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The Pamphlet Collection of Sir Robert Stout: Volume 15

Pamphlet Issued by the Committee

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Printed at the "Times" Office, Christchurch.

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Local Industries and Productions.

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The Past.

There was a time in the history of New Zealand when the question of Protection v. Freetrade did not require to be discussed; population was limited, and scattered over wide areas; the great business of the country was wool-growing; squatters were occupying and stocking stations, and a large and profitable trade was created for those who were engaged in supplying their wants. In those early days flour was imported from England; butter, hams, and bacon from Belfast; and indeed almost every requisite had to be imported. The country progressed slowly, but comfortably enough for the small number who then composed its population. This state of things continued till gold was discovered in Otago, and subsequently on the "West Coast, and Auckland. We then saw a large influx of miners and traders from all parts, and a tremendous impulse was given to business of every kind; our farmers found a brisk demand for all they could produce, and the country was on the whole decidedly prosperous, notwithstanding the fact of wool having fallen to a low price. The "gold excitement," spread over a period of about eight years, brought us down to 1870—a date which marked a New Era in the History of the Colony, being the year Sir Julius Vogel announced his great Public Works policy. Railways and other large works were commenced; immense sums of borrowed money were rolling into the country; free Immigration was conducted on a large scale, and all who came found ready employment. Wool, in the meantime, had also advanced; farm produce commanded high prices; a great land-buying mania set in—two million acres were purchased from the Crown in Canterbury alone between the years 1870 and 1878; the country was advancing with page 4 giant strides, and was held up by the other Colonies as an example of what British enterprise could accomplish; anyone who dared to question the Policy of the Country, or to suggest that something else was necessary to add to its permanent prosperity was looked upon as a croaker. He was referred to Statistics of Imports, Exports, and Immigration, and they were supposed to be unanswerable arguments. During the period we have so briefly referred to, the whole desire had been to spend, spend, spend—borrow, borrow, borrow. Import everything you require from the cheapest market, [and everyone was too busy to think of adopting any other course.! But a change came o'er the "spirit of the dream," our good field-yields grew beautifully less; wool receded to a low price; our farmers, instead of having local markets, had to seek foreign ones; even the Australian Colonies became a blank to us in this respect, for they no longer required our wheat, oats, barley, butter, cheese, &c.—they had decided to produce these things for themselves; and to crown our misery, two miserable harvests, and low prices for the little that was grown, bring us up to this point in our history—

The Present.

The wretched present—the most disastrous in the existence of our Colony—and what do we find? Our Labourers unemployed, and calling for work; our Mechanics and Operatives walking the streets; our Farmers in the most miserable plight, many who, a few years ago, were comfortably off seeking that doubtful refuge, the Insolvency Court; our Merchants and Traders struggling as they never struggled before; Fathers of families puzzling their brains to try and solve the problem of "What shall we do with our Boys?" We find our Government thirsting for another Loan (indeed the Country cannot do without it), but with no special object in view, except to repeat what previous Governments have done—Spend! Spend! Borrow! Borrow!—and the principal question troubling our Parliament is, not so much what can we do to add to or improve the general prosperity of this splendid Country, but who shall run the concern. It is this state of things that has led to the issue of this sketchy Pamphlet. We, in common with many others, have been induced' to pause and consider.

Is there any remedy for this great depression? What mistakes have we committed in the past, and what policy shall we pursue in the future? And before dealing with those matters, we draw attention to a few Statistics.

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In 1868 225,000
In 1878 430,000
From 1868 to 1878 £60,320,000
Same period £52,640,000
Excess of Imports £7,680,000

But the whole of this increase arose in 5 years—from 1873 to 1878.

Government Loans £22,000,000
Government Loans now being authorised 5,000,000
Say £27,000,000
Annual charge on Loans £1,200,000
Annual charge Municipal, Harbour, and Private Loans, say 800,000
Total amount to be provided annually £2,000,000

What inference can be drawn from these figures?

First—That our Imports are largely in excess of the Exports; of course greatly to be accounted for by the large quantity of Railway Material. But a careful examination of the Government Statistics will show that ignoring this item the Imports still preponderate.

How long can a Country continue to Import more than it Exports? How have we managed to do so hitherto? Very easily; we have borrowed the difference, and we still owe it; but this state of things cannot last for ever, for remember our Exports are not all available for paying for the Imports, Two Millions annually are pledged to pay for Interest on our Loans. England is perhaps the only Country in page 6 the world that can afford to Import above her Export, and this arises from the fact that nearly every nation has to remit her immense sums yearly for Interests, which she receives in the shape of Produce and Gold.

