The Pamphlet Collection of Sir Robert Stout: Volume 30
Free Trade v Protection
Free Trade v Protection.
The meanings of these terms ought to be considered by all. Free Trade meant, literally, trade without any restrictions, and Protection meant, not prohibition, as it had been called, but encouragement to such industries as might develop themselves in this country. Mr Hutchison here briefly traced the history of manufactures and trade in England from the Elizabethan period and the advent of Flemish spinners, down to the repeal of the Corn Laws, and showed that whatever her policy might have been since Cobden's time, England did not build up her Industries by a system of Free Trade. To-day England was endeavouring to open doors that had been closed against her, and her policy was admitted to be one directed to her own benefit but not one that would apply here. We must consider ourselves. We started here as a pastoral colony, and naturally adopted a system of Free Trade; but great changes have occurred since then. Native difficulties have been encountered, and the immigration and public works policies had brought people into the colony for whom work had to be provided. It was them, as farmers, to consider how this was to be cone; because as all comes from the land, so surely all goes back to it or to those who have to do with it. The chief objections to the tariffs of past years had been that they were unequal and uncertain, but even under these tariffs raised professedly for revenue purposes, industries have sprung up, which employ some 25,000 people. On these it may be considered there are at least 100,000 dependent,—or one-sixth of our total population. There seems to be no other choice but a Protective tariff. (Applause.) He had endeavoured to go into this question in an unbiassed manner, because he had first adopted Free Trade as the ideal fiscal policy to be kept to as far as possible, and it was rot with any predilections in its favour that he had adopted Protection. He believed that the only objection that could be fairly brought against it was this—that the consumer suffers from the fact that he has to pay more for goods made in the colony than for the imported article. This, of course, assumed that a rise in prices followed from a rise in the tariff, but he believed this to be unfounded. As an instance, he quoted woollens, which, though the tariff had been raised, were lower in price now than formerly. There had not been any rise in the price, but he believed the reductions had been due, to some extent, to the fall in values in consequence of the world-wide depression now existing. I He would point out that they were not seeking now to establish industries; I they are actually in existence, and assistance through the tariff, while it would not tend to raise prices, would tend to increase the number of manufactories. But supposing it did raise the prices, and that was the strongest case they could put against Protection; supposing they, as farmers, had to pay 21s for what now cost them 20s, would there necessarily be a loss? All political science has shown that it is not so, The money is kept in the country, and circulates through it, acting and re-acting on the community. It was saved the double process of sweating, and does away with the middleman's profits. He thought that such a fact would not be detrimental to New Zealand. The effect of protecting industries in one's own country was, not to effect an increase in price, but to enable manufacturers to export largely into Free Trade countries Thus goods could be brought into England, and undersell English manufacturers in their own markets, as was happening now with Belgium rails and Sheffield (German made) cutlery. Even in New Zealand they found that the woollen goods that stock our ready made shops, and compete with Roslyn, Kaiapoi, and Mosgiel woollens, were not English goods, but Victorian. Surely there could be no objection to Protection when it did not raise the prices, but cut them down, and enabled a country to compete in the Freetrade markets of the world; (Applause) If Freetrade were to be introduced into this colony, supposing it even to be practicable, they would have to abolish the poll tax en Chinese, to enable them to compete with other countries, for no one else could work as cheaply, and cheap labour was a necessity under a Freetrade policy. Remove the tariff, do away with the poll tax, and allow these Mongolians to come in, and where would they be? the did not know. (Applause.) In a protection tariff only could he see a way to assist our industries. This, of course, did not mean much revenue, for such a tariff was to assist industries by excluding imported goods, but revenue hid to be raised, and it should come from luxuries which there would always be people willing to pay for. He believed the necessities of life should, as far as possible, be free. By following that rule, namely, that articles produced in our own borders should be encouraged, and luxuries taxed, they would be following the policy that best conduced to their own welfare. (Applause.)