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The Pamphlet Collection of Sir Robert Stout: Volume 14

Advantages of Manufactures

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Advantages of Manufactures.

The main proposition we have to demonstrate is that it is not only desirable but necessary to establish manufactures in New Zealand.

The principal countries in the world are those in which manufactures are extensively carried on, and it has always been the ambition of rulers and statesmen, from Peter the Great to Richard Cobden, to make their own a manufacturing country.

The power of England is not in her ironclads, but her shuttles, consequently the fulfilment of Gladstone's prediction involves the loss of more than mere commercial supremacy. Let us hope this may be another unfulfilled prophecy. One part of it, at least, we believe will never be fulfilled. Should the dark day ever come when the sceptre of England's commercial supremacy passes from her hand it will not go to a foreign power but into the hands of her own sons, the young nations she has brought to life. We trust that Macaulay's New Zealander may be a standard bearer in the new confederation.

No one questions the desirableness of establishing manufactures in any country, old or new, providing the conditions are favourable thereto, for without them the other resources of the country cannot be developed. The Americans go further than this, and promote every industry, "against which nature has not interposed a barrier."

Economists of all countries and ages advocate the establishment of manufactures on the ground that they provide two markets—one at Home, and the other abroad. Adam Smith advocated them as affording a ready market for rude produce, and showed that the Home market was more profitable to the State than the Foreign one. Although the latter might increase individual wealth, the former was of greater benefit to the community at large. Benjamin Franklin said—"Every page 71 manufacturer encouraged in our country makes part of a market for provisions within ourselves, and saves so much money to the country as would otherwise be exported to pay for the manufactures he supplies."

Horace Greely appraises industrial skill and energy at its proper value when he says that Watt, Arkwright, and Stephenson would be worth more to the United States than Canada or Mexico. I could name half-a-dozen members of our little industrial community who have done more for New Zealand than a legion of Carlyle's "perorating politicians" who contribute most to Hansard.

Manufactures do not spring spontaneously from the soil in any country or clime no matter how favourable the soil may be. Under any circumstance the seed must be sown and the young plant sheltered and nurtured till it takes root and gains strength, and is old enough to bear fruit.

Every commercial and manufacturing country in the world has at one time or another protected and stimulated its trade and industries in a direct manner. Every legitimate means has been and still is employed, and many means that are neither legitimate nor just have in the past been resorted to. "England's thunder" has more than once been evoked to stimulate the looms of Manchester, and untold hardships and suffering have been inflicted in forcibly carrying British commerce into every corner of the globe.

The second Act passed by the first United States Congress in 1789, was one to promote native industries, and the policy thus early initiated has been persistently adhered to.

All the great industries of the United Kingdom have been largely stimulated by assistance or concessions from the State at various times. Direct bounties were given, protective duties imposed, and competition absolutely prohibited, and these regulations were altered and amended as occasion required.

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The Navigation Laws of Cromwell which were only finally repealed in 1854, provided that all goods imported into England should be carried in English ships, three-fourths of the crew being Englishmen. Besides giving a direct impetus to English commerce, these laws were intended to checkmate the Dutch who were then formidable rivals in maritime trade. It is the Navigation Laws that really made Britain the ruler of the seas. Although a free trader himself, Adam Smith says of them that they were "perhaps the wisest of all the commercial regulations of England."

While thus protecting her own commerce, England choked off competition by prohibiting the carriage of colonial manufactures, even from one colony to another. And although the linen trade of Ireland was for a time protected along with that of Scotland, her industries were crushed in much the same fashion as the colonial ones. She was forbidden to trade with the East, the Mediterranean and the Colonies, and for some time the English market was absolutely closed against certain of her manufactures and agricultural products. These restrictions combined with the reluctance of the Irish to use machinery, and the start given to English manufactures completely crushed the industries of Ireland. In the year before the Union, there were 6,600 weavers in Cork alone, thirty-five years afterwards there were not 500. When we consider the army of spinners, dyers, and other workers in textile fabrics that this number of weavers represents, we have an idea of the dire calamity that befell the country. Practically it meant the extinction of Irish manufactures, for they have not recovered to this day. With the exception of the linen trade there is no manufacture in Ireland worthy of the name. Perhaps the complications in that fair isle would have been averted had her industries been properly developed.