Second—That the Country is not Capitalising. We have been incurring large liabilities, and have been exceedingly busy in consuming in a wasteful manner the productions and manufactures of other countries, enriching them and impoverishing ourselves. For bear in mind that Importing cannot possibly enrich a people. Is there any way of remedying this state of retrogression? Yes, two; one by increasing the Exports, and another by a judicious Fostering and Encouragement of Local Industries and Productions; and it is the advocacy of this last that has led to the issue of this short pamphlet; the seriousness of the subject prevents us from offering an apology, but before referring to it we will allude to the possibility of increasing the Exports; it is possible certainly, but we do not desire it unless it can be done profitably. What do they consist of at present? "Wool, wheat, tallow, hides, meats, gum, and gold. The last item gives employment to a limited number, and although the yield is fluctuating will doubtless continue; but it is wool and wheat that the Country is bound up in. Wool—A most valuable Export, inasmuch as it does not exhaust a Country to produce it, but gives comparatively little employment. And as for Wheat, who can judge of the future of this article, we fear the prospect is gloomy. Can a Country grow wheat for Export year after year? Yes, if the price is sufficiently high to permit of a certain amount being spent annually in returning to the soil some of the vitality that wheat-growing extracts from it; but the price is not high. Our unfortunate farmers sold last year at 3s. per bushel, our only market being England. Next season they will probably get more in consequence of a short yield in England and France, and a deficiency per acre in America, which she makes up by putting in an additional four million acres or more than the whole acreage of wheat in Great Britain. America is the competition we have to fear, she is so close to England, and her territories are immense. We firmly believe that the future of Wheat-growing—unless in exceptional years—is not a bright one, and "God help the farmers if they have nothing better to depend upon."

Farmers to thrive must grow Root Crops, Barley, Wheat, Oats Fat Stock, Pork, Butter, Cheese, &c.; and why not Linseed and Sugar-beets, and Tobacco. Most of these articles can only be grown for page 7 local demand; they cannot be exported except in small quantities Our interests are bound up in the farmers; they have to grow the food required by a nation, and thus supply the motive power; and unless they are prosperous every other business will suffer. But if everyone is a farmer there will be no customers for his products. He must have people engaged in other ways, and as with the exception of wheat he cannot export; those people must be employed in the country he lives in. It is on these grounds we claim the sympathy o the farmer. And the value to him of a local demand is forcibly illustrated in the matter of Barley. This has commanded for some time past a higher price than any other grain, in consequence of the requirements of our brewers. Had this demand not existed it would have been valued at so much for horse feed, and yet last year an attempt was made to tax this very industry. Whether a man should or should not drink beer does not enter into our discussion, but on the grounds that brewing is a colonial industry of great service to the farmer, we are glad the attempt failed. No doubt it will be cheering news for our farmers to know that Victoria proposes to levy a duty of one shilling per bushel on Barley, with the express object of shutting out New Zealand growth; and also, our own ports being free to grain numerous enquiries are at this moment being made from San Francisco, with the object of consigning Barley to this Colony. And we may further add here, as concerning the farmers, that orders for Hams and Bacon have been sent to Chicago, both from Dunedin and Christchurch; and yet every Australian Colony taxes our production to the extent of 2d. per lb., and the same on cheese. Ponder over these things, and ask yourselves has the time not arrived for a change? "We think so.

The question is—How can we give profitable employment in other ways than farming? Employment that shall be remunerative, and add to the wealth of the country.

Our reply is—Foster and encourage local productions and manufactures. New Zealand is bleeding at every pore. Let us endeavour to retain within ourselves some portion of the wealth we are pouring so freely into other countries, and this brings us face to face with the question of—

Protection v. Freetrade.

"We are not going into detail on this subject, but shall refer to it broadly. The question is one that agitated England for many years, and has been settled there long ago in favour of Freetrade. With page 8 many the audacity of anyone daring to question the application to ourselves of the theories of Bright, Cobden, Stuart Mill, and others is looked upon as rank blasphemy. Notwithstanding this we do so; and one great incentive arises from the fact that we are not in England, but in "New Zealand." That is the great error our Freetraders fall into; they talk and think as they have been taught, under circumstances wholly different. We ask them now to throw aside the prejudices of their early education, and try and look at this matter as it bears on our own particular case.

The theory of Freetrade broadly stated is this—

"That each country shall freely produce that which it can naturally "produce best, and that all countries shall freely exchange."

A splendid theory, but inoperative. The "world" has not adapted itself to it yet, and we in New Zealand are not prepared to wait till it does.

