of the tariff laws, point out where further protective assistance was needed, indicate any anomalies which might exist, and suggest how the cost of the necessaries of life might be reduced without injuring the tariff policy or the existing industries. Before examining the report of this commission, let us look at the various side-lines" and experiments of the period.

Sugar and White Labour. One of the first acts of the Federal Parliament was the abolition of kanaka labour from the Queensland sugar plantations. No more coloured labour could be introduced, and the existing supply was to be removed by 1907. A tariff of £6 per ton was imposed upon all imported sugar, but at the same time an excise duty of £3 per ton was levied on the local product. In order, however, to encourage growers to get rid quickly of their coloured employees, a rebate of £2 was allowed on sugar produced by white labour only. This rebate was altered in 1903 into a bounty, which was to expire in 1907. In 1905 it was extended until 1912, and whilst the excise duty was increased to £4 the bonus on sugar produced by white labour was raised to £3. In return for this concession and large measure of protection, the sugar grower was required to prove that he was paying the standard rate of wages prevailing in the district. If he fulfilled these conditions the net protection given him amounted to £5 per ton. In 1912 both excise and bounty were abolished, conditionally upon the Queensland government approving of legislation which prohibited the employment of coloured labour in the industry. Under the influence of this legislation the sugar plantations have been almost cleared of coloured labour; in 1902, 68 per cent. of the sugar produced in Australia was the work of coloured labour; in 1911, only 6 per cent. In spite of the large measure of protection the progress of the industry has been very fitful. The acreage under sugar-cane between 1901 and 1919 increased only 31 per cent.; the yield of cane increased, but with violent fluctuations. The net importation fell rapidly up to 1906, and in 1907 exports exceeded imports. Since that date on only one occasion has the country been able to do without foreign supplies. The whole industry is subject to great fluctuations, due to climate, labour conditions, the policy of the refining company which monopolizes the industry, and the vacillating conduct of governments.

Bounties. Bounties were urged as an alternative to the tariff from the first days of the Federal Parliament. The idea underlying the bounty is that instead of raising the cost of imported goods by a customs duty, thosc goods shall be allowed to enter free. This would mean that they might sell at say £6 per unit. But the local manufacturer cannot sell his wares at less than £6 10/- if he is to pay his way and make a profit. Therefore let him sell at £6, like his foreign competitors, and let the state give him the additional 10/- as bonus or bounty. He benefits as much as he would by a 10/- duty, and the consumers get all the goods at £6 instead of all at £6 10/. True, the state thereby loses some of its customs revenue, but the amount is probably not large.

This plan was put forward by Kingston in 1901, and a big scheme of bounties promised. In 1902 a select committee was appointed to enquire into the question of giving bounties to foster the growth of the iron and steel industry. The whole unfortunate history of that industry was surveyed, and glowing pictures were painted by witnesses of the extent and quality of the ore deposits. On the casting vote of the chairman a majority report recommended a bonus on all iron and steel manufactured from Australian

ore, and on zinciferous ores treated locally. The minority, amongst

whom were Messrs. Hughes and Cook, opposed the proposal, because the bounty-receivers would soon demand a tariff as well, because the time was not yet ripe for such industries in Australia, and because while large sums "of the people's money' would be paid "to private individuals engaged in an industry for their private gain, there can be no guarantee that the bonuses proposed would permanently establish the industry, though it is probable the inducements offered might be instrumental in forming speculative companies.' In view of such a report no action was taken until 1906, when Lyne introduced and carried a Bounties Bill. Parliament in 1907 allotted £340,000, to be devoted during the next fifteen years to paying bonuses on the production of certain scheduled goods, including cotton, flax, hemp, rice, rubber, coffee, tobacco, preserved fish, dried fruits, and combed wool. No industry was to receive more than £10,000 a year in bonuses, and the money could be paid only on goods grown or produced by white labour. The Manufacturers' Encouragement Act of 1908 provided for a bounty of 12/- per ton on all pig-iron and steel made from Australian ore between 1908 and 1914, with a 10 per cent. bounty on iron or steel sheets, wire, netting, and tubes, subject to the payment of wages which were declared by the Arbitration Court to be fair and reasonable. Two years later the Shale Oil Bounties Act provided for the payment of a bonus of 2d. per gallon on all kerosene, and 2/6 per cwt. on all refined paraffin wax produced from Australian, shale oil during the next three years.

These bounties had little effect. That on tropical products failed to produce any considerable extension of such cultivation. In the year 1916-17 only £488 was paid on tobacco, £26 on fibres, flax, and hemp, and £2,060 to dried fruit producers. When the shale oil bounty expired in 1913 only about 120,000 gallons of kerosene were being produced yearly in the whole continent. A new bounty on crude shale oil was offered in 1917, and claimed on 6,000,000 gallons by 1920. The iron bounty, along with the higher tariff of 1908, caused some expansion in the treatment of Australian ore, though little was really achieved until the opening of the Newcastle steel works in 1915.

