LETTERS TO OVERSEAS READERS.
Page 22
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No. 12. —Imperial Preference and Prohibitions.
THE ACTION which has recently been taken by the Australian Government with a view to the protection and strengthening of the new industries which are now springing up in the Common-wealth, opens up a very important question of principle. The policy of the Australian Government is based upon the theory that, when new industries are in the course of development, the home markets should, so far as possible, be exclusively reserved for their products. Thus, it has been decided to prohibit the importation into the Commonwealth of running boards on chassis and of accumulators such as are used. for lighting, ignition and starting purposes on motor vehicles. The importation of motor bodies is also limited in the interests of body builders in the Commonwealth, and there is, at least, some talk of prohibiting the importation of carburetters.
Presumably, these prohibitions will not apply when the articles or parts in question are 'brought in merely as parts of complete vehicles. It is clear that the principle, if applied rigidly in all other cases, would prevent, for example, the British 'motor manufacturer from maintaining, in Australia, stochs of all the spare parts and replacements which might be required from time to time and from stocking, in each case, the actual make which he has found best upon his own vehicle.
Of course, if the standard of quality attained by the new Australian industries is equal to the best that can be offered by any established concern elsewhere, the performances of vehicles in use in' Australia will not deteriorate as a -consequence of the use of Australian accessories or parts. If, on the other hand, as often happens, the products of the new industries, scrupulously protected from competition, are not in the first instance up to the highest standard, then the Australian motor owner would 'have to put up with somewhat inferior service and the effect would be a sort of levelling down process.
Why the Better-class Product Would Suffer.
The whole thing would react to the detriment of the people who are trying to send to Australia vehicles every part of which is of the highest possible quality. By comparison' it would react to the advantage of those who are sending stuff of an inferior quality. Suppose, for instance, that certain British vehicles are fitted with starting, lighting and ignition sets of proved merit, in which are incorporated bat teries, tither specially made by the makers of the sets, or specially selected by them as being hest suited to their purpose. Now, suppose these batteries to be replaced by something inferior. The set, as a whole, subsequently fails to give satisfaction, and very likely performs no better than a much cheaper set of much lower quality imported from else
where. .
' The strength of a chain is the strength of its weakest link. If the weak link is there, there is very little advantage resulting from the fact that all the other links are strong. The load borne is no greater than it would be if all the links were equally weak. Thus, ea it is clear that this process of protecting new and somewhat inexperienced industries from competition by meansof prohibition of imports is much moredetrimental to those whose imports are of high quality than to those whose imports appeal mainly on the grounds of low price.
In other words,. putting the thing in plain English, the policy, though not aimed against Great Britain, is calculated to have the effect of comparatively encouraging American as against British imports into Australia.
Complete prohibition applied in any one section' of the Empire is, of course, entirely opposed to the principles of Imperial preference now, at least in theory, recognized as sound. In. prohibition there is no room for preference. All are treated alike, be-. cause prohibition is, in fact, an infinitely great import duty. The principle .of Imperial preference could be maintained if, instead of prohibition, "a, very heavy import duty were levied, a, proportion of this duty being remitted in the case of goods being manufactured in other parts of the Empire.
The existing prohibitions in Australia may, in themselves, be a small matter, and should possibly be regarded Phi* as a political move at the time of an election. Once the principle is established, however, it is capable of infinite extension. Other parts of the Empire and other countries may, in the course of time, be compelled to follow suit in the interests of their, own industries. Thus, in the long run, we should get a very undesirable state of affairs. The motor user in any one part of the Empire would be obliged to employ vehicles of local manufacture; even though these were known by him to be of inferior quality. The economy of transpOrt in each country would suffer from comparative lack of incentive towards improvement due to absence of competition. The industry of one country, very enterprising and capable, would be prevented from growing beyond the limits set upon it by the demand to be developed in that country alone. The Australian manufacturer would supp137 only in Australia—the British manufacturer only within Great Britain—and so on. In the event of co-ordinated effort becoming again necessary, as it was during the great war, we should. start -with the disadvantages of being industrially divided into many watertight departments. There would be uo interchangeability between the military transport organizations of the various parts of the Empire Look at the principle from a purely selfish standpoint. It must then be recognized that it cuts both ways. Any country which protects its own industries by prohibiting imports from all other countries must expect, in time, to. be similarly treated by ethers. The principle is, in fact, u.n absohite negation of the Imperiaridea. It assumes that each self-governing portion of the Empire must exist absolutely independently of the Empire as a whole, owing no obligations to the other parts and, therefore, entitled to expect nothing from them. One can see that the idea may be useful for electioneering purposes, but it is, surely, necessary to consider the ultimate consequences and dangers likely to follow upon its adoption.