UBC Theses and Dissertations

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UBC Theses and Dissertations

Survey of Empire Trade Pilkington, Roderick Alfred 1932

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4 i _ JS BRA-R' Cfh/,) I AO?. 'aSascjissi £ £ 7 A Survey of Empire Trade • •: b y ' Roderick Alfred Pilkington A Thesis Submitted for the Degree of MASTER OF ARTS in the Department of , ECONOMICS The University of British Columbia APRIL, 1932. 3 U R V S Y 01' 3l:lPIRi; TRADS, Culf Ti&STS. • In t roduct ion 1'art One. A l ie -Ui i i ted U n w d o a S e c t i o n One. ITormal- Post-war T r a d e . S e c t i o n x V o . The p o s t -war d e c l i n e of B r i t i s h Trade S e c t i o n Three . Reasons f o r This -dec l ine . I 1 -art Two. The Rest of the E m p i r e . S e c t i o n Qne. Canada. S e c t i o n Two. A u s t r a l i a . S e c t i o n Three . Hew Zealand. S e c t i o n F o u r . I n d i a . S e c t i o n l i v e . Union of South A f r i c a . S e c t i o n S ix* '^he I r i s h i 'ree S t a t e . • S e c t i o n Seven. B r i t i s h A f r i c a n C o l o n i e s . S e c t i o n l i g h t . Hewfoundland and th° B r i t i s h »<est I n d i e s . S e c t i o n N i n e , tialaya and ^eylon* far t Thr e e . Imp e r i a 1 Scon oral c Un i t y . S e c t i o n One. I n t r o d u c t o r y . S e c t i o n Two.The P o s s i b i l i t y of a S e l f - s u f f i c i n g -Empi re . A survey of Resources . S e c t i o n Three . Proposed I m p e r i a l Economic P o l i c i e s . S e c t i o n F o u r . I r e s e n t T a r i f f s and Agreements. b e c t i o n l i v e . ^ I—J 51 60 70 QO <J>a 90 98 111 119 124 127 136 154 161 ( i ) lIlfTHODUGTIQS, The e x t e n t o f t h e B r i t i s h E m p i r e a n d t h e v a r i e t y o f i t s r e s o u r c e s a r e u n p a r a l l e l e d by•those p o s s e s s e d b y a n y o r g a n i z e d g r o u p o f s t a t e s i n t h e p a s t o r t h e p r e s e n t . Ho e m p i r e i n h i s t o r y h a s b u i l t u p a s i m i l a r d e c e n t r a l i z e d o r g a n i z a t i o n . S t a t e s m e n and o t h e r s who h a v e v i e w e d w i t h m i s g i v i n g t h e g r a d u a l - g r o w t h . o f p o l i t i c a l i n d e p e n d e n c e a m o n g t h e - c o u n t r i e s Of" t h e e m p i r e , h a v e r e c o m m e n d e d t h e f o s t e r i n g o f c l o s e r e c o n o m i c r e l a t i o n s as - a u n i f y i n g f o r c e , T n e " b o n d s o f empire " h a v e b e e n r e d u c e d t o t h e i n t a n g i b l e t i e s o f a common l a n g u a g e , a common t r a d i t i o n , a common r a c e a n d a l l e g i a n c e t o a common k i n g . T h e passage o f t i m e t e n d s t o - l e s s e n t h e r a c i a l a n d t r a d i t i o n a l t i e s . The Jfinglish language i s s h a r e d b y t h e U n i t e d S t a t e s o f A m e r i c a . L o y a l t y - to a common s o v e r e i g n d i d n o t b i n d t o g e t h e r B r i t a i n a n d -Jianover. i'or p o l i t i c a l r e a s o n s t h e r e f o r e t h e p o s s i b i l i t y o f c l o s e r c o m m e r c i a l i n t r a - i m p e r i a l r e l a t i o n s h a s a s s u m e d a n o u t s t a n d i n g s i g n i f i c a n c e . The e c o n o m i c a t t r a c t i o n s o f s u c h a r e l a t i o n s h i p w i l l b e e x a m i n e d - i n t h e c o u r s e o f t h i s e s s a y . I t i s n o t t h e a i m o f t h i s e s s a y t o e x p o u n d a new s c h e m e o f i m p e r i a l t r a d e r e l a t i o n s . IT or d o e s i t s e e k t o u r g e t h e a d o p t i o n o f a n y o f t h o s e a l r e a d y a d v o c a t e d . I t m e r e l y e x a m i n e s t h e p r e s e n t , e x t e n t , d i r e c t i o n a n d c o m p o s i t i o n o f e m p i r e t r a d e , d i s c u s s e s m a j o r problems s u c h a s t h e i n d u s t r i a l c o n d i t i o n o f G r e a t B r i t a i n , a n d r e v i e w s t h e advantages a n d d r a w b a c k s t o t h e g e n e r a l t y p e s of- p r o p o s a l ? t o e n c o u r a g e t r a d e . b e t w e e n t h e p a r t s o f t h e e m p i r e . In- examin ing t h e t r a d e o f t h e m o s t impor tan t B r i t i s h c o u n t r i e s , t h e p e r i o d u n d e r s u r v e y h a s b e e n l i m i t e d ( i i ) i n most cases , to the y e a r s 1926-28 as be ing , as f a r as can be a s c e r t a i n e d a t p r e s e n t , the normal or. t y p i c a l p e r i o d s i nce the - 'Great * a r . The" d e p r e s s i o n - i m m e d i a t e l y f o l l o w i n g the Great War and the c u r r e n t (1932) dep res s ion a re c o n s i d e r e d abnormal and not t r u l y i n d i c a t i v e of t rade t e n d e n c i e s . ( I ) PART 01TE-. TIQT U1TITED KINGDOM SECTION 013! NORMAL POST-WAR TRADE Of a l l the c o u n t r i e s o f the B r i t i s h Empire the U n i t e d Kingdom i s , i n d u s t r i a l l y , the most i m p o r t a n t . The volume of h e r t r a d e f a r exceeds t h a t o f any o t h e r p o r t i o n of the empire,and h e r w e l f a r e i s dependent t o a f a r g r e a t e r e x t e n t on the maintenance of h e r e x t e r n a l commerce. ' G r e a t B r i t a i n ' s i n d u s t r i a l o r g a n i z a t i o n i s b u i l t f o r the purpose o f c a r r y i n g on e x t e r n a l t r a d e . I t i s on t h i s t r a d e t h a t h e r p r o s p e r i t y depends. As the b i r t h p l a c e of the i n d u s t r i a l r e v o l u t i o n , she s e i z e d the l e a d i n e x p o r t t r a d e and h e l d h e r advantage u n t i l the g r e a t war of 1914-18. She has f o r l o n g been the l e a d i n g exponent of f r e e t r a d e because of h e r c o m m e r c i a l need o f cheap rav. m a t e r i a l s r e q u i r e d f o r ' h e r i n d u s t r i e s , and cheap f o o d f o r h e r w o r k e r s . Long b e f o r e the end o f the n i n e t e e n t h c e n t u r y she ceased t o be s e l f - s u p p o r t i n g i n the m a t t e r of f o o d and m a t e r i a l s and from then on became more- and more dependent upon h e r o v e r -seas t r a d e . A f t e r 1900, the U n i t e d S t a t e s and Germany began to o v e r t a k e the U n i t e d Kingdom i n e x t e r n a l t r a d e , though t h i s d i d not i n d i c a t e a d i m i n u t i o n i n the a b s o l u t e volume of B r i t i s h commerce.The r e a s o n s ' f o r t h e d e c r e a s e i n B r i t i s h t r a d e a f t e r the w o r l d war w i l l be a n a l y z e d i n a l a t e r s e c t i o n . Here, the a c t u a l c o m p o s i t i o n and d i r e c t i o n of B r i t i s h e x t e r n a l t r a d e with comparisons t o pre-war c o n d i t i o n s w i l l be d e a l t w i t h . The e f J e c t s of the d e p r e s s i o n w h i c h began i n the f a l l of 1929 b e i n g as y e t beyond comprehensive a n a l y s i s , t h e y e a r s 1927 o r 1928 w i l l he t a k e n as n o r m a l . More r e c e n t development w i l l be r e v i e w e d b r i e f l y i n a l a t e r s e c t i o n . The U n i t e d Kingdom i m p o r t e d more goods i n 1928 than d i d any o t h e r - c o u n t r y i n the w o r l d s and e x p o r t e d more than any o t h e r e x c e p t the U n i t e d S t a t e s ..-Imports i n 1928 . amounted t o £1,195,598,413 w h i l e e x p o r t s t o t a l l e d £84 3,862,333. Of t h i s l a t t e r -amount, £120,-283,244 c o n s i s t e d of r e - e x p o r t s The v a l u e o f e x t e r n a l t r a d e ( i n money) i n 1929 was the h i g h e s t ever r e c o r d e d , though e x p o r t s were s l i g h t l y l o w er than i n 1928. S i n c e 1924, e x p o r t s have been g r a d u a l l y -i n c r e a s i n g though e x p o r t s have- shown a s l i g h t tendency t o d i m i n i s h . However the currant'- (1932) has caused a d e c i d e d • f a l l i n the v a l u e and. volume of B r i t i s h e x p o r t s and a s i m i l a r though s m a l l e r d e c l i n e i n i m p o r t s . - The f o l l o w i n g t a b l e g i v e s t r a d e f i g u r e s f o r r e c e n t y e a r s . ( 2 ) Year Imports (£) Exports'''(<£) T o t a l (£) B r i t i s h R e - e x p o r t s > e x p o r t s produce 1913 659,200,000 525,253,000 109,566,000 634,819,000 1926 1 , 241 ,361 ,277 653 ,046,909 125,494,968 778,541,877 1927 1,218,341,150 709,081.263 122,952,839. 832,034,102 1928 1 ,195 ,598 ,413 723,579,089' 120,283,244 843,862,333 1929 1 ,220 ,7 65., 300 7 29,349,322 109,701,828 839,051,150 1930 1,044,840,194 570,552,946 86,980,279 657,533,225 B r i t i s h e x p o r t s a r e p r e p o n d e r a n t l y m a n u f a c t u r e d goods and i m p o r t s m a i n l y f o o d and raw m a t e r i a l s . The U n i t e d ( l ) Statesman's Yearbook p930 p53 . (2.) I b i d p53. Kingdom no l o n g e r produces s u f f i c i e n t f o o d s t u f f s t o m a i n t a i n i t s p o p u l a t i o n and of n e c e s s i t y impor ts l a r g e q u a n t i t i e s , On the o t h e r hand, most B r i t i s h i n d u s t r i e s m a n u f a c t u r e f o r e x p o r t , p r o d u c i n g f a r more than i s needed f o r the home market, In 1 9 2 8 , f o o d , d r i n k and tobacco i m p o r t e d was w o r t h ,£278,900,000 or 42,1% of the t o t a l i m p o r t s ;raw, m a t e r i a l s <and a r t i c l e s • m a i n l y unmanufactured were i m p o r t e d t o the v a l u e of £206,600,000 • or31.2$; and m a n u f a c t u r e d a r t i c l e s imported, c o s t £171,500,000 or 26%: E x p o r t s f o r the same y e a r haa v a l u e s and pe r o e n t g g e s as f o l l o w s : f o o d , d r i n k and tobacco ,£50,132,000 or 7.8%; raw m a t e r i a l s and a r t i c l e s m a i n l y unmanufactured ,£129,872,000 or •20.4$ J m a n u f a c t u r e d a r t i c l e s , £443,325,000 or 69 .8^. ( l ) • C o n s i d e r i n g i n d i v i d u a l items c o m p r i s i n g t h e ^ i m p o r t t r a d e , i t i s found t h a t maet l e d i n v a l u e i n . 1 9 2 9 , w i t h a t o t a l of £113,575,000«. G r a i n and f l o u r came n e x t i n o r d e r of im p o r t a n c e w i t h a v a l u e of £95,915,000. Mext came raw m a t e r i a l s f o r i n d u s t r y ? c o t t o n £77,366,000; w o o l £63,012,0005 o i l s , , f a t s &c £43,928,000..The l a r g e s t i t e m among e x p o r t s i n 1929 was c o t t o n y a r n -and m a n u f a c t u r e s , v a l u e d .at' £135,449,000. I ron and s t e e l m a n u f a c t u r e s amounteu t o £68,003,000; m a c h i n e r y t o -£54,341',0001 c o a l t o £4.8,617,000 and w o o l l e n m a n u f a c t u r e s t o £52,883,000. , The f o l l o w i n g t a b l e c o n t a i n s the v a l u e s of the ^ r i n c l p ^ i x items o f - B r i t i s h e x t e r n a l . t rade i n 1929.(2*)' (1) "The U n i t e d Kingdom" p516. (2) "The S ta tesman 's Yearbook" 1930 p57 . (4) Values of P r i n c i p a l Items In B r i t a i n ' s E x t e r n a l Trade A r t i c l e 1929 Imp or ts £1000 *s 5 j 91 o 113,575 18,499 45,840 G r a i n and f l o u r Heat Tobacco IVood, t imber Raw c o 11 on & wa s t e 77 ,366 Wool and wool rags 63,012 O i l s eeds , f a t s 5 gum 43,9 28 C o a l I ron and s t e e l manufactures 24,690 i\ron-fer?u'ous meta ls and manufac ture s 37,061 19s 15 3 10,938 Mach inery Cotton ya rns and manufactures Wool len ,wors ted ya rn and manufac tures 16,225 S i l k manufactures 13,173 ' 'thei [text i l e i Appare l 17,121 19,956 1 £5 * 3 3 Dome s t i c iCxp or t : £1000 4,829 48,617 68,003 18,29 3 59,351 13.9,449 52,883. 2,168 26,865 25,612 2 6,617 8,599 Chemicals etc O i l s , f a t s , and r e s i n menu f ac t ur e s 43,42 -Paoer and cardboard etc 17'*972 ' 9,809 V e h i c l e s , i n c l u d i n g shivs and a i r c r a f t 10,759 50,742 The above f i g u r e s do not i n c l u d e r e - e x p o r t s . T h e s e norma l ly extend over a v/iae range of goods, the most im-por tant of which,wool,was- r e - e x p o r t e d to the value of (5) £24,910,000 i n 1929. A c t u a l q u a n t i t i e s of the p r i n c i p a l f o o d s t u f f s (and tobacco) imported i n t o the U n i t e d Kingdom from 1927 to 1929 are set f o r t h i n the f o l l o w i n g t a b l e . ( l ) Q u a n t i t i e s of C e r t a i n Foods tu f f s (and Tobacco) -Imported i n t o the Un i t ed kingdom,1927^29. A r t i c l e . U n i t 1927 1928 1929 Wheat 1000 cwt 109,962 102,795 110,821 wheat f l o u r »» 10,855 8,813 9 , 617 Maize- « 40,511 31,431 33 9 2 5 X Tea 1000 l b s 451,414 418,831 464,145 Beef 1000 cwt 12,960 12,118 11,465 Mutton ft 5,493 5,628 5,625 Sugar II 30,820 35,886 38,925 B u t t e r 11 5,949 6,274 Tobacco 1000 l b s 138,160 - 141,726 1 4 7 8 2 2 One other aspect of B r i t i s h e x t e r n a l t rade must be sketched before "beginning a comparison between i t s normal post -war s ta te and i t s pre-war c o n d i t i o n . T h i s aspect i s the d i r e c t i o n of trade,that i s , the source of imports and d e s t i n a t i o n of e x p o r t s . Of a l l the c o u n t r i e s i n the world British I n d i a was the Uni t ed Kingdom's bes t customer i n 1929,taking B r i t i s h goods to the va lue of £79,372,000. The U n i t e d S ta tes and (gerrnany were next i n importance, the former (l)Sta tesman's Yearbook 1930 p58 (6) r e c e i v i n g goods w o r t h £62,016,000 and the latter '£60,220,000 I n each case the f i g u r e s g i v e n above i n c l u d e r e - e x p o r t s . ( l ) The c h i e f s o u r c e s of B r i t i s h i m p o r t s i n 1929 were t h e u n i t e d S t a t e s , w h i c h s e n t goods w o r t h £195,980,000, Argentina,£81,447 ,000 and Germany , £68,818,000. ( l ) On comparing B r i t a i n ' s t r a d e w i t h ^ S o u n t r i e s of the empire, t o t r a d e w i t h f o r e i g n s t a t e s , i t appears t h a t v/h w h i l e 7 0 . 6 $ 6f B r i t i s h i m p o r t s came from f o r e i g n s o u r c e s i n 1929, t h e s e c o u n t r i e s t o o l : o n l y 58 .9$ o f B r i t i s h e x p o r t s ( i n c l u d i n g r e - e x p o r t s ) . The f o l l o w i n g t a b l e shows the v a l u e o f ^ r i t i s h t r a d e w i th c o u n t r i e s i n 1929 ••( 1 )'../• , V a l u e of B r i t i s h Trade w i t h • P r i n c i p a l C o u n t r i e s 1929. Co u n t r y Imports £1000 S x u o r t s £1000 Re-exp £1000 Ru s s i a 2.6,487 - 3,713 2,799 Benmark 56,178 10,670 ' 829 Sweden 25,709 10,548 1,156, Germany 68,818 36,967 23,253 N e t h e r l a n d s 42,372 2 1 5 31Q ^ 91 9 u j J J I I O B e l g i u m ' 44,019 19,4.13 9,205 France 5 6,549 31,663 17,517 I t a l y 16,800 16,000 1,579 JSgypt 13,583 12,576 265' U n i t e d S t a t e s 195,980 45,55.8 16,458 ( l ) Statesman's Yearbook pp 153-1 ( 7 ) C o u n t r y 6hile A r g e n t i n a Iran o r t s £1000 10 5 6-15 8 1 , 4 4 7 T o t a l f o r e i g n i n c l u d i n g o t h e r s n o t s h o w n a h o v e 8 6 1 , 9 2 3 I r i s h T r e e S t a t e 4 5 , 0 8 7 E u r o p e a n p o s s e s s i o n s •7 O P, K •UL. ^ x.i >„/ \J 108 S o u t h '.Vest A f r i c a U n i o n O f S o u t h A f r i c a 2 4 , 3 0 9 S o u t h R h o d e s i a 1 , 2 9 4 327 " 2 , 7 5 7 5 , 9 4 5 3 , 9 2 8 1 1 , 3 8 7 6 2 , 8 4 5 1 4 , 1 7 3 3 , 4 3 6 15 tf 1 o 0 5 5 , 6 4 8 4 7 , 7 2 7 4 6 , 4 1 0 2 , 0 34 5 , 2 9 8 3 5 8 , 8 9 2 H o r t h R h o d e s i a K e n y a S u d a n M a u r i t i u s O t h e r A f r i c a n • p o s s e s s i o n s B r i t i s h - ^ n d i a S t r a i t s S e t t l e m e n t s F e d e r a t e d Malay S t a t e s C e y l o n A u s t r a l i a . Mew Z e a l a n d C a n a d a N e w f o u n d l a n d B r i t i s h W e s t I n d i e s T o t a l Empire . T o t a l w o r l d 1 , 2 2 0 , 7 6 5 Exports £1000 2 9 , 0 7 4 4 0 4 , 8 9 8 5 6 , 0 7 8 6 , 1 1 9 249 3 2 , 5 0 6 2 , 0 2 4 4 1 1 . 3 , 0 5 2 1 , 7 8 1 669 1 2 , 3 1 6 7 8 , 2 2 7 12 5 2.7 2 3.3 22.2 5 , 9 2 0 5 4 , 2 3 5 . 2 1 , 3 9 3 3 5 , 0 0 8 909 4 , 6 0 0 3 2 4 , 4 5 1 7 2 9 , 3 4 9 R e - e x p o r t £10 ob 397 603 8 6 , 6 4 0 1 0 , 2 2 0 1 , 3 5 0 2 1 , 5 7 4 58 2 85 43 . 14 1 , 6 3 4 ' 1 , 1 4 5 327 93 217 • 2 , 1 0 5 7 9 3 ' 2 , 5 6 3 164 289 2 3 , 0 6 2 1 0 9 , 7 0 2 (8) The above o u t l i n e of the p r e s e n t e x t e n t and composite of G r e a t B r i t a i n ' s o verseas t r a d e w i l l s u f f i c e as a hack-ground to an e x a m i n a t i o n of the d e c l i n e of t h i s commerce s i n c e 1913. on ^9) PART OHE.. Sii'CTTO¥ TWO. THE POST-WAR DECLINE OP BRITISH TRADE, The r i s e o f p r i c e s s i n c e the war ( a t l e a s t u n t i l 1929) makes'comparison of v a l u e s i n money terms m i s l e a d i n g . The f o l l o w i n g table shows B r i t i s h t r a d e v a l u e s c a l c u l a t e d on a b a s i s of the p r i c e l e v e l of 1913.(1) E x t e r n a l Trade of t h e U n i t e d -kingdom Based on 1913 p r i c e s , i n u n i t s of £1,000,000. Year Imports Domes t i c .Bxports R e - e x p o r t s 1913 768.7 o 2 5«3 109.6 1919 679.8 288.1 85.7 1920 679.3 o 7 2 «5. • 98.9 1921 -570.9 - 261.6 86.1 1 9 £Z> f2 659^4 361.8, 3 Q e 3 1923 735.7 404.4 94.. 0 1924 825 .7 420.6 106.2 1925 852.4 417*5.'.. 104.2 1926 ' 87 6.7 373.1 90.8 1927 900.3 430.3 95.1 . 