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PUBLIC RECORD OFFICE

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CEPIFFICO.

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PUBLIC RECORD OFFICE, LONDON

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10. As however it is not likely that enemy traders can be kept out by mere discouragement, or even by penal measures such as preventing them from acquiring freehold property, some positive obstacles to their enterprise I think should be erected. A special tax of say 10 per cent. on the value of their turnover should meet the case, and lest such tax be evaded by enemy firms masquerading as neutrals or British we might introduce legislation (which I think would be necessary in any case) compelling every firm trading or operating in the Colony, whether as a branch or as a principal, to supply the Chief Registrar once a year with a complete list showing the names of its shareholders, the nationality of each, and the amount of his holding. Each shareholder's nationality could be certified by a magistrate in the United Kingdom, or by a British Consul or other approved British officer elsewhere, and a firm with an enemy shareholder could be taxed proportionally to such shareholder's interest. An alternative, which would have the merit of simpli- city and directness, would be to forbid, for a term of years after the war, any enemy firm having an enemy shareholder from trading at all in the Colony. The first proposal should be adopted I think only if the second be considered too drastic.

B.

By what means and to what extent should we endeavour after the war to reserve our export for the Empire and her Allies.

11. In order to answer this question fully, each article of export must be considered separately:-

Cocoa. This produce is consumed everywhere and is produced in many countries both inside and outside British and Allied territory. To reserve our crop for Britain and her Allies would mean forcing it artificially into their markets by means of export duties here, and to do this would mean limiting the number of our customers and so reducing prices to the detriment of the producer. The purchaser of course should reap a corresponding gain (at our expense), but if, as would be the case, he still had to buy cocoa from neutral countries at open competitive prices, (prices which probably would be forced up by the withdrawal of our crop from the free market), he would lose part of the gain.

12. Again, Britain and France (the only Allied Countries to which we ship direct) can scarcely need a monopoly of our crop. They need cocoa as a raw material in various grades for different manufactures and many of those grades are not produced in this Colony. The monopoly therefore would not relieve the British and allied manufacturer from the necessity of purchasing cocoa from neutral countries, while it would leave him with a surplus of ours which he would have to sell to neutrals or even to enemies. In other words our cocoa would find itself in a free market once it had left the Colony, and the only result of our patriotic attempt to reserve it for our friends would be a loss to the producer, without even a corres- ponding gain to the purchaser. I think therefore that no attempt should be made to interfere with the freedom of our market for this product, unless it is made quite clear that, thereby, some essential gain to the Empire or her allies is likely to be achieved.

13. The same considerations apply with practically the same force to our exports of Timber (Mahogany) and Rubber. These commodities are produced in so many neutral territories, that Britain and her Allies could never hope to create a monopoly in them, and they are required in so many different countries that an artificial narrowing of the market for our exports of them would merely impose a hardship on our producer without hurting the enemy or conferring compensating benefits on purchasers in the narrowed markets themselves.

14. Kola need not be taken into account as it is consumed almost entirely in the Nigerian hinterland and the Soudan, from which destinations it is not likely to be diverted by any competition in Europe.

15. Copra. For many years the French manufacturer has held practically a monopoly in the treatment. of this product, and as long as he is able to hold it no action on our part will be necessary.

16. Palm Kernels. The policy of imposing an export duty on shipments of this raw product to places outside the British Empire, with a view to transferring to the Empire the German monopoly in its treat- ment, has been widely discussed and, I think, approved. That the capture of a German monopoly would be a gain cannot be denied, and that such capture is practicable can scarcely be doubted since Britain can control the world's supply of the product. That injury to the producer may result from the British mono- poly is quite possible, of course, but as the British monopolist is not likely to be less generous than the German monopolist has been, the injury is not very likely to materialise. The question of how our Allies are to benefit by the proposed monopoly is a question of course for the Imperial Government.

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17. Palm Oil. This product differs from palm kernels inasmuch as before the war there was a free market for it. In other words, no country had specialised in its treatment to such an extent as to crush .out all competitors and create such a monopoly in it, as Germany had created in palm kernels. Before the war, the United Kingdom took about nine-fourteenths of our supply, France about four-fourteenths and Germany over one-fourteenth. To force the whole of our supply therefore into the British and French markets in the same way as it is proposed to force kernels into the British market would result in only a slight narrowing of our market with a corresponding slight diminution of price. This sacrifice might be worth while if Britain and France really desire such a concession, or if such a concession would be likely to serve them in any important purpose. The power of Britain to control the sources of supply must be exactly the same as in the case of palm kernels, so that no complications in the home markets need be apprehended from the incidence of a free supply from neutral countries.

C. By what means and to what extent should we keep Enemy imports out of our markets after the war?

18. The problem of penalising enemy imports in this Colony after the war, or even of excluding them altogether, is quite simple. A surtax of say 10 per cent. where desirable on imports of enemy origin, or a definite prohibition of such enemy imports as we do not really need, would hurt, no interests but those of the enemy.

19. The Colony has suffered very little from the exclusion of enemy goods since the outbreak of war, and there is no reason why it should suffer by their continued exclusion. Practically all enemy goods that we have been accustomed to receive are being, or have been-replaced by others of British, Allied or Neutral origin and, with few exceptions, those that cannot be replaced are such as we do not miss. True in some cases the substitutes are dearer than the original enemy articles, even when we allow for the generally increased prices of commodities, but the difference does not impose any burden on the local consumer greater than what, under the circumstances, he is able and willing to bear.

20. It will be convenient to study the details under the following heada :—

Classes of enemy goods that before the war possessed no advantage in price or quality over corresponding British goods. The values of these imported from Germany in the three years before the war were as fol-

tows:-

1911

1912

1913

Brass and Copperware

£826

Bread and Biscuits

368

£3,470 1,432

£3,286

3,159

Building Materials (Lime and Cement}

2,788

4,011

4,970

Candles

1,393

871

259

Carriages and Carts

513

778

765

Clocks and Watches

805

1,051

1,212

1,416

1,673

1,294

Cotton Yarn and Twist

4,068

6,342

4,537

Galvanised Fron

1,546

3,657

737

Glassware

1,106

1,761

1,379

Gunpowder

3,518

4,017

1,765

Stationery

2,316

3,538

3,065

Umbrellas

2,934

1.182

880

Cordage

21. German merchants alone were responsible for these imports from Germany, and without German merchants such imports would have ceased automatically-not even a surtax would have been needed to keep them out. The deficiences in each case caused by the cessation of German supplies are made up now by the United Kingdom with much less difficulty than might have been expected, but of course the prices have been much heightened by the War. Only the following call for special mention :-

a. Brass and Copperware. Practically all of this is being obtained now from the United Kingdom, and it is the only class in which it is difficult to get orders filled. This of course is only what might be expected under War conditions.

b. Bread and Biscuits, are declining in public favour, and the supplies from the United Kingdom show a falling off while those from the United States of America show an increase.

c. Galvanized Iron. The only remarkable feature about this is that the United States of America figures this year for the first time as a supplier.

d. Carriages and Carts. The loss of the German supply is being made up by the United States of

America.