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The Pamphlet Collection of Sir Robert Stout: Volume 61

A Lecture on the Economic Defence of our Commerce and the Development of our Industrial Resources [May 28, 1886]

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A Lecture on the Economic Defence of our Commerce and the Development of our Industrial Resources.

Dunedin: Printed at the Evening Star General and Commercial Printing Office, Bond Street, Dunedin.

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A Lecture on the Economic Defence of our Commerce and the Development of our Industrial Resources,

Admiral Scott gave a lecture under the auspices of the New Zealand Manufacturers' Association at the Y.M.C.A. Hall last evening on "The Economic Defence of our Commerce and the Development of our Industrial Resources."

His Worship the Mayor (Mr J. Barnes) occupied the chair.

In his preliminary remarks the lecturer explained that, besides touching upon the defence of New Zealand's commerce and the development of her industrial resources, he would throw out suggestions for the removal of the present severe depression, and advert to the position of New Zealand in regard to Foreign nationalities and the Mother Country, with its probable influence upon our future prosperity.

The lecturer then proceeded as follows:—

The alarming nature of the outlook, when all Europe and much of Asia are one vast camp, is I believe apparent to most of us; nor can it be denied that peaceful occupations are likely to be sadly interrupted by the breaking out of perhaps the most sanguinary war the world had ever witnessed.

Every nation in Europe seems, as if impelled by some unseen force, to polish up its armor and to furbish the newest weapons of destruction, which are through the advance of science and its application becoming more deadly day by day.

According to an able war office official every trade was becoming stagnant but that concerned in the manufacture of costly weapons of war. Wherever he visited in the factories throughout Britain the manufacture of the latest war-like arms was alone prosperous, while all else was in a very depressed state, and the masses were becoming pauperised.

On this side of the globe we had been stirred up and had raised some strong remonstrances against foreign encroachments, and the colonies were now resisting the annexation of the New Hebrides by France.

Germany, once peaceful, having tasted the sweets of conquest and the value of power, seemed to be meditating making other additions to her territory, and thus fully employing her warlike spirits. Both these ends would be thoroughly achieved by annexing the German-speaking provinces of Austria, and by the further extension of her Empire in Africa and the Pacific.

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Russia also had been looking with a loving eye upon the Slav, and was prepared to take coy Transylvania within her arms; a fact well known to German statesmen, and one which would, of course, render it necessary for the German Emperor to take other portions of Austria under his own protection. The former gigantic Power was now overshadowing the various principalities around the Black Sea in its advance towards Constantinople and the Mediterranean; and was likewise threatening to absorb Persia In its movement southwards towards the ocean.

Russia had also abolished the Turcoman, and been gradually swallowing portions of the Chinese Empire; and she was said to be now employing the L7,000,000 which was withdrawn from the Bank of England by German financiers last year in further war preparations.

France had likewise been busy in various other parts of the world; and having added Annam, Tonquin, etc., to her territories, would be perhaps well satisfied to further increase them by the addition of Belgium and Madagascar. These and other compensations in the Pacific, and the possession of the port and territory of Acre in the Mediterranean would probably go far to content France for the loss of Alsace and Lorraine.

On such an outbreak as he had indicated, Holland, with its valuable Pacific possessions, would be a tempting prize to Germany, and might be snapped up, with the remainder of Denmark. England at such a time would have quite enough to do to secure her own extensive trade and commerce, and hence the supreme importance of our being able to supply our own trade requirements was self-evident.

As regarded Germany, what had already been mentioned only formed a part of her recent movements, for it appeared that Prince Bismarck had been negotiating for the transfer of the Sandwich Group. These islands would become of great strategical and commercial importance hereafter, as they lie directly in the fair way from Panama, and commanded the trade routes which would be established to China, Japan, and Russian territory north of the Amoor directly the Lesseps canal is opened.

England had certainly made a mistake in giving up the Sandwich Islands, and Tahiti, with the other Society Islands. These events, however, took place in times when even England's own colonies were regarded as of little value, her free trade throughout the earth being looked upon as secure; for England was then the great manufacturing centre, and also the mart of the whole world for nearly every commodity.

