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The Pamphlet Collection of Sir Robert Stout: Volume 23

No. 1.—Commercial and Pastoral

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No. 1.—Commercial and Pastoral.

There is nothing more evident to the observer of current events than the reaction which has set in amongst English communities against the policy of free-trade and in favor of the policy of protection. Outside of England and her dependencies the sophisms of the free-trade theorist never had much countenance or support, for the reason that, whatever value they might have, it was a value due to the position and condition of England herself, and could alone be reaped by her, and only so long as and to the extent which those conditions continued. That England is rapidly awakening, and her colonies more rapidly still, to the fact that the theory is a fallacy and its longer practice folly, resulting in commercial disaster and social ruin, every passing event goes to prove. The frightful condition into which the agricultural, manufacturing and mining industries in the United Kingdom have fallen, with the consequent widespread distress which affects the community generally, together with the many royal commissions which have been appointed to inquire into the causes, and suggest cures for these evils, bear testimony to the absolute and complete failure of the free-trade policy to justify the faith of its advocates, or to accomplish the predictions of its prophets. The discredit into which this doctrine has fallen is still more marked in our self governing colonies. Canada, some years since, finally shook herself free from the incubus which it imposed. New Zealand, after some years of dallying and temporising with the question, is now about to free itself from the burden which its want of decision has hitherto laid upon it; and the recent elections in South Australia and New South Wales give unmistakable evidence of the rapid growth of the protectionist party. The colony in which this heresy dies hardest, and where the commission agent makes the strongest efforts to maintain his position and profits, is New South Wales. Owing to the political apathy which for years has characterised that community, and the complete ignorance of the people of the facts underlying the controversy, the agent of the foreigner has succeeded up till now in persuading the electors that it is better to employ people on the other side of the world than it is to employ their next door neighbors and themselves. The incidents of the late election, however, leave no room for doubt about the ultimate result of the contest. A cause which has to depend upon the ignorance of its opponents and the misrepresentations of its friends is doomed, and its defeat is only a matter of time.

During the recent elections, the free-trade party in Sydney issued a varied assortment of leaflets intended for the mystification of the electors, and in the absence of effectual contradiction from the other side, doubtless to a certain extent they answered their purpose. These squibs, for the most part, were of the dullest and dreariest character, being nothing more than a repetition of the old platitudes of the Cobden Club, which have been refuted over and over again in the experience of every protectionist country, and which have long failed to be noticed on this side of the Murray. Interspersed, however, amongst these forcible feeble page 2 fallacies, there were to be found a few daring attempts to deal with facts, and as these for the most part were presumed to be drawn from the affairs of Victoria, it will not be out of place to subject them to a little examination and criticism. The question in these colonies has long passed the stage of discussion as an abstract theory; and can only now be dealt with as a matter of fact to be proved or disproved by the experiences and conditions of the several communities engaged in the controversy. The free-traders of New South Wales, in these election pamphlets and elsewhere, continually assert that they are making greater progress and are more prosperous than protectionist Victoria; and that these advantages are due entirely to their free-trade policy. We in Victoria assert that this colony is in advance of New South Wales in every department of industry which our policy of protection affects, and was adopted to advance; and that in those departments which are independent of fiscal arrangements we are more than holding our own, notwithstanding the superior resources of our neighbor, backed as they are by what is claimed to be the superior policy. It is possible, though not easy, to reduce these opposite pretensions through the crucible of statistics to the residuum of bare facts, about which there can be no genuine dispute. This it is our purpose to do, and the result should place beyond question the superiority of our position as a colony and the policy by which it has been attained.

In order that the full significance of the figures and facts which will be submitted may be fully realised and appreciated, it may be as well to set out the relative position of the two communities 20 years since, when this country first started upon its present course. New South Wales had, and has, a territory four times as large as ours, and has consequently natural resources for pastoral and agricultural enterprise four times as great as our own. Irrespective, therefore, of any fiscal policy, presumably it must eventually surpass us in the quantity and value of its pastoral and agricultural products. Our neighbor also enjoyed the advantages of a settled population, the growth of 80 years of colonisation, while we had the nomadic and unemployed population consequent upon the working out of oar alluvial gold diggings, from which population the land was shut out by our then existing laud laws. On the other side of the Murray, too, they have had one enormous advantage over us which of if self should have ensured them the manufacturing and commercial supremacy, regardless of any and every fiscal system; and that is the possession of developed and payable coal fields. Then, situated as Sydney, the capital, is, on the shores of a bay, which necessitates water travelling, it was inevitable that the establishment of iron works, ship building yards and docks, engine and machine works should take place, if only in the first instance for the purpose of effecting repairs. It must not be forgotten, either, that the long distance which that colony was from England, reckoned by time, during the 80 years it had been established, bad been practically a great protection to all those industries associated with the supplying of the daily wants of the people in the way of dress and food, which perforce secure a footing in every community irrespective of a tariff, but which can be either aided or hindered in their development most materially by fiscal legislation. If only one half were true which free-traders say about the superior growth of manufactures under the benign influence of their favored nostrum, all such manufactures should have made it impossible for any outsider to compete with them in the Sydney market, or approach them as commercial or manufacturing rivals. It may also be remembered with advantage that the government of that colony had been during the 80 years, as it still is, in the hands of that section of the community which firmly believes that no people know what is good for themselves in the shape of legislation, and that Providence has confined that knowledge in every country to a favored few, who, always in a spirit of pure benevolence, undertake the task of government, and thereby secure the best possible for every country. Joined to these favoring conditions it must not be forgotten that New South Wales has had whatever page 3 advantage could be derived from holding the premier position in the estimation of the English commercial world, and the first place in the regard of a large portion of our Victorian public, which was free-trade first and Victorian second.

