FREE-TRADE v. PROTECTION: A SUGGESTED COMPARISON. [To THE EDITOR OF

TEE 4. SPEDTATOR.1 SIR,—When we wish to ascertain the effects of different modes

of treatment on similar bodies, it is an essential condition that the experiments, in order to be of value, be carried out under similar conditions, and that the bodies experimented on be alike. Similarly, if we desire to arrive at a scientific conclu- sion as to the relative merits of Free-trade and Protection as applied to different nations, it is essential that the conditions of the nations experimented on be identical, physically and politically. If a Protectionist will not admit that a com- parison between England as it now is and as it was under Protection proves anything in favour of Free-trade, because, as he alleges, the conditions are so dissimilar, so, in like manner, can a Free-trader demur to any inferences being drawn from the prosperity of the United States in favour of Protection. The Protectionist asserts that England owes its prosperity, not to Free-trade, but to the development of its industries through steam and electricity, &c. ; the Free-trader maintains that the real cause of the progress of the United States is the possession of great natural resources whose full development is as yet far distant. It is therefore evident that if accurate conclusions are to be drawn as to the relative merits of Free-trade and Protection as exemplified in different nations, we must look for two countries as alike as possible in every respect, and only differing in that one is Free-trading and the other Protectionist. If, then, after a term of years, during which both of such countries had persisted in their distinctive policies, we found any marked difference in their relative progress and prosperity, it would not be illogical to look on this as the effect and on the respective fiscal policy as the cause.

The conditions for such a comparison are found in Victoria and New South Wales. These countries are both new, both rich in natural resources and peopled by men of the same race, language, and political traditions ; capital and labour circulate freely from one to the other; the system of government is the same, and if in territory New South Wales is larger, Victoria enjoys a better climate and more extended means of com- munication. If there be any superiority as regards natural advantages, it is in favour of Victoria, whose fertile and well- watered soil gained for it the name of "Australia Felix." Up to the federation of the Commonwealth (January 1st, 1901) the essential difference between the two Colonies was, that whereas since 1866 Victoria had lived under a Protec- tionist regime, year by year more accentuated, New South Wales had continued faithful to Free-trade.

Now, according to Protectionist theories, Victoria in this interval ought to have made more progress than New South Wales. Let us examine the facts. In 1866 Victoria was ahead of New South Wales in population, revenue, imports and exports, and only in tonnage cleared was it a little behind. In 1900, although both had made notable progress, that of New South Wales was so much greater that it not only passed Victoria in each particular, but passed it by large amounts, as can be seen from the following figures, which comprise a period of thirty-four years :—

Victoria.

New South Wales.

( 1866

636,982 431,412

Population

• 1901

1,200,914 1,359,943 ( 1866 • • • £3,079,160 .€2,012,079

Revenue...

1900

7,460,855 10,794,233 ( 1866 • • • .e14,771,000 .Z9,403,000

Imports ...

1900

• • • 18,301,811 27,561,071 ( 1866

... £12,889,000 £9,913,000 Exports ...

1900

... 17,422,552 28,164,516 Tonnage (

1866

1,325,720 tons 1,514,735 tons cleared 1900 • ... 5,873,581 „ ... 8,014,889 „ The population in the respective capitals increased as follows :—

Melbourne. Sydney.

1885... 325,000 with suburbs ... 267,194 with suburbs

1901... 493,956 „ „ ... 488,382

SO that Melbourne, which in 1885 had 57,806 more inhabitants than Sydney, in 1901 exceeded the latter by only 5,574; and this in spite of the impulse which "protection to native industries" gives to the growth of urban population. The number of factories was as follows :—

Victoria.

New South Wales.

1866... 983 Insignificant. No data.

1889...

3,137 with 59,169 workers ...

2,926 with 46,135 workers 1900... 3,097 „ 64,207 „ ... 3,077 „ 60,779 „ So that even here Protection has not assured to Victoria the hoped-for pre-eminence ! It is also very significant that wages were higher in the Free-trade Colony, whereas, accord- ing to the Protectionists, the contrary should be the case. The result of this has been that many Victorians left their own Colony for New South Wales, where they found their labour better rewarded, and the conditions of living more favourable. I could add many interesting facts, social and economic, to show how much more New South Wales had advanced under Free-trade than Victoria had under Protec- tion; but fearing to make this letter too long, must refer all who wish for further information to Wise's "Industrial Freedom," from which and from the statistical Blue-books the above figures are taken.—I am, Sir, Scc.,