The doctrine that trade followed the flag was then unrecognised; and it was not till long after Britain had lost the once valuable pearl fishery and other trade of the Society Islands (formerly the rendezvous for whalers, and the entrepot for much of the China commerce) that this doctrine became recognised. Should Germany now acquire the Sandwich Islands, Java, Sumatra, and the other Dutch possessions, France possessing New Caledonia, Rapa, the Marquesas, etc., Australasia would be hemmed in around her northern side and separated from China and Japan as well as from Panama.

It was true that the possession of islands entailed expense, but this to England with her maritime power would have been trifling, and their development would be attended with considerable advantages. If New Zealand and her sister colonies only availed themselves of their many present opportunities and secured a portion of the trade that was now offering in the Malay Archipelago and Spanish possessions, there would be little fear for her future.

Peace was the period for preparation and strengthening the sinews of our national life, so that we might become a united and powerful, and consequently a successful and prosperous people. Trade followed the flag, and therefore every island group seized by any foreign Power reduced either our present or prospective markets.

Germany and France were both strictly Protective, and did their best to retain trade in their own hands. Russia followed a similar policy; so that, in self-preservation, we should adopt a discriminating tariff in favor of the Mother Country, and a well-regulated interchange between ourselves and our natural allies, the United States, together with a close union and reciprocity between the colonies. This union is as necessary to the due development of New Zealand as it is essential to her efficient protection. The union would likewise materially strengthen Great Britain, and would enable her to speak far more strongly against annexations in these seas.

Canada had been during a period of peace attracting a large population to her shores by a wise protective tariff, which had given employment to thousands page 3 of her children. Victoria had also become richer and more powerful, and both countries were being fast prepared against every eventuality. New Zealand and other colonies, however, had shown little sign of progress.

Victoria was well worthy of imitation, not only in the energy with which she was developing her resources and making known to England her wishes, but also in her earnestness in seeking new markets and pushing her manufactures in every direction. He was credibly informed that twenty-five years ago the condition of Victoria was incomparably worse than that of New Zealand to-day; but a duty sufficient to enable industries to be inaugurated was put upon imports, and from a state of pauperism and incipient bankruptcy she had been raised to being the only really prosperous colony in Australasia. Thousands of our best mechanics had Hocked to Victoria, with many youths (educated at our cost) to swell the ranks of her population and increase her producing and manufacturing powers.

Victoria was believed to have received the greater part of the 3,000 or more of the adult male population who had left our shores. Reducing this number to 2,000, and reckoning their value at L200 a head, it would be seen that we had sustained a loss equal to L400,000. If we take the value of the 2,000 at only L100 each—the sum each immigrant was estimated to be worth to the United States—where the population was rapidly increasing—we should still find that L200,000 had been lost to us. Such an amount would only represent a part of the diminution of wealth which the labour of two thousand persons—principally skilled men—would have produced; for estimating their wages, which would have been earned and spent here, at an average of L100per annum for each man, the yearly loss in money circulation alone would amount to L200,000!

But even this large sum would not represent the total yearly loss to New Zealand, for the money would by its circulation in our midst have helped to provide employment for men in other branches of trade, whose wages also would then have passed to the shopkeepers, and they in their turn would have purchased from the merchants. More goods and a greater number of commercial and other travellers would have been carried by our railroads, swelling the receipts; and thus under a wise protective policy a continuous stream of employment and profit would have resulted throughout New Zealand. Not only so, but every increase of wealth would have brought an increased number of settlers, and consequently have added to the value of our pastoral and agricultural lands, and further benefited directly or indirectly every citizen in New Zealand.

It may be said the recent census shows an increase in 1880 over the population in 1881 of about 3,000 souls, but the excess of births over deaths is at least 75 per month; this rate would give 900 per year, which is equal to 4,500 since the last census; that is, 1 500 in Dunedin alone beyond the actual number. The arrivals here have amounted to many hundreds more, which will serve to show us the great loss in population we must have been sustaining through emigration, and will in itself account for much of our depression.