1928 87 3.1 440.1 93.4 I t w i l l be seen t h a t w h i l e i m p o r t s have r i s e n |< s l i g h t l y i n volume, e x p o r t s have d e c l i n e d . B o t h rose • u s l o w l y from 1919 t o It-29. The s e p a r a t i o n of the I r i s h ^ree : ^ . . . in • ' • 'i1 s t a t e from the U n i t e d Kingdom has made the t o t a l s s i n c e t. I ( l ) The U n i t e d Kingdom ,p506 j ..i . - • - . i i i/ (10) 1922 s l i g h t l y h i g h e r than t h e y would o t h e r w i s e have been, and t h i s f a c t must be borne i n mind when comparing f i g u r e s f o r subsequent y e a r s w i t h - t h o s e f o r 1913. B r i t i s h t r a d e has n o t o n l y d e c l i n e d a b s o l u t e l y but a l s o r e l a t i v e l y as Compared t o t h a t of o t h e r -countries« The p e r c e n t a g e of the w o r l d e x p o r t t r a d e a t t r i b u t a b l e t o Great - B r i t a i n f e l l from 15.2% i n 1911-13 t o 12.5^ i n 1928. Imports showed a s m a l l e r d e c l i n e , f r o m 17.A% t o 16.6%. I t i s t r u e t h a t the share of most European c o u n t r i e s d e c r e a s e d a l s o , b u t the U n i t e d S t a t e s , C a n a d a and Japan, among o t h e r s , r e g i s t e r e d l a r g e gains.. The f o l l o w i n g t a b l e shows p e r c e n t a g e s h a r e s . o f the l e a d i n g i n d u s t r i a l s t a t e s b e f o r e and s i n c e the wa r . ( 1 ) P e r c e n t a g e Shares of V a r i o u s C o u n t r i e s i n "World Trade. •Country Imports - E x p o r t s 1911 -13 1926 19 28 1911-13, 1926 l b 28 U n i t e d S t a t e s 8 .4 13 .6 11 -.7 12.3 • 15. 15 . 6 Untd.Kingdom 17 .4- 18 .5 16 . 6 1 5 © 2 12 e 4 12 U.K. and I r i s h T.Sta tel.7 .4 18 .1 16 o 2 15.2 11. <J 7 11 .8 B e l g i u m 4 a 3 2 « 3 .5 3.7 2 # 1 2 .5 Canada 2 .9 3 o 1 3 « 'J 1.9 4. 2 4 .2 Trance 7 . 8 5 »Q 6. .0- 6.6 6. 3 6 » 1 Germany 12 .1 7 © 3 9 • 5 l i e 3 8. 1 P .9 J apan ' 1 .5 3 .4 2 .9 1.4 3. o 2 .8 N e t h e r l a n d s 4 .7 3 .0 3 .1 4.1 2.» 3 2 .4 ( l ) Commerce Yearbook 1929 p772. (11) P a r t i c u l a r B r i t i s h i n d u s t r i e s shuw v a r y i n g changes i n volume, o f p r o d u c t i o n . G o a l p r o d u c t i o n i n 1928 was 16$ l e s s t h a n i n 1 9 1 3 . P i g i r o n p r o d u c t i o n d e c l i n e d 35$ over the same period.Tonnage of s h i p s launOhed d e c r e a s e d by one t h i r d , as d i d the volume of c o t t o n t e x t i l e s m a n u f a c t u r e d . The s t e e l o u t p u t on the ave r a g e was lower than i n 1913. On. the o t h e r hand,autom£obile- p r o d u c t i o n d u r i n g the same p e r i o d i n c r e a s e d • 5 0 0 $ . E l e c t r i c a l m a c h i n e r y p r o d u c e d i n 1928 was 50$ g r e a t e r i n volume t h a n i n 1913.The m a n u f a c t u r e of r a y o n a l s o showed l a r g e e x p a n s i o n . ( l ) I n d i v i d u a l i t e m s i n the e x p o r t t r a d e showed c o r r e s p o n d i n g c h a n g e s . C o a l e x p o r t s d e c r e a s e d f r o m 7 3 ,400,000 tons i n 1913 to 50,055,000 tons i n 1928.- M a c h i n e r y sent a b r o a d t o t a l l e d 677,221 tons i n 1913 and 566 ,153 tons i n 1928. E x p o r t s of c o t t o n p i e c e goods f e l l from- 7 ,075 ,252 ,000 square y a r d s i n 1913 t o 3 ,866,593,000 square y a r d s i n l 9 2 8 . B o o t s and shoes d e c l i n e d from 1 ,719,865 dozen p a i r s ' t o - 1 , 0 7 9 , 3 7 0 dozen p a i r s d u r i n g the same p e r i o d . l o t t e r y and c l a y e x p o r t s i n c r e a s e d . s l i g h t l y , r i s i n g f r o m 539,244,000 l b s ; t o 549 ,612 ,000 l b s . ' I r o n and s t e e l m a n u f a c t u r e s f e l l .a l i t t l e : 4 ,934,000 t o n s ,,,s a g a i n s t 4 ,261,000 t o n s . J u t e p i e c e g o o d s r o s e f r o m 173,484,000 square y a r d s i n 1913 t o 192,265,000 square y a r d s i n 1928 .^aper and c a r d b o a r d e x p o r t s showed an i n c r e a s e , r i s i n g from 391,878,000 l b s . t o 503 ,377,000 l b s . V/oollen t i s s u e s g a i n e d i n volum e , a d v a n c i n g from 105,884,000 square y a r d s t o 128,556,000 square y a r d s . ( E ) ( l ) u n i t e d Kingdom f p 10-11 (2) CommergceYearbook 1929 pp655«56 (12) The r e s u l t s of t h e s e changes a re b e s t shown by an e x a m i n a t i o n of t h e p o s i t i o n - of the f i v e ' l e a d i n g e x p o r t i n d u s t r i e s o f the U n i t e d Kingdom. The f o l l o w i n g t a b l e shows the p e r c e n t a g e s .of e x p o r t s due t o each of these t r a d e s i n i n 1913 compared t o a s i m i l a r p e r c e n t a g e f o r 1 9 2 8 . ( l ) Shave of "Five L e a d i n g I n d u s t r i e s i n E x p o r t f r a d e I n d u s t r y 1913 1928 7° % I r o n , s t e e l and manufactu: :es 10. 5 9*2 C o t t o n m a n u f a c t u r e s 24. 1 20.1 W o o l l e n m a n u f a c t u r e s 6. 8 . 7.9 C o a l - 9 c 7 5.4 M a c h i n e r y 6. 4 7.4 T o t a l 57, 5 50.0 u t h e r t r a d e s 42. 5 50.0 • 100. 0 * 1 0 0 . 0 I t i s o b v i o u s t h a t t h e s e f i v e i n d u s y e a r s the -backbone' of B r i t i s h e x p o r t t r a d e have s u f f e r e d t o a l a r g e r e x t e n t than the l e s s i m p o r t a n t i n d u s t r i e s . S p e c i a l c i r c u m s t a n c e s have p l a y e d t h e i r p a r t i n t h i s phenomenon. C o a l i s b e i n g d i s p l a c e d by o i l and e l e c t r i c i t y a s aa f u e l . ( T h i s hs,s i t s - r e p e r c u s s i o n on I t h e s h i p p i n g i n d u s t r y ) . Moreover the post-war s t r i k e s - h a v e p r e j u d i c e d B r i t a i n ' s p o s i t i o n i n f o r e i g n c o a l markets.Rayon i s making i n r o a d s i n t o the market f o r c o t t o n g o o d s . C o m p e t i t i o n i n i r o n and s t e e l m a n u f a c t u r e s , p a r t i c u l a r l y from the O n i t e d °tates, has been i n c r e a s i n g . ( l ) U n i t e d Kingdom p512. (13) The volume o f the e x p o r t s from t h e s e f i v e l e a d i n g i n d u s t r i e s i n r e p r e s e n t a t i v e y e a r s i s i n d i c a t e d "by the f o l l o w i n g t a b l e w h i c h s e t s f o r t h the v a l u e as computed on a b a s i s o f p r i c e s p r e v a i l i n g i n 1913.(1) Value of E x p o r t s o f F i v e I n d u s t r i e s a t 1913 P r i c e s . U n i t £1000 i I n d u s t r y 1913 1924 192.8 C o a l 50,727- 4.1,676 33,502. C o t t o n 126,4.67 86,743 79,657 Wool 35,709 .35,158 . 29 ,198 I r o n and s t e e l m a n u f a c t u r e s 55 j o J 1 47,917 54,047 M a c h i n e r y 33,603 22,282 27 ,6.99 T o t a l 301,856 233,776 224,103 Other e x p o r t s 223 5 307 186,824 216,033 T o t a l • 5 2-5 p 2 5 K) 420 s600 440,136 Er om the above i t appears t h a t w o o l m a n u f a c t u r e s and m a c h i n e r y ,which i n c r e a s e d i n r e l a t i v e i m p o r t a n c e as components i n the t o t a l e x p o r t t r a d e , n e v e r t h e l e s s d e c r e a s e d i n volume between 1913 and 1928. Among r e - e x p o r t s , t i n , c o t t o n and h i d e s show a d e c l i n e i n volume s i n c e 1913.Rubber r e - e x p o r t s w h i l e more than d o u b l i n g i n volume a c t u a l l y d e c r e a s e d i n v a l u e by about 15% owing t o the g r e a t drox^ i n . p r i c e . The volume of p r i n c i p a l r e - e x p o r t s i n 1913,1924 and 1928 i s shown i n the f o l l o w i n g t a b l e . ( 2 ) ( l ) U n i t e d Kingdom p513. (2) I b i d p 526. ( 1 4 ) R e - e x p o r t s f r o m the U n i t e d Kingdom. A r t i c l e . U n i t 1913 1924 1928 Wool,raw Hides and - s h e e p s k i n s c e n t a l s cwts 3,065,000 812,240 3,588 718 ,000 ,756 3,390 578 ,000 ,258 S k i n s , o t h e r number 79,2-78,241 65,197 i ,429 69,133 ,7 63 Rubber c e n t a l s 1,008,000 1,715 ,000 2 5 363 ,000 Tea l b s 57,556,000 75,878 ,000 90,030 ,000 C o t t o n 5 raw c e n t a l s 2,576,000 1,421 ,000 681 ,000 T i n l o n g t o n s 30,236- ,828 7 ,741 T u r n i n g t o i m p o r t s , i t i s f o u n d t h a t most changes are the n a t u r a l complements o f changes i n the e x p o r t t r a d e , b e i n g c h i e f l y n o t i c e a b l e i n r a w m a t e r i a l s d e s t i n e d f o r ex-p o r t i n g i n d u s t r i e s . . R a ^ c o t t o n d e c l i n e d f rom 2,174,300,000 l b s . i n 1913 t o 1,505,768,000 l b s . i n 1928. I r o n ore i m p o r t s dropped from 7,442,000 tons t o 4,435,000 tons d u r i n g the same p e r i o d . . Wool 'decreased s l i g h t l y , f rom '800,581,000- l b s . t o 780,714,000 l b s . Undressed l e a t h e r f e l l f r o m 106,050,000 l b s . t o 9 6,192,000 l b s . Crude p e t r o l e u m i n c r e a s e d from 32,000 b a r r e l s t o 14,739,000 b a r r e l s , w h i l e . r e f i n e d m i n e r a l o i l s r o s e from 13,916,000 b a r r e l s t o 46,001,000 b a r r e l s . Auto-m o b i l e s g a i n e d i n number$14,778 i n 1913 and 34,179 i n 1928. Wood p u l p Imports grew from 573,000 tons t o 1,283,000 t o n s . A a p e r and c a r d b o a r d i n c r e a s e d f rom 1,442,746,000 l b s . t o 2,115-,423,000 l b s . P r a c t i c a l l y a l l f o o d s t u f f s showed a n i n c r e a s e e x c e p t v.heatyv/hich remained a p p r o x i m a t e l y the same. T h i s r i s e i n the volume of f o o d s t u f f s wa? d o u b t l e s s due t o % (15) the growth of p o p u l a t i o n . A s a r e s u l t of the r e m o v a l of the embargo on the i m p o r t a t i o n of l i v e c a t t l e 724,917 head were i m p o r t e d i n 1928 as a g a i n s t 2,902 head i n 1 9 1 3 . ( l ) C o n c l u s i o n s t o be drawn from t h i s e x a m i n a t i o n a r e f i r s t B r i t i s h i m p o r t s a re of such a nature^ t h a t t h e y cannot be g e n e r a l l y reduced' w i t h o u t l o w e r i n g the s t a n d a r d of l i v i n g or s t a r v i n g i n d u s t r y ; second,as a . r e s u l t of t h i s the o n l y hope of B r i t a i n r e g a i n i n g h e r p r o s p e r i t y l i e s i n r e - b u i l d i n g h e r e x p o r t t r a d e . B e f o r e • t h e war B r i t a i n had l a r g e " a d v e r s e " v i s i b l e b a l a n c e s of t r a d e w h i c h were met by i n v i s i b l e e x p o r t s i n the shape of s h i p p i n g , b a n k i n g , and f i n a n c i a l s e r v i c e s and i n t e r e s t on f o r e i g n i n v e s t m e n t s , a m o u n t i n g t o between £ 3 0 0 , 0 0 0 , 0 and £ 4 0 0 , 0 0 0 , 0 0 0 per annum. Inv e s t m e n t s a b r o a d by Gr e a t B r i t a i n have been e s t i m a t e d a t £ 4 , 0 0 0 , 0 0 0 , 0 0 0 . ( 2 ) A p o r t i o n of the i n t e r e s t f r om o v e r s e a s i n v e s t m e n t s was n o r m a l l y r e -i n v e s t e d a b r o a d . In 1913 about 75$ of ^ r i t i s h i m p o r t s c o n s i s t e d of f o o d s t u f f s and raw m a t e r i a l s . I n a d d i t i o n , a l a r g e p a r t of the r e m a i n i n g i m p o r t s c o n s i s t e d of t o o l s and o t h e r f i n i s h e d or s e m i - f i n i s h e d a r t i c l e s w ^ i c h e n t e r e d as " c o s t s " i n t o some B r i t i s h i n d u s t r y or commerce.In s p i t e of e f f o r t s t o r e - o r g a n i z e and improve B r i t i s h a g r i c u l t u r e d u r i n g the war, the U n i t e d Kingdom i n 1920 was as dependent upon o v e r s e a s s u p p l i e s as i n 1913. I'urther, the c o s t of the war had changed the whole c o m p l e x i o n of her f i n a n c i a l s t a t u s . A l a r g e p r o p o r t i o n ( l ) A l l i m p o r t f i g u r e s above from Commeree Yearbook 1 9 2 9 pp 654 ( 2 ) Hobs on,"Some A s p e c t s of Recent B r i t i s h Economics ( 1 6 ) o f h e r i n v i s i b l e e x p o r t s - w h i c h bad c o u n t e r a c t e d the " a d v e r s e " t r a d e b a l a n c e had d i s a p p e a r e d . J.ohn A Hob son e s t i m a t e s t h a t B r i t a i n ' s l o s s i n f o r e i g n h o l d i n g s amounted t o between .£1,500,000,000 a n d ' £ 2 , 0 0 0 , 0 0 0 , 0 0 0 c ( l ) B r i t a i n c o n s e q u e n t l y was f a c e d w i t h the need of i n c r e a s i n g h e r e x p o r t s by over £100,000,000 a y e a r I n o r d e r to pay f o r the imports: required,,An a l t e r n a t e way of m e e t i n g t h i s need was t o suspend or g r e a t l y reduce annua l i n v e s t m e n t s o v e r s e a s , w h i c h b e f o r e the war t o t a l l e d between £100,000,000 and £200,000,000 a n n u a l l y . T h i s l a t t e r c o u r s e has been f o l l o w e d t o a c e r t a i n e x t a n t b u t has s e r i o u s drawbacks. Over-seas i n v e s t m e n t s a re v i t a l t o G r e a t B r i t a i n as an agency i n the development of backward c o u n t r i e s as s o u r c e s of raw-m a t e r i a l . In the f a c e of t h e ' g r o w i n g economic c o n t r o l of the - - - • . . ..i n a t u r a l r e s o u r c e s of c o u n t r i e s i n a l l p a r t s of the w o r l d by the U n i t e d S t a t e s , G r e a t B r i t a i n can h a r d l y a f f o r d t o l o s e h e r g r i p on s o u r c e s of r a w m a t e r i a l necessary- t o h e r w e l f a r e . The p r o b l e m of B r i t i s h i n d u s t r y r e s o l v e s i t s e l f i n t o the t a s k of i n c r e a s i n g e x p o r t t r a d e . B e f o r e c o n s i d e r i n g the f o r c e s a i d i n g or h i n d e r i n g such a r e c o v e r y , I s h a l l d e a l b r i e f l y w i t h changes i n the d i r e c t i o n of B r i t i s h t r a d e s i n c e -1913,-which may g i v e an i n d i c a t i o n as to the most p r o m i s i n g f i e l d s f o r t r a d e e x p a n s i o n . D i s t i n g u i s h i n g between t r a d e w i t h i n the empire and t r a d e w i t h f o r e i g n s t a t e s , i t appears t h a t i n t r a - i m p e r i a l t r a d e has been, assuming a r e l a t i v e l y more- i m p o r t a n t p l a c e i n ( l ) Some A s p e c t s of Recent B r i ^ i s h jSconomics p7 . ( 1 7 ) B r i t i s h commerce.. In 1 9 1 3 , 2 4 . 6 $ of - B r i t a i n ' s imports came f f r o m w i t h i n - t h e e m p i r e . I n 1 9 2 4 , t h e c o r r e s p o n d i n g f i g u r e was •30 .3$ , w h i l e i n 1928 i t h aa r i s e n t o 3 0 . 6 $ . T h e s h a r e of t h e e m p i r e i n B r i t i s h e x p o r t s - i n c r e a s e d f r o m 57 .1$ i n 1913 to 42 .1$ i n 1924 a n d 45.3% i n 1928. I n r e - e x p o r t s t h e c o r r e s p o n d i n p e r c e n t a g e s : w e r e 1 2 . 4 , 1 8 , 9 a n d 1 8 . 9 . The f o l l o w i n g t a b l e shows t h e v a l u e s o i B r i t i s h t r a d e w i t h t h e e m p i r e a n d w i t h f o r e i g n c o u n t r i e s . ( l ) B r i t i s h T r a d e w i t h t h e OSrapire a n d w i t h F o r e i g n S t a t e s . U n i t £1000 Y e a r .1913 1924 1927 1928 Imports F o r e i g n B r i t i s h E x p o r t s a n d r e - e x p o r t s F o r e i g n B r i t i s h c o u n t r i e s 577,219 889,566-851,680 832,014 c o u n t r i e s 191,516 387,823 366 ,661 365,585 c o u n t r i e s 425,398 57 6,982 483,340 493,415 e o u n t r i e s 208,922 363,954 348,694 350,4.67 - T r a d e b e t w e e n t h e U n i t e d K i n g d o m a n d t h e r e s t o f t h e e m p i r e i s d e s i r a b l e i n t h e s e n s e t h a t t h e e m p i r e f u r n i s h e s Great B r i t a i n w i t h raw m a t e r i a l s a n d r e c e i v e s m a n u f a c t u r e d goods . .Canada , i t i s t r u e , i s b u i l d i n g up h e r m a n u f a c t u r i n g i n d u s t r i e s b u t a s y e t r e l i e s o n f o o d s t u f f s a n d r a w m a t e r i a l s t o make u p t h e b u l k o f h e r e x p o r t s - , m a n u f a c t u r e d g o o d s f o r m i n g o n l y 37$ o f h e r e x p o r t s i n 1928. I n t h e same y e a r 90.6% o f i m p o r t s i n t o t h e U n i t e d 1 / K i n g d o m f r o m t h e e m p i r e w e r e c l a s s e d a s f o o d s t u f f s r a w m a t e r i a l s a n d a r t i c l e s m a i n l y ( l ) U n i t e d K i n g d o m p535. (18) u n m a n u f a c t u r e d . S x p o r t s t o the empire i n the same yea.v were coraposedjof 84.1% manufac tured g o o d s . D e t a i l s of t r a d e between Great B r i t a i n and the c h i e f d i v i s i o n s of the empire are shown i n the f o l l o w i n g t a b l e . ( l ) V a l u e s a r e g i v e n i n u n i t s of £1005 e x p o r t and i m p o r t and p e r c e n t a g e s shown a r e of the t o t a l / t r a d e of ^ r e a t B r i t a i n . Imports are from and e x p o r t s a r e t o the c o u n t r y m e n t i o n e d . Trade between the U n i t e d Kingdom and C e r t a i n S e c t i o n s of the E m p i r e . C o u n t r y 1913 1924 1928 v a l u e % v a l u e & v a l u e & S t r a i t s S e t t l e m e n t s Imports from 15,800 2-.05 10,563 0.83 12,610 1.05 E x p o r t s t o 5,836 1.11 8,289 1.03 11,439 1.58 B r i t i s h I n d i a -Imports from -48,420 6.30 7 8,87 3- 6.17 64,491 5.39 E x p o r t s t o 70,273 13.38 90,577 11.30 83,921 11 .46 U n i o n of S . A f r i c a ' Imports from 12,301 1.60 18,02-6 1.42 24,152 2.02 E x p o r t s t o 22,185 4.22 30,271' 3.77 31,471 4.35 A u s t r a l i a • Imports from 38,065 4.95 59,022. 