4644
PUBLIC RECORD OFFICE
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Reference :-
mimic.o.
885/25
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
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Part B is concerned with transitory measures to be adopted during the period of commercial reconstruction. With this we are to some extent concerned, as regards certain particular measures and proposals which I will deal with later-but whatever views the Council may hold on those particular proposals they need not affect our adherence to the general lines of policy. Part C is by far the most important one, since it deals with the permanent measures to be adopted after the
It profoundly affects the economic policy of the Empire.
War.
The lines of policy laid down in these recommendations have been accepted by His Majesty's Government and by our Allies, and the motion I have submited is that this Council heartily agrees with that policy.
The late Prime Minister summed up the main issues which emerge fro. the recommendations in the form of four questions, which he addressed to the Com- mittee appointed by him. You will observe that the circular particularly asks for the views of this Government on these questions, and I propose therefore to confine my observations to them.
The first question is: "What industries are essential to the future safety of the nation; and what steps should be taken to maintain and establish them?" Bearing in mind the limitation to the special circumstances of Nigeria, we may consider which are the chief exports of this country which contribute to the safety of the nation, and in what way they can be best developed to the general benefit of the Empire; and, secondly, what is the nature of our imports, and are they susceptible of any change which would benefit the Empire and ourselves.
To take the exports first. The War has shown that there are three articles which are so essential to the prosecution of war that they have been made con- traband. They are oil, and oil-producing seeds and nuts; hides and skins for leather; and cotton. These three between them account for about seventy-five per cent. of the total value of our exports. What, then, are the steps which should be taken to maintain the output of these staples, and to establish the industries We export connected with them in the Empire or the territories of the Allies? much palm oil, and many oil-producing nuts and seeds, such as palm kernels, ground-nuts, shea nuts, beniseed, etc. With regard to one of these nuts only has it been considered necessary to take any special steps, in consequence of the War, viz., palm kernels. The output of the British West African Colonies is approximately one-quarter million tons per annum, and almost the whole before the War went to Hamburg. The late Secretary of State appointed a Committee to consider, in accordance with the proposals of the Conference, how this trade The Committee recommended might be diverted from enemy countries to our own.
that an export duty of £2 a ton (and more if necessary) should be imposed on kernels at the port of export, but that a refund should be made on production of a crusher's certificate in England or elsewhere in the Empire. The proposal has not yet become law, and every opportunity will be given to the legislatures con- cerned to discuss it, but as the proposal is very pertinent to the subject we are discussing I will briefly put before you the salient points.
Mills for crushing kernels did not exist in the United Kingdom to an extent in any way sufficient to cope with this output. They had been erected in Germany, Crushers in which also secured great benefit from her inland water-ways. England were ready at once to erect mills, but they feared that at the end of the War, when the mills had been barely completed. Germany, whose mills would be lying idle, would offer prices so high that the mills could only be run at a heavy loss a loss which Germany would be willing to incur in order to recapture the trade. They asked for some temporary protection until the trade had become established in the United Kingdom. This temporary protection should, it was proposed, take the form of the export duty I have described. The merchant who ships kernels from Nigeria to any place within the Empire will be able to recover the whole of the duty-in fact it was not proposed to actually levy it provided he produced a crusher's certificate within a reasonable time. It would be a mere book transaction, which it was anticipated would not affect the market price to any appreciable extent. And above all it must be borne in mind that it was merely a war measure to last only for a few years after the War ceased.
It has been suggested that this arrangement would reduce the price paid to the native producer. In my opinion, it should have no appreciable effect on the local price. That price, be it large or small, is dependent on competition, and competi- tion would not be decreased to any appreciable extent by this proposal, since German competition must in any case be eliminated. Germany, however, will still desire
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to purchase the oil from British crushers just as before the War we purchased the oil from German orushers. There will still be practically the same, and (with the use of kernel oil for margarine) an increasing demand, and with it, as I hope, a healthy competition by which the native producer will benefit.
You will observe that the duty is enforceable unless the kernels are crushed in the Empire, and, in view of the recommendations of the Conference, you may ask why Allied markets were excluded. That is a question which may well be considered when the legislation takes form. As a practical matter I believe that there is no market for palm kernels in any Allied country, and it is possible that no objection would be taken to their inclusion. Even in the United States of America I understand that there is no market for kernels though a large demand for the oil.
But even if I am mistaken, and a contraction of the market, or a combination of crushers or any other combination, should result in a decrease in the local price, the duty can at any moment be abolished by the light of such experience. And were The it thus misused I should myself be the first to press for its withdrawal. experiment is admittedly a temporary war measure intended to assist the merchants and crushers of the Empire to divert to home industries a particular product of British Colonies so as to win back a trade which we ought never to have allowed Germany to monopolize a trade which is an essential safeguard in time of war when the oil, or, rather, its glycerine contents, are required for the manufacture of explosives. It is in accordance with the terms of the Paris recommendations which pledge the Allies to take steps to render themselves independent of the enemy countries for such commodities. Even were some inconvenience or even hardship involved during the few years that the duty will remain, is it unreasonable to ask the Colonies to accept the risk? They claim to be full of loyalty to the Empire, and they have suffered but little comparatively from the War.
In regard to cotton, I feel sure that this Council will unanimously agree that the efforts of the British Cotton Growing Association to promote cotton growing within the Empire are worthy of all support, both by the Home Govern- ment and by the Government of Nigeria, which has never failed, and will not fail, to co-operate in every way with the work of the society.
On this branch of the subject, viz., the raw materials exported from Nigeria, I invite the Council to consider whether we shall record our cordial concurrence with the measures already proposed by the Home Government.
The other branch of this subject refers to imports. Are our imports, for the most part, of a nature to promote the commerce and industry of Great Britain and her Allies? Is there any direction in which we can better assist (in the terms of question 3) in "developing the resources of the Empire"?
In 1913 (the year before the War) the value of our commercial imports (exclusive of Government material and specie) stood at £5.246,000, of which £456,000 was accounted for by trade spirits, viz., nearly nine per cent. If we add the duty levied on imports, viz., the purchasing power of the goods, apart from transport charges and profit, spirits would form about thirty per cent. of the value of all imports. The revenue derived from spirits in that year was £1,140,000 and from all other imports combined it was only £585,000.
These spirits are partly produced in Germany and partly in Holland (largely, I believe, from material imported from Germany). None of it is produced in the Empire or the countries of our Allies. I invite this Council to record its judgment that it would be to the great benefit of the industries of the Empire" if this import were replaced by others which emanate from our own country or those of our Allies. I will go further and add-though I am no extremist in this matter --that it would also be to the benefit of Nigeria if these foreign imports of spirits were replaced by articles of more value to the people of this country-articles more calculated to raise their standard of life and comfort and to increase the output of the industries from which they derive their wealth. Agricultural and industrial implements and tools, textiles, articles of household use, carts, motor- vans, bicycles, even salt and such-like necessaries.
But since it is in conjunction with our Allies that we propose to take these steps "to develop our economic position and independence in relation to enemy countries," we may reasonably ask them to co-operate with us in this reform, and to take such steps as may be feasible and judicious to suppress this foreign import.