CO885-(25-26) — Page 587

539

PUBLIC RECORD OFFICE

Reference :-

T།། །།

CO.885/25

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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I have quoted in paragraph 13 supra, that Gold Coast cocoa should definitely be classed as one of the raw materials produced in the British Empire which cannot, in the public interest, be ear-marked as being required for the exclusive use of Great Britain and of her Allies.

PALM KERNELS AND PALM OIL.

20. Turning now to the question of Palm Kernels and Palm Oil, reference to the Table in paragraph 16 of this Despatch will show that, even before the outbreak of war, these industries were already showing signs of decline in the Gold Coast. The Palm Kernels exported had fallen from 11,598 tons in 1909 to 9,744 tons in 1913, and simultaneously our exports of palm oil had dropped from 2,007,296 gallons in 1909 to 860,155 gallons in 1913. This falling off in production of palm kernels and palm oil alike was due to the great popularity of cocoa-planting among the native population, who found that it secured to them a much larger return than their oil palms at the cost of a minimum of grudging labour. The figures for 1914, 1915, and 1916 show a continuation of this decline, though a slight recovery in the exports of palm kernels is to be noted during the last named year. These figures are:--

Palm Kernels Palm Oil

1915. 1914.

4,064 Tons 5,633 Tons 495,763 Galls. 330,990 Galls.

1916. 5,857 Tons. 450,360 Galls.

Even before August, 1914, therefore, the palm industry in this Colony, was in a precarious position, which the outbreak and prolongation of the war have served still further to depress.

21. Of the total output of palm kernels from the Gold Coast in 1909 Great Britain took only 1,575 tons, and France only 45 tons, while 9,978 tons-representing 86% of the total quantity exported-was absorbed by Germany. During the same year, Great Britain took 1,502,127 gallons of palm oil from the Gold Coast, 305,740 gallons went to France, and only 199,429 gallons or 9.93% to Germany. By 1913, Great Britain was taking 2,601 tons of our palm kernels, France 738 tons and Germany 6,405 tons--equivalent to rather more than 65.7% of the total quantity exported. During the same year, Great Britain took 591,378 gallons of our palm oil, France 212,057 gallons and Germany only 56,720 gallons, or only a little more than 6.59% of the whole quantity exported.

During the five years immediately preceding the outbreak of war, therefore, Germany was much the largest consumer of our palm kernels, while the quantity of palm oil which she took from us represented an insignificant fraction of our total export.

22. The fact that so large a percentage of our palm kernels went to Germany must not, however, be regarded as an indication that she had, in any sense, "captured" this trade, in so far as the Gold Coast was concerned. On the contrary, the business of purchasing and exporting palm kernels and palm oil was mainly in the hands of British firms; and the latter shipped kernels to Hamburg and oil to Liverpool solely because these ports offered respectively the best market for these two commodities. Nor, as the evidence taken before the Committee presided over by Mr., now Sir Arthur, Steel-Maitland, in 1915-16 clearly proved, was Hamburg rendered the better market for palm kernels by any act of the Germans which could by any expansion of the phrase be described as " unfair competition." It was shown by the evidence taken before that Committee that German Manufacturers were enabled to handle palm kernels more advantageously than their British rivals partly on account of cheaper landing-charges and transport, partly because they possessed machinery better adapted to the extraction of the oil than was ordinarily to be found in Great Britain, and partly because they had developed a satisfactory market for the palm oil cake for cattle fodder, which had no counterpart in England or Scotland.

SUGGESTED EXPORT DUTY ON PALM KERNELS.

23. That Committee, as you are aware, recommended (vide West Africa Cd. 8247, which formed an Enclosure to your predecessor's Despatch No. 338 of the 1st June, 1916), that an export duty of £2 per ton should be imposed by the West African Colonial Governments upon palm Kernels which were not exported under a guarantee that they would be crushed in Great Britain.

24. This proposal I resisted at the time in my Despatch No. 823 of the 8th November 1916-a copy of which, together with copies of its enclosures, I attach for ease of reference,--and up to the present this export tax has never been imposed in the Gold Coast.

25. The grounds upon which I opposed the imposition of this tax in November last were that, having regard to the circumstances of the local trade in this product, the export duty could not fail to depress the prices which the merchants would offer to the native producers for their palm kernels, and that this would probably deal the coup de grace to an industry which had been steadily declining for several years.

26. I based my contention that the imposition of this proposed export duty would inevitably depress local prices for palm kernels upon the following facts:-

a. That the local exporter of palm kernels would never know with certainty, until the time came for actual shipment, whether it would pay him best to ship any given consignment to great Britain, to Germany or elsewhere.

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b. That he would, therefore, never know with certainty at the time when he made the purchase whether

he would or would not have to pay the £2 per ton export duty on any parcel of Palm Kernels which he was buying from the native producer.

c. That he would, therefore, give himself the benefit of the doubt, and would only offer to the native such price as might enable him subsequently to ship the kernels purchased to any destination without risk of loss.

d. That, apart from these practical considerations, it is obviously to the advantage of the local merchant to purchase his kernels at the lowest price at which he can obtain them; and that the existence of this export duty would furnish him with a legitimate excuse for forcing the price down to the smallest figure compatible with the survival of the industry.

e. That no change in local taxation, such e.g. as an increase in import duties, has been made in the Gold Coast, during recent years, without prices being so raised by the merchants that a handsome margin of additional profit has accrued to them therefrom after the enhanced demands of the Government have been duly satisfied.

f. That when, in 1912, the rates chargeable for goods conveyed over the Sekondi-Kumasi Railway were reduced by the orders of one of your predecessors, no corresponding reduction was inade in the prices demanded for imported articles at the stations served by that line; and that the greater portion of the large annual sum which was then lost to the public revenue found its way into the tills of the merchants and conferred no appreciable benefit upon the local public.