4.62 55,469 4.63 E x p o r t s t o 34,471 6.56 60,760 7.58 55,699 7.69 Hew Z e a l a n d Imports from 20,338 2.65 46,964 3.68 47,315 3.90 E x p o r t 3 t o 10,873 2.06 20,333 2.53 19,297 2.66 Canada Imports from 30,488 3,97 65,900 5.16 57,110 4.7 9 E x p o r t s t o 23,795 4.53 27,993 3.49 34,267 4,73 B r i t a i n ' s t r a d e w i t h each of the main p a r t s of the empire i s c o n s i d e r a b l e b u t a p p a r e n t l y i s capab le of e x p a n s i o n , ( l ) U n i t e d Kingdom p535. ( 1 9 ) S i n c e t h e s e c o u n t r i e s c a n s u p p l y l a r g e r q u a n t i t i e s o f t h e m a t e r i a l s t h a t B r i t a i n n o r m a l l y i m p o r t s , t h e e n c o u r a g e m e n t o f i n t r a - i m p e r i a l t r a d e o f f e r s a t t r a c t i v e p o s s i b i l i t i e s . In a d d i t i o n , f a v o r a b l e t r a d e agreements w i t h i n t h e e m p i r e s e e m m o r e l i k e l y t o b e consummated t h a n t r e a t i e s w i t h f o r e i g n s t a t e s , i n v i e w o f t h e e c o n o m i c h o s t i l i t y b e t w e e n n a t i o n s a s e v i d e n c e d b y r i s i n g t a r i f f s , a n d i n v i e w 7 o f t h e p r e f e r e n c e s a l r e a d y g r a n t e d t o B r i t i s h g o o d s b y t h e d o m i n i o n s . (20) SSCTI01T T E R S Ei EKASOaS PQR THE POST-WAR DSCLIEE 117 BRITISH TRADE. As r e g a r d s the e x t e r n a l t r a d e o f &reat B r i t a i n , t h r e e f u n d a m e n t a l c o n d i t i o n s have tended t o r e t a r d p o st-war t r a d e r e c o v e r y . These are- f i r s t , d e c l i n e of p u r c h a s i n g power i n many p a r t s of the w o r l d ; s e c o n d , g r o w t h of l o c a l m a n u f a c t u r e s in- f o r e i g n c o u n t r i e s ; a n d - t h i r d , the d i s p l a c e m e n t of B r i t i s h goods by i m p o r t s i n t o f o r e i g n markets f r o m o t h e r s o u r c e s . These f a c t o r s a re wor ld-wide and a f f e c t the o v e r s e a s t r a d e of o t h e r c o u n t r i e s as w e l l as t h a t o f the U n i t e d K i n g -dom. The d i f f e r e n c e i n e f f e c t a r i s e s f r o m the g r e a t e r dependence of d r e a t B r i t a i n f o r h e r w e l l - b e i n g on h e r commerce. The f i r s t f a c t o r , d e c l i n e of p u r c h a s i n g power, i s a d i r e c t r e s u l t of the w o r l d w a r . D e s t r u c t i o n of man-power and c a p i t a l and the d e v a s t a t i o n of l a r g e a r e a s are prime c a u s e s . A l s o the f i n a n c i a l o r g a n i z a t i o n of many c o u n t r i e s was r e -duced t o chaos .Consequent m a l a d j u s t m e n t of c r e d i t arrangements had v e r y s e r i o u s e f f e c t s upon t r a d e . Europe was c o n f r o n t e d a l s o w i t h the t a s k of f u r t h e r economic r e o r g a n i z a t i o n due t o re-arrangement of p o l i t i c a l f r o n t i e r s . The war's a f t e r m a t h of p o l i t i c a l and i n d u s t r i a l u n r e s t , a g g r a v a t e d by a d e f i c i e n c y of c a p i t a l and c r e d i t , w a s a f u r t h e r iaciovjin r e t a r d i n g the r e t u r n t o .pre-war p r o s p e r i t y and has n o t y e t l o s t i t s f u l l e f f e c t . Reduced p u r c h a s i n g power i n w a r - s t r i c k e n Europe haa (21) i t s r e p e r c u s s i o n s elsewhere.AS w e l l as a i f e e t i n g e x p o r t i n g I n d u s t r i a l n a t i o n s s u c h as G r e a t B r i t a i n , i t harmed c o u n t r i e s / e x p o r t i n g raw m a t e r i a l s and f o o d . Inevi ta-bl j r , t h e s e s t a t e s unable t o s e l l t h e i r produce,were c o m p e l l e d t o reduce t h e i r i m p o r t s of -manuf ac t u r e s , a r e s u l t w h i c h f u r t h e r a g g r a v a t e d European and B r i t i s h i n d u s t r i a l d e p r e s s i o n . A b i g 'slump i n w o r l d t r a d e came i n 1 9 2 1 , a f t e r the s h o r t p e r i o d of p o s t - w a r . opt imism was o v e r . P r i c e s f e l l and p u r c h a s e s were r e d u c e d t o a minimum' i n the e x p e c t a t i o n of s t i l l , l o w e r p r i c e s . Ag the r a t e of the f a l l of p r i c e s d e c r e a s e d , t h i s tendency d i s a p p e a r e d and a r r e a r s of o r d e r s i n c r e a s e d the volume of t r a d e , e s p e c i a l l y B r i t i s h e x p o r t s . ( l ) f h e second f u n d a m e n t a l i n f l u e n c e , g r o w t h of l o c a l manufac t u r e i n - many c o u n t r i e s , g a i n e d <impetus f rom w a r - t i m e c o n d i t i o n s . I n d u b i t a b l y the t r e n d was p r e s e n t p r i o r t o the c o n f l i c t of 1914-18, but the w a r ,by c u t t i n g o f f f o r m e r s o u r c e s of s u p p l y and by c r e a t i n g an immense demand f o r c e r t a i n a r t i c l e s , c o m p e l l e d many c o u n t r i e s t o produce i n -t e r n a l l y «mny•classes of goods f o r m e r l y i m p o r t e d . t h e advent of peace caused the abandonment of some of t h e s e new i n r d u s t r i e s b u t a number were, m a i n t a i n e d f o r s e v e r a l r e a s o n s . In the f i r s t p l a c e , f e a r of f u t u r e wars had a s t r o n g i n f l u e n c e i n d e t e r r i n g c o u n t r i e s from a g a i n becoming dependent upon f o r e i g n e r s f o r s t a p l e p r o d u c t s and m a t e r i a l s , e s p e c i a l l y f o o d . A g a i n , v e s t e d i n t e r e s t s c o n c e r n e d i n the maintenance of war-time i n d u s t r i e s n a t u r a l l y .protested a g a i n s t t h e i r de-( 2 2 0 s t r u c t ! o n and a g i t a t e d f o r p r o t e c t i o n . A l s o i n some cases the n e w l y e s t a b l i s h e d i n d u s t r i e s were a b l e t o compete a g a i n s t f o r e i g n e n t e r p r i s e . There was a l s o the u n w i l l i n g n e s s t o throw workers on the l a b o r matket a t a. time when r e t u r n i n g s o l d i e r s were s e e k i n g employment. To c i t e examples of t h i s g r o w t h , C a n a d a , I n d i a and A u s t r a l i a , w i t h i n the empire ,.show i n c r e a s e d m a n u f a c t u r e s , much of w h i c h can be a t t r i b u t e d t o the s t i m u l u s of the war. In I n d i a ^ n a t i o n a l i s t s e n t i m e n t was a c o n t r i b u t o r y f a c t o r . The l a r g e r r e p u b l i c s of South A m e r i c a show c o n s i d e r a b l e p r o g r e s s , A r g e n t i n a h a v i n g a volume of m a n u f a c t u r e s i n 1925 n e a r l y t h r e e t i m e s as l a r g e as i n 1 9 1 3 , ( l ) B r a z i l has e s t a b -l i s h e d t e x t i l e and boot i n d u s t r i e s . C h i l e ha^ d e v e l o p e d many manu f a c t u r e s w h i c h have d i s p l a c e d i m p o r t s . Bor example, the i m p o r t s of g l a s s w a r e d e c r e a s e d from 1,500,000 pesos i n l 9 1 3 t o 14,430 pesos i n 1922.(2) The number of c o t t o n s p i n d l e s i n .Japan,China, I n d i a and B r a z i l i n l 9 1 3 ' was about 10 m i l l i o n s ; by 1924 the number had i n c r e a s e d t o n e a r l y - 18 m i l l i o n s . -Between 1913 and 1922- the number of -cotton -power looms i n I n d i a - a n d Japan r o s e from 120,000 t o 200,000.(3) The a n n u a l p r o d u c t i o n of s t e e l j u s t b e f o r e the war i n J a p a n , C h i n a , I n d i a and A u s t r a l i a was 360,000 t o n s . I n 1922 i t was 858,000 tons.(3) One r e s u l t a r i s i n g from t h e s e nev/ c o n d i t i o n s has been a tendency of B r i t i s h e x p o r t e r s t o c o n c e n t r a t e on f i n e r q u a l i t y goods, the new c o m p e t i t i o n b e i n g c h i e f l y i n (1) Survey of Overseas M a r k e t s ( B a l f o u r Committee) p467 ( 2 ) I b i d p480 (3) I b i d p 10 ( S 3 ) l o w g r a d e w a r e s , due t o t h e n e w n e s s o f t h e c o m p e t i n g i n -d u s t r i e s . B r i t a i n i s w e l l a d a p t e d f o r s p e c i a l i z a t i o n a s r e g a r d s q u a l i t y a n d m a y b e c o n s i d e r e d t o h a v e a n a d v a n t a g e i n t h i s r e s p e c t o v e r o t h e r m a n u f a c t u r i n g c o u n t r i e s d e s i f r o u s o f e x p o r t i n g t o s t a t e s w r i e r e i n d u s t r y i s s t i l l i n a p a r t l y d e v e l o p e d c o n d i t i o n . Ag a l o n g - r u n f a c t o r t e n d i n g t o n o r m a l i t y , t h e r e - i s t h e g r o w t h o f p u r c h a s i n g p o w e r i n t h o s e c o u n t r i e s w i t h newly d e v e l o p i n g i n d u s t r i e s . I n c r e a s e d . e m p l o y m e n t , d e m a n d f o r m a c h i n e r y a n d i n some c a s e s t h e e x p o r t o f t h e p r o d u c t o f . t h e new i n d u s t r y a l l c o m b i n e t o i n c r e a s e t h e p u r c h a s i n g p o w e r a b r o a d o f s u c h s t a t e s . T a k i n g f o r e x a m p l e t h e U n i t e d S t a t e s a s a c o u n t r y w h i c h h a s c o m p a r a t i v e l y r e c e n t l y a t t a i n e d i n d u s t r i a l m a t u r i t y , we - f i n d t h a t i t s e x p o r t s o f r a w m a t e r i a l s s u c h a s w h e a t a n d - m e a t h a v e b e e n c h e c k e d , owing t o i n c r e a s e d d o m e s t i c demand a r i s i n g f r o m t h e f a s t e r g r o w t h o f t h e i n d u s t r i t h a n t h e a g r i c u l t u r a l p o p u l a t i o n , T h i s h a s s t i m u l a t e d t h e wheat a n d m e a t e x p o r t s o f t h e B r i t i s h . d o m i n i o n s a n d S o u t h A m e r i c a ,w h i c h r e c e i v e i n t u r n m a n u f a c t u r e s f r o m B r i t a i n and E u r o p e A g a i n , t h e i n c r e a s e d , w e a l t h o f t h e U n i t e d s t a t e s h a s c a l l e d i n t o b e i n g a d e m a n d f o r l u x u r i e s r e g a r d l e s s o f p r i c e . C o n s e q u e n t l y f o r e i g n g o o d s o f h i g h q u a l i t y a r e i m -p o r t e d i n t o t h e U n i t e d S t a t e s i n s p i t e o f t a r i f f imposts. The f a c t r e m a i n s , w n e t h e r B r i t i s h e x p o r t e r s l i k e i t o r n o t , t h a t t h e w i d e s p r e a d g r o w t h o f l o c a l m a n u -f a c t u r e i s a p e r m a n e n t o n e . The p r i n c i p a l r e s u l t w i l l b e a r e - a r r a n g e m e n t o f l o c a l d i s t r i b u t i o n . B r i t a i n ' s o p p o r t u n i t i e s ( 2 4 ) o f maintaining h e r s h a r e o f i n t e r n a t i o n a l c o m m e r c e depend-n o l o n g e r on h e r f o r m e r p o s i t i o n o f p r i n c i p a l m a n u f a c t u r e r , ( a p o s i t i o n a l r e a d y t h r e a t e n e d b e f o r e t h e w a r ) , b u t on h e r a b i l i t y t o p r o d u c e g o o d s o f s u p e r i o r q u a l i t y o r o f c o m p e t i t i v e l ^ r i c e . T h i s w i l l n e c e s s i t a t e w i d e s p r e a d r e - a d j u s t m e n t o f h e r m a n u f a c t u r i n g i n d u s t r y . The p e r m a n e n c e o f l o c a l m a n u f a c t u r e i n f o r e i g n c o u n t r i e s h a s b e e n m a i n t a i n e d i n m a n y c a s e s b y v a r i o u s measures i n t r o d u c e d b y s u c h s t a t e s t o h a n d i c a p c o m p e t i n g p r o d u c t s . T h e s e may b e d i v i d e d r o u g h l y i n t o f o u r g r o u p s , n a m e l y ( l ) c u s t o m s t a r i f f s , ( 2 ) p r o h i b i t i o n s o r r e s t r i c t i o n s , w i t h o r w i t h o u t a s y s t e m o f l i c e n s e s , ( 3 ) s p e c i a l p r i v i l e g e s , c o n c e s s i o n s o r s u b s i d i e s t o l o c a l i n d u s t r y , a n d (4) s t a t e c o n t r o l o r m o n o p o l y . The f i r s t o f t h e s e , t a r i f f s , i s a l m o s t u n i v e r s a l l y e m p l o y e d . S i n c e t h e w a r t h e r e h a s b e e n a g e n e r a l r i s e i n t h e l e v e l o f t a r i f f s a i l o v e r t h e ? v r o r l d . The f o l l o w i n g t a b l e s s h o w d u t i e s on c e r t a i n s t a p l e a r t i c l e s b e f o r e a n d a f t e r t h e w a r r e d u c e d t o -a c o m p a r a b l e b a s i s , ( l ) T a r i f f D u t y o n P i g I r o n ( I n E n g l i s h E q u i v a l e n t ( C o u n t r y 1 9 1 4 1924 G e r m a n y I O / ' - p e r t o n 1 1 / - p e r t o n I r a n c e 1 2 / 2 11 » 7/4 tt ii I t a l y 8 / ' l | - " » 2 5 / 2 n tt J a p a n s A o i * " 2/- tt « U n i t e d S t a t e s f r e e 3/4 it t! A u s t r a l i a . f r e e 2 0 / - t l t l C a n a d a 6 / l l p e r t o n . i t II I n d i a 1% a d v a l o r e m 13/4 i f i l ( l ) S u r v e y o f O v e r s e a s T r a d e ( B a l f o u r C o m m i t t e e ) <J O (25) T a r i f f D u t i e s on T i n P l a t e s ( i n E n g l i s h E q u i v a l e n t ) C o u n t r y 1914 1924 R u s s i a 13/5 per cwt er cwt Trance .<->/<->% « 4/9 - II I t a l y 7/4 « 12/4 * u • Germany 2/9 M it 3/- tt 11 C h i n a • 9d il 1/4 tt ;> Japan 1 / 2 1 (I i / i n tt B r a z i l 4/3 M « t / 3 « « A r g e n t i n a , lOd II it 1/2 n tt I n d i a Ifa a d . v a l o r e m 4/5 • ;t tt Canada f r e e d v a l o r e m A u s t r a l i a f r e e f r e e U n i t e d S t a t e s ad v a l o r e m • 4/11 per cwt The above s h o u l d I n d i c a t e how g e n e r a l was the t e n d e n c y among s t a t e s t o r a i s e t h e i r t a r i f f s i m m e d i a t e l y a f t e r the war. A l l s t a p l e c l a s s e s of m a n u f a c t u r e d goods showed i n c r e a s e d d u t i e s . T a r i f f s on m a c h i n e r y were r a i s e d to a c o n s i d e r a b l e e x t e n t i n E u r o p e a n c o u n t r i e s ,but were o n l y s l i g h t l y ©hanged In o t h e r p a r t s of the w o r l d . D u t i e s on a u t o m o b i l e s were r a i s e d u n i v e r s a l l y . C o a l Vv&s a dmi t t e d f r e e by most European s t a t e s a f t e r the w a r , F r a n c e and T'ottugal levyingGredUced:;rates . • i.Spain r a i s e d the d u t y f r o m 2/10 per t o n i n 1914 t o 3/7 i n 1924. The U n i t e d S t a t e s and A r g e n t i n a a d m i t t e d c o a l f r e e i n 1924, B r a z i l r a i s e d the d u t y c o n s i d e r a b l y but the new charge i n c l u d e d p o r t t a x e s . (26) C o t t o n y a r n s .and p i e c e g o o d s s h o w e d a g e n e r a l i n c r e a s e , t h e p r i n c i p a l e x c e p t i o n b e i n g C a n a d a where a s m a l l r e d u c t i o n w a s made. The d u t y on w o o l l e n a n d w o r s t e d p i e c e g o o d s i n g e n e r a l r e m a i n e d app£oximately t h e s a m e . I t a l y a l m o s t d o u b l e d h e r r a t e s w h i l e C a n a d a l o w e r e d h e r s s l i g h t l y . The f o l l o w i n g t a b l e s h o w s i n d e x n u m b e r s e x p r e s s i n g t h e e s t i m a t e d a d v a l o r e m i n c i d e n c e o f t a r i f f s a p p l i e d t o B r i t i s h g o o d s i n v a r i o u s c o u n t r i e s b e f o r e a n d a f t e r t h e w a r . ( l ) E s t i m a t e d A d V a l o r e m I n c i d e n c e on T a r i f f s . C o u n t r y I n d i a 1914 at /* 1924 > i o i A u s t r a l i a 6i C a n a d a i 5 i U n i o n o f S o u t h A f r i c a H 9 l e w Z e a l a n d 8 i 8 i U n i t e d S t a t e s i 9 i 3 2 G e r m a n y i ? i 1 0 A r g e n t i n a 24 2 0 E r a n c e ( & A l g e r i a ) i 2 i J a p a n 1 9 t 1 0 , C h i n a 5 5 N e t h e r l a n d s 2^ B r a z i l 88 41 B e l g i u m 10 8 E g y p t 8 8 I t a l y 18t S p a i n 42 3 7 i S w e d e n 23 124-4r ( l ) S u r v e y o f O v e r s e a s M a r k e t s p 5 4 5 (27) The e x t e n t of e f f e c t i v e p r e f e r e n c e g i v e n by the dominions t o B r i t i s h goods i s shown In the f o l l o w i n g t a b l e . ( l ) Ad V a l o r e m P r e f e r n c e g i v e n t o B r i t i s h Goods. C o u n t r y 1914 1924 of erf /O /O A u s t r a l i a 3-j-f l i f Canada 5 l # 5 b r 6## 5# .or 8^ - ## Uni o n of South A f r i c a , 2 f ,2-f-Hew Z e a l a n d 3|- 12 (#• over c o u n t r i e s e n j o y i n g i n t e r m e d i a t e t a r i g g r a t e s {Or over c o u n t r i e s s u b j e c t t o g e n e r a l t a r i f f rates.') While the i n d e x numbers i n the above two t a b l e s , f r o m the n a t u r e of the m a t e r i a l whence t h e y were drawn and the com-p l e x i t y o f changes i n t a r i f f r a t e s , a r e a d m i t t e d l y m e r e l y ap-p r o x i m a t i o n s , t hey n e v e r t h e l e s s g i v e a f a i r l y a c c u r a t e Idea of the i n c i d e n c e of d u t i e s ...on B r i t i s h goods. I t appears t h a t up t o 1924 the r i s e i n s p e c i f i c d u t i e s had been a p g r o x i m a t e l y e q u a l t o the r i s e i n p r i c e s , l e a v i n g the ad v a l o r e m i n c i d e n c e o n l y s l i g h t l y c h a n g e d . I n t e x t i l e s ,an i m p o r t a n t b r a n c h of B r i t i s h i n d u s t r y , t h e ad v a l o r e m i n c i d e n c e i n 1924 was a c t u a l l y l e s s t h a n ' i n 1914,- I n .metals t h i s i n c i d e n c e had i n c r e a s e d s l i g h l t y . C o n c l u s i o n s t o be drawn from the above i n d e x numbers p o i n t t o o t h e r causes than i n c r e a s e d t a r i f f s as the r e a s o n f o r the post-«ar d e c l i n e i n B r i t i s h e x p o r t s . An i n t e r e s t i n g f e a t u r e of the post-war t a r i f f s i t u a t i o n i s . that the main i n c r e a s e s i n d u t i e s on B r i t i s h goods have o c c u r r e d w i t h i n the empire,where the average ad v a l o r e m i n c i d e n c e r o s e by n e a r l y two t h i r d s \ w h i l e i n f o r e i g n c o u n t r i e s , u e s p i t e ( l ) Survey of 'Overseas M a r k e t s p545. ' • (28) the p rea t i nc rease i n the Uni t ed S ta tes t a r i f i , the average (weighted) ad valorem i n c i d e n c e d e c l i n e u by one f i f t h . Con-cu r ren t inc rease i n the * preference accorded B r i t i s h goods im-por ted i n t o the dominions has tended to o f f s e t t h i s disadvantage^ The average i n c i d e n c e of empire t a r i f f s on B r i t i s h goods remains lower than t h a t of f o r e i g n t a r i f f s "by a r a t i o of rough ly 10 to 17 . ( l ) As regards d i f f e r e n t i a l t reatment of B r i t i s h goods as compared to those of other c o u n t r i e s , i n gene ra l - B r i t a i n r e -ce ives a t l e _ s t as f a v o r a b l e t reatment i n f o r e i g n markets _s any other e x p o r t i n g c o u n t r y . In the U n i t e d S ta tes , B r i t i s h goods are not sub jec ted to d u t i e s l e v i e d i n r e t a l l i a t i o n a g a i n s t t a r i f f s imposed on Amer i can p r o d u c t s i n other c o u n t r i e s . Caries where B r i t i s h commodities r e c e i v e d d i sadvantageous t reatment in 19 24 were u n i m p o r t a n t , u s u a l l y o c c u r r i n g i n n e i g h b o r i n g c o u n t r i e s tha t have mad^e s p e c i a l 'agreements* f o r example ,Spain and B c r t u g a l , the B a l t i c s t a t e s , and some of the South American r e p u b l i c s . I t w i l l be seen tha t w h i l e f o r e i g n t a r i f f s g r e a t l y h inde r B r i t i s h t r a d e , t h e y do n o t , a s y e t , d i s c r i m i n a t e aga ins t i t nor d i d they inc rease s u f f i c i e n t l y immedia te ly a f t e r the war to be cons ide red the prime cause of the d i m i n u t i o n of B r i t i s h expor ts before 1929. A type of o f i i c i a l r e g u l a t i o n of overseas commeree of les,.