65
482
PUBLIC RECORD OFFICE
Reference :-
CO.885/25
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
17203
SIB,
(No. 58.)
No. 17.
SIERRA LEONE.
THE GOVERNOR to THE SECRETARY OF STATE.
(Received 2nd April, 1917.)
[Answered by No. 24.]
Government House, Sierra Leone, 12th March, 1917.
I HAVE the honour to acknowledge the receipt of your despatch No. 44, of the 5th February,* regarding property in palm kernels and the existence of a combine to regulate their price in Sierra Leone.
2. The existence of a combine in Sierra Leone has never been admitted openly by the firms that compose it. In connexion with your despatch, two heads of firms were questioned as to the facts, and refused to give any information.
But in private life or in confidential conversation, members of the combine are less reticent; and I may mention that my private secretary (Mr. Stocks) travelled out with the representative of one of the firms in question, who made no secret of the existence and policy of the combine. The memorandum by the Comptroller of Customs (which is attached to this despatch) is based on information obtained at first hand under the seal of confidence as to its exact sources.
3. The terms of the question and answer in the House of Commons on the 31st October last were forwarded to me in your predecessor's despatch of the 7th Novembert as having reference to territories under my administration; and I inferred that the existence of the Sierra Leone combine had been made known to you.
4. I have never met a European or creole in this Colony who did not know that a combine was believed to exist or who disbelieved in its existence. The matter has been referred to repeatedly in the Press and in petitions addressed to me officially. In the Weekly News of the 3rd March, for instance, a letter asks the Government to do its duty and suppress this illegal form of business"; and a petition addressed to me last month by the (native) Traders' Association refers to the rigging of the local palm kernel and oil markets by the European buyers." As these complaints tend to foment bad feeling between Europeans and natives, and German competition" is good for the as they are used to support a theory that " African, I should consider the European firms guilty of a serious disservice to their country if they were in a position to deny the reports and did not do so.
5. On my visit to Bonthe a deputation of traders representing "combine firms waited on me, unsolicited, to explain the difference in price between Bonthe and Freetown kernels. Explanations of this sort would be unnecessary if prices were regulated by the ordinary considerations of supply and demand.
6. The firms that are understood to make up the combine are (1) the Société Commerciale de l'Occident de l'Afrique; (2) the Compagnie Française de l'Afrique Occidentale; (3) the African Association; (4) Paterson, Zochonis, & Company: (5) Peter Ratcliffe & Company; and (6) G. B. Ollivant & Company. These are six of the eight most powerful local houses. The other two are the Co-operative Wholesale Society (which is opposed to combines on principle) and the firm of Pickering and Berthoud, which has no branches in the Protectorate.
7. The smaller firms stand outside the combine. Some explanations suggest themselves; but I have no actual evidence of the reason for their abstention.
8. It is this opposition by other firms which makes the combine less effective in Sierra Leone than in Lagos. But, apart from this fact, an explanation of the lower prices offered to natives in Lagos may be sought in the difference in freights. The Elder Dempster rates are only 40s. from Lagos, as against 30s. from Sierra Leone: but reference to my despatch No. 526, of the 30th December, will show that the price of kernels is affected largely by lack of tonnage and the use of chartered steamers. The increased time taken up by a voyage to Lagos would mean very high "chartered" rates from that port. I have, however, no actual Lagos figures for chartered boats,
* No. 7.
+ Not printed.
↑ No. 4.
41
9. The question in the second paragraph of your despatch is, I venture to think; the result of a misunderstanding of my meaning. Palm kernels are not cultivated; they are forest products growing on unalienated lands. They are not the the State" is to be property of individuals. I do not suggest for a moment that identified with the British Government. My legal advisers are at variance on certain issues, and I used the expression State" because of its indefiniteness. But whether one regards forest products as the property of the chief or of the community or of the Government, the fact remains that the Government, in the It has for- interests of the community, does control their sale when necessary. bidden the collection of gum copal and all dealings in ivory tusks of less than a certain weight; and, while the rights of natives have to be respected, the chiefs and their people would be the first to support any steps that the Government may think fit to take to prevent their exploitation by means of combines.
I have, &c.,
R. J. WILKINSON,
Enclosure in No. 17.
Governor.
THE HONOURABLE THE COMPTROLLER OF CUSTOMS to THE HONOURABLE THE COLONIAL SECRETARY.
THERE is undoubtedly a system in operation among a group of produce exporters in Freetown, Sherbro, and the Protectorate, its objects being to regulate the local prices of kernels. Fortunately, however, for the native producer, there are other buyers of kernels who act independently and are prepared to purchase at rates above those fixed by the group if it suits their convenience so to do. this way competition enters into the kernel trade, and the aim of the group to regulate prices to their advantage is sometimes frustrated.
In
""
Or
2. Those exporters who have banded themselves together in common interest combine," which is object to the use, in reference to their body, of the term
"trust generally accepted as implying some combination of the nature of a
ring." At their inception they adopted the title Produce Committee."
3. The committee was formed for the purpose of securing for each of its members a fair share of the produce-palm kernels, palm oil, and ginger-brought to market, and to do away with the business necessity of the merchants meta- phorically "cutting each other's throats." Its executive consists of the principals in Europe of the firms represented locally. From the prices ruling in the European markets they estimate what may reasonably be paid for produce in the Colony, and cable instructions accordingly to the local body.
4. The Freetown price being fixed, that for produce purchased in the Pro- tectorate is easily adjusted by deducting the expense of railway freight and a small sum-now 5s. per ton-as allowance for shrinkage.
5. The purchases of the members of the committee are pooled and shared amongst them agreeably to a scale of percentages decided by an average of ship ments made by each member firm during a definite period preceding the date of formation of the committee. Exact information as to the term of the period is not available. Thus, A may be entitled to twenty-five per cent., B to fifteen per cent.; if A buys twenty-eight per cent. and B twenty-five per cent. they turn over the excess, three per cent. and ten per cent., at cost price, to the others who have not purchased so freely.
6. Shipments are regulated by agreement. Certain tonnage space is allotted to the committee as a group, and they arrange amongst themselves as to apportionment.
7. Local competition does not materially affect the prices fixed from time to time by the committee, although it is by no means a negligible quantity. It is known that four firms, now of considerable importance as shippers, act individually. It is a fact, however, that prior to the establishment of the committee, these firms were not prominent as produce exporters. Not being able to show shipments in the stated period sufficient to qualify them for membership of the group they were not admitted. It is possible that at some future time they may amalgamate with the others. They may, as is said by some, have been induced to embark in the business or deal more largely by the anticipation of the committee working on a broad margin of price and thus paving the way to large profits easily made.