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10. In these circumstances, I feel it my duty to record my firm conviction that the imposition of the proposed export tax will go a long way towards bringing about the final extinction of the industry; and having regard to the peculiar circumstances of this Colony, I would earnestly plead for ita exemption from the provisions of the proposed legislation.

11. Finding myself compelled to hold the opinion which I have expressed above, and feeling sure that this view will be shared by most Europeans and natives who are well acquainted with the conditions that prevail in the Colony, I think you will appreciate the great difficulty that I should experience were I to attempt to persuade the Legislative Council to adopt the proposed legislation. The only grounds upon which I and my advisers would be able to commend this Bill to the acceptance of the Council would be that its passage was demanded a in the interests of the Empire as a whole, or b in the interests of this Colony in particular. In reply it would be advanced that any action which exposes a struggling industry to grave risk of extinction is violently opposed to the interests of the Colony, and cannot be to the advantage of the Empire. Nor am I able to see any general patriotic or imperial grounds upon which it would be possible for me to base an appeal to the Legislative Council for the adoption of this Bill. So far as this Colony is concerned, the statement contained in page 22 of the Committee's Report that "For many years before "the war, German traders in British Colonies in West Africa, as throughout the world, have enjoyed-and "abused-British hospitality," has no application. I have no information which leads me to think that our hospitality has been thus abused in this Colony, and the suggestion that the Bill was necessary on this account would carry no conviction to members of the local public.

Similarly, such hold as the Germans had obtained over the palm kernel industry in no way depended upon any attempt by them to corner the local sources of supply; and I therefore venture to suggest that the parallel drawn on page 22 of the Report between the hold which the Germans had obtained over the base metal industry in Australia and that which they are alleged to have secured over the palm kernel trade is misleading. As a matter of fact the local traffic in palm kernels was mainly in the hands of the British firms, and nothing approaching a German monopoly had ever existed nor, so far as I am aware, had any attempt been made by them to secure such a monopoly. The reason why British merchants shipped their kernels to Hamburg in preference to any port in Great Britain was because it paid better to do so; but the reasons why it paid them better to do so had no connection with any trade conditions in the Gold Coast or with the presence of German Firms in this Colony. The native producer in the Gold Coast stands to lose much and to gain nothing at all by the artificial restriction of his market, and to him it is a matter at once beyond his knowledge and of complete indifference whether his kernels are crushed in British or in German Mills. So long as the war continues his markets are already subject to considerable restriction. He is to-day getting a smaller price for his kernels than was the case before German competition was automati- cally eliminated, and with the winding up of enemy firms and the contemplated sale of their business premises he had no prospect of seeing that competition restored. Meanwhile the establishment of a new industry in Great Britain will afford him no relief, and will bring to him no benefit direct or indirect. If, therefore, it be felt to be necessary for imperial reasons, with which the native producer has very little concern, that this new industry should be afforded protection, I submit that the assistance of which it stands in need should be extended to it by the Imperial Parliament and by the British consumers, rather than by the native whose labour produces the raw material and whose interests begin and end with its production and sale to local merchants.

12. I have purposely avoided the discussion of controversial questions as far as has been possible in the circumstances. I greatly hope that you will see your way to accept the recommendation which I have made for the exemption of the Gold Coast from the operation of the proposed export duty. Such a course appears to be rendered necessary by the precarious condition of the industry in this Colony, and if this be conceded there is no need for me to enter into any discussion upon the principles of the proposed Bill.

13. With reference to paragraph 3 of your Despatch under reply, and to the recommendations of the Committee with regard to investigations by the Agricultural Department, I have the honour to enclose a copy of an extract from a letter addressed by the Director of Agriculture to the Colonial Secretary dated the 31st August, 1916. I have called for further and more detailed information, and I would here only point out that the European personnel of the Department is seriously depleted at the present time, and that there is no prospect of adding to its strength during the duration of the war.

I have the honour to be,

Sir,

Your most obedient, humble Servant,

COPY.

No. C.S. 63/11/21916.

SIB,

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Sub-Enclosure (i) to Enclosure VII.

LAW OFFICERS' DEPARTMENT,

VICTORIABORO, Accra.

15TH SEPTEMBER, 1916.

With reference to your letter No. 5673/S.S. Despatch No. 338 of 1st June 1916, dated the 26th July, 1916, I have the honour to forward herewith a draft Bill for the imposition of an Export Duty on Palm Kernels in accordance with the directions contained in that letter and the enclosure which accompanied it.

2. The Treasurer, the Comptroller of Customs and I conferred with the following gentlemen :—

R. Jacobs, Esquire, Agent for Millers Limited,

A. Rowntree, „

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F. Albinson,

Graham Stewart,

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F. &. A. Swanzy, Limited,

African Association Limited,

Guinea Traders Association,

The Honourable J. M. Parker, and W. H. Light, Esquire, Superintendent, Bank of British West Africa Limited, on the 12th and 14th ultimo.

3. The only observations those gentlemen offered on the proposed scheme were :-

(i) That Palm Kernels on a voyage from the Colony to Europe lost weight owing to shrinkage and therefore an allowance should be made when a certificate of delivery and crushing is produced. They estimated that an allowance of ten per cent. would cover any such shrinkage, the average shrinkage being about five per cent. In the draft Bill the Comptroller of Customs is permitted to make, in his discretion, such an allowance not exceeding ten per cent.

(ii) They were all of opinion that the production of the required certificate of delivery and crushing would be in practice an impossibility. That, as kernels would be sold through brokers, it would not be possible to trace any particular consignment to any particular mill; and as a mill owner might transfer kernels to another mill owner it would not be possible to say in what mill or mills any particular consignment of kernels was crushed. They felt unable to suggest a method by which the required certificate could be obtained.

4. I have drafted the Bill in accordance with the directions of the Secretary of State but regret I am unable to suggest a method of overcoming the above difficulties.

5. After the above conferences I drafted the attached Bill which did not then contain section 15 and such minor alterations as I have underlined red and sent a copy of it to Mr. Parker, who laid it before a meeting of the Chamber of Commerce in Accra, and he has informed me that the Chamber have no further observations to make.

6. The Treasurer and the Comptroller of Customs approved of the draft Bill.

I am not aware if it is desired to allow a refund of duty in the case of kernels lost at sea on their way from the Colony.

THE RIGHT HONOURABLE

A. BONAR LAW, M.P.,

&c., &c., &c.

HUGH CLIFFORD,

Governor.

I have, etc.,

W. R. TOWNSEND,

Attorney-General.

PUBLIC RECORD OFFICE

C.O.

Reference :-

885/25

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

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Sub-Enclosure (ii) to Enclosure VII.