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PUBLIC RECORD OFFICE
Reference :--
CO.885/25
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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16. The second is (b) What steps should be taken to recover home and foreign trade lost during the war and to secure new markets.
If at the conclusion of the war we embark on a policy of exclusion of ex-enemy goods we shall, perhaps, suffer retaliation by the introduction of restriction on such of those raw products of this country, as, prior to the war, were shipped to Germany. This only, so far as this Colony is concerned, may be considered as "trade lost during the war." The solution of this question seems to depend upon whether the entry of our products into the affected countries is so restricted. As a producing country it is clearly to our disadvantage to limit our customers, and I do not think therefore that we should take the first step in such a direction. But, if the first move is against us, we may, as is suggested, be compelled to seek new markets. It has been shewn that none of the natural products of this Colony are peculiar to the locality or peculiar to British possessions, and artificial methods of creating a market are therefore outside the question. New markets can only be secured by meeting a demand with a suitable supply.
17. (c) To what extent and what means the resources of the Empire should, and can, be developed. It is not for a small Colony like this to say to what extent resources can be developed; but the best step toward improvement would appear to be, by the dissemination of knowledge of the products of a country by those in a position to distribute it; and as in other walks of life, by the exercise of intelligence in their labours on the part of those more immediately concerned with the profits accruing therefrom.
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18. The last question is (d) To what extent and by what means the sources of supply can be prevented from *Bources of falling under foreign control. Consideration on this point hangs on what may be described as supply" If such a trade as the timber trade of this Colony, which, prior to the war was almost entirely in the hands of German firms, who shipped to the United States, there being no demand, or likelihood of demand, in England for the class of timber exported, be classed as "a Source of Supply" there would not appear to be any gain from interference. If "Sources of Supply" connotes only articles essential to the sinews of war then I do not think that anything short of the nationalization of the industries concerned can fairly meet the case.
GENERAL.
19. The employment, after the cessation of hostilities, of restrictive measures against countries, with which we are now at war must be based on one of two assumptions. Either it is believed that the present war will conclude in a period of temporary armistice, not a peace, during which a system of aggravation is to be instituted calculated to precipitate the resumption of strife; or that our present enemies are de- pendent upon resources of so slender a character that they can be crushed out of existence or reduced to impotence by the machinery of trade. The first of these propositions I think involves political error and the second an economic fallacy. The first pre-supposes perpetual enmity between certain groups of nations; a condition which apart from other considerations is out of conformity with the experience of history. On the one hand it is not many years ago since a responsible British Statesman, who advocated an Anglo- German-Alliance, gave a warning to one of our present allies in no uncertain and well remembered language, and we have but small guarantees as to the kaleidoscopic action of political and military ambitions and aspirations. On the other hand Pitt's reply to Fox that "to suppose any nation can be unalterably the enemy of another is weak and childish " remains as true to-day as ever--Our alliances and our animosities are alike ephemeral.
20. As to the economic side of the question it seems as clear as noon-day that if the trade of any given country, or group of countries, can be fostered and improved by driving it back on restricted resources so too, can that of any other and only a viscious circle is created.
21. The articulate sections, that is the political sections, of commerce have shouted so loudly that many have come to believe that they represent the whole field of trade. But capital is no more the whole organism of trade than is labour, and, dependent as they are one on the other both are impotent and useless without the producer and the consumer. The whole system is interdependent and finely balanced and to legislate for the benefit of one component part is not to work for the benefit of the whole but for the disturbance of the equilibrium of the entire machine.
22. It does not require a strong bias in favour of Free Trade principles to perceive these things, and one may be prepared to admit that the policy of allowing economic questions to drift unguided and unrud- dered is unscientific and unwise. Nevertheless one may hold in the very strongest contempt the exploit- ation of natural sentiments and sentimentalities in the interest of private interests, and it is idle for thinking people to blind themselves to the fact that this spirit, with the unregulated passions and the ill-considered aspirations which war lets loose abroad, is working diligently for its own ends.
23. I consider therefore that the imposition of restrictive measures against any given countries is impolitic, impermanent and unsound.
F. C.
9th January, 1917.
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MINUTE BY THE TREASURER-(THE LATE MB. E. B. REECE).
The question as to the soundness or otherwise of the policy of imposing after the war restrictivè mes- sures against present enemy countries is to be considered by the Committee appointed by the Prime Minister. The recommendations of the Economic Conference of the Allies are embodied in the terms of reference to this Committee and, as I understand it, what this Government is invited to do is not generally to criticise the principle on which the reference to the Committee is based or even the recommendations of the Economic Conference, but to express an opinion on the Recommendations and questions submitted only so far as the circumstances of this Colony appears to call for special attention. in connection with them.
2. The recommendations of the Economic Conference of the Allies fall under three heads →→→
A. Measures for the war period.
B. Transitory measures for the period of Commercial, Industrial, Agricultural and Maritime Recon-
struction of the Allied Countries.
C. Permanent measures of Mutual Assistance and Collaboration among the Allies."
As to the first of these, the Assistant Comptroller of Customs reports that the measures recommended have already been carried out fully in this Colony.
As regards the second, the Gold Coast, as a Colony, is not affected.
As regards the third, the measures recommended by the Economic Conference apply, as Mr. Mitchell points out, only to a limited extent in the Gold Coast. In paragraph 9 of his memo he points out that before the war local Enemy firms were unable "to accomplish or even to influence any important economic purpose"; but he goes on to say that their associations had the effect of encouraging importations from Germany and Austria and he personally does not think they should be re-admitted into the Colony on open
terms.
3. Mr. Mitchell proposes to deal with enemy traders in one of two ways, (a) by imposing a special tax on them on the value of their turnover or (b) by prohibiting them from engaging in business for a term of years after the war.
It seems to me that either of these proposals would mean the insertion of a special clause in the ternis of peace, a condition that would, not unnaturally, be resisted to the bitter end by the Central Powers,
4. That this Colony is not an invaluable market for British and Allied Manufactured articles is, I think, well established by the figures given in Mr. Mitchell's memo. The measures to be taken for conserving or further developing this market must, however, be taken by the British and Allied Governments. Obviously, if the local Government were to impose an export tax on our staple product-Cocos-shipped to ex-enemy countries and if, as the result, we were unable to dispose of our product in full or had to part with it at a comparatively low price, we should commercially be penalising ourselves and by restricting the amount of money to be got from our export we should be reducing our purchasing power-our imports. Similarly, if, by imposing a Protective duty on enemy goods we are forced to buy at enhanced prices we would simply be handicapping our trade.
5. On the other hand, if the British and Allied Governments, by the development of the policy enun- ciated by the Economic Conference of the Allies, are in a position to accept all our natural products and to give us terms which would not be less than those obtainable from markets of the Central Powers then there would be no harm in imposing a tax such as would keep our natural products out of enemy markets.
TERMS OF REFERENCE TO THE COMMERCIAL AND INDUSTRIAL POLICY COMMITTEE.
(a) What industries are essential to the future safety of the nation; and what steps should be taken to maintain or establish them.
6. This is obviously a question that can be answered only on broad Imperial lires, not as it affects this or any individual Colony.
(b) What steps should be taken to recover home or foreign trade lost during the war, and to secure new markets.