All the metal and textile industries in Great Britain have been protected at various times, and in different ways. At one time the duty on iron was £6 10s. a ton, and later on the export of machinery and skilled labour page 73 was absolutely prohibited. In 1700 the use as well as the importation of cotton was prohibited, because it spoiled the woollen trade, and a century later there was an import duty of 60 per cent. on cotton goods as a protection to the English manufactures of cottons.

The greatest rival that England had in the cotton trade was India, and she was silenced by a special enactment that absolutely prohibited the importation of cotton goods from any place east of the Cape. This ruthless application of the Darwinian law brought starvation and death to many thousands in India—poor weaklings, who could not defend themselves, even through the ballot box. Surely they were not "foemen worthy of our steel."

So great was the desire to stimulate manufactures in the olden times that the obligation to encourage them did not cease with life. At one time it was illegal to be buried in anything but linen, and at another the only lawful cerements were of woollen cloth. I have copied from an old Scotch Act of Parliament in the General Assembly Library the title and preamble of one of these laws, passed in 1597. In addition to being a literary curiosity it is a good exposition of leading points in the philosophy of manufactures. "Act anent the Restreaning off the hame-bringing of Inglis claith. The same claith haveand onlie for the maist parte ane outwarde shaw wantand the substance and strenth qlk oftymes it appeiris to have, and being ane of the chief causes of the transporting of all gold and silver furth of this realme, and consequentlie of the grite scarsitie and pnt derth of the cunyie now current within the sami."

The complaint of auld Scotland 300 years ago is repeated in young New Zealand to-day, and with equal force. The "hame-bringing" of shoddy from England militates against the cloth manufactures of the Colony, and assists to "transport furth the realme" that cunyie" already remarkable for its "grite scarsitie nd present derth."

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Having thus shown how highly manufactures are prized in other countries, and what means have been employed to secure them, I shall now consider the question from a colonial point of view.

Although the sketch I have given shows that ground has been broken in many places, and that a goodly number of our manufacturing industries have made fair progress, we are still depending most on the production and export of raw materials. The state of the wool market is still the pulse of colonial trade, every industry being more or less affected by its fluctuations. Wool alone constitutes about 45 per cent. of our exports, and all the pastoral products about 60 per cent. One penny on the wool clip comes to more than the property tax.

Four years ago all our hopes were centred on the grain trade. It went up with a bound, but ran down just as fast, like a watch when the mainspring is broken. As previously shewn the export of wheat in 1885 was only about a sixth of what it was in 1883. This seems the fate of all grain-growing countries, the main source of supply is continually changing. The reason is simply that the cheap production of corn in large quantities is not a permanent industry, it wants fresh fields at short intervals. This has not been directly the cause of the collapse in New Zealand, for our virgin grain country is not nearly exhausted. Notwithstanding the larger returns, we have been jostled out of the market by those who can work their fresh fields more cheaply.

A United States Commission has declared that "the policy of growing grain for exportation, except as a pioneer expedient in opening and improving farms, is not to be commended." The western farmer, so much patronised by the Cobden Club, is not a desirable settler. Like his countryman, the Colorado beetle, he sweeps across the country a veritable plague, eating up every green blade or what comes to the same thing, extracting all the substance from the land.

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This is not the only way in which new countries are living on their capital—killing the goose that lays the golden egg. The wholesale destruction of our forests is a case in point. Instead of carefully conserving them—a store of industrial wealth—they are ruthlessly cut down as a "pioneer expedient" to raise the wind, or to make room for less valuable crops. Kauri gum is another indigenious export that will ultimately pay better to keep for our use or to manufacture for export, rather than export in the raw state.

Looking at the matter as a national policy, we might go further and question the wisdom of exporting coal in large quantities, for which we are making such extensive preparations. We should not be too anxious to divest ourselves of any raw material which does not reproduce itself. Although our coal supply is large for a young colony, it is very small for a large manufacturing country. The Westport coalfield would only give about one year's supply to Great Britain.

Viewed in this light, the collapse of the export trade in grain, "although for the present grievous," is not the dire calamity at first supposed. If the average price of wheat for the 80 years prior to 1881 had been sustained, the end of the century would have seen the light shingly lands of Canterbury transformed into a barren waste.