America, by high protective Duties, has built up Industries that are competing with England at her very doors; American cotton goods are to be found in Manchester, and American cutlery in Sheffield; she comes to the Colonies and rushes some of her surplus stock into our markets, and one instance comes right home, when we find that in consequence of extensive consignments of Carriages and Buggies glutting this market, our Coach Factories shut up and 100 men walking the streets, who would otherwise in all probability have been employed, and when we say 100 men, remember that it means 400 mouths, you must take into consideration their wives and children. And again we find, in the matter of Timber, our markets glutted from "Oregon" and other countries, and our mills and wood-working establishments, who might have been fairly busy, also in a state of collapse. Had the Duty that was taken off last season remained on, this Timber would not have been imported, for New Zealand possesses splendid forests of various kinds. Now let us reverse the picture, what does America take from us? Except Kauri Gum, absolutely nothing. She shuts out by Prohibitory Duties everything else we could produce; she gluts the English market with her Wheat, and competes with us there, and Freetraders will argue that this is Sound Policy, we differ. Is New Zealand to be a receptacle for the surplus manufactures of other countries, and, like England, a Football for the whole world to kick at, or shall we adopt the same selfish policy, object to be kicked, and endeavour to retain within ourselves the life blood that is now flowing from us? We call Protection selfish, and so it is, but can we afford to page 9 be otherwise? What are we here for? As patriots to uphold the commercial supremacy of England, or with a view of building up a nation and raising an industrious happy population; the latter certainly. People left England to better themselves, and we are not called upon to sacrifice ourselves, much as we may love the old Land. But was there nothing selfish in the Freetrade of England? we think so. She said send us your raw produce, we will manufacture it and sell it back again at a handsome profit; this was done, England constituted herself the work-shop of the world, and grew immensely rich; but other countries have grown tired, and have decided to manufacture for themselves. America, France, have high Duties, and we see "Germany" adopting the same Policy, also the English Colonies, Victoria, and "Canada." Mark the difference to America—7 years ago her Imports exceeded the Exports by £100,000,000 sterling annually; now the Exports are in excess by £100,000,000 sterling, making an annual difference in favour of America of £200,000,000 sterling; hard facts these, and they speak for themselves. Let us examine the experience of "Canada" who has adopted Protection within the past few months. Her Duties now run from 25 to 35 per cent.; she has been driven into it from sheer self-defence, and this with a Young Country is exactly what Protection means, A Weapon of Self-Defence.

Canada saw 500,000 of her young men driven into protected America, and were employed in increasing its wealth, and also from the knowledge that goods were actually cheaper there than in free England.

And this emigration from Canada to protected America illustrates what will take place in New Zealand unless we alter our policy. In a conversation with a Freetrader in this City, he brought this forcibly to our mind. In reply to our queries, he said: "Yes; I am a Freetrader—have been so all my life. I believe that unless we can manufacture as cheaply as in any other part of the world, we should not do it. If I cannot get my living as a cobbler, I should try tailoring." "And if you could not succeed in that, what then?" "I should try something else." "And if you could not obtain that something else?" "Then I should leave the Country," was his reply, "and go to some other country where work was more abundant." Splendid! The very process that is, and will go on. But we have no desire to leave the Country; in fact, we mean to stay.

Another argument used by Freetraders is: "Wages are too high," and they at once quote the prices for odd jobs. We believe that there page 10 are thousands of men in the place and growing up who would be quite content to work for a fair wage, and we hope never to see the day when a steady man cannot earn sufficient to maintain himself and family comfortably.

We have only to continue our Free trade policy long enough and wages will be low with a vengeance. We believe the people will become so poverty-stricken that they will work for anything. God forbid that we should live to see the day. Surely in a new country we need not follow the old beaten tracks—there should be some room for originality of thought.

But it is the Prospect of the Future that Strongly Urges us to a Change. Vital Statistics prove that without the aid of Immigration New Zealand can double her population in 16 years, the excess of birth-rate over death-rate being the highest the world ever saw. How is this enormous natural increase to be utilised? Look at the thousands of boys in the various schools of the Colony, and say what are you going to do with them; for even supposing farming did pay, every boy or man is not physically adapted for that kind of life. In view of the wonderful natural increase, can we sit down quietly and wait for things to adjust themselves? We could better have waited for our Railways to develop themselves than to neglect this question.

We contend that the matter is so pressing that no matter what party may be in power it is their urgent duty to solve the question at once. We believe one great solution will be found in our oft repeated phrase—

Develop by protection if necessary the natural resources of the Country, and foster by protection also all the Manufactures that would have a fair chance of success.

We do not advocate prohibitory Duties, but sufficient to give a healthy stimulus to enterprise, and to protect the Industries in their infancy.

