CO129-549-14 Commission of Enquiry into trade of Colony 17-7-1934 - 18-1-1935 — Page 57

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(Enclosure No.2 to Mr.Pelham's despatch No.57 of 5th July,1934).

COPY OF LETTER ADDRESSED TO THE "HONGKONG TALEGRAPH' BY SIR WILLI ́M SHENTON, IN REPLY TO MR. DOD"ELL'S REMARKS AT THIE ANNUAL MEETING OF THE HONGKONG BREWERS AND DISTILLERS LIMITED,

JUNE 16th, 1934.

Dear Dodwell,

As regards your Brewery speech, I now propose to deal

in detail with Page 8, as requested by you.

Your proposal raises a very important issue, which calls

for very careful enquiry and a great deal of deep thinking. Your

suggestion entails giving up the free port status of Hongkong

and instituting, presumably for the whole Colony, high protective

tariffa, in addition, of course, to the revenue tariffs which we

at present have. At the moment we tax opium, wines, spirits,

beer, tobacco and petrol for revenue purposes, a form of taxation

which is internationally recognised as not being contrary to

free trade principles.

All nations recognise the necessity of revenue tariffs,

but protective tariffa are placed in an entirely different

category and are brought into being so as to enable a country to

be or become highly industrialised, or for the purpose of correctin

the balance of trade.

Bilateral trade agreements have not always the

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benefite they at first appear to have "the most favoured nations

clause" so often crops up, taking away what at first appeared a

real advantage.

The early declarations of Captain Elliot and others

when taking over the Colony in 1842 cannot be lost sight of. The

Port of Hongkong was declared free to the flags of all nations

and a general indication of free port status given. I can give

you details, should you so desire.

I can see the advantage of high protective tariffa

in a Colony such as Ceylon or the Straits Settlements (in which I

include Singapore, the Federated Malay States and the Unfederated

States) because in both osses they have a big hinterland, large

natural/