As just shown, the grain trade was only ephemeral at the best, and in the language of the old Scotch act, it "transported furth the realme" much of our substance that can be better utilised at home. A farmer on the Canterbury plains only gets 3s. a bushel for the wheat that he exports, but when it reaches Bradford it is worth 5s. as food for weavers. That food is converted into labour and woven into the cloth just as much as the yarn. By-and-by the cloth finds its way back to Canterbury, and by this time it is worth 6s. The farmer, therefore, has to pay double for the labour created by his own wheat. In consequence of the page 76 round-about way in which the conversion is effected he gives two bushels for the labour that is contained in one. When the farmer and weaver are working side by side on the Canterbury plain that second bushel of wheat will be divided between them.

If we take frozen meat and other articles of food in which the difference between the English and Colonial prices is about three to one, the result will be still more striking, one pound's worth of our exports converted into labour in manufacturing goods for the Colonial market will cost us four.

But the loss on food is not the only one. Ordinary wool used in the manufacture of tweeds is worth 1s. 6d. a pound in New Zealand, and when we buy it back in the form of English cloth we pay 5s. a pound for it. This leaves a balance of 3s. 6d. that might be distributed among the wool growers, woollen manufacturers, and consumers of cloth in the colony.

Without knowing the relative values of labour, capital, and profit in manufactured goods it is impossible to give the combined results in exporting both food and raw materials, but enough has been said to show the enormous advantages to be derived by using our own food, fuel, and raw materials in manufacturing goods for our own consumption. Unless it is a positive and permanent burden every fresh industry that starts benefits those already in existence and, through them, all classes of the community, and the producer of raw materials most of all.

Much of the opposition to local manufactures is by, or at any rate in the name of, the producer. It is contended that they are inimical to his interests, and that any encouragement given to them must be at the expense of the farmer and grazier. Theoretically this may be in accordance with "sound economics," what would be called in Scotland "the fundamentals," but practically the effect is as often the other way about. A case in point occurred two or three years ago within the sound page 77 of the Cathedral bells. Immediately on the establishment of barbed wire manufactures in the Colony the price of the imported article fell £18 a ton in one drop. Assuming that a sixth of the wire used in New Zealand is barbed, this fall represents a saving to the producer of about £20,000 a year. He may well afford a handsome commission to local industry out of the transaction.

There is no country in the world more subject to ups and downs than New Zealand. The reason simply is that we have so few strands in our cable. When one or two give way the ship goes on the rocks. If the wool-growers, farmers, and miners had a market within the Colony they would get better prices for their products, and in all probability the periods of depression would be fewer and less sudden and severe.

It has been shown that grain growing for export is not, under any circumstance, a "national policy"; and further, that for the present, at least, it is not even a paying business in New Zealand. But independently of these considerations, agriculture is not of itself sufficient to develop any country. Adam Smith says:—"Flourishing manufactures and commerce are indispensable to a flourishing agriculture. To suppose that the latter should exist without the former is to suppose that man may be industrious without a motive—that there may be an effect without a cause."

As "we cannot live by bread alone," neither can we live altogether by producing bread. If we confine our colonising operations to growing wool and corn, as we are frequently advised to do by political economists of the Old Country, our progress will speedily come to an end. Agriculture cannot live without railways, and railways cannot live on agriculture. The half-million people that inhabit New Zealand are all living on the fruits of the earth; but it only takes a sixth of the number to gather these fruits—the rest are camp followers, who page 78 minister to the regular soldiers, and without which the warfare cannot be carried on. The relative proportion of the two classes must not be brought below a certain point, otherwise the producers will suffer; and, as already shown, the more trades and industries are multiplied the better for them.

The policy of the Colony all through has been one of progress, to make of itself a nation; but what nation can exist in these modern times that is composed entirely of tillers of the ground and shepherds of sheep?

A paucity of pursuits means a paucity of ideas, and without ideas in profusion there can be no progress. Growing corn and wool demand skill and experience on the part of those who conduct the business, but the rank and file are a lower grade than their confreres, who are engaged in manufactures; their pay also is much lower.

In pursuance of the national policy just referred to, New Zealand has made the most liberal provision for educating and raising the people to a high intellectual standard. Every latent faculty is to be developed, every talent brought to light; and as there is such a diversity of faculties in humanity generally, and in colonists particularly, so must there be a diversity of pursuits. We must have employment for "all sorts and conditions of men," strong and weak, old and young. Manufactures and other industries of various kinds would not only furnish these employments, but they would awaken ideas, develop skill in manipulation, and generally uphold the intellectual standard of the community.

What are we to do with our boys? is a question frequently asked, and every day becoming more pressing. There is only one answer:—Unless we develop new industries and new occupations within the Colony, we must simply export them along with other raw materials!