When to this loss of population is added the heavy losses of our runholders and farmers by the fall of wool and grain, and the consequent reduction of their purchasing power, it can be readily understood how so many of our best workmen have been forced to leave from the lack of funds and suitable work to employ them, and why so many of our tradesmen have been unable to meet their liabilities. It will be seen likewise why several skilled manufacturers and workers of metals who have had to face the almost continuous fall in the value of the materials they import (none being as yet raised in this Colony) have made little or no profit upon their capital.

The result of the present state of our trade is unfortunately too apparent in the many line shops deserted, and in the numerous stores and houses advertised to let, not only in Dunedin but throughout New Zealand.

The causes of the present state of our trade were not far to seek. The first great cause was to be found in our national forgetfulness of the Giver of All—He who could not be mocked, and who had said of the Israelites of old, "The wisdom of their wise men shall perish, and the understanding of their prudent men shall be hid." Where were our wise men to be found at the present grave crisis? Where were our prudent men to guide us through the present gloomy depression? Who was to be our leader? Victoria had triumphantly emerged from her former difficulties, and Canada was fast becoming a powerful nation. New Zealand, with a better climate, a highly productive soil, numerous flocks and herds, and an abundant fish supply, seemed to be daily becoming poorer.

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A secondary cause was that the interests of other countries had been looked after at the expense of our own, so that at the present day New Zealand was relatively poorer than she was when she was founded.

Those who were still energetically striving to extend our industries were forced to obtain money from foreign creditors. The latter sent their manufactures to our markets, and therefore made a double profit at our expense. A responsibility, then, which rested on the Government was the encouragement of our local industries by a strong national and colonial policy—a policy that would place the unemployed on the "Tucker" goldfields, and bring experts to discover our own "Kimberleys" and to teach us how to raise new crops to be utilised in new industries.

The Public Works policy had relieved the depression which originally existed in the Colony, but the choicest of the land opened up was bought by companies, and many of our best settlers had been tempted to purchase farms at far too high prices. They had borrowed from these companies, and the result was as pointed out by Mr Macandrew. Whilst the whole of our earnings were being swept away from us, the companies were dividing from 15 to 20 per cent, profits, many of the shareholders believing that we could well afford to pay so much.

The Colony was sustaining a further loss through absentees, who, after making their money here, were spending it in the Old Country.

A similar cause conduced to the serious dissatisfaction and consequent troubles in Ireland; her landlords prefering the gaieties of London to living amongst their own tenantry.

Whilst we are so foolishly lagging behind, and allowing aliens to manufacture at our expense, Germany is vigorously pushing to the forefront in the industrial race; and—not content with sending numbers of her highly trained young men to secure, as they have done, a large share of the South American and Pacific trades—is now dispatching a vessel laden with samples of her various industries, so as to open up markets in the more distant parts of the world. The German Chancellor is well aware that trade produces the sinews of war, and is encouraging to the utmost the manufacture of woollen and all other goods within the country; respecting which the British Charge d'Affaires at Dresden recently reported that "the political constellations of the empire, the most powerful industrial and commercial forces, . . . are all on the side of the existing protective system"; and that "the belief is widely diffused that the tariff reform of 1879 saved Germany from a great ruin; and that the empire is now on the road to industrial greatness, perhaps to the succession of that hegemony which Great Britain, it is thought, now with difficulty holds in her hands."

We are told by some of our advisers that, under the present condition of things, the best course is "to economise and to wait"—perhaps, like the famous Mr Micawber, for something to turn up. But will such a course furnish employment! Will it return a profit to our runholders, farmers, and other producers, and tend to bring back prosperity to all class as? Certainly not. What the country really requires is union amongst our legislators, so that their abilities may be wholly directed to the well-being of the Colony. This will not be secured by cutting down loans, which if wisely used should return, perhaps, a small direct, but an increasing indirect profit.

Economy as regards unnecessary expenditure is doubtless much needed; but what we urgently want to lessen without waiting, is the exodus of our best workmen, and the youths we have trained at such a cost; and it is to our Government we must look to provide the work needed to foster this most valuable of assets—viz., population. For if it be right to expend nearly L400,000 annually on the education of the children growing up in our midst, it is doubly the duty of the State to provide for the profitable application of the capabilities which its enforced education has developed.

