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tariff protection. This was granted, and once the wall had begun to be built additional layers of bricks were added from time to time. As part of the general policy preference was given to native ships, bounties were revived, railway rates were modified in the interest of certain industries, and restrictions placed on alien immigration, especially of Asiatics.

Protection in Great Britain. The cry of the ruined agriculturists in Britain fell on deaf ears, for that country, relying chiefly on its industrial supremacy, was willing to sacrifice agriculture, if by so doing it could obtain cheap food for the urban masses. It was doubtful if British soil could provide enough food for the huge industrial population, and therefore British labour and capital seemed far better employed in industry and commerce than in struggling against bad weather growing an inadequate corn supply. Agriculture did not matter so long as industries and commerce flourished. But when in the eighties German and American manufactures began to compete with those of Britain, even in British markets, the claims cf protection received a little more attention. The long industrial depression of 1885-87 was attributed by some to foreign competition, and protection, dressed as a plea for "fair trade," for colonial preference, or for retaliation on those countries which had imposed a tariff on British goods, vas vigorously advocated for a time. But industry recovered, and protection went into recess, until the next depression. It was not until 1903 that the policy received any strong support from leading men. In that year Mr. Chamberlain revived the whole subject as the basis for industrial protection and imperial unity. His suggestions were eventually adopted by the Conservative Party, and thus were kept well in the public mind. The depression of 1908 enabled protectionists to declare that, given protection, ro such calamity would have occurred, but the existence of similar conditions in Germany and America, and the dawning of prosperity once more, pushed the agitation to the background. The great obstacle to the adoption of the Chamberlain policy was the difficulty of reconciling Imperial preference with the interests of Great Britain. The only imports from the dominions were foodstuffs and raw materials. But a duty placed on such goods when cbtained outside the Empire would raise the price of food to the industrial wage-earners, as well as the price of raw materials to manufacturers. Further, if dominion corn were allowed to come in free, the British farmer would be no better off than before. In 1913, after much internal wrangling, the protectionists had to declare that they wanted imperial preference without a tax on foodstuffs, a plan which would benefit neither the dominions nor the British farmer. The whole controversy was party-political, and was fought with extreme bitterness.

Recent Developments. Since 1900 the slower increase in the world's production of foodstuffs has taxed the productivity of the world heavily to meet the demand. America, whose exportable surplus once caused the big agricultural depression, soon required all her produce for her own population, and even began to import supplies. The new areas opened up after 1860 had almost reached the limit of their expansion on an extensive scale, and the problem confronting the world in 1914 was not so much how to keep out alien produce as to find some country with supplies to spare. Prices had gone up in consequence, and British farmers were once more able to make profits, even without the aid of a tariff. In Germany, the growth of the industrial population threatened to outstrip the native supply of food, and a big scarcity during 1912-13 caused the manufacturing classes to agitate for

2 reduction of the rates on imported food, in order to enable the nation to draw upon the supplies of other lands. This agitation, though frowned upon by the government, was making considerable headway, especially since at this time Germany was importing 15 per cent. of her food requirements. In America protection was waning; the arguments of Patten and Carey were disproved by the fact that higher wages were paid in unprotected industries than in protected ones. It was being generally felt that the tariff had outlived its usefulness, and was not benefiting anyone but the trusts, who behind its shelter were able to extract big prices from the consumer, while dumping their goods abroad at a lower rate. The return of President Wilson in 1912 was followed by a drastic downward revision of the tariff; food and certain kinds of machinery were placed on the free list, and the duties on manufactured goods were considerably reduced.

