacturer; it affords healthful and remunerative employment to a large number of skilled and unskilled artisans; it gives employment to many collateral industries, amongst which may be enumerated the mechanical engineer and the machinist, the box maker, printer, and all those engaged in the transport of commodities by road, rail, or water. But above all it stimulates the agriculturist to the profitable cultivation of the tobacco plant, for which I believe the climate of New Zealand eminently well adapted, and it thus creates a demand for a fresh home product of the soil, which is at present entirely imported from abroad. The latter important fact is amply borne out by the experience of the Australian Colonies, demonstrating that the establishment of local tobacco factories has led to an enormous production of home-grown tobacco, which has developed into a progressive, permanent, and profitable industry for the producers of the soil.

When the factories are fairly established, and are placed in a position to maintain themselves, the protection now required may be gradually reduced, as was, and is now being done in Australia. I will first deal with the growth and possibilities of tobacco in New Zealand, giving comparative tables of the various results obtained in the other colonies.

These figures are taken from T. A. Coglan's statistics. As an expert, I am thoroughly convinced that Wellington, Wanganui, New Plymouth, Poverty Bay, and Hawkes Bay, and possibly the Otago central districts, can produce an excellent quality of tobacco, which, under skilled hands, would soon not only supply local demands, but be a very large source of export, and at the same time a profitable crop to the farmer.

One of the first considerations is, Is this product profitable to the farmer? To prove this, I quote from a treatise called "English Tobacco Culture," edited by E. J. Beale, F.L.S., dedicated by royal command to H.M. the Queen.

In this Colony there would be no occasion on the rich lands in the Wellington districts, which have been fertilised for years by the decomposition of vegetable matter, to go to the expense of manure or guano, thus effecting a saving on this table of £4 5s 3d per acre, which would give ample margin for any difference in the expense of labour, and also augment the handsome profit of £23 14s to the acre. The book that I extract these figures from I shall be pleased to lend you for your perusal if desired. There can be no doubt of tobacco growing in this Colony. I am informed from a reliable source that tobacco has been produced as far South as Queenstown and Mataura Mouth; but the growers, owing doubtless to their limited experience, do not yet understand the drying and curing of the leaf. This is a process that must be effected in properly constructed and warmed drying sheds, and to accomplish this I shall be pleased to furnish all requisite information and assistance for the economical construction of such sheds, which could easily be erected by local labour. To show the value of the growth of tobacco, a fair example would be Queensland (which protected this industry in 1888), given in Government statistics published up to 1893. In 1889 the crop of tobacco amounted to 283,472lbs., the price paid being about 9d per lb, its value being the first year £10,580; the crop of 1893 being 512,674lbs at 9d per lb, the money paid amounted to £19,223. In the five years 2,353,344lbs of tobacco has been grown to the value of £88,250, which has been a source of great profit to the farmer, as each year has brought increased crops, which are only sufficient as yet to supply the local requirements of the fourteen factories that the protection of this industry has built in the Colony. In the table of cost of production of leaf, the value is put down at 4d per lb. In every instance in the history of the Australian Colonies the selling value of the crop for the first ten years has never been less than 6d per lb, and has gone as high as 1s 3d. Taking the product of one acre, viz.: 2900lbs at a cost to the farmer of £24 12s 8d, the value of this crop at 6d per lb. would be £72 10s, leaving a profit of £47 17s 4d per acre for the cultivation of local leaf.

New Zealand being situated about the same parallel as Virginia and North Carolina, and about the same climate, will produce, under skilled cultivation and curing, tobacco that would compete with America in the European markets, and the producing of this tobacco should be done at a much less page 6 cost here, in consequence of the richness of the soil not requiring expensive fertilisers or manures as in the case of America. My firm would, in all probability, import from America a man well skilled in the growth of leaf of all grades, and construct buildings for the curing and manipulation of the leaf for manufacture, providing the Government would give us facilities for so doing.