Victoria is in the same position as this Colony in regard to the low price of cattle and produce; but, on the other hand, she has developed her mineral and other industrial resources, and thereby accumulated sufficient wealth to fully employ all her people—thus affording us a valuable example. Unless a change speedily takes place in our own policy, the numerous children who annually finish their education and leave our schools must migrate to seek the work which cannot be given here, as but few of them are fitted—even were there agricultural employment—to go upon the land.

England, from which we have inherited or copied our notions in regard to Free Trade, would be simply ruined if mainly dependent upon pasturage and agriculture; page 5 but instead of being so, manufactures and mining products are her main stay; and it is with the sale of these, combined with the interest accruing from the stocks (purchased with the large capital derived from her former manufacturing and mining profits) that she continues to pay for her imports, and is still enabled to maintain her vast shipping and commerce. New Zealand has not yet any such resources, and is consequently daily feeling more and more the drain, not only from the heavy interest upon borrowed money, but also from having to pay for imports with her bullion. In other words, instead of employing her own children and increasing wealth within her own border, she is sending away the means of production to maintain strangers, consequently pauperising hesrelf!

New Zealand, instead of imitating the example of energetic Victoria, has even allowed large stocks of articles, mostly unsaleable elsewhere, to be landed, to the ruin of her producers. The fruits of this system—which is that of taxing ourselves to keep an open market for the benefit of foreign manufacturerers, and of borrowing money which mainly benefits them—are to be seen in the stagnation of our own Colonial business and in the bankruptcies in all classes; to say nothing of the eighty-six men who are stated to have recently gone from our shores, leaving their wives dependent upon charity and their children to be educated at our expense. Besides the many goods imported which could be manufactured here, and afford profitable employment; the amount of Colonial work is further lessened and its industries are crippled by the exemptions from duty of numerous articles only slightly differing from those on which duty has to be paid; and, as if this peculiarity were not sufficiently disadvantageous to the colonial producer, articles presumably supposed to be intended for one purpose are admitted "free," whilst if passed for other purposes are subject to duty. Need it be added that such a tariff occasions a direct loss of revenue to the Colony, as well as serious injury to the manufacturer, and has certainly a tendency to lead to fraudulent representation—especially in times like the present. We have been often told that, as the importers of British or foreign goods pay duty upon some of their manufactured imports, the local producer ought to be able to advantageously compete. But these writers altogether ignore the fact that the New Zealand manufacturer has in most cases to import the raw material he requires, paying for its freight, just as is done in the case of the manufactured article; and, as a set-off to the import duty (if charged), has to be put the comparatively large stock which the manufacturer is obliged to keep—for his customers can't or won't wait for the articles they require until these can be made from materials imported from Europe or America.

The British or foreign manufacturer need not keep stock, as he has the open market close at hand for whatever he requires; and he has the further great advantage of being enabled to make many articles from the same pattern.

The difficulty of manufacturing profitably under the conditions of the present bad New Zealand tariff may be shown by the fact that a partner in one of the largest manufacturing firms in this Colony placed L20,000 in the business, and yet had to be dependent upon his father for his household expenses. This gentleman is an intelligent and skilled expert in his profession. If we look around Dunedin we find the principal industrial businesses taken over by the banks, who, fortunately for all classes, continue to work them, and also to help other businesses. Were it not so, the cry of the unemployed would give place to far more extensive distress.

New South Wales, prosperous so long as a large revenne was obtained from land sales, is now proportionally depressed; and the Premier of this oft-praised free-trade colony has been calling attention to the injurious drain experienced through so largely purchasing from other Colonies, and sending away such great sums to pay for foreign manufactures. This Premier has, in consequence of these representations, just succeeded in carrying a Protective Tariff by a large majority. New South Wales, like the rest of the world, was beginning to understand that the free interchange of commodities should be restricted to those articles which each country was unable to make for itself. To lay open a country to the free introduction of goods which could be made by that country's own people was as unwise as it was to invite invasion by the absence of due precautions; and the country which does so cannot progress satisfactorily.

All wealth is the product of labour combined with capital, and unless the labouring classes are fully employed, and capital put to its right use of aiding their work in developing the resources of a country, there cannot be page 6 prosperity. This subject, and the opinions of eminent political economists thereon, is more fully treated in my lecture given at Wellington before his Excellency the Governor, on November 1, 1884.

