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manifestations of the disease. In reality the loss to a state through actual dishonesty in the governing class is insignificant when compared to the more general and constant, though less obvious, action of the malady; which may be described as the exclusive attention, of each individual to his own profit, grasping all he cannot be prevented from taking, and paying only what the law compels. When such is the general condition of a society, can we wonder that the magistrate fails to administer justice amongst an unjust people ; that the politician aims no higher than his own and his friends' aggrandisement; that the capitalist grinds down his employees who in turn scamp their work; and that the soldier, furnished with power to defend his brother citizens against their enemies, and finding not brothers behind him but a struggling horde as ready to jostle him as one another, turns round and crushes all? And, seeing what the ultimate results of financial looseness are, can we attach too much importance to the discontinuance of a system under which it takes £112 to pay off each £100 of debt?

How closely the general condition of the people is bound up with the question of public finance can be judged by a comparison with any of the more civilised nations. It will be found that, due allowance being made for natural advantages, the higher the place a nation occupies in respect of general well-being the better are its finances administered ; that is to say, the closer it follows the principle of wasting nothing. It will further be found that the improvement or deterioration in financial policy is antecedent to or contemporary with the corresponding social change, but never subsequent. Italy and Germany form strikingly contrasted examples of the truth of this law. In the one case the people have been taxed to the last penny-nothing that could be squeezed out of the nation has been spared in the endeavour to maintain the dignity of a Great Power. And yet, unharmed by enemies, it has brought about its own collapse. On the other hand we have a people, spending only when convinced that a distinct advantage is to be gained, attaining the highest position as a military power and yearly becoming more formidable in their commercial rivalry with this country, and that despite their disadvantages in regard to mineral wealth, sea-board, and immunity from foreign menace. Could anything show more clearly than do these two examples the paramount necessity for good reason to be shown for every act of public expenditure, and how fraught with danger is the policy that attempts to

No. 33.-VOL. IX.

counterbalance such an omission by increasing the total outlay?

To recapitulate :-A sound system of finance connotes soundness in respect of every item of expense. For, if the strict rule is violated in respect of any one item, a like course will be pursued with any other so soon as expediency suggests it. Since it is natural to avoid unnecessary trouble, the standard of all transactions will be set by whatever approved example satisfies the fewest and most easily fulfilled conditions. The financial tone of the governing powers is consequently lowered ; and their laxity is multiplied throughout the whole range of administrative officials. The efficiency of the public service depends entirely upon the strength of the sentiment that urges towards a full return for value received. The same principle is the foundation of commercial morality, and, though the fact is somewhat disguised, is the guiding rule of all social intercourse. Consequently, the pernicious effects of the violation of this principle are not confined to the loss of a million or two annually through the operations of reducing the national debt and investing the money of the savings banks depositors.

One of the great impediments to progress in financial method is the impossibility of fully tracing the effects of error except in very rare and very gross cases. No matter how serious may be the blunders which a financier is driven to commit, there comes a time when his supporters are able to turn upon his critics and confidently demand to be shown the evils the latter have prophesied. Yet it will be seen from the above that incalculable mischief may have been done without its being possible to lay one's finger upon any particular result, whose direct connection with the original cause can be demonstrated. This is owing to the great complexity of social life and also because, in order to reach the worst effects, we must pierce the medium of a metaphysical stratum, in passing through which the causal line that we are following becomes blended with others and its individuality is lost. But on this very account its action becomes more widespread and irresistible. Bad finance is capable of making its influence felt in almost every phase of human life; whilst its agency is generally unrecognisable. This knowledge of its insidious character strengthens the already sufficient reasons for combating it on every occasion where its existence can be detected. But, when it can be shown that it is part of our permanent policy, in dealing with a considerable proportion of the money entrusted to Government, to disregard the first principles of sound finance; then, though it may appear to be sounding too alarmist a note to suggest the fate of Italy or Spain as likely to become our own, it must be admitted that we have no means of resisting pressure in that direction until we revert to the common-sense system of giving measure for measure.

DOUGAL RENTON

PROTECTIVE TARIFFS IN AUSTRALIA AND NEW

ZEALAND.

Of the seven colonies of Australasia all but one have customs tariffs of a more or less deliberately Protective character. The exception-New South Wales-is indeed the oldest, most populous, and most important of the seven. But complete Free Trade in New South Wales is a thing of yesterday, and is still opposed by a strong minority of her colonists. It is therefore within the mark to say that Protective tariffs have had for many years the support of a considerable majority throughout Australasia. This is the more noteworthy inasmuch as the duties, in so far as they have been Protectionist, have been mainly imposed to check the competition of England-a country against which the colonists have no national feeling of antagonism such as has helped to build up Protectionist tariffs in America and on the Continent. Moreover, the seven colonies only began to acquire self-government in the fifties, some years after the doctrine of Free Trade had been finally accepted in the mother country. Most of the colonists were themselves emigrants from the stronghold of Free Trade, and but few of them belonged to the landowning class or the Protectionist minority which lingered on in the United Kingdom. In their new home they remained readers of English literature and newspapers, and any economic doctrine they studied in this way was pretty sure to reflect the teachings of the Cobden school. Their almost universal drift into Protection in the face of the object lesson furnished by the amazing prosperity of England under Free Trade I may therefore deserve the term “ remarkable.”

Nothing is more common throughout Australasia than to meet men who frankly admit that they have changed their economic doctrines with their hemisphere. They were free-traders, they tell you, in England, and would be again ; but in Australasia they have become Protectionists. How and why have they become so ?

1 The course of agricultural depression in the United Kingdom has, however, been closely watched by the colonists, themselves mainly dependent on farming and grazing.

The natural industries of Australasia are, of course, the production of food and raw material, and to the English free-trader it seems logical that the colonists should devote their whole effort to producing these in the largest quantity, and as cheaply as possible, and should buy everything else, in the cheapest-i.e., in as far as manufactured articles go, in the English-market. A majority of the colonists have not hitherto accepted this doctrine. The principles which they have preferred to adopt are chiefly two:

(1) That a variety of interests is beneficial and necessary and cannot be obtained in a young country without State aid.

(2) That exchange of goods within a country is more profitable to that country—though not perhaps to the individual trader

-than exchange across the sea with foreign manufacturers or producers.

On the first point it is necessary to ask British readers to try and imagine what their point of view would be were England a vast sheep-walk and cattle-run sparsely dotted with small towns and with agriculture slowly making headway in certain limited plots here and there. A certain amount of mining and timbercutting would represent all the other industries. Further, they must imagine the products of the land exported across the ocean to America in American ships, which ships brought in return a quantity of American manufactured articles. They must picture nearly the whole of this import and export trade in the hands of Americans, who would also be the bankers, financiers and creditors of the country; who, as such, would levy exorbitant rates of interest, and whose imports would be retailed at prices very much higher than they, commanded in the country of their origin. Something like this was the condition of the average Australasian colony in the years when Protection began to grow up, and it was some such economic condition as this which bred a temper favourable to it. A decline in the value of a single staple export, wool, was enough to plunge Australasia into depression and ruin from end to end. If work slackened in the country, labourers could not turn to the towns, for there were

As one instance of this I may point out that New Zealand received less money or 91,000,000 pounds weight of exported wool in 1886, than for 59,000,000 in 1878.

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