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flourished owing to the presence in Malta of British and Allied troops, and to the presence in our harbours of British and Allied fleets.

92. Unfair Competition.-We have ascertained that imitations of Malta lace are being, or have been, sold locally as the genuine article. Such imitations so closely resemble the genuine article that the difference can only be detected by experts, and, being produced at less cost than the real article, tend to oust the latter. We recommend that the sale of imitation Malta lace as the genuine article should be made punishable at law. This measure, if adopted, would render such frauds an The Industrial Board should have power to impossibility, at least in Malta. inspect shops and to prosecute the offenders. A special minute ink stamp that could be easily removed and would not injure the lace should be adopted as the official stamp, such stamp not to be obligatory, but to be affixed on payment of a very small fee (d.) by the lace school or by a person appointed by the Industrial Board. The object of this recommendation does not concern lace sold on foreign markets, as we are perfectly aware that the proposed stamp could be imitated by the foreign com- petitors, but it would have the effect that any purchaser in Malta would ask that the lace be guaranteed by that mark.

There are, 93. Unfair competition does not come from imitations only.

A third quality properly speaking, two qualities of Malta lace-silk and linen. has been introduced made of silk-waste and linen, a quality which soon wears out of shape, and which is foisted upon purchasers who are not experts as real silk lace. All dealers in Malta lace should specify the quality of the lace as being silk, linen, or mixed, and there should be a different stamp for each of these three qualities. The Industrial Board would issue a notice, to be affixed on the premises of such lace dealers, to the effect that purchasers may have the genuineness of their Such notice would also contain a purchases guaranteed by the said stamp.

description of the different stamps.

94. The Assistant Secretary to Government for Gozo has shown that the lace worker, generally a poor woman with a family, gets her silk thread from a grocer or some other shopkeeper who is not a dealer in Malta lace. After working for some days she returns the lace article completed to the grocer himself, who fixes the price and gives her the small balance, not in money, but in kind, such as coffee, sugar, or paste. The grocer or other shopkeeper thus sells the thread at a profit, acquires the lace article at a considerable discount, and, in payment for her work, gives the woman groceries or other goods, on which he again makes a profit. This system has resulted in a very inferior article being produced in large quantities, and if a remedy is not found good Malta lace will eventually cease to exist and the industry will irreparably suffer. The Assistant Secretary to Government for Gozo suggests that if the Government or some other agency were to offer a fair price for lace the lace workers would flock in crowds to dispose of their goods and the unde sirable middleman would be driven out of competition. In that gentleman's opinion such a measure would have a two-fold advantage, the one of putting the industry on a proper footing, and the other of improving the style of work, which, owing to the present system, leaves much to be desired. We agree that something should be done, and that the Government should make a grant for the purchase of the lace, or, better, should make a grant for the advance of money to free the people from the middleman. The advance should be made on the article of lace itself at a small interest, and by an agreement with the lace school in Valletta the latter would dispose of the manufactured article. Our suggestion is not a novelty. At one time the Government had offered to advance up to £500 to assist local industries and workmen. Unfortunately the offer had no practical result, as it was proposed that the money should be advanced from the Monte di Pietà, and the workmen refused to deal with that institution, which is primarily intended for indigent persons.

The advances should be under the control of the Industrial Board, who should devise a plan by which the lace makers be united on co-operative lines for the sale of the articles manufactured, thus eventually eliminating the

ecessity of any Government assistance.

95. Competition of Machine-made Lace. The foreign machine-made article cannot be taxed as a protection for Malta lace, because the difference in price between the two articles is such that a protective tax would by far exceed the value of the imported article, so that a duty on imported lace can only be levied for revenue

purposes.

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96. Outlets.-If an Industrial Board is established and the official mentioned in paragraph 33 is appointed, we feel certain that, especially with the introduction of preferential trade, our lace will find ready markets within the Empire.

97. Tobacco. The tobacco industry in Malta consists chiefly in the manufac- ture of cigarettes, and is concentrated in the hands of two or three firms who have laid out extensive plant and practically control the sale of Maltese cigarettes on the local market, with a very good export trade also, giving employment to about eight hundred workmen. There are also some small concerns in this industry, but they are limited to the individual ability of the workman, and the produce is sold only on the local market.

98. Before the enactment of Ordinance No. III. of 1917, the import duties on raw and manufactured tobacco were as follows:- (1) On raw tobacco: 34d. per rot. (2d. per lb.).

(2) On manufactured tobacco :-

(a) Cigarettes and cigars, 1s. 9d. per rot. (18. per lb.).

(b) Cavendish or Negro Head and snuff, Is. 31d. per rot. (9d. per lb.). (c) Manufactured, unenumerated, 1s. 2d. per rot (8d. per lb.).

By that ordinance the duties on raw and manufactured tobacco were

increased to:-

Cigars, 2s. 6d. per rot.

Cigarettes, 2s. 6d. per rot.

Cavendish, Negro Head, and other manufactured tobacco and snuff, 2s. per

rot.

Unmanufactured tobacco, Turkish, 1s. per rot.

American leaf, 7d. per rot.

No drawback was allowed on exported Maltese cigarettes; that ordinance has removed this disadvantage.

99. The difference of duty between the raw material and the manufactured article was before the enactment of that ordinance considered to be too small and not a sufficient inducement to local trade. The statistics of the imports for the quarter ended 30th June, 1916, show that over £16,000 value of cigarettes were imported into Malta, so that evidently cigarettes of foreign manufacture were in a position to compete keenly and successfully with those of local make. The new ordinance, while increasing by over two hundred per cent. the duty on raw tobacco, has only increased the duty on manufactured tobacco by less than fifty per cent. In the United Kingdom the difference in duty between raw and manufactured tobacco was 3s. per lb. In order to encourage the local industry we are of opinion (Mr. Howard dissenting) that the duty on imported manufactured tobacco should be increased to 4s. per rot., leaving a protective difference of 3s. per rot. Even under this duty the importer of the manufactured article is more favourably placed than the importer in England, who has to pay a difference of 3s. per lb., which is equal to 5s. 3d. per rot.

100. The extent of this trade can be seen from the following statistics, viz. :— Importation:-

Cigars and cigarettes

Exportation---

Cigars and cigarettes

1911-12. 1912-13.

£12,414

£11,710

1911-12.

1912-13.

£19,162

1913-14. 1914-15.

1915-16.

£11,534

£16,729

£85,548

1913-14.

1914-15.

1915-16.

£19,071 £19,631 £17,021 £19,931 101. Jewellery.-Mr. Ferris, Financial Assistant of the Charitable Institu- tions, has favoured us with a very exhaustive report on this trade, which will be found in the appendix* to this report. Malta was once famous for the manufacture of gold and silver articles, especially of filigree work. Our churches are full of objects of art made in Malta by Maltese artists. Unfortunately the competition of foreign articles, machine-made, and in many cases of cheap quality, together with the anomaly that the foreign article was not subject to the same restrictions as that made in Malta, have all but killed the local industry.

As stated in paragraph 23, over eighty per cent of the total amount imported comes from Germany, while about fifteen per cent. comes from England. The more costly articles are exclusively imported from Germany.

102. As in the case of Malta lace, foreign articles of filigree work are sold in Malta as of local manufacture. We recommend that locally-manufactured articles of filigree should be labelled as such, and that any vendor labelling an imported article

* Not printed.