The closer union of labor with capital was needed in New Zealand, and instead of companies—who were but small employers of labor, and yet were deriving an amount of interest from the country far beyond what they should—we required companies which would quickly complete our railway system and develop our mines. .Such companies could profitably engage far more skilled and other labour than the whole mass of unemployed now in the Colony; and the additional workmen settling here and spending their earnings amongst us would soon diffuse a stream of wealth to fructify in New Zealand.

As already mentioned, we want population to consume the now unremunerative produce of our hard-working farmers, who have been erroneously told that putting duties upon articles imported into the Colony necessarily renders everything far dearer to them. This statement, as Mr Joyce, M.H.R., recently pointed out, is wholly incorrect; for manufacturing within the Colony has in every known instance lowered the prices of articles to the consumer, and benefitted—through increased employment—the wage-earning classes.

The other side of the question has not been fully placed before our country population, viz., that with the development of our mining and other industries, and the increase of our town population, a greater demand and a far better Home market would be opened for their produce.

The bright spot on the horizon was the construction of the East and West Coast Railway, which from every point of view was a matter for rejoicing, and one upon which we can heartily congratulate Canterbury. This Province, though suffering quite as severely as Otago, has shown both vitality and energy, and furnishes in the union between all classes to push forward this great railway work—an example which if we followed in regard to Otago's improvement might soon be taken up, and fresh vigor diffused throughout the Colony.

As regards our heavy loss through employing foreign labour, it had been said that through the manufacture of woollens outside the Colony since 1860 the working classes had been deprived of nearly L2,000,000 in wages, and that a considerable loss through the same cause still continued. Mr Blair in 1884 had said it was possible to produce and make three-fourths of the goods we bought from other countries, that is four out of the six millions sterling worth of goods we now import could be manufactured in New Zealand.

It may be asked, what is the view of New Zealand's position taken by unprejudiced outside observers. First, in regard to the possible effect of the movements of foreign powers in these seas. A summary of Bishop Moorhouse's last speech before leaving Australia, on the necessity for Imperial federation, shows that this sensible and eminently practical prelate said "his conviction was that in the time to come small communities, however virtuous, would not be able to maintain an independent existence. We were approaching an era of great empires. Should there be a great empire of British-speaking people? If not, we could not hold our own in the great time coming. What was going to be the next move of Prince Bismarck, that man of mystery? He did not think that he had been so mysterious that some could not lift the mantle and see the scheming face beneath. Had not what he had been doing recently shown that his next step would be to take Holland, then Borneo, Java, New Guinea, the Caroline Islands, so that Germany would encircle Australia all over her northern frontier. Then, if we were separated, and Germany went to war with England, than which nothing was more likely, Germany would at once seize our small navy, for the same reason that England seized the fleet of Denmark in the time of the great war with France. Therefore we wanted the protection of the Home fleet, which we should not get unless we federated. We must be federated to be safe—if we were to maintain that sense of brotherhood which held us all together as subjects of one great power for the world's good. Professor Max Müller had said that the world would be intolerable if it were not for England."

Secondly, as respects our New Zealand trade, the father of our House of Representatives recently told his constituents that, with all the advantages of New Zealand, "so ignorant? or so prejudiced are our public men as to the true principles of political economy—so utterly helpless are we and destitute of mutual confidence in each other—that we can find no means of developing our vast resources, except by sending out of the country three to four millions a year—the page 7 whole of our surplus" Mr Macandrew further painted out that a Home market for our products and produce is the best of all markets. Respecting the value of a Home market, the father of political economy in Great Britain wrote:—"The greatest and most important branch of the commerce of every nation is that which is carried on between the inhabitants of the towns and those of the country." The inhabitants of the town pay for the rude produce "by sending back to the country a certain portion of it manufactured and prepared for immediate use." Adam Smith further says:—" Whatever tends to diminish in any country the number of artificers and manufacturers, tends to diminish the home market, the most important of all markets for the rude produce of the land, and thereby still further to discourage agriculture."

