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MINUTE BY THE TREASURER.

(THE LATE MR. E. B. REECE).

56)

I regard this contemplated legislation with some dismay. Even were I assured of the probity, or of the utility, of an endeavour artificially to foster undertakings the only result of which would appear to be the benefit of the pockets of a few home munafacturers by risking one of the industries of the people of this country, I should still question the expediency of attempting the measure on a falling market and at a time when the local merchant was, as he is now, never so full of power to " depress prices artificially for his own profit." Probably the advocates of the theory supported in the first sentence of paragraph 5 of the Secretary of State's Despatch of 1st June 1916 have failed to bring home to me their arguments with suffi- cient force, and why every country should be its own oil-crusher is no clearer to me than why every man should be his own tailor. Perhaps if I could see this commercial patriotism would present itself in a more honourable light than it does to me at present.

2. It seems to me exceedingly difficult to secure proof of the crushing. I presume that in the normal con- dition of the trade the raw product is shipped to a broker by whom the sales are effected, and that the manufacturer buys (a) such quantity as he can afford or (b) such quantity as he can handle or (c) such quantity as at the current price is conformable to ordinary business foresight. None of these quantities (except so far as it may be restricted by the possible circumstance of demand exceeding supply) can be calculated beforehand. If the particular quantity should be 100 tons and if the broker holds, say 40 tons of Sierra Leone kernels, 20 of Gold Coast and 70 of Nigerian, he will have his hundred and no more and I do not see who is to trace the broken shipments.

3. Section 4 of the Bill I should think would hardly pass the Legislative Council unchallenged and I share the view expressed by the Colonial Secretary in paragraph 4 of 3 of 14501/16. I do not like it.

(Intd.) F. C,

9th October, 1916,

MINUTE BY THE PRINCIPAL MEDICAL OFFICER,

(DR. RICE),

As far as this Colony is concerned there appears to be reason to believe that this attempt to beggar the enemy or neighbour-will result in beggaring ourselves.

2. In paragraph 6 of his letter of the 3rd of September 1915 the Director of Agriculture states "the Palm kernel industry is a rapidly dying industry, the natives finding cocoa much more profitable and less "the lower prices labourious and are consequently neglecting the former for the latter " now ruling in consequence of the war are sure to accelerate the rapidity of the decline of the industry."

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*

The Director of Agriculture also produces figures in support of the above statements and it appears to me to be not improbable that the imposition of an export duty will accelerate the dissolution of an industry that appears to be already impending.

The bill is in accordance with the direction of the Secretary of State. The Committee, however, have pointed out difficulties that will be met in obtaining certificates of crushing and, as drafted, the provisions of the Bill are not calculated to overcome these difficulties.

2. As to the policy of the Bill I venture to make the following remarks.

3. Previously to the war, Germany had the monopoly of the Palm Kernel Industry, the raw products of British Colonies in West Africa being allowed to gravitate to Hamburg. Directly and indirectly the trade between these Colonies and Germany was being fostered and that Country was being fed by the natural resources of British Colonies.

4. Personally I am very pleased to know that the Imperial Government propuses now to adopt the principle of conserving and developing the Empire's resources in the interests of the British peoples. I am heartily in agreement with the policy of this Bill, viz: to capture for British Markets the trade in palm kernels, provided that this can be done without injury to the producing British Colonies.

5. It is essential, I think, that difficulties should not be put in the way of exporting the kernels as this would give the shipper an excuse for not paying to the grower the full measure for his produce. It is clear that if the local price were to drop a blow would be dealt to the industry, and from this it may not for a long time recover. In this Colony cocoa has more or less elbowed out of the running the palm-oil industry, so much so that the latter is regarded now as a dying concern or at all events an industry in which little interest is taken.

6. Now it seems to me that the insistence upon a crusher's certificate would create a difficulty and might at once produce the effect of lowering the local price. The shipper will cover himself by paying so much less to the grower on the plea that he may not be able to satisfy the requirements of Government and

may,

in consequence, have to pay the export tax. If palm kernels were this Colony's main industry competition would no doubt soon adjust matters, but there is, as I understand it, not a great deal of com- petition and the industry is, so to speak, a "side issue" indulged in by a few shippers more as a convenient means of stimulating local trade than as a profitable business. If the local price for palm kernels were to fall I am afraid that the industry would shrink, This I personally should regard as nothing short of disaster. I consider that every encouragement should be given to the development of this particular industry in West Africa where the Palm tree is indigenous and requires little or no cultivation, the fruit being easily and very cheaply gathered. It is true, as has been said before, that in the Gold Coast, Cocos is now-and may be for many years to come-the first consideration of the farmer but, as time goes on and as the Cocoa indus- try develops in other parts of the world, it may become less profitable for the West African farmer to grow and export cocoa and we should do, I think, what we can to keep an industry-the palm oil industry— ready at hand upon which he can fall back. Any step that might now prejudice the industry-such as to cause a drop in price, and which might conceivably lead to the destruction of the trees-is, therefore, in my opinion, to be deprecated.

7. It seems to me that by far the simplest plan-certainly the best plan so far as the Colonies are concerned--is for the Colonial Government to accept proof of landing at some port in England, which means that the control of the export from that Country would be left to the Imperial Government but this of course introduces the question of Protection as opposed to Free trade. I confess that I can think of no other measure that might be adopted to divert the trade from Germany to England which would, at the same time, cause no detriment to the local industry.

8. As regards section 4 of the Bill I share the scepticism of the Colonial Secretary and, with regard to the last paragraph of (1) of M.P. 14501/16, I agree with him tht the duty should not be remitted in the event of kernels being lost at sea which were on their way from the Colony to a port other than a British port.

(Intd.) T. E. R.

11th October, 1916.

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(Intd.) E R

17th October, 1916.

PUBLIC RECORD OFFICE

Reference

CO.885/25

PUBLIC RECORD OFFICE, LONDON

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