Freetrade and Protection.

I will now come to deal with the question of Freetrade and Protection, because it is a branch of this same question of taxation that has caused considerable agitation in the colony, and perhaps may causa some more—I mean this question of dealing with the customs revenue. Some people say what about protection and free-trade? Well, I don't know how this colony can be called a freetrade colony with 16½ per cent ad valorem duties. Nor can I understand how many of those people—I do not allude to gentlemen on the platform, I mean persons outside altogether—how many of those who are now loudest in proclaiming themselves freetraders can well do so, for if you will turn to Hansard you will find that they voted for an additional duty of 5, and also 1 per cent, and all the time proclaimed themselves freetraders. Let me say this : that this freetrade and protection question has to be looked at from quite a different stand point from what it has been looted at for many years, and in many books on political economy. I have not time to read to you a very instructive extract from a paper that appears in the Contemporary Review for January this year, called "Contemporary Life and Thought in the United States." I would ask you who have time to try and read that paper, In it President Adams, president of one of the colleges in America, shows that at one time in America there was only one kind of opinion held by the professors of political economy in the universities,—the University Colleges of America—and that that kind of opinion was what was termed the free trade opinion—that was that the Professors were all followers of Adam Smith's "Wealth of Nations," and Mill's "Political Economy." But he points out that the younger economists,—he means the professors of Political Economy in America, have studied in Germany, and that now the majority of the Professors of Political Economy in the States do not follow that school, and are not what are termed freetraders; that is, they belong to what is termed "the historical school." Now you will pardon me if I do not refer at length to my position on this question; in fact it would take me fully more than an hour to explain my position, and, therefore, I can only hint it to you, suggesting to you perhaps to read some works where that position in more fully dealt with, I have been—I do not wish to say it in the way of boasting—I have been a student of Political Economy from my earliest years. I spent, when I was at the University, two years specially studying it and mental science, and it has been almost my hobby all my life; but I am not pretending to say that that would make my opinion worth any more than that of any person in the audience. I may say that I have been to the trouble to read not only two but all sides of the question, I look upon free trade and protection as entirety a side issue, or a half issue of a far larger question, and that that larger question is—What is the duty of the State? Now just only think, when you come to consider this question of free trade and protection—what is the duty of the State? Are page 15 the State's functions, as some people contend, limited to more police duties? If you once say that, then the State has no right to make a road, no right to make a railroad, no right to erect a telegraph post or telegraph wire, no right to provide telephones, no right to endow a school, no light to subsidize direct steamers, no right to have a mail service; in fact no right to deal with trade, no right to deal with settlement—that the State's functions are to be what Huxley calls "a police-ocracy"—purely police duties. If you limit the duties of the State to that, and say that so far as the State's duties are concerned it is to be a race, and "the devil take the hindmost;" and that the State has simply to stand up and see fair play that everyone is to bo allowed to race and jostle his neighbor as he likes—if you say that is the function of the State—that it is not really an association, but that it has simply to look at life from the individualist point of view—then, of course, you are Freetraders, and the State has no right to interfere with manufactures. But if you once step forward, and say that the State is a growth—that the State is an association that it has got, to use a word used by the positivists, to be alturistic and that it has to look after the wellbeing of men, not only to provide that there shall be fairness in the race, and that one shall not kill the other,—that its function is to look after even the weak ones in the community,—and hence it is that it aids hospitals, establishes lunatic asylums, and dispenses charitable aid, helps the settler in the outlying district by making roads and railways for him, and gives conveniences in the country districts to the settler that his own means cannot provide—if you say that the State is an association that should be used to raise mankind, to help forward the race—if you once fix the function of the State in that way, then you cannot draw the line fast and say—Yes, it is right that the State should look after education, and it is right that the State should provide conveniences for the merchants, in cable subsidies and direct steam, and aid commercial enterprize, that it is right for the State to aid the small farmers in various enterprizes—right that the State should carry their grain at less cost than would pay the interest on the money sunk in railways—right that the State should make roads for which it gets no return—if you once say that it is right for the State to do that, then I ask what right have you, as soon as you come manufactures, to say the State must not touch manufactures, to say you may deal with the big farmers, the small farmers, but you must not touch manufactures; the rich merchants may do this that and the other thing with impunity. If you say that you take up an illogical position. Before you can deal with this question of free trade and protection, you must answer the larger question—what is the duty of the State? It is no use simply to begin and talk to people about the glories of freetrade—what freetrade has done for England, what enormous advantages freetrade has confered upon England. Why, I do not know what cannot be attributed to freetrade in England. When I hear a mm talking about education, he will get dp and say: Come, and I will show you what education has done for England. Everything that England has got is by education. If you attend a Bible meeting, the clergyman will show you what the Bible has done for England—that everything that England has possessed during the present century is due to the Bibe If you go to a Freetrade meeting the speakers will show you what Free-trade has done for England. What does it mean? You cannot isolate one factor in England's progress, any more than you can abstract your thumb from your arm, and say the arm did this and not the thumb You must face the question—what's page 16 the duty of the State? I tell you this, that except you are prepared to limit the franchise of the State to mere policeocracy—that the State is to abandon education, abandon its common schools, allow the people to grow up uneducated if they please—except the State is prepared to abandon everything of that kind, you have no right to say the State has no right to recognise manufactures. Here is a thing that comes in to hamper this question, and it is like almost every question of social science. You are beset, so to speak, with what beset the navigator in ancient times you have Scylla on the one hand and Charybdis on the other; you have danger on both sides. If you extend the functions of the State unduly, and allow the State to interfere in every enterprise—if you allow the State to meddle in everything a private individual can do, you will destroy the individuality of the race, and the State instead of procuring the independence of the community does a great deal of mischief. Hence it is that a man who is a wise politician will have to take up a large question when it comes before him and discuss it on its merits, and he will not attempt to go by any drawn line without reference to his surroundings. Now when we come to deal with manufactures the freetrader and the protectionist are agreed on this point: that no country obtains any position in civilization unless the arts arise, and the arts only arise after you have the primary products of the country such as your wheat, your wool and your gold, and that you have also your secondary products, namely, manufactured articles. How are they to arise? I do not invite the State to begin and provide for industries, but what I say is this: that if the State is to have indirect taxation—and that you must all acknowledge, because the people are not sufficiently politically educated to deal with direct taxation, nor do I think it would he possible to so frame a scheme of direct taxation that it would fall with proper equality upon all—if the State is not able to do that, it must deal with indirect taxation, I claim to belong to what President Adams calls "the historical school" of economists. When you come to deal with customs revenue,—when you come to see what has happened in New Zealand, namely, that the Customs tariff has fallen mainly because the goods are a great deal cheaper; the total bulk of goods has been as great as it was in years past, but the total value of the goods, through their cheapness, has been a great deal less, and hence the duties have been less, and there must be a greater increase of taxation in some way, and it may have to arise from Customs sources—I say when you come to deal with the question as practical men you recognise, as the most ardent freetrader will recognise, that you must have industries in the country—that even the small farmers will be injured if you have not industries in the towns. If you have no home market, you will also be injured, If you recognise that, you must take up each individual item of the tariff, and consider it carefully, and see how an increased duty will bear on manufactures in this colony—see what manufactures are suitable in this colony, and how far indirect taxation can assist them. That is how I believe this question can be dealt with; and if not dealt with in that way, I believe an injury will be in flicted upon the industries of this colony which may take years to redeem. (Cheers)