The export trade of Great Britain illustrates the results of her policy. The 'European Mail' of February 19th last, when dwelling upon this subject, said that Mr Kimber had stilted in the House of Commons, only four days previously, that the large proportion of the population of this country dependent entirely upon its external trade, was annually increasing by hundreds of thousands; while that external trade had, during the past two years, gradually declined to the extent of nearly eighty millions sterling (representing in large part the wages of labour), and was still declining. And he asked whether Her Majesty's Government were prepared with any proposals to encourage fresh enterprise to arrest that decline.

This position is very similar to our own, with this important difference, that we happily have abundant resources, only needing to be properly encouraged and developed, to secure remunerative labour to twenty times our present population.

A practical British farmer, Mr William Harris, F.S.S., referring to the advantages possessed by the United States In being able to soon adjust and afterwards maintain a happy balance of industries, so as to keep their rapidly increasing population employed, points out the fallacy of regarding the total value of imports as the test of prosperity. He says that Britain, by giving up farming, might increase her imports by nearly L200,000,000 sterling a year, and he pertinently asks if that would be prosperity? Food, he adds, which cannot be easily produced at home, is an import, which it is to the advantage of the majority of the population to have cheaply. Haw materials of manufacture are also imports, which it is still more advantageous to the wage-earners to have at the lowest possible price. Our working men, he says, take very good care to prevent foreign workmen underbidding their wages in our large wage-earning industries. They are only beginning to see that by admitting the results of labour expended in other countries to the detriment of their own, they are admitting what is worse than the men themselves. Mr Harris adds, as a sign of decadence, that during the last ten years the imports into Great Britain have been nearly three times the value of the exports therefrom.

Scotland is now suffering from the effects of Free Trade. A paragraph in the 'Otago Daily Times' of 15th December last stated that "statistics published regarding the linen and cotton goods exported from Dunfermline to the United States show an immense decrease in the value of the latter and a smaller but steady decrease in the value of the former. . . . . Several hundred looms in the town are reported to be standing compulsorily idle," and similar distress is very prevalent in England. As a contrast to this sad state, protectionist America has, according to her own staticians, paid oft a large proportion of her enormous war debt, by the profits derived from her exports to Britain.

The resolution moved by Mr E. W. Sullivan, and adopted by the Congress held in Sydney in October last, has an important bearing on Trade interchange. He said, "That the time has now arrived when a judicious and discriminating protective tariff should be applied in New South Wales for the purpose of promoting agriculture and encouraging native industries." He stated that "New South Wales had tried Free Trade for over twenty years, and the result of it had been to make the greater portion of the Colony a sheep-walk."

Writing on the same subject, Mr Buckingham Pope, the able English barrister, said "that the hackneyed phrases of Freetraders were contradicted at every point by the direct evidence of the senses;" and added that Great Britain and Ireland "are perfectly surfeited by encomiums on Free Trade, Free Breakfast Tables, Free Education, etc. Let us trust (he says) that all these free institutions may not be supplemented by just one more—viz., Free Starvation."

Happily we have not yet reached free starvation, or even the pauperism of a large number of Britain's labouring classes, whose page 8 children are fed by charity dinners, and the parents themselves by scraps collected at the houses of their richer brethren; but we certainly are very far removed from prosperity. For years past we have been told that we are on the eve of better things, but the better things have faded like the mirage of the sandy desert.

We are, however, still hoping on, and our manufacturers and producers are straining every nerve, and notwithstanding their many discouragements, are doing their utmost to keep the diminished number of their workmen employed; trusting that our rulers will soon be enabled to take the same patriotic course as those of Canada, and with the same happy result—a result which this meeting can materially forward by a strong and unflagging support.

There was no doubt that cheap money and home manufacture were the essential means whereby New Zealand might, with the blessing of God, assume the noble position to which her resources, climate, and geographical situation fully entitled her.

Cheap money would doubtless flow to this Colony in abundance, were a practical movement made to realise the truth of the assertion that New Zealand is as much a portion of Great Britain as Scotland or Westminster. To this end British trustees should be legally empowered to invest in real securities in this country, and the younger sons whose incomes are now a charge upon the estates of their eldest brothers, should be permitted to capitalise these charges for the purpose of investing in New Zealand or other colonial securities. These points have doubtless been well considered by the Government, but the present seems an opportune time for urging the matter, and also that of the exchange of lands between Britain and the colonies, when the owners have emigrated from Britain to New Zealand or other colonies. This exchange would not be more difficult than that between lands situated in different parts of Britain, which are now being exchanged by the Commissioners at small cost.

