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Wuluilulilu.

PUBLIC RECORD OFFICE, LONDON ALLY WITHOUT PERMISSION OF THE

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9. It is essential that the trade in matchets should be wrested from Germany, This trade was formerly in English hands. Matchets are so essential to the primi- tive methods of native agriculture that the difficulty and cost of obtaining them It is most undesirable have been the subject of complaint by native chiefs to me. that Germany should have so close a hold upon the agriculture of this agricultural country.

10. Cotton goods are a matter of less importance at present, because England can still supply them and has a firm hold on the trade; but it is, of course, desirable that this hold should not be lost.

11. The question of gin opens up more issues than that of trade. The creole Unofficial Members of Council would be glad to see local distilleries; and, if the matter is regarded as merely one of commerce, it is difficult to see why the foreign Regarded as a question distillery should be protected against local industries.

of trade, the German hold on the gin trade is due to cheap bottle making rather than to cheap distilling. The spread of Mohammedanism is tending to lessen the consumption of European spirits, but is raising new problems in the consumption of palm wine and the consequent destruction of valuable trees. Personally I should be inclined to favour closer Government control, or even a Government monopoly, in the matter of spirits; but the question is one affecting all West Africa and not Sierra Leone only.

12. I have gone very carefully into the question of the combine and the prices paid to the native producer. I take it, from your predecessor's answer to Mr. P. A. Molteno in the House of Commons, that the existence of this combine is not disputed. The following figures will illustrate its apparent effect.

13. In December, 1913, a date prior to the War, the price per ton of kernels was £19 in Freetown and £23 in Europe. Early in December, 1916, the prices were £18 in Freetown and £25 in Europe. These differences will explain the local feeling against the combine.

14. Freights by ordinary Elder Dempster cargo-boats have risen 28. a ton, to which must be added 3s. for war risks to the ship. A varying sum (say 158.) must be added again for insurance on war risks to the ton of kernels. The War explains £1 of the additional difference in price between England and Freetown. But the total difference to be explained away is £4 5s., if we are to be satisfied that the combine gives "a fair average price" to the producer, as it claims to do. 15. The real explanation lies in the fact that it is not always possible for He the shipper to obtain cargo space on ordinary steamers at ordinary rates. may have to pay special rates by special steamers; and he has been known to pay as much as £5 48. per ton. I do not suppose that he makes an actual loss even at these rates; but to secure himself against such loss he has to reduce his price to the producer by a corresponding amount. This explains why the price to the producer has fallen so much."

16. The unfairness to the producer lies in the fact that the high rates of freight are rarely incurred, while the reduction in price is always made.

17. Confirmation of iny view that the combine is making very large profits The first is in the commission paid on profits is forthcoming from two sources. by the parent firms to local agents, who are notoriously prosperous at present; the second is in the Bonthe rates.

18. In December, 1913, the Bonthe price was £17 108. per ton, as against £23 in England. In December, 1916, the Bonthe price was £12, as against £25 in England. The explanation lies in the fact that few ordinary steamers touch at Bonthe, and the profit on cheap rates of freight is rarely made. It has beer secured by a further reduction in the price given to the local producer.

19. In my opinion the real struggle for trade after the War will lie between the great monopolist combines and the smaller traders. It was made plain to me on my last visit to Bonthe that the Syrians and the more enterprising Africans were endeavouring to secure better prices by building small vessels and sending produce to Freetown; on the other hand, the combine was trying to get lighterage and transport into its own hands so as to check local competition. This is only natural; but there is no doubt as to its being the duty of Government to assist the native of the country in his effort to create new openings for himself. The combine is creating a strong pro-German feeling by its policy, as it is thought (quite incorrectly) that the return of the Germans would create competition. In reality the Germans would join the combine.

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20. The imposition of a heavy export duty on kernels shipped to Continental ports will have the effect of stimulating a local kernel-crushing industry. The machines may be crude, but they should be able to compete with the more efficient mills in England, owing to the fact that kernel-oil crushed in Sierra Leone can be exported direct to the Continent, while the English mill has to pay freight on importing its kernel and then again on exporting its oil. I take it that there is no objection to this building of small local crushing mills. It would certainly check the creation of a monopoly.

21. It is also possible that the efficient crushing machinery of Germany will be bought for re-erection in Sierra Leone by neutral firms in order to secure a direct trade with Germany. This policy would put the industry in our power, but it might take its profits largely out of British hands.

22. In view of the fact that palm products are the produce of State land, and may be regarded as the property of the State, I am inclined to think that it may ultimately be found expedient to introduce a system of exporting palm products under Government licence. This system is familiar at present through the regula- tions as to conditional contraband. Used for purposes of trade control in peace time, it would give the Government great powers both over the trade and over the trading monopolists.

I have, &c.,

Enclosure 1 in No. 4.

R. J. WILKINSON,

Governor.

FROM THE HONOURABLE THE Comptroller of CUSTOMS to THE Honourable THE

COLONIAL SEcretary.

C

I HAVE the honour to submit the following remarks regarding the present and future trade of the Colony.

The attached statement, marked A," gives the more important articles of import which have hitherto been supplied in varying quantities by the enemy countries; they are essential articles of trade, necessary for the requirements of the Colony, and a continuous supply of each should be maintained.

2. In the supply of trade spirits in bottles to this Colony, Germany and Holland have been almost without a competitor, such trade spirits as emanated from the United Kingdom being imported in casks. The control of this trade by the two first-named countries was due very largely to the low cost of produc- tion of German bottles. Steps should be taken to encourage the British bottle- making industry either by subsidy or by the imposition of a protective duty- as, unless receptacles can be provided very cheaply, an ultimate reversion to pre- War conditions will be almost inevitable. I understand that a cheap trade spirit can easily be produced in the United Kingdom.

3. Cotton goods, beads, hats and caps, cutlery, jewellery, iron manufactures (other), perfumery, flour. Cutlery is included in the statement not because of its monetary value as an import, but because matchets, included in the heading, are of the first importance to the native farmer. They are used to prepare the ground for crops and for general agricultural cleaning purposes; a scarcity of these imple- ments might-in all probability would seriously affect the extent of the crop of rice, the most important cereal grown in the Colony As to the other articles named, I am not aware of any adequate reason why they should not be manufac- tured and supplied by British firms. Customs preference to our Allies, provided they reciprocate, and reciprocal tariff relations with neutral countries (but in no case placing them on an equality with the British Empire or its Allies), should enable the British trader successfully to combat German competition. It is in the cheapest class of goods that German trade has hitherto been most successful. 4. The next statement attached, marked "B," exhibits the principal articles of exports of the produce and manufactures of the Colony.

5. The future of this Colony is almost entirely dependent upon the successful development of the trade in palm produce. At the outbreak of war considerable anxiety was manifested by those interested in the trade, as at that time Germany was taking eighty-seven per cent. of the kernels exported from Sierra Leone, and it was questionable whether British mills would be able to cope with the supply. This anxiety, however, was allayed by the prompt and energetic measures which