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Effect of the War. Then came the War, with its emphasis on national sentiment, its inflammation of hate, and its demand for national selfsufficiency. On both sides demands began to be made for an economic grouping of Powers which would injure enemy, trade during the years following the War. In Germany, Frederick Naumann's book, “Middle Europe, pleaded for a Central European economic union, with Germany, Austria-Hungary, Turkey, and Bulgaria working together to repair their shattered fortunes after the War. Whether the proposal ever received any official consideration is unknown, but the book helped in no small way to stir up opinion in Allied countries, and was partly responsible for the recommendations of the Paris Economic Conference, June, 1916. That conference passed many resolutions, mostly very general in character, which were to be suggested to the Allied governments as guiding principles for the period of transition after the War, and as proposals for the establishment of more permanent trade agreements which would secure inter-allied economie independence of enemy goods, favour inter-allied trade, and penalize that of enemy countries. Popular sentiment certainly seemed to favour the lengthy ostracism of German commerce, but American commercial interests refused to contemplate any such policy, and America's entry into the War made the Paris resolutions almost worthless. Still, the War saw many important changes in commercial policy. Great Britain and France in 1918 denounced all trade conventions or treaties containing any "most favoured nation'' clause; Britain adopted imperial preference to a limited extent, and endeavoured to return to the old colonial policy of preferential claim on colonial produce by imposing an export duty on palm kernels exported from her West African possessions to any non-British ports.

The position since the Armistice is too clouded to allow of brief description, but some features stand out. The loss of home territory, ships, and colonies may reduce Germany to a third-rate commercial power, though one cannot be ure. The method by which her reparation is to be paid is still unsettled, but any payment in goods may seriously affect the industries of the countries to which those goods go. The war-time cry for a boycott of German wares is no longer heard, and it was a French minister who in January, 1920, declared that "there was no reason why France should obtain from America or Great Britain at heavy prices (because of the adverse exchange) goods which could be procured from Germany under more favourable terms." Other factors which may influence future developments are: (1) The need to give some protection to the British farmer if he is to continue cultivation on the scale made necessary during the War; (2) the

need for a large revenue in order to pay interest on the national debts of the world, which may force governments to increase their tariffs; (3) the rise of Japan and America to great heights as exporting countries and the expansion of American shipping, which may cause a revival of navigation laws, and a struggle for control of undeveloped areas and supplies of raw material or fuel; (4) the establishment of the League of Nations, which may lead to the removal of international friction and the mellowing of national sentiments. (5) While the German reparation payments in kind may injure industries in countries receiving the indemnity, the war legacy of inter-Allied debts complicates the outlook for international trade. During the war Great Britain (and, in a less degree, France) lent money to her Allies, and all the European Allies borrowed heavily from the United States. Payment of interest or repayment of principal was waived until 1922. Unless these debts are cancelled the flood of goods sent by the debtor nations in payment of their obligations will have grave effects on American production and tariff policy.

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Books Recommended, As in previous chapter. Also, Ashley, W. J., "The Tariff Problem"; Ashley, P., "Modern Tariff History''; Naumann, F., Middle Europe'; Hobson, J. A., "The New Protectionism''; Gill, C., "National Power and Prosperity"; Keynes, J. M., "Economic Consequences of the Peace."

CHAPTER XI.

THE TARIFF HISTORY OF AUSTRALIA.

IN Australia, as elsewhere, the vexed question of the relative merits of free trade and protection excited popular and parliamentary opinion from the advent of self-government until protection emerged triumphant in the first decade of the present century. The tariff, whether based on the "infant industry" or the "standard of living' argument, has been supplemented in many ways, especially since 1900. Attempts have been made to check the "dumping" of foreign goods at such prices as would injure native indu3tries; the entry of cheap labour has been checked by restrictions on immigration; laws concerning shipping keep the interstate coastal trade in the hands of Australian companies; bounties have been offered in order to bring certain important industries into existence. In all these endeavours, Australia followed the example of other countries, but in one respect she tried to pioneer. The attempt to establish "New Protection" was a definite advance in tariff policy, for it tried to ensure that manufacturers did not use the protection given them to exploit either the workman or the consumer.