Imperial Preference. Preferential trade roused much discussion in the general election of 1903, when Mr. Chamberlain's campaign in England brought to light a body of supporters in Australia. Thanks to the biassed character of the cable service it was supposed that the tariff reform movement in England was carrying all before it, and that the election of 1906 would result in the return of a government pledged to a policy of imperial preference. The crushing defeat of the British imperialists failed to quench the zeal for preference, and in 1906 reciprocal arrangements were made with South Africa, by which each country gave the other preferential rates on certain scheduled imports. It is doubtful whether this arrangement has had any effect on the trade of either country. An attempt to arrange reciprocal preference with New Zealand collapsed with the death of Mr. Seddon, for the fruit-growers, farmers, and millers of that country were opposed to any concessions being given to a rival which produced the same things as they did.

Meanwhile the possibility of granting some preference to British goods was discussed throughout 1906. The arguments for the proposal generally contained the phrase "blood is thicker than water,' " and the assertion that Australia was only following the example set by Canada, New Zealand, and South Africa. But the protectionist could not afford to allow any reduction

of the existing tariff in favour of England, for England after all was still the chief exporter against whose goods protection had to be given to the local man. If she was to have preference, it could only be by raising the duties on goods from elsewhere-an excellent thing from the protectionist's point of view, for he could thus advance his cause under the guise of imperial brotherhood.

Then came the Imperial Conference of 1907, to which Mr. Deakin took the proposal that all-round preference should be established, each dominion giving concessions to British and dominion goods, and Britain granting "preferential treatment to the products and manufactures of the colonies.'' But the British ministers, returned on a strong free trade platform, gave the proposal a very cold reception, and Mr. Deakin returned disappointed at the blind obstinacy of Downing Street. He began the task of overhauling the 1902 tariff, and the revised rates were nearly all accompanied by a grant of preference to British goods. But the grant was of mixed value to the British manufacturer, for the old rate was first doubled and then a concession of about 5 per cent. made on nearly 300 items. On the old schedule, the rate might be 12 per cent. all round; on the new it was 25 per cent for non-British and 20 per cent. for British. Up to 1914 this preference affected about 60 per cent. of the goods imported from the United Kingdom; tariff revisions of 1914 and 1920 extended the preference to much of the other 40 per cent.

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Dumping and Trust-Breaking. The busy parliament of 1906 attempted to deal with two dangers which might confront the country. The first was dumping.' It was feared that some overseas producers might be willing to sell their goods at a very low cost in Australia in order to kill infant industries or prevent new ones from being born. The steel, tobacco, and oil trusts of America were especially feared, and "dumping" by them or anyone else must be prevented. The Australian Industries Preservation Act (1906) therefore decreed that if the Controller-General of Customs had reason to believe that any person was sending any goods to Australia with intent to destroy or injure a local industry by selling them "in unfair competition with Australian goods," he could refer the matter to a judge of the High Court; if that judge, guided by good conscience and the merits of the case, without regard to legal forms and technicalities, confirmed the suspicions of the Controller-General, the goods might be forbidden entry. "Unfair competition was defined in six sub-sections of the act, but still it would be difficult to prove that an importer was acting "with intent to destroy or injure," and this part of the act has therefore never been brought into operation.

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The second danger was that behind the tariff wall local trusts or branches of foreign trusts might spring up and exploit the consumer. The same act therefore copied large slices out of the American Sherman Act of 1890. It declared that any person or company, whether acting as principal or agent, that entered into any contract to restrain trade or commerce or to destroy or injure by means of unfair competition any desirable local industry, was liable to a penalty of £500. Any monopoly built up with "intent to control," to the detriment of the public, the supply or price of any service or commodity, was liable to the same penalty. Two cases were soon brought before the High Court, but both failed, and the Court pointed out that some of the clauses were ultra vires. It was almost impossible to prove "'intent'' "' to injure, control, or destroy; the act was so amended in

1908 as to lay the onus of proving innocence upon the accused; in 1910 a further amendment eliminated the necessity of proving that the accused was actuated by any harmful "intent." But the act has been a dead letter, and meanwhile local and overseas trusts or honourable understandings have effectively secured "control" over nearly every branch of production and sale.