- importance then, t a r i f f s t.-x:ss the form of s p e c i a l p ro -h i b i t i o n s and r e s t r i c t i o n s . T h i s has been more of ten found i n Europe thr.n i n any other pa r t of the w o r l d . Of these r e s t r i c t i o n s the most noteworthy i s the requirement of l i c e n s e s before im-p o r t a t i o n of f o r e i g n goods i s a l l o w e d . This has be?n the source ( l ) Survey of Overseas markets c f >LVch d e l a y ana u n c e r t a i n t y and i s a r e a d y means of i n d i r e c t and unacknowledged p r ? i e r 8 n A p r i v i l e g e s oi£- m o s t - f a v o r e d - n a t i o n t r e a t i e s , '.Vhile l i c e n s i n g ana o t h e r r e s t r i c t i o n s , s u c h as r a t i o n i n g and p r o h i b i t i o n s had a mariced e f f e c t on r e d u c i n g B r i t i s h e x p o r t s i m m e d i a t e l y a f t e r the war, they r a p i d l y d i s a p p e a r e d and s i n c e 192^ have been of c o m n a r a t i v e l j r l i t t l e i m p o r t a n c e . Another s o u r c e of d i f f i c u l t i e s to be overcome bv B r i t i s h e x p o r t e r s has been the p r e s e n c e of s p e c i a l p r i v i l e g e s , c o n c e s s i o n s or s u b s i d i e s . An example of the form wh ich such s t a t e i n t e r -v e n t i o n may t a k e i s c o n t a i n e d i n t h e R o y a l S p a n i s h Decree of 1924,wnich aims a t a i d i n g new i n d u s t r i e s d e v e l o p i n g S p a n i s h n a t u r a l r e s o u r c e s , e x i s t i n g i n d u s t r i e s the p r o d u c t i o n of w h i c h i s i n s u i i i c i e n t t o s u p p l y the n o r m a l demand i n the c o u n t r y , a n d i n d u s t r i e s the- s u r p l u s p r o d u c t i o n of whicu i s e x p o r t e d . C e r t a i n r e q u i r e m e n t s as t o ' n a t i o n a l i t y of s h a r e h o l d e r s and employees were s p e c i f i e d . S t a t e a s s i s t a n c e wa» to take the form of r e m i s s i o n of c e r t a i n .taxes ,government c o n t r a c t s g u a r a n t e e d over a p e r i o d of s e v e r a l y e a r s ana l o a n s . uf a l l i n d u s t r i e s r e c e i v i n g s t a t e a i d , s h i p p i n g i s the most c o n s i s t e n t l y a s s i s t e d . S u b s i d i e s are g i v e n by B e l g i u m , B r a z i l 5 I t a l y , J a p a n , He ther l ands ,JSForway,Spa in , and f o r a time by the U n i t e d S t a t e s of A m e r i c a . Sweden g r a n t s l oans to i t s s h i p p i n g companies .Germany,under a program of " p r o d u c t i v e unemployment rel ief '- '- , begun i n 1925, made s t a t e l o a n s t o encourage ship^m.:-b u i l d i n g . I rance g u a r a n t e e s the i n t e r e s t on and the r e d e m p t i o n of bonds o f one or more companies ,'and g i v e s s p e c i a l c o n c e s s i o n s t o s h i p b u i l d e r s i n r e s p e c t to r a i l r o a d r a t e s . (30) S t a t e m o n o p o l i e s are a l e s s e f f e c t i v e system t e n d i n g to the c u r t a i l m e n t of B r i t i s h e x p o r t s . I n so f a r as t h e y e x i s t , they l i m i t B r i t i s h t r a d e , h u t as there has heen no abnormal inc rease i n t h i s form of.- e n t e r p r i s e s ince the w a r , t h e i r par t i n the post-war decrease i n commerce i s not an important one. Another c o n s i d e r a t i o n i s tha t s t ap l e a r t i c l e s of B r i t i s h t rade (wi th perhaps the excep t i on of manufactured tobacco) are not among those commodities which a re - most f r e q u e n t l y the subjec t of m o n o p o l i e s * More impor tant t h a n monopolies has been t h e t e n d e n c y toward s t a t e t r a d i n g and c o n t r o l which has mani fes ted . i t s e l f on a l a r g e r s c a l e s i n c e the w a r , p e r h a p s as a l egacy of the s t r i n g e n t c o n t r o l e x e r c i s e d du r i ng t h e s t r u g g l e , fiere aga in t h e most important branch of t rade a f f e c t e d i s s h i p p i n g . he number of c o u n t r i e s ope ra t i ng o r c o n t r o l l i n g c o m m e r c i a l s h i p p i n g has l a r g e l y i n c r e a s e d a n d now i n c l u d e s C a n a d a , J A u s t r a l i a , B e l g i u m , Rumania and S o v i e t R u s s i a . The Uni ted , S t a t e s f o r some years af ter , the war operated a s t a t e l i n e but abandoned the p r o j e c t as u n p r o f i t a b l e . The two.causes o u t l i n e d above as f a c t o r s i n the d e c l i n e of B r i t i s h t rade t n a m e l y d i m i n u t i o n of pu rchas ing power and growth of l o c a l manufacture a long w i t h v a r i o u s r e s t r i c t i o n s , are gene ra l tendencies observable i n a l l pa r t s of the wor ld .The remaining cause, t h * displacement of B r i t i s h imports by imports-from other c o u n t r i e s , cannot be c l a s s e d as a gene ra l tendency inasmuch as some c o u n t r i e s show ga ins and others l o s s e s i n the va r ious marke t s . (31) The G r e a t war t e m p o r a r i l y drove Germany out of w o r l d c o m m e r c i a l c o m p e t i t i o n . l r a n c e ,on the oth e r hand., owing to i t s g r e a t g a i n of " m i n e r a l -wealth and m a n u f a c t u r i n g c a p a c i t y r e s u l t i n g fsom t e r r i t o r i a l changes,and owing t o re-equipment on modern l i n e s of i n d u s t r i e s i n the. d e v a s t a t e d d i s t r i c t s , h a s assumed a more i m p o r t a n t p o s i t i o n i n i n t e r n a t i o n a l t r a d e . The c o m p a r a t i v e immunity of the U n i t e d S t a t e s ' i n d u s t r i e s f r o m the d i r e c t e f f e c t s of t h e war,combined w i t h the enormous f i n a n c i a l s t r e n g t h of the r e p u b l i c and the g r a d u a l a t t a i n m e n t of c o n t r o l over i n d u s t r i a l e n t e r p r i s e s o u t s i d e the c o u n t r y , h a s g i v e n to--Amer ican t r a d e a much s t r o n g e r p o s i t i o n than b e f o r e the war i n al m o s t a l l m a r k e t s , e s p e c i a l l y t h o s e o f the American c o n t i n e n t s B e l g i u m , w h i c h i n s p i t e o f i t s s i z e , i s an impor tant i n d u s t r i a l c o u n t r y , h a s been s l o w e r t h a n F rance i n r e c o v e r i n g , from the r e s u l t s of the war . J a p a n , w i t h the same o p p o r t u n i t i e s as the U n i t e d S t a t e s b u t l e s s p r e p a r e d t o t a k e advantage o f them, has doubl e d h e r p r o p o r t i o n of w o r l d t r a d e s i n c e 1913, A common f a c t o r i n f l u e n c i n g the d i f f e r e n t r a t e s of r e c o v e r y has been the e x c h a n g e , C o u n t r i e s i n w h i c h the exchange v a l u e of c u r r e n c y f e l l f a s t e r t h a n the i n t e r n a l p u r c h a s i n g power f o u n d t h e m s e l v e s hampered i n the purchase of e s s e n t i a l f o o d and raw m a t e r i a l s f r o m a b r o a d ; w h i l e , o n the o t h e r hand, t h e i r e x p o r t s e n j o y e d an i n d i r e c t premium. An o t h e r i m p o r t a n t c i r c u m s t a n c e t h a t i s s t i l l p o t e n t i s the s h o r t a g e of c a p i t a l as a consequence of the war. P r e v i o u s to. the d e p r e s s i o n b e g i n n i n g i n 1929,high r a t e s of i n t e r e s t i m most European c o u n t r i e s a c t e d as a h a n d i c a p on i n -d u s t r i a l development ,and c o u n t e r a c t t o a c e r t a i n degree the c o m p e t i t i v e , advantage w h i c h most of these c o u n t r i e s , d e r i v e f r o m lower l a b o r c o s t s . Summariz ing the above e x a m i n a t i o n of c e r t a i n f a c t o r s i n G r e a t B r i t a i n ' s i n d u s t r i a l p r o b l e m , i t may be s t a t e d t h a t d u r i n g the post-war p e r i o d b e f o r e 1929 none of these f e a t u r e s a f f e c t e d G r e a t B r i t a i n a l o n e . They were w o r l d - w i d e i n t h e i r s cope, o p e r a t i n g u s u a l l y w i t h e q u a l i n t e n s i t y a g a i n s t the t r a d e of o t h e r e x p o r t i n g c o u n t r i e s . T h e e x t e n t t o w h i c h Great B r i t a i n has s u f f e r e d from t h e s e w o r l d c o n d i t i o n s owes i t s magnitude t o her g r e a t dependence unpon e x t e r n a l t r a d e . Compared to the t r a d e of o t h e r c o u n t r i e s , t h e commerce of Great B r i t a i n has n o t s u f f e r e d f r om a d v e r s e d i s c r i m i n a t i o n . In f a c t i t has e n j o y e d an e q u a l p o s i t i o n i n a l l i m p o r t a n t f o r e i g n markets t o g e t h e r w i t h a p r e -f e r r e d p o s i t i o n i n t h o s e of the empire. There i s a n o t h e r f e a t u r e of the post-war phase of B r i t i s h i n d u s t r y t h a t cannot be c l a s s e d as a w o r l d f o r c e . I t i s the problem o f c o s t s . In the l i g h t of the f o r e g o i n g d i s c u s s i o n of B r i t i s h o v e r s e a s t r a d e and the c o n c l u s i o n ' d r a w n , n a m e l y that B r i t a i n r e c e i v e s e q u a l i t y of o p p o r t u n i t y i n the w o r l d m a r k e t s , i t seems obvi o u s t h a t B r j _ t i s h goods must be i n f e r i o r i n q u a l i t y or h i g h i n p r i c e . The q u a l i t y of the s t a p l e c l a s s e s o f - B r i t i s h goods has an e n v i a b l e r e p u t a t i o n , a l t h o u g h m a n u f a c t u r e r s are s low i n c h a n g i n g the s t y l e of goods t o s u i t p o p u l a r demand. I t i s the r e l a t i v e h i g h p r i c e s t h a t r e s t r i c t s a l e s . These.-; h i g h e r p r i c e s a re due c h i e f l y t o h i g h e r p r o d u c t i o n c o s t s . A s an examinat ion of a l l wp^hases'.of t h i s p r o b l e m would be u n n e c e s s a r y i f not im-i m p o s s i b l e , ! s h a l l d e a l o n l y w i t h the main g e n e r a l f o r c e s t e n d i n g to r a i s e c o s t s . These f a c t o r s a r e t h r e e i n number\ f i r s t / h i g h t a x -a t i o n ; second, h i g h wage r a t e s ; t h i r d , o b s o l e s c e n t p l a n t and o r g a n i z a t i o n . S i m i l a r c o n d i t i o n s may e x i s t i n d i f f e r i n g e x t e n t i n o t h e r s t a t e s , b u t i n few i n s t a n c e s w i t h the i n t e n s i t y of the B r i t i s h s i t u a t i o n . T h e f a c t m r s enumerated, jjhough b e a r i n g a more or l e s s d i r e c t r e l a t i o n s h i p t o i n t e r n a t i o n a l e v e n t s , f o r m a p r o blem p e c u l i a r t o the U n i t e d Kingdom, i t i s i n f i n d i n g a s o l u t i o n t o t h i s p r o b l e m t h a t B r i t a i n ' s hope fbx p r o s p e r i t y l i e s * The f i r s t a d v e r s e c o n d i t i o n i s the n e c e s s i t y f b r h i g h t a x a t i o n . U n d e r l y i n g and c a u s i n g t h i s are the problems of war debts and unemployment, f n the m a t t e r o f i n t e r n a t i o n a l war d e b t s , B r i t a i n i s a t l e a s t as w e l l o f f as a l l the combatants e x c e p t t j i e U n i t e d S t a t e s and J a p a n . R e g a r d i n g the n a t i o n a l debt the p o s i t i o n i s r e v e r s e d . I n f l a t i o n of the c u r r e n c y , f o l l o w e d by I t s s t a b i l i z a t i o n a t a l o w e r v a l u e , a s i n F r a n c e , o r by the sub-s t i t u t i o n of a new c u r r e n c y , a s i n Germany,has been used by a number of European n a t i o n s t o reduce or d e s t r o y t h e i r n a t i o n a l d e b t s . w h a t e v e r the j u s t i c e of t h i s d e v i c e , i t s r e s u l t has been the d i s a p p e a r a n c e of the n e c e s s i t y of r a i s i n g by t a x a t i o n the c o n s i d e r a b l e amounts t o be used as payment of i n t e r e s t ang_ c a p i t a l . H e a n w h i l e G r e a t B r i t a i n , h e r l o a n s t o R u s s i a r e p u d i a t e d , those t o h e r wartime a l l i e s " s c a l e d down" t o a p o i n t where th e y do l i t t l e more than s u f f i c e t o pay her debts to the U n i t e d S t a t e s , h a s s t i l l t o f a c e an enormous n a t i o n a l d e b t . The r e -s t o r a t i o n of the par v a l u e of the pound, in 1925,has been d e c r i e d by many e c o n o m i s t s . At the p r e s e n t t i m e , w i t h s t e r l i n g exchange i n ^ew Y o r k s e l l i n g below § 4 . 0 0 , as a r e s u l t of .Great B r i t a i n g o i n g o f f the g o l d s t a n d a r d i n 1931, t h e r e i s c o n s i d e r a b l e (34) s u p p o r t t o the p r o p o s a l to s c a b i l z e the pound below p a r , f o r example a t i?4«00« One permanent r e s u l t of such a measure would "be the r e d u c t i o n of the r e a l v a l u e of the n a t i o n a l debt "by more than 15$. W i t h a n a t i o n a l debt of over £7,500,000,000 t h i s would mean an a n n u a l s a v i n g of the i n t e r e s t on £1,150,-000,000. On the o t h e r hand, a l a r g e p a r t of - B r i t a i n ' s l o a n s abroad a r e p a y a b l e i n -pounds s t e r l i n g , so t h a t l o s s e s f rom t h i s causeemust be con-s i d e r e d . Temporary s e l l i n g advantages due t o t h i s f o r m of i n -f l a t i o n d i s a p p e a r a soon as the c u r r e n c y has been s t a b i l z e d and i n t e r n a l p r i c e s have a d j u s t e d t h e m s e l v e s . F u r t h e r c o n s i d e r a t i o n of t h i s r e c e n t develoi lment i n the B r i t i s h s i t u a t i o n must be d e f e r r e d u n t i l l a t e r i n t h i s e s s a y . The s i z e and g r o w t h of the U n i t e d kingdom's n a t i o n a l debt i d shown.in the f o l l o w i n g t a b l e . ( l ) U n i t e d Kingdom Debt and I n t e r e s t . % t e N a t i o n a l debt Year i n t e r e s t e t c M a t i o n a l debt ° March 3 1 ^ m i l l i o n s £ m i l l i o n s 1 9 1 4 • 6 5 0 1 9 1 3 - 1 4 2 4 1 9 1 9 7 , 4 3 5 1 9 1 8 - 1 9 2 7 0 1 9 2 0 7 , 8 2 9 1 9 1 9 - 2 0 3 3 2 1 9 2 1 7 , 5 7 4 1 9 2 0 - 2 1 3 5 0 1 9 2 2 7 , 6 5 4 1 9 2 1 - 2 2 3 3 2 1 9 2 3 7 ,74'2 1 9 2 2 - 2 3 3 2 4 1 9 2 4 •7,641 1 9 2 3 - 2 4 3 0 7 # 1 9 2 5 7 , 5 9 8 1 9 2 4 - 2 5 »_) JL 2^ /* 1 9 2 6 7 , 5 5 9 1 9 2 5 - 2 6 3 0 8 # (# E x c l u d i n g payments t o s i n k i n g f u n d , v i z . £40 m i l l i o n s i n 1924, £45 m i l l i o n s i n l 9 2 5 , and £50 m i l l i o n s i n 1926.) ( l ) Bowley , "Some Economic Consequences of the G r e a t •'ar" p 105. (35) Ahe above f i g u r e s i n c l u d e the B r i t i s h debt t o the U n i t e d S t a t e s of over £800 m i l l i o n s . B r i t a i n had l e n t £1,740,000 ,000 to h e r a l l i e s d u r i n g the war. Of t h i s £568 M l l i o n s went t o R u s s i a and was r e p u d i a t e d . As m a t t e r s s t a n d . i n t e r e s t p a i d to B r i t a i n a p p r o x i m a t e l y b a l a n c e s her payments t o the U n i t e d States« Then t h e r e i s the burden ©f unemployment.