Early History. Until the coming of self-government in the fifties, the question of a protective tariff was never raised. Attention was centred almost solely on pastoral production. So long as Australia could pay for her manufactured articles by exporting wool, all seemed well, and as Great Britain had removed her duties on Australian wool a free-trade policy was accepted. Still revenue was wanted to meet the expenses of government, and so customs and port duties were levied. In 1791 Governor Phillip recommended a duty on all imported spirits, and many subsequent governors imposed heavy duties, port, tonnage, entry, clearance, light and other charges. In the customs rates preference was given to British or colonial imports. For instance, in 1836, foreign spirits entering Tasmania paid 12/- per gallon, while British gin paid only 9/-; "on all merchandise of foreign production or manufacture" a duty of 5 per cent. was charged, but British goods came in free. The rate was increased later to 15 per cent. But these duties were purely for revenue purposes; there was no idea of giving protection to Australian industries. There were really no industries to protect, except such as had grown up under the wing of the natural protection afforded by the cost of bringing heavy or perishable goods from Europe.

The granting of self-government was almost contemporaneous with the gold discoveries, and as Australia for a time concentrated on mining, and exported vast quantities of gold there was no desire for industrial expansion and little need for customs revenue. The miners' licences and the later tax on exported gold produced an adequate revenue. Many settlers had brought with them vivid recollection of the wretched conditions which had prevailed in England in the Corn Law days. The general policy, therefore, both in Victoria and New South Wales during the fifties was free trade. Should more revenue be needed, let the customs rates be raised on a few articles which were largely consumed, but were not necessaries of life-e.g., tobacco.

liquors, etc. But even such increases were regarded with suspicion, and were removed as quickly as possible. Imports paid for exports, and in return for the millions of ounces of gold sent overseas Australia drew in manufactured necessaries and luxuries of life.

The Coming of Protection in Victoria. The bright days of goldmining in Victoria came to an end about 1858. Rich yields near the surface were no longer found, and individual miners worked hard for scanty returns. Hence there was a big emigration from the diggings. What were the ex-miners to do? Go on the land? But most of them were miners or artisans by training, not farmers; and even had they wished to try farming the best lands were in the hands of squatters and speculators. Go into industries? But there were no manufactures existing, and the free-trade faith held by the legislature would prevent industries from coming into being. There seemed to be nothing for the men to do. Some could afford to go back to Europe; others emigrated to neighbouring States in search of work, and in 1859 45,000 people left Victoria. The remainder flocked to Melbourne and Geelong, and swelled the ranks of the unemployed there. These circumstances called for the opening of new avenues of employment in order to remove distress and find a use for the industrial talents of the population.

Other considerations contributed to create a feeling in favour of protection. The squatters and importers, who were strongly entrenched in the Legislative Council, were ardent free traders, almost anti-democrats, and opposed to any opening up of the land for settlement purposes. Hence popular opinion, expressed by the ex-miners, took the other side, and in supporting protection felt it was hitting the lords of the colony. Others supported protection because of anti-British or anti-imperial sentiments. Finally, the export duty of 2/6 per ounce on all gold exported had had to be paid by the miners, and as mining now provided a bare living for individual miners, or was in the hands of profit-seeking companies, both companies and miners combined to demand the abolition of an export duty which had to come out of their own pockets. This loss of revenue would have to be made up by fresh taxation, and a tariff seemed to be the best means of meeting the deficit.

David Syme. The above forces for a time found very little expression in the press, for the Victorian papers were strongly free trade. But with the appearance of David Syme on the journalistic stage protection found a powerful advocate. After experience on the diggings in California and Victoria, Syme purchased The Age in 1856, and from that day to his death in 1907 was one of the biggest forces moulding Australian public opinion. A man of unbending purpose and strong convictions, Syme, by dint of sheer persistent preaching, forced political opinion to accept his ideas, first in Victoria, and later in the Federal arena.

Syme watched with dismay the steady drift of population from his state, and determined that two remedies-drastic land laws and a tariffmust be applied. His protectionist views were part of his general abhorrence of laissez-faire. "I never could see any virtue in laissez-faire," he wrote. "To let things alone when they had gone wrong, to render no help when help was needed, is what no sane man would do with his private estate, and what no statesman would tolerate as a state policy. It is simply an excuse for incapacity or inertia in affairs of state. It is a policy of drift. It is jus' what the company promoter, the card-sharper, the wife-beater, and

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