Keeping these circumstances in view our purpose is to make as concise and complete an analysis and comparison of the relative position of the two colonies as the material at command will allow. Commerce being looked upon as the strong point of our rival's position, and the extension of external trade being regarded by all free-traders as the chief indication of a nation's prosperity, that department will first engage our attention. It is necessary to point out in connection with the figures in this department two facts, which make it impossible to obtain a really reliable and accurate statement of the case. The one is that there is nothing to warrant us placing any confidence in the accuracy of the figures supplied by the Customs department in New South Wales. Every importer and trader gives in whatever figures he chooses as the value of his goods, and as he has no inducement to under value, as is the case in Victoria, it is to be presumed that in most cases goods are overvalued rather than under-valued. With us, in consequence of our high ad valorem duties, the presumption is all the other way. The other fact is that a large portion of our Victorian trade is not included in our imports and exports at all, but is classed under a separate heading of transhipments in a great many instances without even the values being given. Bearing these facts in mind, the following is the state of the case as regards external trade:—
1885. Imports. Exports. Total.
£ £ £
New South Wales 23,365,196 16,541,745 39,906,940
Victoria 19,656,031 17,163,185 36,819,216

From this table we find that New South Wales had the advantage of us to the extent of £3,087,724. Taking the figures as they stand, and before proceeding to analyse the items which go to make them up, what is there, under the circumstances, to boast of in such a result? We have adopted a policy which aims at restricting our imports in favor of our own productions. New South Wales has adopted the opposite policy, and at the end of 20 years of success in supplying our own wants we are £3,000,000 behind in the total volume of our foreign commerce. Before the establishment of our various manufacturing and agricultural industries our staple product, gold, was declining, and has continued to decline, notwithstanding which we have maintained and continued to improve our foreign trade. At that same time the staple product of New South Wales was wool; that product was increasing, and has continued to increase ever since, and yet, with such an advantage to depend upon, the excess that is boasted of is only £3,000,000. and that se far as exports go is entirely due to a product which has not the remotest connection with the fiscal policy of either country

The most important proofs which the records of trade can afford of the progress of any community is the extent and growth of an export trade in its own productions. All that a country does in the way of receiving and passing on the goods of other countries cannot add much to the wealth of a community, although it may build up a few fortunes by commissions to middlemen. The comparison upon the foregoing basis gives a result highly satisfactory to Victoria, and by no means complimentary to New South Wales:—
Value of Products Exported in 1885.
New South Walos £13,345,034
Victoria 12,452,245

This comparison shows an excess in favor of New South Wales of only £892,789. One of the leaflets to which we have referred told the electors that "under free-trade men follow the most profitable occupations," and that "under free-trade labor and capital is employed in developing the resources of our country and yet, after a hundred years of such blessings, of such a policy, with four times the territory to operate upon, and all the other advantages already enumerated, the value of products for export only exceed those of protectionist Victoria by the sum of £892,789. The only resource which has really been at all developed in New South Wales is the pastoral, and, as everybody knows, it has been Victorian energy and page 4 capital in Riverina which has very largely accomplished even that primitive kind of development, and it is that industry alone which accounts for the extent of the exports.