^ere i s o b s e r v a b l e t h e o l d metaphor of t h e v i c i o u s c i r c l e . D e c l i n i n g t r a d e causes unemployment and unemployment r a i s e s t a x a t i o n and h a n d i c a p s t r a d e . The number of unemployed workers b e a r s a d i s t i n c t r e l a t i o n to the d i m i n u t i o n of B r i t i s h e x p o r t s . A f t e r making a l l o w a n c e f o r . change of p r i c e i t i s found t h a t the a c t u a l q u a n t i t y o f goods e x p o r t e d was i n 1923-24 one q u a r t e r to one f i f t h l e s s t h a n i n 1 9 1 3 . ( l ) Added t o the d i r e c t d e c r ease of l a b o r employed i n the p r o d u c t i o n of these g o o d s , t h e r e i s a l s o the l o s s t o the t r a n s p o r t a t i o n i n d u s t r y . B e f o r e the war, i t has been e s t i m a t e d t h a t n e a r l y one q u a r t e r of the n a t i o n a l i n d u s t r y depended on p r o d u c t i o n f o r e x p o r t , w h i l e i n 1925 the p r o p o r t i o n was o n l y one f i f t h . A r e s t o r a t i o n of the former p r o p o r t i o n would mean the-- employment of about 700,000 t o 800,000 more wage-earners. The d i m i n u t i o n of the p h y s i c a l volume of e x p o r t s i s t h u s seen t o be the r o o t cause of unemployment i n G-reat B r i t a i n s i n c e the war. T r o d u c t i o n f o r the home marked remained a p p r o x i m a t e l y the same i n 1923-24 as i n 1913.As the number of persons, a t work was a l s o n e a r l y the same, the output per head had changed l i t t l e , a l t h o u g h . w o r k i n g hours showed a s l i g h t d e c r e a s e . ( 2 ) R e a l wages on the average had r i s e n s l i g h t l y , owing t o r e d i s t r i b u t i o n of the n a t i o n a l income. (2.) (1) Hob son,"Some A s p e c t s of Recent B r i t i s h Economics" p2. (2) Bowley,"Some Economic Consequences of the G r e a t War" p 207. (36) A second f a c t o r i n unemployment lias been f a u l t y l o c a l i z a t i o n of l a b o r b o t h i n d i s t r i c t s and o c c u p a t i o n s . T h i s tends t o c o r r e c t i t s e l f by the c h o i c e of occupation.made by the r e c r u i t s , t o i n d u s t r 3 r . 1 t i s a l s o h e l p e d by the t r a n s f e r e n c e of u n s k i l l e d and s e m i - s k i l l e d l a b o r f rom i n d u s t r y t o i n d u s t r y . T h i s movement , when l i n k e d up w i t h change of l o c a t i o n , i s h i n d e r e d by the E n g l i s h r e n t system, s i n c e p e o p l e a r e u n w i l l i n g t o l e a v e houses,where the r e n t i s c o n t r o l l e d , t o compete f o r accommodation a t h i g h e r r a t e s . However i t i s not the causes of unemployment,but un-employment as a cause of h i g h e r p r o d u c t i o n c o s t s t h a t 1 wash t o c o n s i d e r . Under the v a s t B r i t i s h system of unemployment i n s u r a n c e i n d u s t r i a l c o n cerns are c a l l e d upon t o c o n t r i b u t e i n two ways. The c o s t of the i n s u r a n c e i s s h a r e d between i n d u s t r y , w a g e - e a r n e r s and the s t a t e . The l a t t e r ' s- c o n t r i b u t i o n b e i n g d e r i v e d f rom t a x -a t i o n a g a i n l e v i e s upon i n d u s t r y . T a x a t i o n must be c o n s i d e r e d an i m p o r t a n t i t e m i n B r i t i s h c o s t s of p r o d u c t i o n . The i n c r e a s e i n t a x a t i o n i n the U n i t e d Kingdom and t h a t i n o t h e r c o u n t r i e s ' i s c o n t a i n e d i n the f o l l o w i n g t a b l e * ( l | T a x a t i o n i n S e v e r a l C o u n t r i e s . Year 1913-14 Year 1923-24 Amount of t a x a t i o n Amount o f t a x a t i o n £ m i l l i o n % of % of n.ationa.1 n a t i o n a l income £ m i l l i o n income U n i t e d Kingdom N a t i o n a l t a x a t i o n 163 7-g- 690 18 L o c a l '« 93 4 162 4 T o t a l 256 Hi 852 22 Germany T o t a l t a x a t i o n 249 11 413 26 ( l ) Some Economic Consequences of the Great >var p p l l 6 - 1 1 7 . ( 3 7 ) T a x a t i o n i n S e v e r a l C o u n t r i e s ( c o n t i n u e d ) . % of % of n a t i o n a l n a t i o n a l £ m i l l i o n income £ m i l l i o n income Prance N a t i o n a l t a x a t i o n 152 10 313 15* L o c a l t a x a t i o n 54 3£ 48 2-k T o t a l 206 15-h 361 18 I t a l y N a t i o n a l t a x a t i o n 69 8-jr 160 16 P r o v i n c i a l & l o c a l -~ 40- 4 T o t a l 69 8-h 200 20 U n i t e d S t a t e s f e d e r a l t a x a t i o n 138 2 733 5-g-S t a t e " 63 1 198 1/, L o c a l » 251 3-g- 519 3-|-T o t a l 452- d£ ' 1,450 10* I t w i l l be seen t ha t B r i t a i n i s hand i capped by t a x a t i o n i n c o m parison w i t h each of the above c o u n t r i e s e xcept g&ermany. I t i s a l s o n o t e w o r t h y t h a t between 1913 and 1924 the p r o p o r t i o n of t a x e s to the n a t i o n a l income i n c r e a s e d t o a g r e a t e r e x t e n t -in B r i t a i n t h a n i n Prance and the 'United States„ The second f a c t o r i n i n c r e a s i n g B r i t i s h . c o stswof p r o d u c t i o n i s the h i g h e r wage r a t e s p a i d i n the U n i t e d Kingdom i n comparison w i t h t h o s e p a i d i n Europe and i n many oj>her c o u n t r i e s . H igh wages i n themselves are not always an added c o s t s . When p u r c h a s i n g g r e a t e r e f f i c i e n c y h i g h wages a re a sound i n v e s t m e n t from the employer's v i e w p o i n t . #or example wages i n the U n i t e d S t a t e s have been f o r some time much h i g h e r t h a n i n S u r o p e , y e t g r e a t e r e f f i c i e n c y keeps per u n i t c o s t s low i n American i n d u s t r y . However, e f f i c i e n c y depends not o n l y (38) t i p on t h e s k i l l o f the. a r t i s a n h u t u p o n t h e q u a l i t y o f t h e t o o l s a n d i o a . c h i n e . r y a n d u p o n t h e o r g a n i z a t i o n o f t h e i n d u s t r y . I t i s s u p e r i o r p l a n t a n d o r g a n i z a t i o n r a t h e r t h a n i n d i v i d u a l e f f i c i e n c y t h a t causes t h e d i i i e r e n c e between A m e r i c a n a n d E u r o p e a n wages. I t i s a - s t a n d i n g c h a r g e a g a i n s t B r i t i s h i n d u s t r y i n g e n e r a l t h a t m u c h o f i t s p l a n t i s o b s o l e s c e n t and i t s o r g a n i z a t i o n o u t o f d . t e . T h e r e i s c o n s i d e r a b l e t r u t h i n t h e c h a r g e 9 p a r t i c u l a r l y i f B r i t i s h i n d u s t r y i s c o m p a r e d t o t h a t o f t h e U n i t e d S t a t e s . A l s o t h e s t r e n g t h o f t h e t r a d e u n i o n m o v e m e n t i n t h e U n i t e d •"•inadom m ak es ' a n y d o w n w a r d r e v i s i o n o f wastes a n e x t r e m e l y d i f f i c u l t tas'k, a n d - ° r i t i s h wage- l e v e l s are p r o n e to r e m a i n s t e a d y whi le ' those i n . t h e r e s t of E u r o p e f o l i o ? / d e c l i n i n g p r i c e s . T h e f o l l o w i n g t a b l e c o m p a r e s r e a l w a g e l e v e l s i n v a r i o u s c i t i e s o f t h e w o r l d o n O c t o b e r 1 ,1928, c a l c u l a t e d on a b a s i s o f t h e L o n d o n l e v e l e q u a l l i n g 1 0 0 . ( l ) I n d e x ITurabers C o m p a r i n g •"•eal '.--ages. 1009 ivadrid 53 188 B r u s s e l s 52 152 l i i l a n 48 • 110 L o d z 47 90 P r a g u e 46 83 Borne 45 70 V i e n n a . 43 58 waraaw 40 C o n s i d e r e d as c o s t s i n p r o d u c t i o n , m o n e y w a g e s a r e m o r e s i g n i f i c a n t t h a n re«JL w ^ g e s . The d i f f e r e n c e i n m o n e y w a g e s b e t w e e n E u r o p e u n a A m e r i c a i s e v e n g r e a t e r t h a n t h a t i n ( l ) Q u o t e d i n " U n i t e d K i n g d o m " p. 65 f r o m " M i n i s t r y Of L a b o r G a z e t t e . " L o n d o n . P h i l a d e l p h i a Ottawa C o p e n h a g e n S t o c k h o l m A m s t e r d a m B e r l i n F a r i s ( 3 9 ) r e a l r. * jes . Honey wage 5 throughout Europe are a_proximate ly i n tae same p r o p o r t i o n as r e a l wages. Ylages i n ( i reat B r i t a i n i nc rea sed c o n s i d e r a b l y dur ing tine ' .Lent ";;'ar , ana l a o r e th-n e q u a l l e d the r i s e i a p r i c e s , r e a l ; : J ? E b e i n ^ s l i g h t l y h i g h e i s ince 1£14 . Th i s r i s e i n r e a l wags •na r p a r t i c u l a r l y n o t i c e a b l e .among u n s k i l l e d laborer 4 ? ,and i n ^eneral ,wages i n the s h e l t e r e d t rades s tha c i s those not subject to f o r e i g n c c a ^ e t i t i o n , have r i s e n h ighe r than wages i n i n s h e l -t e rea i n d u s t r i e s . The f o l l o w i n g t a b l e shows r e a l w,-.,ges o f va r ious c l a s s © of wotk^rs i n 1926 c a l c u l a t e d a^ percentages of the 1913 l e v e l . i V e a l wages 1926 . (1913—100) S k i l l e d t rades B r i c k l a y e r s 104 C o a l - g e t t e r s 97 M u l e - s p i n n e r s ( co t ton) 106 Turners ' 93 Engine d r i v e r s 117 S e m i - s k i l l e d P a i n t e r s 117 P u t t e r s ( c o a l ) 9 6 •Gr inders (co t ton) 110 M a c h i n i s t s ( e n g i n e e r i n g ) 98 Ra i lway guards 123 U n s k i l l e d B u i l d i n g l a b o r e r s 121 M i n i n g l a b o r e r s 99 Vomen weavers 112 E n g i n e e r i n g l a b o r e r s 105 Goods po r t e r s 127 ( l ) ¥ B wley. il3ome Economic Consequences of the Great "<<ar" p l 4 9 . ( 4 0 ) However, i n c r e a ~ e d v i ~es have been r e x i e r a l throu<>-out Europe and A m e r i c a , a t lsa°t p r i o r t o 1929, and cannot he c o n s i d e r e d a g r e a t h a n d i c a p t o B r i t i s h i n d u s t r y . N e v e r t h e l e s s , i n the main, wages (and s a l a r i e s ) form a l a r g e r p e r c e n t a g e of the c o s t -of. ' p r o d u c t i o n of most B r i t i s h commodities than b e f o r e the w a r . T h i s i s shown below i n a t a b l e comparing pre-war ana post-war c o s t s of p r o d u c t i o n i n Great B r i t a i n , ( l ) C o m p o s i t i o n of C o s t s of P r o d u c t i o n . sxpens es /a 1 5 , 4 8 , 5 1 2 . 0 3 7 ? . 7 # 2 5 . 3 3 6 . O y 1 8 . 0 I n d u s t r y m a t e r i a l s 3~ ^  1 o wag,' s o t h e r 1 9 2 4 m a t e r i a l s - 2 5 wage C o a l mining-of /° 1 1 . 4 /° 7 5 . 3 expenses % IL t>j o 3 of /o 1 0 , 3 of 7 4 . 3 T i g i r o n 8 2 , 5 8 . 9 •8.6 8 0 , 5 11.0 S t e e l i n g o t s 7 3 , 5 1 4 . 8 1 1 . 7 . .71.5 ' 16,5 Agx^i c u l t u r a l m a c h i n e r y Locomotive c o n s t r u c t i o n 4 6 . 5 3 6 , 3 # 1 7 . 2 5 9 . 0 3 2 , - 0# E l e c t r i c a l e n g i n e e r i n g S h i p b u i l d i n g 4.8 . o 6 0 . 3 9 . 0 26. 3# 25.4 C o t t o n s w i n n i n g . Amer i dan c o t ton7 6 , - 3 Egyptian 6 4 . 1 C o t t o n weaving P r i n t e r ' s c l o t h 7 6 . 3 d o . Off 1 2 . 7 2 2 . 5 2 0 , 7 6... 2 1 1 . 0 1 3 , 4 3 . 0 B o o t s and shoes 6 3 . 6 2 3 , 9 ? / 1 2 , 5 3 7 . 0 4 6 . 0 4 2 . 5 6 0 . 5 7 3 . 2 7 4.4 7 8 . 5 5 7 . 2 ,y a . o 3 o e 3 f f 16 & id 2 9 , 0 14.0 9 . 4 1 8 . 7 2 . 8 2 6 . 6 - y 1 6 , 2 ,# s a l a r i e s p a r t l y i n c l u d e d i n o t h e r .expenses.) SummariZ'ed, the f o r c e s t e n d i n g toward the r e s t r i c t i o n of B r i t i s h t r a d e s i n c e the war a r e as f o l l o w s , F i r s t , t h e r e has bean a marked d e c l i n e i n p u r c h a s i n g power, ( l ) U n i t e d Kingdom p26. (41) S e c o n d l y 5 l o c a l manufac tures have grown up i n many p a r t s of the w o r l d , u s u a l l y behind, t a r i f f b a r r i e r s . These two f a c t o r s a re prime causes i n the a b s o l u t e d e c l i n e of B r i t i s h e x p o r t s . The r e l a t i v e d e c l i n e of B r i t i s h s a l e s abroad compared t o tho s e of ot h e r n a t i o n s , i s due p r i m a r i l y to h i g h p r o d u c t i o n c o s t s . These a r i s e f r om t a x a t i o n ^ i n c l u d i n g unemployment i n s u r a n c e ) , h i g h wages as compared t o European m a n u f a c t u r i n g c o u n t r i e s , and o b s o l e s c e n t p l a n t . T a x a t i o n i s the most i m p o r t a n t f a c t o r , s i n c e i t i s p a r t l y r e s p o n s i b l e - f o r the n o n - r e n e w a l of o b s o l e s c e n t m a c h i n e r y . B r i t a i n ' s on ly sound course - toward a r e v i v a l of h e r e x p o r t s t r a d e i s by r e d u c i n g c o s t s . T h i s i s e a s i l y s a i d bu t must be. l o n g i n e x e c u t i o n . R a t i o n a l i z a t i o n of i n d u s t r y has of l a t e gained i n c r e a s i n g a t t e n t i o n , b u t r e q u i r e s a g r e a t d e a l of c a p i t a l . R e d u c t i o n of n a t i o n a l debt charges o t h e r than by i n -f l a t i o n - J a u s t t a k e many y e a r s . Recent events p o i n t t o the a d o p t i o n of p r o t e c t i o n as a, n a t i o n a l - S r i t i s h p o l i c y . T h i s may h e l p i n d u s t r y by a s s u r i n g i t o f o a s t e a d y home market wh ich w i l l be a s l i g h t a i d t o r a t i o n a l i z a t i o n , a n d by r e p l a c i n g d i r e c t t a x e 3 on i n d u s t r y to the amount r a i s e d by customs revenue. However, p r o t e c t i o n can be of - comparat ive ly l i t t l e use i n a i d i n g s a l e s abroad upon w h i c h most of B r i t a i n ' s i n d u s t r y depends. (42) P A ^ T T',70. T HJS R E S T O P T H ? ? 2 2 ' J P I R J . SECTION GNIL THE POI'IIITIOP OP 0. JIADA. The p o s i t i o n of °anada i n the ^ r i t i s h Commonwealth of N a t i o n s has "been g r o w i n g s t e a d i l y i n i m p o r t a n c e both econ-o m i c a l l y and p o l i t i c a l l y , , She has l e d the dominions to a u t o -nomy and r a n k s n e x t t o Great B r i t a i n i n i n d u s t r i a l i m p o r t a n c e . The h u l k of u a n a d a ! s w e a l t h i s i n e x t r a c t i v e i n -d u s t r y . A g r i c u l t u r a l .-reduction i n 1928 ,-as valueci a t :!?1,730,504,000 f o r e s t p r o d u c t s at$205,631,727s m i n i n g a t p 273,446,864; and f i s h e r i e s a t -S54 ,971,319 making a t o t a l o f #2,264,353,960. M a n u f a c t u r i n g added £l, 635,92.3,936 t o the v a l u e of Canadian r aw ma t e r i a 1 s . (1) In r e s p e c t t o i n t e r n a t i o n a l t r a d e , Canada ranics f i f t h among .the c o m m e r c i a l c o u n t r i e s of the w o r l d , a p o s i t i o n f a r h i g h e r than the s i z e of her p o p u l a t i o n would seem to c a l l f o r . Canadian t r a d e f o r the f i s c a l y e a r e n d i n g I a a r c h 31,1929 amount<id t o ^2,654,452,166.(2) T h i s compares i a v o ^ a b l y w i t h ttie o v e r s e a s trade of G r e a t B r i t a i n f o r 1928 w h i c h t o t a l l e d : v9,931,200,000; (3) and the e x t e r n a l t r a d e of the U n i t e d °tates f o r tne S-tme y e a r t o t a l l i n g # 9,693,000,000.(4) In t r a a e per c a p i t a the C a n a d i a n f i g u r e f o r 1929 — $ 247.15 i s exceeded o n l y by Pew Zealand,^340.72, Netherlands,§248.21 ,and Denmark, ^254.12.(5) ^ r o b a b l y the most o u t s t a n d i n g f e a t u r e of Canadian t r a d e i s the r a p i d i t y of i t s g r o w t h , ^ h i s - i s due to the a c c e l e r a t i o n i n the development of the c o u n t r y ' s r e s o u r c e s , ( l ) Canadian A n n u a l fieview 1930 (2) I b i d p276 (3) Commerce Yearbook p770 (4) Recent Econ.Changes(HooverCommittee) ( 5 ) Trade of Canada 1 9 3 0 , p r e l i m i n a r y r e p o r t , p 42. (43) b e g i n n i n g near the end of the n i n e t e e n t h c e n t u r y ana t r a c e a b l e l a r g e l y t o the economic m a t u r i n g of the U n i t e d S t a t e s . w h i c h had p r e v i o u s l y a b s orbed the g r e a t e r p a r t of c a p i t a l a v a i l a b l e f o r i n v e s t m e n t , " Canadian t r a d e , e x p o r t s and i m p o r t s , i n 1900 was , v a l u e d a t .$381,517,236 ( l ) , i n 1913 a t $1 ,095 ,300 ,000 ( 2 ) , and i n 1929 a t &2 ,455 ,500 ,000 (2'), In 1913 Canada h o l d n i n t h p l a c e among the n a t i o n s as r e g a r d s e x t e r n a l t r a d e . I n 1929 she had r i s e n t o f i f t h p l a c e b e i n g e x c e l l e d by the U n i t e d S t a t e s , the U n i t e d Kingdom, Germany•and F r a n c e . (3) In p e r c e n t a g e i n c r e a s e oin e x t e r n a l t r a d e between 1913 and 192.9, Canada ranked s i x t h a f t e r J a p a n , B r i t i s h South A f r i c a ,H e w Zealand,Denmark and the U n i t e d ° ta tes , w i t h an i n c r e a s e o f 124^.