This experimental farm would be used to test the various seeds, such as Havanna, Sumatra, the Virginia bark, and the North Carolina tobacco plants (aromatic), the results of which to be inspected by the Government officials, and pamphlets issued giving instructions to the farmers as to the most favorable results obtained, and under what conditions. In suggesting this, my object is to put the growth and curing of tobacco on the right basis to start with, and avoid the mis takes made in the Australian Colonies, as it is manifestly to the advantage of the farmer, as well as the manufacturer, to have the best qualities of leaf tobacco, because, first of all, the grower commands a bigger price, and secondly, the manufacturer can produce a better smoke.

There is a fallacious idea that the cultivation of tobacco can only be carried on by Chinese, or black labour, as in Virginia, North Carolina, and Australia. In these places small farmers, who are only able to start with five or six acres of good ground, cultivate and cure the tobacco themselves. After the extension of their farms from profit derived from this source, when the farm requires more than the farmer or owners to cultivate it, they employ the only available labour, which is the American negro. The reason of this is the white men are more ambitious, and become proprietors instead of employees.

In Australia Chinese do the growing of the leaf, as well as of all the vegetables, not because the white men are unable to work in this form of agriculture, but it is generally under the following conditions:—

The squatter allows them, say, for example, five acres, which he ploughs, and lets the land to the Chinaman for one-third or one-half of the value of the crop. In hundreds of instances that have come under my personal observation land that is worth from £20 to £25 per acre has yielded an annual page 7 profit of from £12 to £18. The Australian white agriculturist only cultivates wheat and oats, and in consequence of this state of affairs the Chinese have the monopoly, which does not exist in New Zealand, and should not exist in Australia. I would also emphasise the fact that this crop is especially adapted to small holdings, even as low as ten acres, on which it would be unnecessary to employ any labour outside the settler's own family. No other crop will yield the same results.

In conclusion, there is no difficulty in the cultivation of tobacco for any one used to outdoor life (and the climate of New Zealand does not in any way make such employment unhealthy or objectionable).

New South Wales yielded 5-8ths of a ton per acre in 1893 (1400lbs.), at the average value of 6d per lb., equal to £35, against a cost much less than table of £20 7s 5d, this leaving a profit of £14 12s 7d; some lands give from 12cwt. to 30cwt., caused mainly by droughty districts and various soils, some being more suitable than others. Victoria yields 4-10ths of a ton per acre (896lbs.), which is being bought at 7d, giving £26 2s 8d, being a profit of £5 15s 3d per acre. Queensland yields half a ton per acre (1120lbs.), at the present market value of 9d. per lb., equalling £42, or a nett profit of £22 12s. 7d. per acre. The small average yield of Australia is caused by drought, which you are comparatively free from in New Zealand. I have known a crop that has had good rain- page 8 falls in Australia yield 30cwt. of tobacco per acre. This Colony will produce a much higher average than the other colonies on account of the rainfall. The estimate of cost by Mr Beal is taken from a district that has ample rain, similar to the districts that I have named in New Zealand, and I have not added the cost of fertilisers and manures, which would not be necessary here, and are not used in Australia.

The following extract from the New Zealand Times Wellington, dated February 18th, 1895:—

Colonial Tobacco in England.

"Mr Valentine states that the trade considers the samples of tobacco sent by the New South Wales Government are the best colonial specimens yet submitted, and that the flavour resembles dark Virginian."

The following extracts are taken from the Tobacco Leaf, organ of the trade of the United States, New York, December 12th, 1894:—

History of Sumatra Tobacco Growing.

The table received from our Amsterdam correspondent, showing the rise and progress of Sumatra Tobacco Growing, is an interesting piece of history written in figures, reminding one of the statistics exhibiting the growth of the cotton-raising interest in this country. Looking down the columns, we see how, from a little crop of fifty bales in 1864, bringing 48 Dutch cents, per lb. and a total of 4000 florins (1600 dollars), the yield mounted up to 236,323 bales in 1890, which, at an exceptionally low average price, sold for 26,000,000 florins (10,400,000 dollars).