That the total value of New South Wales' exports is largely made up of and determined by the value of the year's clip of wool will be clear from the following statement for the past five years:—
Year. Total value of wool exported, produce of N.S.W. Total value of all other products. the produce of N.S.W. Total value of all exports, the produce of N.S.W.
£ £ £
1881 7,149,787 5,745,706 12,895,493
1882 7,433,031 5,775,368 13,208,459
1883 9,598,761 6,531,106 16,129,867
1884 8,953,100 5,642,636 14,595,736
1885 7,246,642 5,711,239 12,957,881
This table shows that wool constitutes a long way more than one-half of the total export of its own products; that in each year of the five, except in 1883, the increase of such exports was more than accounted for by the increase in the total value of wool; and that as a consequence the total value of all other products suffered a corresponding decline. This is a sorry result for a policy for which such a different outcome is predicted and claimed. The value of all other exports apart from wool gives an average for the 5 years of £5,881,211 per annum; while the average for Victoria for the same period, apart from its wool, was £'7,947,934. In these figures, and in this comparison lies the kernel of the argument or illustration, so far as the question of foreign trade can throw any light upon it, or has anything to do with it. A trade that is not a trade in home products is not worth striving after; it is nothing more than a commission business, which is of no advantage to the great mass of the people. A trade too which is made up chiefly of one article of raw material, which depends mainly upon the seasons for its growth, which has no connection with the fiscal policy, and which is largely produced by the capital and energy of the rival country, cannot possibly be accepted as a proof of the success of such policy or the wisdom of its advocates. On the other hand, the £7,947,934, the export of our products apart from wool, is made up very largely of those manufactured products which are entirely due to our protective system, and but for which they could no more have figured in our exports than they do in those of New South. Wales. This tabulated statement also shows, that, in spite of the unerring blessings of free-trade, the value of its own products exported by New South Wales has declined during the last two years £3,171,986. Of course it may be said that these two years have been years of depression, and that protectionist Victoria has suffered in the same way, It is true this colony has suffered in the same way, but not to anything like the same extent. In so far as our exports have been affected by the one article, wool, we have suffered, but our agricultural and manufactured products have well maintained their position, and thus bear testimony to the wisdom of a policy which ensures a variety of channels for the employment of labor and capital. The following figures will prove the correctness of the statement:—
Year. Total value of wool exported produced in Victoria. Total value of all other exports produced in Victoria. Total value of all exports produced in Victoria.
£ £ £
1883 5,213,148 8,079,146 13,292,294
1885 4,482,180 8,024,069 12,452,245

Further it will be found by a comparison of these figures with those given in the previous table for New South Wales that, leaving the item wool out of both accounts, our exported products exceed those of New South Wales by over £2,000,000 per annum, notwithstanding their coalfields and superior resources, developed scientifically under the policy of free-trade.

There is one other aspect of this foreign trade question which it is important to examine before we pass on to the remaining departments of national industry, and that is the view it presents from an intercolonial standpoint. Ten years ago, in 1876, New South Wales exported to the neighboring colonies £2,823,773 worth of goods more than Victoria did, a very large part of which was wool from Riverina passing through Victoria for England. During the page 5 intervening 10 years we have increased our intercolonial exports by £1,842,264, while the New South Wales increase has only been £655.539, just a fraction more than one-third of our increase. Surely, if there were one word of truth in all that is said in relation to the advantages of a free-trade policy for securing and extending external commerce, it ought to have shown itself unmistakably in this instance. New South Wales had the advantage which possession of secured markets gives, and the aid of the policy which it insists upon declaring can alone ensure success, and had as the only real competitor the country which was foolish enough to adopt a policy under which we are assured it is impossible to build up an export trade. None the less, however, here is the startling fact, which confounds all theories and theorists, and disproves all arguments to the contrary, that protectionist Victoria is rapidly overtaking free-trade New South Wales in these colonial markets, and in a few years will have left that country far behind in the race for commercial supremacy, which supremacy it has already lost, if the one article, wool, be eliminated. That Victoria is doing this by the aid of its protectionist policy is best proved by the fact that, while the exports of New South Wales continue to be almost entirely raw material of home produce, and manufactured good obtained from abroad and passed on to their destination, our exports are largely and increasingly exports of our own manufacture. In 1876, not including tallow, preserved meat, flour and other such primitive manufactures as are hardly more than raw materials, bur exports of real manufactures amounted to £802,925. In 1885, still with the same reservations, they had increased to £1,619,955. The most remarkable thing, however, is that while nearly the whole of these goods, the products of our factories, find a market in the surrounding colonies, free-trade New South Wales is far and away our best customer for them. We get from that country timber, and send it back furniture; corn, flour and maize, and return it in biscuits; hides and skins, to be made for it into saddlery, harness and portmanteaus; wool, to be made into apparel and slop clothing; and coal, to keep our machinery going, wherewith to supply the hundred and one articles which, by reason of protection, we can turn out better and cheaper than free-trade New South Wales can produce them for itself. In spite of these facts, however, there are some persons ignorant enough to assert that, because New South Wales has a large quantity of wool to export, that country is making the more rapid progress of the two, and there are still a few foolish enough to believe them. External trade is not the main object of a protective policy, but it is of free-trade. This country has the satisfaction, therefore, of knowing that, while our policy has accomplished all that was expected from it, i the way of internal trade, it has enabled us to more than hold our own in outside business with our rival, whose only aim has been to cultivate that one branch of national enterprise. It is true that the biggest figures yet remain with our neighbor, but, as it has been shown by the foregoing analysis, these big figures are due entirely to wool and other pastoral products. All the real facts which underlie the figures prove that for varied reliable and profitable enterprise. Victoria is a very long way in advance of New South Wales.