(4) w h i l e the lower p o s t -war p u r c h a s i n g power of money as compared to i t s pre-war -power must be remembered when comparing a b s o l u t e f i g u r e s i n terms of money, t h e - r e l a t i v e rank of Canad ian t rade i n compar ison w i t h the t r a d e of o t h e r c o u n t r i e s shows a c c u r a t e l y t h a t Canada has more th a n h e l d her own. Among Canadian i n d u s t r i e s , a g r i c u l t u r e ( i n c l u d i n g s t o c k r a i s i n g and f u r f a r m i n g ) r e p r e s e n t s the g r e a t e s t amount of n a t i o n a l w e a l t h , c a p i t a l i n v e s t e d and the v a l u e of the p r o d u c t combined e q u a l l i n g ¥8,027,301,000 i n 1928, Of t h i s $ 3,316,061,000 re p r e s e n t e d v a l u e of l a n d , -^1,382,684,000 v a l u e o i b u i l d i n g s and #1,750,304 ,000 v a l u e of p r o d u c t i o n . (5) I n e x t e r n a l t r a d e , a g r i -c u l t u r a l p r o d u c t s made up over 50$ of Canadian e x p o r t s i n 1928 and 1929 .Vege tab le p r o d u c t s sh ipped abroad i n 1928 were v a l u e d (1) Canada,the C o u n t r y Of the. 2 0 t h C e n t u r y . (2) Trade of Canada 1930 _ (3) I b i d p42 ( 4 ) I b i d p 43 ( 0 ) Canadian Annual Review 1930 p240. (44) at r?i -555,111,000 and a n i m a l p r o d u c t s a t ^ 1 6 5 , 8 4 5 , 0 0 0 . T o t a l • • e x p o r t s of a l l k i n d s added up t o 1,250,456,000 ( l ) As wheat forms aucha a l a r g e p r o p o r t i o n of -Canada 1s e x p o r t t r a d e , 28% i n 1928,30?? i n 1929 and 19% i n 1930, the , d i s p o s a l -of t h i s c r op c o n s t i t u t e s a pr o b l e m of p r i m a r y importance i n t he s t a b . i l z i n g of 0 ana d a ' s e x t e r n a l -trade. The Wheat 'Pool w h i c h f u n c t i o n e d w i t h a c o n s i d e r a b l e degree of s u c c e s s up to 1930,-was i n t h a t y e a r u n a b l e t o cope e f f e c t i v e l y w i t h the com-b i n a t i o n of d e c r e a s e d woirld p u r c h a s i n g power and the r e - e n t r y of R u s s i a i n t o the w o r l d wheat market. There appears no r e a s o n t o doubt- t h a t R u s s i a w i l l remain a f a c t o r i n the wheat m a r k e t , so t h a t u n l e s s s p e c i a l p r e f e r e n c e s a r e s e c u r e d i n Great B r i t a i n or elsewhere by Canada,she w i l l have t o f a c e , i n a l l l i k e l i h o o d , e i t h e r a l e s s e n e d q u a n t i t a t i v e s a l e or a c c e p t lower prices„ Among a n i m a l p r o d u c t s e x p o r t e d , f i s h had. the g r e a t e s t v a l u e i n 1928,being w o r t h $34,546,646. D a i r y p r o d u c t s , meats and f u r s were n e x t i n o±der o f'importance.. (2) Wood and wood p r o d u c t s ( i n c l u d i n g paper/)' form an i m p o r t a n t i t e m i n Canada's exports--, - in 1928 b e i n g w o r t h ,^284,543,396« V a r i o u s wood p r o d u c t s e x p o r t e d had v a l u e s as fo l lows.s s a w m i l l .and p l a n i n g m i l l products,§73,628,619j wood p u l p $ 47 ,-261,235$ paper $134,-985,777. ( 3 ) M i n e r a l s and t h e i r p r o d u c t s make up the l a s t i m p o r t a n t d i v i s i o n of Canada's e x p o r t t r a d e . In 1 9 2 8 , i r o n and i t s p roduces amounted, t o $ 6 2 , 7 5 3 , 9 3 4 , the l a r g e s t i t e m b e i n g a u t o m o b i l e s & 2 4 , 8 4 0 , 6 7 5 . B o n - f e r r o u s m e t a l s e x p o r t e d were v a l u e d a t $90*840,44.1, w h i l e n o n - m e t a l l i c m i n e r a l s r e a c h e d a t o t a l of $25,949,930.(4) . ( l ) T r a d e o f Canada 1930 p 6. ( 2 ) l b i d pp92-93 ( 3 ) I b i d p 96 (4) I b i d , pp 96-99. ( 4 5 ) £he f o r e g o i n g rough a n a l y s i s of 0 a n a ( a i a n e x p o r t s h-is been i n r e s p e c t t o the g r e a t d i v i s i o n s of e x t r a c t i v e i n d u s t r y and omit a a t r e a t m e n t - o f the amount of manufacture a p p l i e d t o e x p o r t s . • - The Canadian m a n u f a c t u r i n g i n d u s t r y has shown s t u r d y growth and has met s u c c e s s f u l l y c o m p e t i t i o n from o l d e r e s t a b l i s h e d m a n u f a c t u r i n g n a t i o n s i n such, a r t i c l e s as c o t t o n , w o o l and s i l k t e x t i l e s . Under the c a t e g o r i e s of raw m a t e r i a l s , p a r t l y manu-f a c t u r e d goods and f u l l y m a n u f a c t u r e d goods , C a n a d a 1 s e x p o r t s f o r 1928 were as f o l l o w s . ( 1 ) Canad ian E x p o r t s . 1928. Raw m a t e r i a l s 1580,171,000 P a r t l y m a n u f a c t u r e d goods #189,381,000 E u l l y m a n u f a c t u r e d * §458,797,000 Of Canada's t o t a l e x p o r t s , f u l l y m a n u f a c t u r e d goods amounted t o about 57$ i n the two y e a r s 1928 and 1929; w h i l e . p a r t l y m a n u f a c t u r e d goods e q u a l l e d about 1 5 $ , l e a v i n g 48$ as the share of raw m a t e r i a l s . Important items among m a n u f a c t u r e d goods f o r the y e a r 1928 i n c l u d e wood p r o d u c t s §49,048,356 5 t e x t i l e s $ 10,904,075?automobiies $24,840,67 5:; m a c h i n e r y $6,166,574; farm implements and m a c h i n e r y $15,643,381; r u b b e r manufactures $28,625,951; paper $134,985,777? and f i l m s ^3,542,406.(2) I t i s worthy of note t h a t c o n s i d e r a b l e q u a n t i t i e s of raw m a t e r i a l i s impor t e d f o r the use of Canadian manufactures m a i n l y f u e l and raw r u b b e r . In r e s p e c t t o the im p o r t t r a d e od c a r i a c ] a an a n a l y s i s of .imports b v main c a t e g o r i e s i s appended below. (,l) '^rade of Canada 1930 (2) I b i d pp 89-100 (46) G l a s s e s of Canadian Imports 192S ( l ) C l a s s 1928 V e g e t a b l e p r o d u c t s - 238,185,560 Animals and p r o d u c t s 65 ,790 ,021 F i b r e s and t e x t i l e s 186,994,462/ v/,ood,wood p r o d u c t s & paper 51 ,750,924 I r o n and p r o d u c t s 259,575,030 H o n - f e r r o u s m e t a l s & p r o d u c t s 60 ,190,036 H o n - m e t a l l i c m i n e r a l s and p r o d u c t s 153 ,049,438 C h e m i c a l s e t c 33 ,572 ,113 M i s c e l l a n e o u s 59 ,848 ,898 T o t a l 1 ,108 ,956,466 D i v i d e d a c c o r d i n g t o the amount of manufacture C a n a d i a n i m p o r t s may be c l a s s i f i e d as f o l l o w s . (-2) Main C i a S s e s of ,Imports 1928. C l a s s . • • • 1928 A w m a t e r i a l s 283,809,000 P a r t l y m a n u f a c t u r e d goods 105,067,000 F u l l y m a n u f a c t u r e d goods 720 ,090,000 I t w i l l be seen t h a t f u l l y m a n u f a c t u r e d goods form the b u l k of Canadian i m p o r t s . Raw m a t e r i a l s i n t h i s case c o n s i s t e d l a r g e l y of f o o d , i n c l u d i n g i n 1928, f r e s h f r u i t $24,859 ,503 and maize $ 1 3 , 0 5 7 5 8 3 2 . C o a l i m p o r t e d amounted to $64,815,285 and crude p e t r o l e u m $ 3 4 , 0 3 0 , 9 6 7 . ( 3 ) P r i n c i p a l m a n u f a c t u r e s i m p o r t e d i n 1928 were ( l ) Trade of (Canada 1930 pp70-89 . ( 2 ) l b i d (3) I b i d ( 4 7 ) r o l l i n g m i l l p r o d u c t s ( i r o n ) $44 ,067 ,-±36 j f a r m implements and m a c h i n e r y s?29 ,636,44.9$ e n g i n e s and b o i l e r s $18,006,829$ m a c h i n e r y ( o t h e r than " a g r i c u l t u r a l ) #48,600 ,613; v e h i c l e s $ 70,395,597 | and f i b r e s and t e x t i l e s , i n c l u d i n g wool $48,832,356$ s i l k $ 2 9 , 9 6 3 , 0 0 7 ; c o t t o n $58,279,600; and f l a x , hemp and j u t e ^15,132,946* ( l ) The c o n t e n t and e x t e n t of Canad ian e x t e r n a l t r a d e h a v i n g been examined, the d i r e c t i o n , t h a t i s the source of i m p o r t s and the d e s t i n a t i o n of e x p o r t s , must be c o n s i d e r e d . The c h a r a c t e r of Canada's e x p o r t s and imports p o i n t s t o the f a c t t h a t h e r trade, i s c h i e f l y w i t h i n d u s t r i a l l y mature c o u n t r i e s , n a m e l y the U n i t e d S t a t e s and the c o u n t r i e s of Europe. Canada i d c h i e f l y a p r o d u c e r of s t a p l e c o m m o d i t i e s , p a r t i c u l a r l y a g r i c u l t u r a l and a n i m a l p r o d u c t s , and an i m p o r t e r of m a n u f a c t u r e d goods,though i n b o t h t h e s e r e s p e c t s she shows a w i d e r range and more b a l a n c e d t r a d e t h a n most p a r t s of the empire, w h i c h are u s u a l l y d e v o t e d a l m o s t c o m p l e t e l y t o e i t h e r e x t r a c t i v e or manufa d u r i n g i n d u s t r i e s . Canada's c h i e f customer i s n o r m a l l y the U n i t e d °tates w h i c h touk~$466,422,789. wort.; of goods i n 1927 and $478 ,185 ,383 i n j l 9 2 8 . G r e a t - B r i t a i n was n e x t i n importance d u r i n g the same two years,when she bought goods w o r t h $446 ,872 ,851 i n 1927 and #410,691,392 i n l 9 2 8 . These two n a t i o n s r e c e i v e d over two t h i r d s of the t o t a l e x p o r t s . (2) ( l ) Trade of Canada 1930 pp 79-89 (2) I b i d pp 64-65 (48) xhe. f o l l o w i n g t a b l e shows the v a l u e of u a n a d a ' to l e a d i n g customers .(1) E x p o r t s t o P r i n c i p a l C o u n t r i e s C o u n t r y 1927 1928 U n i t e d s t a t e s # 466,422,789 $ 478,145,383 U n i t e d Kingdom 446,872,851 410,691,392 QexDiany •34,411,021 42,244,217 ^ apan 29,9 29,031 32,968,243 N e t h e r l a n d s 26,37 4,378 35,537,951 B e l g i u m 21,341,116 20,781,857 A r g e n t i n a 13,101,846 11,085,728 I t a l y '22,815,083 18,742,516 A u s t r a l i a 18,965,881 14 ,189 ,446 C h i n a 13,516,939 13,432,39 6 Hew Z e a l a n d i j 5 5 3 5 513 11,366,5000 Newfoundland. •11,169,991 11,661,248 France l o 9 220 $ 2 o 2 9,926,145 T o t a l w o r l d 1,252,157,506 1,228,349 ,343 T u r n i n g t o the o t h e r s i d e of the t r a d e b a l a b c e , i t i s found t h a t the U n i t e d S t a t e s i s the chaef source of °anadian i m p o r t s , s u p p l y i n g goods to the v a l u e of #687,022,521 i n 1927, and $718,896,270 i n 1928. In the same two y e a r s Canada bought from u r e a t B r i t a i n goods w o r t h $163,939,065 and $186,435,824. These two c o u n t r i e s s u p p l i e d about 80$ of the t o t a l ilmports i n t o Canada . Hext i n importance wa? France w i t h b i l l s f o r $23,992,322 i n 1927 and $26,473,732 i n 19258. (2) ( l ) Trade of Canada 1930 pp64-65. (2) I b i d (49 ) The f o l l o w i n g t ab l e shows the c h i e f sources of Canadian i m p o r t s ( l ) Chief- Sources of 0 e.nadi: -m Imports . Country " 1927 1928 U n i t e d Sta tes $687,022 $ 5 2 JL $ 718,896 ,270 U n i t e d Kingdom Ju w 5 w %J \J ,065 186,435 ,824 Prance 23,992 f 322 .26,463 ,732 Germany 15,030 ,138 17 ,055 ,798 l"a'pan 11,170 ,380 12,505 ,37 3 Belgium 9,663 ,308 9 ,898 ,237 S w i t z e r l a n d 9,491 ,779 8,595 ,677 B r i t i s h I n d i a 7 ,880 ,914 9 ,.239 ,779 Nether lands 7 ,693 ,668 8,794 ,049 Cuba 8,076 ,575 5,587 ,171 T o t a l "world 1,030,892 H n ^  1,108,956 ,466 The importance of the B r i t i s h Empire i n Canadian t rade i s sh.ovra.ay a r e - g r o u p i n g of f i g u r e s . (2) Expor t s to -° r i t i sh and Eore ign C o u n t r i e s . 1927 1928 S i? -B r i t i s h Empire 540,437,761 ' 499 ,265 ,845 Eore ign c o u n t r i e s 711,719,745 729,083,4.98 Expressed i n pe rcen tages , the empire took 4 3 . 1 ^ of Canada's exports i n 1927 and 40.7%' i n 1928. Imports from B r i t i s h and f o r e i g n Count r i e s (2) 1927 1928 B r i t i s h Empire • 214,068,538 - 249,627,295 Fore ign c o u n t r i e s 816,823,967 859,329,171 ( l ) Trade of Canada pp64-65 (2) I b i d p65. (50( The p e r c e n t a g e share of the B r i t i s h Empire was 20.7$ i n 1927 and 22.5$ i n 1928. The p o s s i b i l i t y and a d v i s a b i l i t y of i n c r e a s i n g the sh a r e of the B r i t i s h Empire i n Canada ' s e x t e r n a l t r a d e has been the s u b j e c t of much d i s c u s s i o n , b o t h as a n a t i o n a l p o l i c y and a l s o as p a r t o f a g e n e r a l scheme of i m p e r i a l e c o n o m i c • u n i t y . C l o s e r ' c o n s i d e r a t i o n of t h i s p r o b l e m w i l l be g i v e n a f & e r the t r a d e and economic p o s i t i o n o f o t h e r u n i t s of the empire have been examined. (51) PART T W . THE REST C P THE EMPIRE. SECTIOH TWOs AUSTRALIA. A u s t r a l i a , the second l a r g e s t s e l f - g o v e r n i n g d o m i n i o n , r a n k e d t w e l f t h i n a g g r e g a t e e x t e r n a l t r a d e among the n a t i o n s of the w o r l d ' i n 1929. In - the B r i t i s h E m p i r e , her t r a d e was exceeded i n volume o n l y by the U n i t e d '-HLn&dom, Canada and B r i t i s h India. , and t o t a l l e d £288,498,333. The per c a p i t a v a l u e of h e r e x p o r t s i n l 9 2 8 - 2 9 s t o o d a t £22/17/2j of i m p o r t s a t £22/13/3; and of a g g r e g a t e t r a d e a t £45/10/6.(l) • A u s t r a l i a n p r o s p e r i t y , l i k e t h a t of the U n i t e d Kingdom and to a l e s s e x t e n t t h a t of Canada, depends on the maintenance of her o v e r s e a s t r a d e . In the decade 1918-19 to 1 9 2 7 - 2 8 , A u s t r a l i a e x p o r t e d 33,46$ of her t o t a l i n d u s t r i a l p r o -d u c t ! o n . D i v i d e d i n t o g r o u p s , i t i s found t h a t 37,29$ of her a g r i c u l t u r a l produce was s e n t a b r o a d ; 66.11$ of her p a s t o r a l ; 19.75$ o f - d a i r y and f a r m y a r d ; 58.14$ of mining;16.25$ of f o r e s t r y and f i s h e r y and 4,61$ of h e r m a n u f a c t u r i n g p r o d u c t i o n . Of her p r i m a r y p r o d u c e , t h a t i s a l l g r o u p s . e x c e p t m a n u f a c t u r i n g , 46.51% or n e a r l y h a l f was e x p o r t e d . (2) (1) B u l l e t i n Ho.120 A u s t r a l i a n S t a t i s t i c s p 18. (2) O f f i c i a l Yearbook of the Commonwealth,1929. p 252. 1TOTEt Under the A u s t r a l i a n .government c l a s s i f i c a t i o n , "pr imary p r o d u c e " i n c l u d e s those commodit ies i n wh ich the v a l u e of the _/rimary element i s a p p r e c i a b l y the g r e a t e r , even though they have gone through- some i n i t i a l p r o c e s s of manuf ac t u r e . F o r example, canned f r u i t i s c o n s i d e r e d p r i m a r y produce. (52) A u s t r a l i a n tra.de defends :.nd se.ms l i v e l y to cont inue to depend p r i n c i p a l l y on e x t r a c t i v e i n d u s t r y . A t present the o-reat bu lk of the coin..odi t i e s she seniu, abro..c i s composed c f p i i . j a r y produce se i the r raw m a t e r i a l s or p a r t l y manufactured poods. Por the decade IS 18-19 to 1927-28, 95*71%' of the t o t a l exports oi the Qommo.nvealtn c o n s i s t e d of pr imary p r o d u c e , l e a v i n g 4.29,"' fo r f u l l y manufactured goods. In impor t s , rc-w i :v„ tc r i^ I s and semi-i ' .anuiacturecl goods amounted to 16,4p in 1929- ortu uiiu-f a c t u r e d goods to 8 3 . 6 # . ( l ) A u s t r a l i a n t r t ie h.„s been growing s l o w l y sir£e 1915. at l e a s t u n t i l 1929. Changes i n the r a t i o of manufactured"goods to p r i m a r y produce i n her expor ts are d i s c e r n a b l e . The f o l l o w i n g t a b l e ( l ) shows the changing p r o p o r t i o n s and the abso lu te growth by an e l i m i n a t i o n of p r i c e changes . The index numbers i n a i c a t e tha t w h i l e manufactured gouds have been g a i n i n g i n compar ison to pr imary prouuce u.s a whole , a g r i c u l t u r a l pr cdnc t s , d-j i r y and f:>rm-yard products and f i s h e r i e s have i n c r e . a e d i n r e l a t i v e imp or to. Expor t s . E l i m i n a t i o n of i ' r i c <-* Chan _ e s 0 I 9 1 3 - -100 Indus t ry 1913 1926-^7 Inde 3 9.: 7 W O Ci In ie c. n o, cP n o A g r i c u l t u r e 10,677,734 21,642,010 203 20,115 ,819 1 8 8 i l~st o r a l 4 2,321,038 <-± '-i- , 2 ,j 1, 8 o 0 105 ~ ~ j , ^ o v.y , c 5 102 D a i r y etc 3 ; , 8 5 * , 7 54 4,086,229 122 ,899 1 5 1 Mines etc 1 4 , 7 1 2 , 2 4 2 1 5 , 5 4 4 , 3 0 0 106 , 1 6 5 64 F i s h e r i e s 424,849 510,300 120 .j 0 0 , 4 7 5 119 l o r e s t r y 1,106 ,549 1 ^ \_)J3G 5 %j 3,0 93 837 r P, « j v t / O 11 T o t a l 7 2 , 8 3 3 , 4 5 i 87,7 50,559 120 7 9,67 4 ,507 109 Manui .„ctur i n - 2 , 3 1 , ,695 : , 3 0 1 , 5 - . 9 100 ' „!.„ 5 ,713 3 15 T o t a l 7U , 1 3 2 , 1 4 7 ~ o 5 \j o j 10 S l a j c'.2,27 0 , 2 . : 5 1JI ( l ) o f i i c i a l Y : .rbook p P 3 2 . (2) I b i d ^ 1 ul« (53) I t i o p l ' i i - tliv, c A u s t r a l i a i s s t i l l an immature country as la1" s man o J. a c tur i n g i s . concerned. In s p i t e of her l a r g e urban p o p u l a t i o n , o v e r 50$ of the t o t a l pnanufaoture i s r e l a t i v e l y u::ii,M.jrt.aiit L i comparison w i t h the e x t r a c t i v e i n d u s t r i e s . As f a r as e : a e m -1 t - a l e i° concerned i t i s almost n e g l i g i b l e , -^be extent *to w h i c h A u s t r ; l i " i s dependent upon - fo r a lgn -nanu iac tu re i s m d i c a t e o by a comparison of the value of her rnauuiacturea w i t h the v-.lue of he i im^ , r t s of f i n i s h e d goods, i n 1928-2©, th^ value of the ouopuc of A u s t r a l i a n manufactur ing i n d u s t r y was £420,445,288, o i which £167 ,623,316 was added to the value of tne r a* m a t e r i a l s by the p r o c e s s . Manufactured goodo imported d u r i n ~ the c AU$ f i s c a l year were wor th about £ 1 1 7 , 2 6 4 , 0 0 0 . I t must be remembered thnt a c e r t a i n p r o p o r t i o n of domestic manu-f a c t u r e s c o n s i s t s w h i c h cannot be imported owing to t h e i r n a t u r e.(l) Compare the r a t i o of domestic manufactures to imported manu-fac tu res w i t h the s i m i l a r r a t i o fo r Canada. In 1928-29, Canadian • n nnuf "ictures had u gross value of $3,425 ,498,540 , vwhile rasnu/ f a c t u r e d i i ^ o r t o were worth $458,797,000. (2) I t is apparent t h a t the Qoramunwealth does n o t approach s e l f - s u f i i c i e n c y , and t h a t her g . ' o £ ^ ? i " i t ; i s l i n k e d up, w i t h t t ha t of h e r customers to a grea te r ?ati-nt than i s t h c a s e w i t h other " ^ r i t i s h na t i ons w i t h the excep t i on oi the U n i t e d kingdom, and p o s s i b l y hew Zea land . An a n c l y s i s - of A u s t r a l i a n e x t e r n a l trade acco rd ing to c l a s s e s of commodities ohows meta l manufactures and t e x t i l e s t o l:e the l e a n i n g impor t s . These ca t ego r i e s amount to ;-:ore than one im I f oi the t o t a l impor t s . C h i e f exports are an imal substances ( l ) O i i i c i a l fe-. ibcok IS 29 (2) Canadian Annual ^ o v i e w 1929 (54) (mainly wool) -vegetable foods tu f f s ( p r i n c i p a l l y wheat/.wheat f l o u r and can-? super)? and animal foods tu f f s (mainly b u t t e r and meat) 9 compr i s ing over 80$ of the t o t a l e x p o r t s . The f o l l o w i n g t ab le s giv:-; more d e t a i l e d survey of imports and e x p o r t s . ( l ) A u s t r a l i a n Imports i n C l a s s e s . C l a s s 1925-26 - 1927 -28 - £ £ Animal foodstuffs- ,473,756 2 , 8 6 6 ,708 Vegetable " ? ,087,836 6,605 ,536 A l c o h o l i c l i q u o r s o ,287,7 83 1,7 67 , 497 Tobacco 2 ,760,176 2,960 ,620 L i v e animals 183,287 120 ,007 An ima 1 sub s tan c e s 1 ,127 ,-972 2 , 1 8 2 ,9 66 Vegetable " 5 ,568,614 3,242 ,367 A p p a r e l , t e x t i l e s etc .3.9 ,055,392 38,488 ,491 0 i 1 s , f a t s an d waxe s 10 ,065,509 9 ,87 2 ,014 T a i n t s -j.nd va rn i shes 705,748 778 , 663 Stones and m i n e r a l s 7 66,149 1,060 ,830 k e t a l s and manufactures 45 ,498,649 42,801 ,886 Rubber and l e a t h e r 5 ,727,019 4,157 ,292 '..