"" "New Protection.' When Syme advocated protection in the sixties and seventies he stressed the argument that a high tariff would ensure steady employment and good wages. But a simple customs tariff, while protecting the local manufacturer, leaves untouched the treatment meted out to the employee and the consumer. The result may be the growth of industries which, especially if they become trustified, may give low wages to their workmen and extort high prices from the purchaser. It was seen, therefore, that a new form of protection was needed-one which would guarantee the Australian market to the local producer, good wages and industrial conditions to the worker, and a reasonable price to the consumer. An attempt was made in 1906 to turn this ideal into reality. The issue arose out of allegations that an American trust was dumping agricultural machinery into Australia, with intent to crush H. V. McKay's industry. The Industries Preservation Act was designed to check this, but parliament went further. It raised the customs duty on stripper-harvesters to £12, and on drills and other appliances to 20 or 25 per cent. At the same time the price of Australian machines was fixed, and the act declared that if this price were exceeded the government should have the right to reduce the import duty by one-half. This was to protect the consumer against the local manufacturer. The workman was to be protected in another way. An excise duty, amounting to half the customs rates, was imposed on all locally-produced implements, but manufacturers could be excused from paying this excise if the conditions for labour in their factories were (a) declared by Parliament to be fair and reasonable, (b) in accord with an award of the Federal Arbitration Court, (c) in keeping with an industrial agreement filed with that Court, or (d) declared by the President of the Court to be "fair and reasonable." Conditional protection was the aim, and this implied the right of the federal government not merely to give uniform protection throughout the continent, but also to impose uniform minimum conditions of employment. Mr. Deakin declared that unless the two things went together "the policy of protection must remain incomplete."

This interesting piece of legislation was soon put to the test, and broke down completely. Manufacturers welcomed the increased protection, but only one firm sold its wares at the price fixed, and all firms compensated themselves for reduced prices by charging from 15 to 25 per cent. interest on instalment purchases. The schedule of prices fixed by parliament was useless, since it made no allowance for differing weights of machines, for an increase in price if the cost of production went up, or for harvesters over 6 ft. in width. The wages provision was no less futile. In Adelaide a conference of employers and workmen agreed upon a "'fair and reasonable" scale of wages, and in New South Wales many firms received exemption from the excise. But other manufacturers willingly paid the excise rather than pay better wages, and one man reduced wages by 10 per cent. in order to be able to pay the duty. In Victoria McKay applied to the Arbitration Court for exemption from excise. Mr. Justice Higgins

dismissed the application on the ground that McKay was not paying fair and reasonable wages. A minimum of 7/- a day for unskilled labourers was laid down by the judge. McKay refused to alter his wage-list, and took the matter to the High Court. Here the Excise Act was declared unconstitutional, in that it attempted to regulate the internal trade and industry of the states, and contained provisions dealing with other matters than the imposition of taxation. At once a storm broke out, for the Labour Party had given its support to New Protection, only to find the word "New" crossed out. The only way out was either to amend the constitution in order to give the Federal Parliament wider powers, or to get a uniform standard of industrial regulation in all the states. Neither of these things has yet been secured, but fair and reasonable' wages regulation has advanced considerably since 1907.

The 1908 Tariff at Work. In 1913 the Interstate Commission commenced its enquiry into the workings and results of the 1908 tariff, and from its report we get a picture of the progress achieved between 1908 and 1913. During that time the number of factories had increased by 2,683, i.c., 21 per cent.; the employees had grown in number nearly 80,000, i.e., 32 per cent.; the value of plant and machinery had increased £11,000,000, i.e., 43 per cent.; payments for wages, raw material, light, and fuel had expanded £50,000,000, i.e., 60 per cent.; while the value of the product had grown £62,000,000, i.e., 62 per cent. The period was one of abundant primary production and of rising prices, and hence the money figures exaggerate the amount of actual expansion. Yet the rate of increase in the value of plant and machinery and in the number of persons employed is scarcely any greater than during the period of low tariff, 1903-8. To what extent Australian production ousted foreign goods during the period it is difficult to say. While the value of the product of local factories grew 62 per cent., that of dutiable imports (less the duty paid) grew 54 per cent., and free imports, which largely comprised things Australia cannot produce or raw materials, increased 71 per cent. It seems evident, however, that there had been a comparative decrease in the importation of goods carrying high duties, and that in these lines the proportion of imports to local manufactures was slowly declining. The chief expansion of manufacture was in metal and machine works and in factories turning out boots, cloth, and clothes; in these industries the number of workers grew 35,000 out of a total increase of nearly 80,000. By 1913 over 86 per cent. of the total boot and shoe demand was met by local factories; 84 per cent. of the leather, and 80 per cent. of the apparel used in the continent was produced here. The chief imports were still apparel, cloth, cotton pieces and goods, metal manufactured goods and machinery, which between them comprised nearly half the £80,000,000 of imports in 1913.

The tariff had been built up devoid of any general plan or formula. Generally speaking, it had been assumed that raw materials which could not, for a long time at any rate, be produced here, and manufactured goods which Australia could not hope to make for itself should be admitted free or at low rates. But in practice the "omnibus' character of the tariff created many contradictions and impeded the progress of many industries. The raw material of one industry is the finished product of another, and tariff encouragement given to both industries may fail to stimulate the growth of either. Hence certain desirable industries might have made greater progress had not their necessary raw material, semi-manufactured