The next branch of industry which it is proposed to examine is the pastoral. Here again every advantage of the situation was, and is, with our competitor. This is the special industry in which capital is said to find profitable employment, rather than in the forced and feeble industries fostered by a protective tariff. On the other hand, we in this country, having given so much time, attention and capital to the establishment of manufactures, may be presumed to have neglected the more primitive calling of sheep and cattle breeding. A comparison of the figures connected with this industry will show, however, that Victoria is not so very far behind New South Wales even in this direction; and that, taking the difference in the area of the two countries into consideration, we are very much in advance. For the purpose of this comparison the stock in each country has been computed at its money value page 6 and for each period. The units of value are the same in both cases, and are for every horse £6, every head of cattle £4, every sheep 6s., and every pig 30s. Proceeding upon this method the following statement shows clearly the position of the respective countries:—
Victoria. New South Wales.
Value In 1875. Value in 1835. Value in 1875. Value In 1885.
£ £ £ £
Cattle 4,218,392 5,163,160 12,536,344 5,29,260
Horses 1,177,104 1,824,558 2,146,17 2,068,182
Sheep 3,524,859 3,204,551 7,606,177 11,346,271
Pigs 211,147 359,755 299,925 313,044
Totals 9,131,502 10,552,054 22,588,622 18,996,757
From these figures it is easily seen that during these 10 years of special devotion to the development of this industry the value of its product has decreased in New South Wales by £3,591,865; while with us in Victoria, where we have been devoting, it is said, our labor and capital to unprofitable manufactures, this self-same pasteral industry has so prospered as to increase the value of its stock by £1,420,552. So that, whereas New South Wales was ahead of us in this investment to the extent of £13,457,120 in 1875, this advantage has been reduced to £8,444,703 in 1885. This is a most remarkable result when all the surroundings are taken into account. With four times our terrier and with special and undivided attention to this industry, the stock of our neighbor is not nearly twice the value of our own, and at the present rate of progress on this side of the Murray, and retrogression on the other side, the difference now existing will before many years be removed. The best evidence, however, which this industry affords of the benefits which this country has derived from its protective policy is found in the relative progress which the two countries have made in the manufactures connected with, or dependent en, pastoral products, as shown by the export trade in such manufactures which they respectively possess. There are in this section in each country two great industries having really no dependence upon protective duties, which are—preserved meats and tallow. In addition to these there are a variety of minor industries, which with us, as the figures will show, have been built up by our policy, while-they have almost died out in New South Wales. The statement which follows gives the exports of these manufactures for each country for the years 1875 and 1885 respectively:—
Victoria. New South Wales.
Name of Manufacture. 1875. 1835. 1875. 1885.
£ £ £ £
Preserved meats 134,297 118,766 73,112 179,307
Tallow 203,243 155,918 106,285 195,821
Leather 244,027 342,818 108,347 103,0,6
Butter 12,355 69,013 46,755 8,925
Cheese 6,926 34,352 46,755 1,500
Bacon and hams 1,282 11,543 6,031
Lard 50 1,516 1,672 616
Bonedust 11,983 14,458 8,411 19,820
Sausage skins 3,172
Candles, soap, &c 5,339 25,352 5,140 5,174
Tallow oil 110 7,166
Totals 619,592 784,074 355,753 514,192

The first thing which is evident from these figures is that our exports of these manufactured: articles are far larger than those of New South. Wales; whereas, according to all the assertions of the free-traders, the reverse should be the-case. The next piece of evidence which they supply, and it is very conclusive as to the value of our policy, is that our exports from those industries depending upon protection are increasing very largely. If we leave out preserved meats and tallow from the calculation we-find that our exports of the remaining items-have increased during the 10 years by £228,338, while those of New South Wales have decreased by £37,292. The value of our exports of these articles having been in 1885, £509,390,. as against £139.064 exported by New South Wales.

Having thus shown that, even in the two departments of enterprise where Victoria might reasonably have expected to be left hopelessly behind by its rival, its policy has enabled it to more than maintain its position as a whole, and, take a long lead in those sections where that policy could possibly make itself felt, on another occasion our examination of the remaining brunches of industry and investment will be undertaken.