-'ood and w icke r 5 ,911,637 5,818 ,541 3arthenw^re ,456,061 2 , 4 2 2 ,822 Paper and - s ta t ionery 7,126,461 7 ,87 3 ,998 J e w e l l e r y etc 2 ,746,403 2,621 ,411 o p t i c a l } s u r g i c a l and s c i e n t i f i c ins t ruments 1 ,843,897 1,464 ,7 94 Lrugs ,chemi c a l s etc 4 ,316,437 4,811 ,212 H i s-cellaneous 5 ,492,718 4,979 ,163 • lo ld specie and b u l l i o n 426,67 4 1,048 ,152 T o t a l 151 ,638,17 8 147,944 ,970 ( l ) O f f i c i a l Yearbook p 223. (55) I n d i v i d u a l commodities -imported i n 1927-28 i n c l u d e d l i n e n and co t t on p iece goods worth• £ , '8 .593,908; s i l k goods (ex-c l u d i n g s t o c k i n g s ) , £ 5 , 9 6 3 , 3 3 9 ; woo l l en p iece goods £ 2 , 5 2 5 , 1 7 9} pet roleum s p i r i t £ 6 , 0 3 7 , 2 1 7 , e l e c t r i c a l machinery ete £ 5 , 4 0 5 , 2 2 7 i r o n p l a t e s and sheets £ 4 , 7 0 3 , 8 7 3 ; automobi les £ 8 , 2 5 6 , 7 8 7 ; paper ( p r i n t i n g ) £ 3 , 0 8 6 , 0 2 3 ; bags and sacks £ 3 , 6 4 0 , 3 4 8 j tea £ 3 , 4 7 3 , 8 0 8 and t imber (undressed) £ 3 , 7 5 4 , 2 8 8 . ( l ) Values of exports i n c l a s s e s are shown i n the f o l l o w t a b l e ( 2 ) . Expor t s of A u s t r a l i a n Domestic Produce i n G l a s s e s . C l a s s " 1925-26 1927-28 n Animal foods tuf1s 16,415,297 ci3 13,264,7 85 Vegetable f o o d s t u f f s 33,673,876 28,993,658 A l c o h o l i c l i q u o r s etc 404,009 1,103,910 Tobacco etc 475,352 37 9,97 6 L i v e animals 221,876 235,384 Animal substances 72,116,824 7 6,563,648 Vegetable •" . 676,292 553,415 A p p a r e l , t e x t i l e s etc 177,401 180,923 O i l s , f a t s and waxes 1,825,232 1,27 4 , 3 7 3 Pa in t s and varn i shes 46,945 •34,858 Stones and m i n e r a l s 3,230,82 5 2,585,864 Meta l s and manufactures 7,082,368 6,097,113 Rubber and l e a t h e r - 782,138 628,192 Wood and w icke r 1 j^cSX j3*i2 1,260,689 Ear thenwar e ,e t c 93,199 120,945 Pape r an d s t a t i onery 156,809 158,884 ( l ) O f f i c i a l Yearbookl929 . p 223. (56) Expor t s of A u s t r a l i a n Domestic 1'roduce (cont inued) C l a s s . 1925-2-6 1927-28 J e w e l l e r y etc - 132,991 104,087 O p t i c a l , s u r g i c a l and s c i e n t i f i c ins t ruments 96,555 182,650 Drugs ,chemica l s etc 601,642 498,740 M i s c e l l a n e o u s 590,891 995,248 G o l d , s i l v e r , and bronze 5,47 5,455 3,738,905 spec i e T o t a l 145,704,799 138,947,447 • In a d d i t i o n to the c l a s s e s l i s t e d above , re -expor t s amounted to £ 3 , 0 6 7 , 1 3 5 and £ 4 , 2 6 5 , 6 2 3 fo r the two years under cons idera t ion- . The p r i n c i p a l - c l a s s e s of these were*metals and manufactures £ 7 1 8 , 4 4 3 i n l 9 2 7 - 2 8 ; vegetable substances £502 ,739$ t e x t i l e s £368,666} and vege tab le f o o d s t u f f s £ 2 8 5 , 3 7 5 i n the same year *(1) Important i n d i v i d u a l commodities exported i n 1927-28 i n c l u d e d wool £ 6 6 , 0 9 5 , 9 0 1 } wheat £ 1 4 , 6 2 9 , 8 9 9 ; f l o u r £ 5 , 2 2 9 , 4 6 3 } b u t t e r £ 6 , 9 0 5 , 9 3 3 ; h ides and s k i n s £ 9 , 8 9 6 , 8 2 7 , meats £4 ,811,522 a n s l e a d £ 3 , 5 1 6 , 2 3 6 . ( 2 ) Bor a comprehensive v i e w of the' c h a r a c t e r i s t i c s of A u s t r a l i a n t r a d e , the d e s t i n a t i o n of her exports and the sources of her imports must be c o n s i d e r e d . As i n the case of Canada, A u s t r a l i a n imports are d e r i v e d p r i n c i p a l l y from two c o u n t r i e s , t h e Un i t ed Kingdom and the U n i t e d S t a t e s , which s u p p l i e d , i n 1927-28, 42.65$ and 23.66$ r e s p e c t i v e l y .Br i t i s h c o u n t r i e s were the source of more than one h a l f of the Common-w e a l t h ' s imports i n the same y e a r . ( l ) C f i i c i a l Yearbook 1929. p 224. (2) I b i d p 223. (57) The - f o l l o w i n g t a b l e shows the p ercentage of 1 from the c h i e f commercial c o u n t r i e s of the w o r l d . ( 1 ) Sources of A u s t r a l i a n ImpO r t s Country of o r i g i n U n i t e d Kingdom 1923-24 it /o 45.24 . 1925-ef /° a 43.42 26 1927-2 ef /° Sr 4 2 « o 5 Canada 3 e 5 Q 2.48 2 „ 22 Ceylon 0.S9 1.07 1.31 I n d i a 3.41 4.37 3.76 B r i t i s h Malaya 0.35 1 e -L 2 1.22 Blew Zealand 1,79 1.7 5 2,23 P a c i f i c ^s lands ( B r i t i s h ) 1.15 1.29 1 * 2 ^ 1 Union of South A f r i c a 0.75 0.59 0.44 Other B r i t i s h possess ions ciO o 5 3 0.48 0.61 Belg ium 0.64 0.56 0.63 China 0.66 0.46 0.46 Brance 2»^ & 2.48 2.62 Germany 0.97 1,86 3 o 12 J apan 2 © 5 o 2.88 2.89 I f e ther lands -Bast Ind ies 3«28 4.08 3.86 Sy/eden 1.44 1.23 1 .27 Swi t z e r l a n d 1.62 1.32 1.43 U n i t e d S ta t e s •24.58 24.55 23 .66 ^ther f o r e i g n c o u n t r i e s 3.66 . 4 .11 4.35 T o t a l 100.00 100.00 100.00 ( a e x c l u s i v e of I r i s h Bree S ta te ) In the export t r ade , the U n i t e d kingdom aga in ranks f i r s t , t a k i n g 37.90$ of the t o t a l exports of the Cornmon-( l ) O f f i c i a l Yearbook, p 209. (58) wea l th i n 1927-2.8. In the same year the Un i t ed Sta tes ranked s i x t h w i t h 6 .25$ , hut i n 1926-27 was second w i t h 12 .82$. France Germany, Be lg ium and Japan took l a rge q u a n t i t i e s of wool and c o n s i d e r a b l e wheat. N e a r l y one h a l f - - 4 8 . 5 3 $ - - of the t o t a l expor ts were taken by c o u n t r i e s w i t h i n the B r i t i s h E m p i r e . The f o l l o w i n g t ab l e g ives a more d e t a i l e d a n a l y s i s of A u s t r a l i a n expor ts w i t h regard to d e s t i n a t i o n . ( l ) E x p o r t s to Va r ious Coun t r i e s Country Un i t e d K l n gd om 1923-24 $ 38.09 1925-26 a/ a 41 .43 1927-28 of ' /'-> a 37,90 Canada 0.20 0.58 0»60 Ceylon 2,05 0.34 0.39 I n d i a 1_ © 01 2.27 1 .81 B r i t i s h Ma laya 1.30 1.43 1.42 New Zealand 4,19 o © 33:' 2.69 Union of South A f r i c a 1.71 1.4.8 Other B r i t i s h a 2.07 1.92 1.73 Belg ium 5.46 4,16 6.51 Egypt 1,94 1.97 2.13 Trance •12,46 12.49 10.59 Germany 3,68 4.70 8.40 I t a l y 3,88 3 913 3.60 J apan 9.67 7 .43 8.7 8 Nether lands E . I n d i e s 1.34 1.46 .1 .36 U n i t e d Sta tes 5.95 8.72 6.25 Other f o r e i g n s t a t e s 5.00 5.16 3.85 T o t a l 100.00 100.00 100.00 ( a - - e x c l u s i v e of the I r i s h Free State,)' ( l ) O f f i c i a l Yearbook.p 211. (59) P r o p o s a l s "to s t i m u l a t e t rade betwwen c o u n t r i e s w i t h i n the empire w i l l be d e a l t w i t h i n a l a t e r s e c t i o n . -How-ever ajfew words upon - A u s t r a l i a ' s - p o s i t i o n .as regards t a r i f f s may be i n c l u d e d at t h i s p o i n t . I t i s mani fes t tha t the t a r i f f of the Commonwealth,while promoting manufactures w i t h i n the ' s t a t e , has not the excuse of p r o t e c t i n g " in fan t i n d u s t r i e s " , but i s r a t h e r a means of m a i n t a i n i n g i n d u s t r i e s that would not o therwise e x i s t . I t the re fore d i s e r i m i n a t e s aga ins t the farmer and the woo l -p roduce r , the c h i e f expor te rs of the coun t ry , by r a i s i n g t h e i r costs- of p r o d u c t i o n . A u s t r a l i a ' s dependence on wool and wheat expor ts f o r her overseas t rade i s shown by the i n t e n s i t y of her present i n d u s t r i a l depress ion ,due l a r g e l y to the f a l l i n w o r l d p r i c e s of these commodit ies ,Other f a c t o r s handicapping the i n d u s t r i a l p r o s p e r i t y of the Commonwealth a re the advanced forms, of labor- l e g i s l a t i o n , w h i c h a l s o r a i s e p r o -d u c t i o n c o s t s . A l o n g w i t h these go her f i n a n c i a l t r oub l e s which take, t h e i r t o l l i n h i g h t a x a t i o n , fhe s o l u t i o n of A u s t r a l i a n i n d u s t r i a l problems i s m a i n l y one of domest i c c o n c e r n . x a r i f f p r e f e r e n c e s from other p a r t s of the empire do not seem l i k e l y to i n c r e a s e g r e a t l y he r expor ts of wheat and wool upon which she depends so much. (60( I-AP.T T..C, THS TS3T 0" TKT S I P IRE . 3.PCTI0H THESE* HEW Z E A L A E D . Hew Zealand,as f a r as e x t e r n a l t rade i s conce rned , i s a, country o f p r o d u c t i o n . Her p r o s p e r i t y depends upon the p a s t o r a l i n d u s t r i e s — s h e e p - r a i s i n g , d a i r y farming and c a t t l e - r a i s i n g . Products of these i n d u s t r i e s s ince 1920 have c o n s t i t u t e d over 90$ of the domin ion ' s exports t r a d e . Of the other i n d u s t r i e s , f o r e s t r y , a g r i c u l t u r e and m i n i n g have s u p p l i e d ah out 2$ each. The r e l a t i o n of the v a r i o u s i n d u s t r i e s on a h a s i s of t o t a l p r o d u c t i o n r e p e a l s tha t i n 1925-26 p a s t o r a l p roduc t ion ( e x c l u s i v e of d a i r y farming) was va lued at £ 3 6 , 4 0 0 , 0 0 0 , d a i r y i n g a t £ 2 6 , 4 0 0 , 0 0 0 , f a c t i r y p r o d u c t i o n a t £ 2 2 , 3 0 0 , 0 0 0 , ( m a n y Hew Zealand f a c t o r i e s handle p a s t o r a l and d a i r y produce^, a g r i c u l t u r e at £ 8 , 4 . 0 0 , 0 0 0 , f o r e s t r y a t £ 6 , 7 0 0 , 0 0 0 , min ing a t £ 3 , 1 0 0 , 0 0 0 and f i s h e r i e s a t £ 6 0 0 , 0 0 0 , ( l ) As a consequence o f c o n c e n t r a t i o n upon c a t t l e and s h e e p - r a i s i n g , the overseas trade of Hew Zealand, resembles tha t of A u s t r a l i a , , i n tha t expor ts c o n s i s t ma in ly o f f o o d s t u f f s and other raw m a t e r i a l s , w h i l e impor t s . a r e composed c h i e f l y of manu-f a c t u r e d goods. Hew Zealand has the l a r g e s t per c a p i t a tra.de i n the wor ld ,amount ing to £ 7 0 / l 7 / 3 i n l929 (2) or #340.72 as compared to Canada's $ 2 4 7 . 1 5 and. A u s t r a l i a ' s | 2 0 0 . 2 7 , (3) The value of the t o t a l e x t e r n a l t rade of Hew Zealand i n 1927 amounted to £ 9 3 , 2 7 9 , 3 0 0 ^ i n 1928 to £ 1 0 1 , 0 7 4,747 j and. i n 1929 to £ 1 0 4 , 3 7 7 , 0 4 0 . ( 4 ) Expor t s fo r the same three years were £ 4 8 , 4 9 6 , 3 5 4 ; £ 5 6 , 1 1 8 , 4 8 1 ; and £ 5 5 , 5 7 9 , 0 6 3 . Imports were worth £ 4 4 , 7 8 2 , 9 4 6 ; £ 4 4 , 8 8 6 , 2 6 6 and (1) H . Z . O f f i c i a l Yearbook 1928.p 894. (2) Report on T E a d e and Sh ipp ing 1929-,1'artII ,p v . (3) Trade of Canada 19 30.p 43 (4) Report on Trade and Sh ipp ing 1929.Tar t I I p v . (61) £ 4 8 , 7 9 7 ,977 . These f i g u r e s i nc lude specie c f which £ 618,100 was exported i n 1928 and £ 6 4 9 , 0 0 0 i n 1 9 2 9 . ( l ) As s t a t ed above, f o o d s t u f f s and raw m a t e r i a l s make up- the g rea t e r p a r t of Hew Zealands e x p o r t s . Wooleexports n o r m a l l y c o n s t i t u t e about 25$ of the v a l u e . Bu t t e r , cheese and eggs are u s u a l l y one t h i r d or more, and meat n e a r l y 20$ .Gra in-exports are n e g l i g i b l e . The f o l l o w i n g t a b l e g ives f u r t h e r d e t a i l s of Hew Zea land ' s export t rade f o r 1927. (2.) Expor t s by Glasses .19 27. Commodity Foods tu f f s of an imal o r i g i n " of vege tab le o r i g i n Beverages A l c o h o l i c s p i r i t s e tc Tobacco,e tc l i v e animals Animal substances Vegetable " -A p p a r e l T e x t i l e s Manufactured f i b r e s O i l s , f a t s and waxes P a i n t s and va rn i shes Stones and m i n e r a l s Meta1,unmanufactured, and ores M e t a l - manufactures(except machinery) Machinery and machines V a l u e ( £ ) 27,229,128 658,462 8,003 12,730 12,739 124,690 16,212,387 830,791 • 48,183 86,180 25,509 97 5,544 10,929 o X o 5 XT' o 622,092 49,566 102,227 (1) Report on Trade and Sh ipp ing 1929. Pa r t I I , p v. (2) I b i d 19 27 Par t . I I , p 15. (62) Expor t s by C l a s s e s . 1 9 2 7 , ( c o n t i n u e d ) C la s s Value (£ ) Rubber-and manufactures(ex . t i r e s ) 522 Lea ther and manufactures 26,533 Timber 425,928 Wood,cane and w i c k e r manufactures 7,130 E a r t h e n w a r e , c h i n a , g l a s s , etc 8,403 Paper 2,7 67 S t a t i o n e r y 40,134 Jewe l l e ry ,wa tches etc 58,581 O p t i c a l , s u r g i c a l , s c i e n t i f i c ins t ruments 57m588 Drugs , chemica l s ate 24,830 Manures 27 ,892 V e h i c l e s 68,488 M i s c e l l a n e o u s 139,496 P a r c e l s post 88,650 T o t a l 48,496,350 Re-expor t s i n 1927 amounted to £925,12,1 .Chi i n t h i s trade are shown below. C las s V a l u e ( £ ) Appare l 44,352 T e x t i l e s 67,513 B-anuf ac tu r ed f i b r e s 19 , 57 8 O i l s , f a t s and waxes 2 | | ? 1 1 4 P a i n t s and va rn i shes 10,453 M e t a l manufactures(ex, machinery) 40,951 Machinery and machines 85, (63) Re-expor t s 1927 ( c o n t i n u e d ) . C l a s s Value {£) Earthenware , c h i n a , g l a s s etc 4,7 37 Paper 2,7 30 S t a t i o n a r y 27,320 Jewe 11 ery,wa t c h e s etc 58,237 O p t i c a l i s u r g u c a l ins t ruments e tc .52,570 V e h i c l e s 68,092 M i s c e l l a n e o u s 139,774 Eew Zea land ' s imports are l a r g e l y manufactured goods, Eoremost among the commodities brought from abroad i n 1927 were machines and machinery which c o n s t i t u t e d 9.3$ of the t o t a l , '-other meta l manufactures 11.2. $ , t e x t i l e s 11.5 $, appa re l 9 .7$ , f o o d s t u f f s of vegetable o r i g i n 7 .8$ , and o i l s , f a t s and waxes ,7.7$ of the t o t a l . The f o l l o w i n g t a b l e shows imports d i v i d e d i n t o main c l a s s e s . ( l ) Imports i n t o Hew Zealand 1927. C la s s Value (£) Poods tuf fs of an imal o r i g i n 346,150 Foods tu f f s of vege tab le " .3,510,450 Beverages ,non a l c o h o l i c 1,021,826 A l c o h o l i c l i q u o r s 962,672 Tobacco etc 1 „ 7 2 9 , 2 8 6 L i v e animals • 72,328 Animal substances (not food) 81,796 Vegetable s'ub stances " " 584,605 A p p a r e l 4,363,834 (1) Report on Trade and Sh ipp ing 1927, P a r t I I , p36. (64) Imports i n t o Hew Z e a l a n d , 1 9 2 7 . ( c o n t i n u e d ) . C la s s Value («£•) T e x t i l e s • 5,158,7 52-Kanufactured f i b r e s 643,838 O i l s , f a t s and waxes 3,173,607 P a i n t s and va rn i shes 388,524 Stones and mine ra l s 558,624 Specie 280 Ores , unmanufactured, u n f i n i s h e d meta l 527,810 Machines and machinery 4 ,157,633 Other meta l .manufactures 5,004 ,071 Rubber and manufactures(ex . t i r e s ) 92,492 Leather and manufactures 428,744 Timber 800,143 "Wood,cane , w i c k e r manufactures 181,477 E a r t h e n w a r e , c h i n a , g l a s s etc 877,470 Paper. 1,087,062 S t a t i o n e r y 908,381 Jewe l l e ry ,wa tches etc 798,175 O p t i c a l , s u r g i c a l , s c i e n t i f i c ins t ruments 570,584 Drugs and chemica ls 1,210.027 Manures • 495,289 V e h i c l e s 3,716,644 M i s c e l l a n e o u s 1,330,367 T o t a l ' 44,782,946 The d i v i s i o n of Hew Zea land ' s e x t e r n a l trade i n t o raw m a t e r i a l s and manufactured goods has a l r e a d y been touched upon. An a n a l y s i s of imports fo r 1927 shows tha t imported manufactured (65) goods were va lued at £ 3 4 , 4 6 2 , 8 1 6 ; f ood , d r i n k and tobacco at £ 7 , 5 4 1 , 3 3 8 ; and raw m a t e r i a l s and a r t i c l e s ma in ly unmanufactured a t £ 2 , 5 1 2 , 6 1 g . ( l ) A p a r a l l e l c l a s s i f i c a t i o n of exports g ives the f i g u r e s £ 1 , 7 4 9 , 2 3 1 ; £ 2 7 , 9 2 1 , 0 6 2 ; and £ 17,762,194 fo r the three c l a s s e s r e s p e c t i v e l y . ( 2 ) Hew Zealand i s m a n i f e s t l y a count ry of pr imary p roduc t ion ,depend ing upon e x t e r n a l t rade f o r her supply of manufactures. 'fhe source of t h i s supply and the d e s t i n a t i o n of her exports have both an economic and p o l i t i c a l i n t e r e s t . The g rea t e r pa r t s f Hew- Zea land ' s t rade i s w i t h c o u n t r i e s of the B r i t i s h E m p i r e . I n 1927, imports from B r i t i s h c o u n t r i e s amounted to £ 3 2 , 2 5 7 , 7 3 5 , w h i l e those from f o r e i g n sources t o t a l l e d £ 1 S ' , 5 8 3 , 6 9 0 . Expor t s to the B r i t i s h Empire d u r i n g the same year were va lued a t £ 4 2 , 7 6 1 , 5 7 7 as a g a i n s t £ 5 , 7 3 4 , 7 7 7 sent to f o r e i g n c o u n t r i e s , (s) Injconsidering these f i g u r e s i t must be noted tha t the U n i t e d Kingdom r e - e x p o r t s a cons ide rab l e p r o p o r t i o n of i t s . i m p o r t s from Hew Z e a l n d . I n 1928 t h i s amounted to £ 8 , 0 3 5 , 4 5 1 , o f which £ 5 , 8 1 1 , 9 3 1 c o n s i s t e d of w o o l . ( 4) The g r e a t e r pa r t of wool r e - e x p o r t e d from Great B r i t a i n goes to France ,Germany and B e l g i u m , B r i t i s h c o u n t r i e s took almost a l l the b u t t e r and meat exported from the southern dominion, i n 1927, Rev iewing the growth of Hew Z e a l n d ' s e x t e r n a l t r ade , i t i s seen tha t t h i s growth i s p a r a l l e l to the development- of t r a n s p o r t a t i o n f a c i l i t i e s . F o r example, b u t t e r , which i n 1929-30 comprised 28.1$ of the va lue of the t o t a l exports ,owes i t s p o s i t i o n to the i n v e n t i o n of r e f r i g e r a t i o n as a means of p re -( 1 ) .Report on Trade and Sh inp ing 1927,Far t I I , p 35. (2) I b i d Fa r t I I , p p 13-14. \z) I b i d . ( 4 ) I b i d F a r t I I , p x i i i . (ee) s e r v i n g p e r i s h a b l e goods i n t r a n s i t . - S i m i l a r i s the case of f rozen meat ,which du r ing the same year amounted to 2 1 . 