27. I also pointed out that the elimination of German competition and the closing of German ports had resulted, since the outbreak of war, in a fall in the price locally offered for palm kernels, which could not be satisfactorily accounted for by increased rates for freight and insurance, and which compared very unfavourably with the prices then ruling in the market at Liverpool.

28. To these facts I may add that the produce trade, and indeed the whole commerce of the Gold Coast, is largely controlled by a very strong group of firms-viz., Messrs. F. & A. Swanzy, Messrs. Millers, the African Association and the Basel Mission Factory—which adopt towards one another a reciprocal policy, and conduct their business in close combination. I think it must be obvious that the existence of such an association makes the regulation of the purchasing price to be locally offered for any commodity a matter of comparatively small difficulty; and that, in this instance, the opportunity and the temptation to drive prices down to a bedrock footing will alike present themselves. It should also be borne in mind that the native producer is not in a position to ship his kernels on his own account, and that, in this matter, he is utterly at the mercy of the European merchant. His only remedy is a refusal to continue to produce com- modities for which a very low price is obtainable, and his power continuously to resort to this expedient is limited by his necessitities.

29. In the Despatch in question I purposely refrained from any discussion of the principle involved in the imposition of the proposed export tax, and I confined myself exclusively to arguments designed to demonstrate the local inexpediency of the course recommended. In this place, however, I feel compelled to invite your attention to the even weightier objections to the proposed policy which I have ventured to touch upon in paragraphs 5 to 8 of this Despatch. If it be desired, in the interests of Great Britain, to establish a kernel crushing industry in England on a firm basis, and if it be considered that, in order to achieve this end, it is necessary to afford to the British crusher an effective measure of protection against hia German competitor, I suggest that such protection should be secured to him by the imposition of import duties upon the articles manufactured from palm-kernels, or by some other means, but that the native producer in the Gold Coast cannot equitably be called upon to pay by the restriction of his market for the establishment of an industry from which he stands to derive no benefit direct or indirect.

30. Finally, I venture to point out that this proposed export duty on palm kernels, in as much as it establishes a differential tariff, not only against Germany, but also against all other foreign countries, does not appear to be in strict accordance with the spirit, or even with the letter, of the Recommendations of the Paris Conference.

IMPORT TRADE OF THE GOLD COAST.

31. Turning now to the import trade of the Gold Coast, the following Table shows the annual value of the imports into this Colony from the year 1909 to the year 1916 inclusive. This Table also shows the annual value of the imports brought into the Gold Coast from the various countries whence we draw our supplies. The period to which this Table relates, it will be noted, includes the quinquenniad immediately preceding the outbreak of the war; the year 1914, the first seven months of which were marked by unexampled commercial activity, while the five concluding months witnessed a great disturbance and dislocation of the world's business, in which the trade of the Gold Coast inevitably shared; and the two complete years--1915 and 1916--which have elapsed since war was declared. Throughout specie has been excluded from the imports as shown in the Table,

1914

1915.

J

3

3,583,758

3,471,794

5,096,767 1916.

£

Ai

Total Value OF IMPORTS, EXCLUSIVE OF SPECIE FOR THE YEARS 1909 to 1916.

1913.

£

3,510,402

TOTAL VALUE OF IMPORTS EXCLUSIVE OF SPECIE FROM EACH IMporting CountRY FOR THE YEARS 1909 to 1916.

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Countries whence Imported.

Value. 1909.

Value. 1910.

Value. 1911.

Value. 1912.

1913.

1914.

1915.

1916.

Value.

Value.

Value.

Value.

等

£

£

3

United Kingdom

1,519 111

Germany..

245,043

U.S. America

France ..

Holland ..

Nigeria

Sierra Leone

Other British Colonies...

Other French Countries

10,459

16,900 324,660 2,037,412

2,088,764

2,317,732 |

2,468,604

2,660,682 £

F

3

2,734,991

305,303

379,028

386 670

27,471

42,604

44.299

32,979 289,288

9,839

3,860,765

128

37,285

680 LL

988

20,141

174,173

229 604

251,742

270,176

349,106

751,225

..

158,176

16,644

1,167

12,859

40,850

2,005,195

240,515

182,337

13,945

19,355

718

8,151

46,834

*2,709,276

1,324

16,865

87,576

2,903,168

5,528 18.315 182,965

189,165

170,810

199,644

217,976

23,535

24,322

36,351

1,674

16,994

109,573

3,302,343

19,749

124,964

3,510,402

1,200

12,623

121,678

3,583,758

2,317

75,902

4,021

6,673

27,902

95,588

3,471,794

81,759

5,096,767

1909.

£

2,005,195

1910.

2,783,466

1911.

1912.

3

等

2,903,168

3,302,343