Though the 1934 interdepartmental committee report had not been officially approved by the cabinet, the Colonial Office regarded it as an authoritative guide to policy. Governors were instructed to refer all proposals for industrial development to London before any changes to tariffs or excise duty were submitted to legislative councils, or any promises of financial or other assistance were made to the promoters of the project. Entrepreneurs also approached the Colonial Office directly with their own schemes for industrial development. Officials examined the proposal to see if it was economically sound. Normally the Board of Trade was consulted for advice as to whether British exports would be adversely affected. Expert advice was sometimes obtained from outside government. If the colony was receiving a grant from Britain to balance its budget, the views of the Treasury were sought. The general attitude of the Colonial Office was an exceedingly cautious one, but if the project appeared to be economically viable, officials did not feel justified in preventing its development.
When a proposal was rejected by the Colonial Office, a governor could still protest at the decision, arguing that the special circumstances of his colony should be taken into account. Governors often submitted counterproposals suggesting a lower protective tariff or a different mix of financial incentives to enable the project to go ahead. Governors were insistent on the need for industrial development, and the Colonial Office was always very reluctant to overrule a governor who persisted in pressing his views on what was in the best interests of his colony. In 1936, the colonial secretary wrote to the chancellor of the exchequer suggesting that the cabinet should reconsider the 1934 Report, so that when writing to governors, he could refer to the principles laid down in the report as having the authority of the whole government. The Federation of British Industries had also written to the Treasury complaining about competition from dominion and colonial manufacturers which enjoyed free entry into the British market. Treasury officials believed that the Colonial Office was too ready to sanction the establishment of industries in the colonies which might adversely affect British exports, ignoring the fact that Britain bore the whole cost and responsibility for the Royal Navy and colonial defence.68
A new committee was set up, which, unlike the 1933 committee, included representatives from the Treasury and the Bank of England. It met for the first time in February 1937. The committee tried to formulate general principles, but found that in every case they examined, special considerations could be adduced to justify the new industrial development. For example, a brewery in the Gold Coast which competed with imported British beer was defended by the governor as a means to turn the natives away from gin and neat drinks to (cheaper) beer; the capital investment of £250,000 would be