The promotion of home manufactures in New Zealand is in the hands of our legislators, and merely needs a discriminating adjustment of the tariff to give our now dormant industries a new and vigorous life. Freetrade had pauperised the masses in Britain to such an extent that, as Gladstone had remarked, "Human life is in the majority of cases a struggle for existence."

Mr Giffen had referred to the increase of Britain's population as a proof of her prosperity; but, as a matter of fact, there had been double the increase before a Free-trade policy was adopted.

Since 1870 the United States had in creased their commerce by 75 per cent, France hers by 51 per cent., and Germany hers by 40 per cent.; but Britain, though enjoying a period of profound peace, showed only 26 per cent. Since 1873 the consumption of cotton had increased in the United States 84 per cent., on the Continent 64 per cent., but in England only 3 per cent.

The progress of the Protectionist countries was surprising. When it was found that France had during the period named paid as indemnity of nearly L400,000,000 to Germany, and the United States had incurred a heavy war expenditure, of which she had paid oil nearly L200,000,000, it might well be asked what would Britain's position be had she been called upon to make similar sacrifices!

With such examples before us, we might well decline to follow Britain's lines, but urgently press for an adjustment of our present tariff, not to enhance the cost of articles, but to reserve for our own artisans the manufactures we require.

With such encouragement, and the development of her mercantile marine, New Zealand should in enterprise resemble Spain and Genoa during the palmy days of their maritime power. She should, like Canada, encourage her external trade, and, by opening up her mines and building her own ships, attract a large population which would not only increase her material wealth, but be the best defence against every enemy.

It only remained for him to indicate how our commerce could be most economically and best protected. The First Naval Lord of the Admiralty last year had said that, if officially asked, he would recommend that half the cost of the six-pounder quick-firing guns which would have armed our direct mail steamers should be paid by the British Government. The cost to us would have been about L1,000 per vessel. Had this generous offer been then accepted we should have had an additional trained force, at a very small cost, constantly upon our coasts.

The arming of the Union Steam Ship Company's steamers with half the number of guns required for each of the direct Steamers, viz., two per vessel, would have given us a further and still larger force, and the training needed to handle the guns would have been a most valuable and inexpensive defence preparation.

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We had recently been asked to contribute towards the additional vessels with which Great Britain offered to augment the Pacific squadron, and such vessels to be of the latest approved type. This, in the opinion of the best naval authorities of all nations, was the sea-going torpedo-boat, which would be admirably adapted to our harbors, and would act to great advantage in combination with our armed mercantile marine. A contribution of L10,000, or at most of L15,000 a-year, would cover the expense of from four to six of these formidable vessels; and their small crews could act as instructors. Such a force of mercantile steamers and torpedo boats, together with the vessels maintained from the contributions of other colonies, would, in combination with the British squadron, form an effective and economic defence to our commerce, and at the same time protect the whole of our coast from aggression.

In conclusion Admiral Scott said: I have ventured to place before you what other nations are doing, and how far these doings may now and hereafter affect our trade; and also what steps are best calculated to develop our resources. I have also endeavored to indicate how the present cloud upon our industries might be presently made to give place to sunshine, and likewise how these islands can be efficiently protected at a small cost. I have done this in the hope that the examination of our present position may stir us all up to give a long pull, a strong pull, and a pull altogether, and thus unitedly lift the Colony out of the abyss into which she has been so long sinking.

Trusting that you will cordially join in urging upon our rulers the pressing necessity for the fullest inquiry into the causes of our depression and the best means of removing it, I beg to thank you all for so kindly listening to my paper.

Mr G. P. Farquhar said that he was sure that the lecture they had listened to, whether regarded from a Freetrade or Protection point of view, had been a very interesting one. He had much pleasure in moving a hearty vote of thanks to Admiral Scott for his paper.

The motion was carried by acclamation, and the meeting dispersed after the customary compliment had been passed to the chair.

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Printed at the Evening Star Office, Bond Street, Dunedin.