We give a list of some of the Imports as taken from the Blue Book for 1877:—
Agricultural Implements and Machinery 120,000
Apparel and Slops 180,000
Basketware 1,500
Biscuits (fancy) 2,000
Blacking 3,000
Boots and Shoes 200,000
Bricks (fire) 3,000
Brushware and Brooms 15,000
Candles 96,000
Carriages and Carts 20,000
Chaff (Victorian) 5,000
Chicory 1,400
Coals, 156,000 tons 240,000
Confectionery 20,000
Cordage 17,000
Doors and Sashes 5,000
Earthenware (not including China and Porcelain 40,000page 11
Fish (potted and preserved) 40,000
Fruits (bottled and green) 45,000
Furniture 62,000
Gas Plant 24,000
Glass Bottles 9,000
Hats and Caps 60,000
Window Glass 21,000
Hops 25,000
Malt 10,000
Iron, bar, rod and galvanised 250,000
Iron Pipes 10,000
Jams and Jellies 40,000
Leather 60,000
Machinery (other than agricultural) 80,000
Boilers 3,000
Marble 2,000
Matches and Vestas 50,000
Maizena and Cornflower 6,000
Oils, Linseed and Colza 30,000
Paper—Bags and Wrapping Paper 15,000
Do. Printing 50,000
Pickles 6,000
Portmanteaus and Bags 2,000
Pipes (drain) 3,000
Saddlery and Harness 50,000
Seeds, Grass and Clover 75,000
Slates 4,000
Soap 5,000
Starch 8,000
Stationery and Account Books 60,000
Sweets (potted and preserved) 2,000
Tinware 5,000
Timber 50,000
Tobacco and Cigars 120,000
Vinegar 10,000
Woodware 11,000
Woollens 85,000
Woollens Blankets 24,000

Without going into detail, out of this vast array of figures surely there is scope enough for home production.

We do not anticipate for a moment that such articles as General Drapery, Hardware, Groceries (with a few exceptions), and many other articles, could be produced here, and we advocate a Discriminating Tariff to protect those Industries that would have a fair chance of success.

We cannot close this without a reference to the Free-traders' great standing objection, viz.: That Protection means Increased Cost to the Consumer.

It seems almost a pity to attempt to destroy about the only rag of an argument they have, but we are prepared to assert that it does not necessarily, in the long run, mean Increased Cost, and, in support of this, we quote the remarks as made by the Canadian Finance Minister when introducing his Tariff:—

"But cry the Freetraders you are considering the producer only, and injuring the" consumer, who has to pay the duties you levy upon imported goods, in order to "support native industry. The price of cotton fabrics, steel rails, wood ware, tools, "machinery, &c., is very low in America, and the few articles that have been protected in Canada prove the same thing. Vinegar, manufactured tobacco, and "agricultural implements have had high aunties upon them, and at present each "of these trades is flourishing, and not at the cost of the consumer, for vinegar "is sold at less than the duty upon it. Tobacco is as cheap as it is in Virginia." While agricultural implements are sold at lower prices than in other countries."

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That is the experience of Canada, and similar instances can be quoted here.

Consumers can rest quite certain that competition will be quite keen enough to prevent extravagant charges, and with goods locally-manufactured, the buyer will be able to purchase the description he requires; whereas, with imported articles, he has to take them whether they suit his requirements or not. We have only to draw attention to the ploughs made in Dunedin and "Christchurch," they are preferred to the imported ones. One effect of an increased duty will be, not that the consumer will have to purchase the imported article with duty added, but it will shut those importations out, and he will simply have to use Colonial made goods instead of foreign ones.

At some future date we shall, if necessary, be prepared to prove that supposing Protection does increase the cost, it is still the right policy to pursue. We are firmly of opinion that the different industries once fairly established, and following the example of "America" in using labour-saving machinery, will stand and become prosperous, creating wealth and affording profitable employment to thousands.

We conclude by summarising our points.

1—That as the Exports are now below the Imports, and Two millions in value annually of those Exports have to be shipped to provide Interests due in England, we are not in a position to Import at the rate we have been doing.
2—We believe the future of wheat-growing for Export is a gloomy one, and our Farmers must have a large population employed in other ways than farming to create a local market for their other products.
3—That a country can never become rich by Importing, and we must endeavour to create wealth within ourselves, and this we can only accomplish by Protection and developing the local industries and productions.
4—Our present population and the wonderful natural increase cannot possibly be employed without manufacturing.
5—We claim the sympathy' of the farmer, the mechanic, the parent who desires to see employment created for his family; the capitalist who is interested in seeing an industrious prosperous people growing up. We claim the protection of our Parliament and support of every right-thinking man throughout the Colony, and we ask all to throw aside their prejudices and party feelings and dispassionately consider this most

Important Subject.