The crop of 1890, in number of bales, made the present high-water mark; but the largest total sum, 40,600,000 florins (16,240,000 dollars), was realised the year before. The highest average price was reached as long ago as 1873, when 182 Dutch cents, per lb. was paid. The figures giving the number of bales produced immediately after this date show how much the tobacco growing was stimulated by the prices then realised.

page 9

Those who think that the prices paid for this year's crops are exceptionally high, will see from the table that they fall considerably below those of former years:

Year.	Bales.	Average Price. Cents.	Total Florins
1864	50	48	4,000
1874	12,895	150	2,850,000
1884	125,496	144¼	27,550,000
1890	236,323	72½	26,000,000
1891	225,629	91½	21,400,000
1892	144,689	126	26,700,000
1893	169,521	144	37,600,000

Tobacco Culture in the Antipodes.

(Taken from the Tobacco Leaf, New York, Dec. 12, 1894.)

The cultivation of tobacco is making very rapid progress in the Australian Colonies—notably in Victoria and New South Wales. In the latter the leaf has been a profitable industry for many years, and now Victoria is making a big bid to control and supply her own markets.

The possibilities of those lands are almost beyond conception, and the only reason why they have not hitherto developed a more active rivalry against our own people in the markets of the world is solely owing to the cost of labour. Asiatics are now restricted by a heavy poll tax, and, as no other form of cheap labour is possible, it may be taken for granted that America need fear no keen competition from their Australian cousins for many years to come. Of all these countries, Queensland is the most naturally suited to the growth of tobacco, but it is even more handicapped in the matter of labour than the others. The fact, though, that Connecticut and Virginia seed is being imported into Australia is indicative that the trade which we have enjoyed with such absolute immunity may one day be seriously assailed

As a result of the introduction of the tobacco industry in Australia, there are now 27 factories in the Australian colonies, involving an investment of some £900,000 capital.

The crop is estimated at 2,731,344lbs, and the approximate value is £70,000 per annum. From the fiscal point of view I wish to say that some people hold that the protection of this industry would seriously interfere with the revenue derived from the duty on imported tobacco; but, in reply to that, I might say that such has not proved to be the case in the Australian colonies, because, after allowing for the increase in population, the cheapening of the article leads to a more extensive and liberal use of it. To illustrate this, I may say that while in 1885 the import of tobacco into New South Wales from America was 350,000lbs, in 1893 it was about 975,000lbs, notwithstanding that the local factories produced about 2,000,000lbs per annum. Similar results have taken place in Queensland, where tobacco manufacturing was commenced as late as 1889. Previous to that practically no tobacco was grown in Queensland, but today the actual value of the tobacco crop is estimated at £30,000 per annum. In Victoria, where they have a duty of 3s per lb. on imported tobacco, 1s duty on American leaf, and 6d excise, the imported tobacco has held its own; and I would page 12 suggest, to prevent any falling-off of revenue, the following tariff, which I feel would increase the present returns, and allow ample protection for the pioneering of an industry employing so many workmen:—A duty of 4s per lb on American manufactured tobacco; a duty of 2s 6d per lb on American leaf going into bonded factories (this duty to last for three years); then an excise of 6d per lb to be imposed at the end of this period. In suggesting this to you, I would like to impress the fact that it would take fully 12 months after the passing of the Act to thoroughly build and equip a factory with machinery, and we would have only two years to introduce the locally-grown leaf in a smokeable form. To illustrate by figures the result of the above suggestion, the only New Zealand Government figures available are those contained in the Blue Book of 1893. In this year l,239,597lbs were consumed by a little over 700,000 inhabitants, yielding a revenue of £216,929. This additional 6d would increase this revenue by £30,990, being an adequate amount to compensate for any loss during the second two years of actual work done by the factories under the protection suggested, which bears the same differential duty as the present Victorian tariff. At the end of three years, when the local growth of tobacco is thoroughly accomplished and understood, an excise could be imposed of 6d. per lb., which would make American-manufactured leaf in New Zealand pay a duty of 3s. per lb., which is at present the case; or if the local leaf manufactured became so formidable to the tariff, which I have no doubt it will, it should be necessary to impose a heavy excise duty to compensate for any loss that might be sustained by a local article supplanting a foreign one. Of course you will thoroughly understand that there is always a strong prejudice against a local manufacture, which it takes hard work as well as skilful manufacture to overcome, and at the same time an investment of capital necessary to the commencement of operations, which are always attended by considerable initiatory expenses, and a certain amount of protection is therefore required. There should also be considered the fact that annually about £100,000 goes away from New Zealand to be distributed in labour and materials in other countries; this money kept in circulation here would materially increase the revenue by the purchases and consumption of other dutiable articles by those who work in and benefit by such industry.

