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Page 4
And now is there nothing we can do to help forward this great object?
Is it really the case, as the Free Traders contend, that in order to
meet the advances of the other British States and to give, as the
saying is, Preference for Preference, we should be obliged to make
excessive sacrifices, and to place intolerable burdens on the people
of this country? I believe that this is an absolute delusion. I
believe that, if only we could shake off the fetters of a narrow and
pedantic theory, and freely reshape our own system of import duties on
principles of obvious common sense, we should be able at one and the
same time to promote trade within the Empire, to strengthen our hands
in commercial negotiations with foreign countries, and to render tardy
justice to our home industries.
The Free Trader goes on the principle of placing duties on a very few
articles only, articles, generally, of universal consumption, and of
making those duties very high ones. Moreover, with the exception of
alcohol, these articles are all things which we cannot produce
ourselves. I do not say that the system has not some merits. It is
easy to work, and the cost of collection is moderate. But it has also
great defects. The system is inelastic, for the duties being so few
and so heavy it is difficult to raise them in case of emergency
without checking consumption. Moreover, the burden of the duties
falls entirely on the people of this country, for the foreign
importer, except in the case of alcoholic liquors, has no home
producer to compete with, and so he simply adds the whole of the duty
to the price of the article. Last, but not least, the burden is
inequitably distributed. It would be infinitely fairer, as between
different classes of consumers, to put a moderate duty on a large
number of articles than to put an enormous duty on two or three. But
from that fairer and more reasonable system we are at present debarred
by our pedantic adhesion to the rule that no duty may be put on
imported articles unless an equivalent duty is put on articles of the
same kind produced at home. Why, you may well ask, should we be bound
by any such rule? I will tell you. It is because, unless we imposed
such an equivalent duty, we should be favouring the British producer,
and because under our present system every other consideration has got
to give way to this supreme law, the "categorical imperative" of the
Free Trader, that we must not do anything which could by any
possibility in the remotest degree benefit the British producer in
his competition with the foreigner in our home market. It is from the
obsession of this doctrine that the Tariff Reformer wishes to liberate
our fiscal policy. He approaches this question free from any doctrinal
prepossessions whatever. Granted that a certain number of millions
have to be raised by Customs duties, he sees before him some five to
six hundred millions of foreign imports on which to raise them, and so
his first and very natural reflection is, that by distributing duties
pretty equally over this vast mass of imported commodities he could
raise a very large revenue without greatly enhancing the price of
anything. Our present system throws away, so to speak, the advantage
of our vast and varied importation by electing to place the burden of
duties entirely on very few articles. As against this system the
Tariff Reformer favours the principle of a widespread tariff, of
making all foreign imports pay, but pay moderately, and he holds that
it is no more than justice to the British producer that all articles
brought to the British market should contribute to the cost of
keeping it up. It is no answer to say that it is the British consumer
who would pay the duty, for even if this were invariably true, which
it is not, it leaves unaffected the question of fair play between the
British producer and the foreign producer. The price of the home-made
article is enhanced by the taxes which fall upon the home makers, and
which are largely devoted to keeping up our great open market, but the
price of the foreign article is not so enhanced, though it has the
full benefit of the open market all the same. Moreover, the price of
the home-made article is also enhanced by the many restrictions which
we place, and rightly place, on home manufacture in the interests of
the workers--restrictions as to hours, methods of working, sanitary
conditions, and so forth--all excellent, all laudable, but expensive,
and from which the foreign maker is often absolutely, and always
comparatively, free. The Tariff Reformer is all for the open market,
but he is for fair play as between those who compete in it, and he
holds that even cheapness ought not to be sought at the expense of
unfairness to the British producer.
I say, then, that the Tariff Reformer starts with the idea of a
moderate all-round tariff. But he is not going to ride his principle
to death. He is essentially practical. There are some existing duties,
like those on alcoholic liquors, the high rate of which is justified
for other than fiscal reasons. He sees no reason to lower these
duties. On the other hand, there are some articles, such as raw
cotton, which compete with no British produce, and even a slight
enhancement of the price of which might materially injure our export
trade. The Tariff Reformer would place these on a free list, for he
feels that, however strong may be the argument for moderate all-round
duties as a guiding rule, it is necessary to admit exceptions even to
the best of rules, and it is part of his creed that we are bound to
study the actual effect of particular duties both upon ourselves and
upon others. No doubt that means hard work, an intimate acquaintance
with the details of our industry and trade, an eye upon the
proceedings of foreign countries. A modern tariff, if it is to be
really suitable to the requirements of the nation adopting it, must be
the work of experts. But is that any argument against it? Are we less
competent to make a thorough study of these questions than other
people, as for instance the Germans, or are we too lazy? Free Traders
make fun of a scientific tariff, but why should science be excluded
from the domain of fiscal policy, especially when the necessity of it
is so vigorously and so justly impressed upon us in every other field?
It is not only the War Office which has got to get rid of antiquated
prejudices and to open its eyes to what is going on in the world. Our
financial departments might reasonably be asked to do the same, and
they are quite equally capable, and I have no doubt equally willing,
to respond to such an appeal, instead of leaving the most thorough,
the most comprehensive, and the most valuable inquiry into the effects
of import duties, which has ever been made in this country, to a
private agency like the Tariff Commission.
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