The Employment of Labour.

I have been informed that the experiment of a tobacco factory has already been tried in New Zealand, but I have reason to believe that the attempt has been inadequately made, and I am convinced with greater experience and more ample means and the employment of the best modern appliances, we shall be as successful in New Zealand as in the other Australian colonies, and I am under no apprehension that the considerable capital which we propose to invest will not prove unproductive. I especially wish to point out that the manufacture of pipe tobacco, which I propose to devote my attention to, is totally dissimilar to the cigarette business. Whilst we possess the exclusive right of the use in Australasia of one of the best cigarette machines of modern invention (which we propose to employ in New Zealand, as in Australia, in this remunerative branch of manufacture) I am prepared to admit that this portion of our industry stands on an exceptional footing, and is susceptible of special treatment. A cigarette is not, generally speaking, a working man's smoke; those who indulge in it can well afford to pay sixpence per packet, which has been and still is the standard retail price for imported cigarettes. The introduction of most ingenious labour-saving machines, almost entirely automatic in action, has enabled the local producer of cigarettes, under cover of the protection afforded to the manufacturer of plug tobacco, to produce colonial cigarettes in enormous quantities, which have been placed on the market to be retailed at 3d per packet. This has led to a considerable increase in their consumption—largely, it is said, by youths and boys, to whom the premature use of tobacco is held to be deleterious. I would suggest, therefore, with all respect, that a substantial increase in the excise on cigarettes, which would bring this retail price back to sixpence per packet on the colonial product, would not appreciably effect the ordinary cigarette smoker, but it would check the consumption in a direction which is held by many to be an objection, and it would yield back to the revenue probably more than would be taken away by the suspension of the excise on the material which can be grown in the Colony. The duty on cigarettes manufactured in New Zealand at present by the American Trust is 3s 6d per lb. They manufacture 1000 cigarettes to 2lbs. of tobacco, while the duty on imported cigarettes is 7s per lb., and about 2½lbs. of tobacco is used. The duty amounts to page 14 17s 6d; clear protection 10s 6d per 1000 for this branch of the industry, which is done entirely by machinery and has deprived a large number of girls in this Colony from employment that, prior to this machinery, they were able to earn fair wages by. The machines can turn out, by the employment of one man and a boy, from 8000 to 10,000 cigarettes in an hour. This has deprived the country not only of revenue but of employment for a large number of hands and has enjoyed a heavy protection.

In the factory which I had charge of in Sydney we employed about 190 hands, the pay roll for wages generally being from £240 to £280 per week, besides the large amount of repairs which had to be locally done, which extended the employment still further. And, in addition to this, the working in tobacco factories is a very healthy occupation, in no way affecting the labourer's health. The rate of wages is fixed by the unions, and is thoroughly satisfactory all over Australia.

I am familiar with your labour laws, and anticipate no difficulty in working under them.

The Selling Price of Tobacco.

It has at the present time become a necessity to the labourer, and to every other branch of the community, to use tobacco, and the introduction of a local factory will diminish the cost to the consumer. We will undertake to produce a well-manufactured tobacco, which would be acceptable to the consumer, at a more moderate cost than the imported article.

Conclusion,

I desire to say I am not seeking anything in the nature of an exclusive concession or monopoly, and I have no doubt page 15 that our enterprise in New Zealand will be followed, as in the Australian colonies, by competitors, which will bring about further investment of capital in this Colony and extended employment, besides ensuring to the producer of leaf tobacco healthy competition in purchasers and a permanent and reliable market for their product.

Messrs Philips and Pike, National Mutual Buildings, Wellington, have in their possession some further information on the subject of this pamphlet, and they will be pleased to take charge of any correspondence dealing with the matter, or to supply any details that may have been omitted.