5 $ of the va lue of the t o t a l e x p o r t s . The i n v e n t i o n of r e f r i g e r a t i o n per-m i t t e d the growth of over one h a l f of Mew Zea land ' s export t rade? the trade i n . sheepskins being dependent on the t rade i n meat and w o o l . The volume of e x t e r n a l t rade s ince 1 9 0 0 has been i n -c r e a s i n g s t e a d i l y . The accompanying graph, drawn froirjdata s u p p l i e d i n the 1 9 2 9 Report on Trade and S h i p p i n g , P a r t I I , page vii, i n d i c a t e s volume of expor t s by e l i m i n a t i n g p r i c e changes. Imports show s i m i l a r growth . In c o n s i d e r i n g the d i r e c t i o n of t rade s ince the Great War, i t appears tha t the share of the B r i t i s h Empire in e x t e r n a l t rade has been s l o w l y d i m i n i s h i n g . Expor t s to B r i t i s h c o u n t r i e s show a decrease of about 8$ of the t o t a l t r a d e . The decrease i n exports to the U n i t e d Kingdom has been even g rea te r than t h i s , but has been p a r t l y o f f s e t by inc reases i n goods sent to C a n a c l a and I n d i a s ince the war. Expor t s to the Uni t ed Sta tes ahye inc reased s l i g h t l y i n comparison to the t o t a l t r ade . The shares of Germany and 'Prance have ga ined markedly i n expor t s , the, former r i s i n g from . 1 0 $ i n 1 9 2 1 to 2 . 2 0 $ i n 1 9 2 9 , and the l a t t e r from . 0 3 5 to 3 . 1 8 $ d u r i n g the same p e r i o d . The f o l l o w i n g t ab l e g ives f u r t h e r d e t a i l s of the r e l a t i v e shares of p r i n c i p a l c o u n t r i e s . ( 1 ) ( l ) Trade and Sh ipp ing 1 9 2 9 . Par t i l , p x . (67) Shares of P r i n c i p a l Coun t r i e s i n Pew Z ea l and 1 s Exp or Country U n i t e d Kingdom 1921 ef •• /o 86.36 1923 /o 81.19 1925 $ 79.76 1927 $ 76,04 1929 /° 73,69 Canada 1.01 1.44 0.77 3.44 6.03 Indie. 0.09 0.73 0.35 0.30 0.70 Ceylon 0.06 0,10 - - - - - 0,01 Union of S. A f r i c a . 0.02 0.03 0.06 0.09 A u s t r a l i a 4.62 5.7 4 4.53 7 .56 4.21 P i j i 0.34 0.26 0.24 0.25 0.24 Othei^Bri t i s h c o u n t r i esO.88 0 ,54 0.44 0 a 0 2 0.42 T o t a l empire 93.36 90.02 86.12 88.17 85.39 Germany . 0.10 0.41 2.92 2.35 2 o 20 Prance 0.03 0.74 1.07 2.08 3 ® 18 Be lg ium 0.01 0.02 0.35 0.34. 0.45 Japan 0.04 0.45 0.42 0.52 0.77 U n i t e d S ta tes 6,03 7 .67 7.87 5.53 6.57 Gther f o r e i g n c o u n t r i e s 0.43 0.69 1«2*3 1.01 1.44 T o t a l f o r e i g n 6.64 9.98 13.88 11.83 14.61 As to impor t s , thosejfrom B r i t i s h c o u n t r i e s have dropped from 72.54$of the t o t a l t rade i n 1921 to 67.81$ i n 1929. Imports from A u s t r a l i a have almost h a l v e d , d e c r e a s i n g from 12.71$ to 6 .68$, w h i l e those from the Uni ted Kingdom show a d e c l i n e of over 2$ of the t o t a l t r a d e . Compared to pre-war f i g u r e s , imports from the Un i t ed Kingdom show an even g rea t e r d e c l i n e . Imports from G a nada and Ceylon manifes t the l a r g e s t ga ins among B r i t i s h c o u n t r i e s . • C a n a d i a n imports i n t o Hew Zealand dropped c o n s i d e r a b l y i n 1930-31 a f t e r the t e r m i n a t i o n of the t rade a.grcement between ( 6 8 ) these two dominions . A temporary agreement was drawn up i n A p r i 1 1 9 3 2 pending the I m p e r i a l Economic Conference c a l l e d f o r t ha t y e a r , u ermany and the Nether lands Eas t Ind ies were the only f o r e i g n c o u n t r i e s to r e g i s t e r conspicuous g a i n s , France and the Un i t ed S t a t e s , the l e a d i n g f o r e i g n c o u n t r i e s e x p o r t i n g to the dominion i n 1 9 2 1 , h e l d ahout the same share of the t o t a l trade i n 1 9 2 9 . The f o l l o w i n g t a b l e con ta ins d e t a i l s of imports frcm p r i n c i p a l c o u n t r i e s . ( l ) Shares of P r i n c i p a l C o u n t r i e s i n Hew Zea land ' s Imports . Country ; Un i t ed Kingdom 1 9 2 1 % 4 8 . 5 3 1 9 2 3 . /° 5 1 , 9 4 1 9 2 5 % 4 8 . 7 5 1 9 2 7 % 4 7 . 9 3 1 9 2 9 % 4 6 . 2 5 Canada 4 . 0 2 6 , 8 0 7 .4.7 6 . 1 2 9 . 8 1 I n d i a 1 . 4 1 1 . 7 1 1.74 1 . 7 0 1 , 5 7 Ceylon. 0 . 7 4 1 . 6 3 1 . 6 2 1 « 9 1 1 , 8 8 Union of S . A f r i c a 0 . 2 0 0 . 2 . 5 0 . 2 2 0 , 2 7 0 , 2 1 A u s t r a l i a 1 2 , 7 1 8 , 4 2 1 0 , 0 1 8.64 6.68 F i j i 4 . 4 4 1 . 9 7 2 . 3 7 0 , 9 5 0 . 3 6 Other empire. 0 . 4 9 0 . 7 4 0 . 7 8 1 . 0 7 1 , 0 5 T o t a l B r i t . Empire -72.54 7 3 . 4 6 7 2 . 9 6 6 8 . 5 9 67.81 Germany 0 . 0 6 0 . 1 6 0 . 9 5 • 1.87 1 . 9 3 France 1 . 5 8 1 . 7 3 1 . 7 5 1 . 9 0 1 . 4 9 Belg ium 1 . 1 2 . 0 . 6 4 0 . 8 4 0 . 8 5 1.16 Japan 1 . 4 0 1 . 2 9 JL © 3 2 1 . 2 7 1 . 2 8 Nether lands E . I n d i e s i . 0 0 2 . 6 0 1 . 1 7 1 . 8 9 2.36 U n i t e d S ta tes 1 9 , 0 1 1 6 . 0 4 1 6 , 9 4 1 8 . 0 4 1 9 . 1 0 Other f o r e i g n 3 , 2 9 4 , 0 8 4 . 0 7 5 , 5 9 4 . 8 7 T o t a l f o r e i g n 2 7 . 4 6 2 6 . 5 4 2 7 . 0 4 3 1 . 4 1 3 2 . 1 9 ( l ) Report o n T r a l e end S h i p p i n g , 1 9 2 9 . F a r t IT , p X . (69) Imports from the U n i t e d Kingdom show a fa r more s e r i o u s d e c l i n e when compared to t h e i r pre-war r a t i o . Dur ing the p e r i o d 1909-13, they amounted to ah out 60$ of the t o t a l , hut have s ince been faced w i t h I n c r e a s i n g c o m p e t i t i o n - - ma in ly from the Un i t ed Sta tes— ?/hich, w h i l e concerned ma in ly w i t h hardware and so f t goods-*-- covers p r a c t i c a l l y the whole range of the domin ion ' s impor t s . Hew Z e a l n d ' s t a r i f f p o l i c y and her p lace i n any scheme of i m p e r i a l economic u n i t y w i l l he d e a l t w i t h i n a l a t e r s e c t i o n . PART TWO. T H E REST OF THE E1L?IRS • 3ECTIOH POOR 3 I P P I A . The economic•problems of I n d i a d i f f e r r a d i c a l l y from those of the s e l f - g o v e r n i n g dominions . The divergence i s merely one m a n i f e s t a t i o n of the fundamental d i f f e r e n c e between the two types of s t a t e . The s e l f - g o v e r n i n g dominions are newly-deve lop ing c o u n t r i e s , t h i n l y popu la t ed , w i t h a shor t t r a d i t i o n of e n t e r p r i s e and i n d u s t r i a l a c t i v i t y . They are compara t ive ly f ree from the r e t a r d i n g weight of c u s t o m , r e i n f o r c e d by r e l i g i o n . I n d i a , o n the other hand, i s under the i n f l u e n c e of an anc ien t h i s t o r y , w i t h a l l i t s i n h e r i t e d customs. Her p o p u l a t i o n i s one of the densest i n the w o t l d t o d a y , n e c e s s i t a t i n g a low s tandard of l i v i n g and r e s u l t i n g i n the pover ty and p a s s i v i t y of a l a rge p r o p o r t i o n of the peop le . The r i g i d i t y of the casteb sys tem,sanc t ioned by r e l i g i o n , l i m i t s i n d i v i d u a l e n t e r p r i s e to a narrow f i e l d } w h i l e l a c k of educa t ion makes the m a j o r i t y of l a b o r e r s incapab le og h a n d l i n g the machinery of modern manufactur ing p l a n t s . I n d i a i s p r e - e m i n e n t l y an a g r i c u l t u r a l coun t ry ,and t h i s f a c t dominates the course of her t r a d e . The important Indian expor t s t a p l e s are the produce of the s o i l - - c o t t o n , j u t e , wheat, and seeds. Under B r i t i s h r u l e , i r r i g a t i o n has worked a great change toward s t a b i l i t y i n the p roduc t ion of these m a t e r i a l s , s a f e g u a r d i n g aga ins t a recurrence of the t e r r i b l e famines of the pas t , and censur ing a dependable supply of these s t ap les f o r overseas t rade• Custom and n e c e s s i t y have made Indian a g r i c u l t u r e an i n d u s t r y of s m a l l fa rmers , and have p rec luded the widespread adopt ion of l a r g e - s c a l e modern fa rming . (71) fiie s u b - d i v i s i o n of l and has had a dec ided i n -f luence on other i n d u s t r y by h i n d e r i n g the accumula t ion of capital 's- A g a i n , t h e q u i c k e r r e tu rns to commerce 'than to manufactuie has tended to d i v e r t c a p i t a l to the impor t a t i on and r f t - s a l e - o f f r o e i g n - g o o d s , e s p e c i a l l y co t ton t e x t i l e s , a : tendency s t rengthened by- the c o n s t r u c t i o n of r a i l r o a d s , w h i c h i nc rea sed the r a p i d i t y of the t r a d e r s ' t u rnove r , A t h i r d r e t a r d i n g f a c t o r i n Ind ian i n d u s t r y was the l a c k of adequate bank ing f a c i l i t i e s . B a n k s devoted t h e i r funds to f i n a n c i n g the Ind ian crop movements r a the r than to the l a s s p r o f i t a b l e f i e l d of deve lop ing new i n -d u s t r i e s . To summarize, the smallness- of I n d i a ' s c a p i t a l r e -sources , the c o m p e t i t i o n fo r these from bo th a g r i c u l t u r e and commerce, and the p a r t i c u l a r l y high x r a t e s tha t r u l e d fo r money accomodation at ha rves t t ime , a l l have combined to prevent a. l a rge flow of Ind i an c a p i t a l i n t o i n d u s t r y . Another s p e c i a l f a c t o r i n Ind ian i n d u s t r y i s l a b o r . As f a r as wages are concerned , lab or i n I n d i a i s cheap. The s t a n d a r d ' o f l i v i n g among the workrers i s very low and t h e i r r e -quirements are few. In s k i l l e d h a n d i c r a f t s — e s p e c i a l l y where the occupa t ion i s h e r e d i t a r y - - the l abo r i s a l s o ve ry e f f i c i e n t . I t i s h i s s k i l l and low s tandard of l i v i n g that a s s i s t the hand weaver i n h i s c o m p e t i t i o n w i t h machine-made goods. I t has a l s o been proved t h a t , when p r o p e r l y t r a i n e d ana p r o p e r l y cared for,- the Ind ian l a b o r e r i s as e f f i c i e n t as any other l a b o r e r , ( l ) On the other hand, t a k i n g c o n d i t i o n s as they are today, there i s very l i t t l e doubt tha t Indian l a b o r i s d e c i d e d l y i n e f f i c i e n t , even a t the low wages i t earns . The main reasons f o r t h i s are ( l ) G a d g i l , " I n d u s t r i a l E v o l u t i o n of I n d i a " , p 221. (72) the i l l i t e r a c y of the people and the c o n d i t i o n s o b t a i n i n g i n Ind ian i n d u s t r y . Lack of educa t ion makes the l a b o r e r unable to grasp the s imp le s t o f mechanica l opera t ions .The same l a c k of educa t ion i s p a r t l y r e s p o n s i b l e fo r the gene ra l absence of des i re on the pa r t of the worker to improve h i s s tandard of l i v i n g . This prevents the c o - i n c i d e n t r i s e of wages and e f f i c i e n c y . Long hours and bad l i v i n g c o n d i t i o n s have ..a twofo ld e f f e c t i n p re -v e n t i n g educa t ion and s t u n t i n g the physique of the l a b o r e r . This again makes f o r i n e f f i c i e n c y . The two c h i e f handicaps o i Ind ian i n d u s t r y , s c a r c i t y of c a p i t a l and i n e f f i c i e n c y of l a b o r , are not n e e e s s a r i J y permanent f o r c e s . In f a c t they should ,under normal c o n d i t i o n s , tend to become s e l f - c o r r e c t i v e . Indus t ry w i l l g r a d u a l l y accumulate and a t t r a c t c a p i t a l , w h i l e l a b o r w i t h proper encouragement w i l l w i l l cor rec t - i t s draw b a c k s , which are not innate but merely the r e s u l t of present cond . i t ions . As to resources upon 'which i n d u s t r y must b u i l d , I nd i a h o l d s . a ve ry favorab le p o s i t i o n i n many r e s p e c t s . Cot ton and ju t e are produced i n abundance,Coal i s found i n I n d i a in. l a rge q u a n t i t i e s , t h e p r o d u c t i o n i n B r i t i s h Ind i a i n 1926 be ing 20,100,000 t o n s . Burma p r o d u c e d pet ro leum to the amount of 280 m i l l i o n g a l l o n s i n 1926. I ron depos i t s e x i s t but up to the present the p roduc t i on of i r o n and s t e e l has not been able to meet f o r e i g n c o m p e t i t i o n . Manganese ore produced i n 1926 t o t a l l e d 1 , 0 1 5 , 0 0 0 t o n s , i r o n ore 1 ,659 ,000 t ons , g o l d 384,000 ounces and mica 4 2 ,000 cwts . ( l ) Ind ian e x t e r n a l t rade , as a consequence of th* ( l ) Anstey "Economic -Development of I n d i a " p 518. (73) comparative pover ty of most of her people , and as a r e s u l t of the l a c k of development of her i n d u s t r i e s , i s f a r sma l l e r than the s i z e of her p o p u l a t i o n would seem to p romise . In 1928 - 2 9 , imports i n t o I n d i a were va lued , at R s . 253 c rores or £ 1 8 9 , 7 5 0 , 0 0 0 ' . Exports f o r the same year amounted to R s . 338 c rores or £ 2 5 3 , 5 0 0 , 0 0 0 , making t o t a l e x t e r n a l t rade £ 4 4 2 , 2 5 0 , 0 0 0 . ( 1 ) While t h i s l a t t e r amount i s a lmost equal to the value of the t o t a l trade of Canada J $ 2 , 1 2 6 , 9 0 0 , 0 0 0 compared to #2,455,500,000, Indian per c a p i t a t rade wast only $6167, w h i l e tha t of Canada was $ 2 4 7 * 1 5 . •( 2 ) These f i g u r e s show two t h i n g s , f i r s t , the com-p a r a t i v e smal lness of I n d i a n e x t e r n a l tradep and secondly, the l e s s e r dependence of I n d i a upon outs ide coun t r i e s fo r her economic w e l f a r e , a s to compared to Great B r i t a i n and c e r t a i n dominions. The m a j o r i t y of I n d i a n . e x p o r t s are raw m a t e r i a l s and semi-manufactured a r t i c l e s . R a w c o t t o n was the most important i n -d i v i d u a l i t em i n 1928-29 when i t e q u a l l e d 20,20$ of the t o t a l w i t h a value, of R s . 6 6 6 , 9 1 0 , 0 0 0 . Bext came j u t e manufactures whiGh amounted to 17,2$ of - the t o t a l and had a value of Rs - 5 6 9 , 0 4 9 , 0 0 0 . G r a i n , p u l s e and. f l o u r made up 10.21$ and ra« ju te 9.80$. Seeds amounted tct 8.97$ and tea 8 .06$. Bo other s i n g l e i tem equa l l ed more than 3$- of the t o t a l . The f o l l o w i n g t a b l e shows the va lues of exports l o r the l a s t three years before the present d e p r e s s i o n . ( l ) Ind ia Yearbook 1930 p 816. (2) T r a d e of Canada p45. I n d i an expor ts (1) Commodity 1926-27 RslOOO 1927-28 SslOOO 1928-29 RslOOO Ju te , raw 267,804 306,626 35 3,492 Ju t e,manufactur e d 531,809 535,643 569,049 Cot ton j raw 591.,419 481,953 666,910 C o t t o n 5 manufctd. 107,485 86,723 77 ,956 G r a i n , p u l s e , f l o u r 392,490 - 429,203 336,942 Seeds 190,87 7 266,930 kj S f3 5 252 Tea 290,377 524,849 266,044 Hides & s k i n s , r a w 71,707 88,094 95,598 Leather 73,769 90,7 27 93,074 P e t a l s and ores 7 2,086 99,708 8 9,163 La c 54,7 24 69,886 86,426 Wool,raw & manuftd 46,828 53 f333 59,071 O i l cakes 25,27 6 31,419 38,418 P a r a f i n wax 18,460 24,246 24 ,554 Rubber,raw 26,014 25,7 09 14? ^ b 81) wood and t imber 16,204 16,57.3 17,686 Coffee 13,263 23 j 1 2 16,925 op i ces 15,597 23,996 15,880 Opium 21 § 1-5 3 19,909 15,742 Podder ,bran etc 10,625 13,67 4 14,493 Tobacco 10,415 10,6.13 12,947 Manures 12 ^ 5 *"i 0 12,801 1 id ^  216 Dyeing and tanning substances 11,772 16,070 11,805 Co i r 9,9 35 1 1 5 3*7 o 10,627 B r u i t o: vegetables p o c p. 10,542 9,615 ( l ) Ind ia Yearbook 1930. p 827. (75) Indian expo r t s (c ontinued) Commodity 1926-27 1927-28 1928-29 RslOOO RslOOO RslOOO Mica. 10,841 9 ,284 9,047 Hemp^raw .8,276 8,08 3 O i l s 9,571 7 ,098 8 ,663 F i s h , ( e x c e p t c anned) 7,538 8,713 7 ,824 Goal and coke 8,133 7,643 7 ,183 H i s c e l l a n e o u s 7 3,210 86,915 79,000 T o t a l 3 ,014,358 o <J X 91 j Ot - )5 5,301,279 Among impor t s , manufactured goods preponderate . Cot ton and c o t t o n goods l e d i n value i n l 9 2 8 - 2 9 , c o m p r i s i n g 26.51$ of. the value of a l l i m p o r t s . Me ta l s and ores amounted t'o 10.65$ of- t h e - t o t a l . M a c h i n e r y and mi11%ork equa l l ed 7.25$ and sugar 6.35$ of t o t a l i m p o r t s . The f o l l o w i n g t ab l e g ives va lues i o r the p r i n c i p a l i m p o r t s . ( l ) I n d i a n Imports Commodity 1926-27 1927-28 1928-29 H E 1 0 0 0 RslOOO RslOOO Cotton and manufactures 700,813 ' 719,016 671,516 Meta ls and ores • . <Jo3 $ 284,168 269,884 Machinery and m i l l w o r k e?136,514 159,37 5 183,604 Sugar 188,906 1 -i 9 ,0 o 5 160,895 O i l s 91,878 110,868 115,323 V e h i c l e s 63,993 76,937 110,060 G r a i n , p u l s e and f l o u r 9,169 23,070 107,281 P r o v i s i o n s etc 57,7 64 64 ,060 62,124 Hardware 50,662^ 52,442 52,328 Wool -and manufactures 44,639' 53,682 50,187 ( l ) Ind ia Yearbookl950 , p 817-819. (76) Ind ian Imports (cont inued) Commodity 1926-27 1927-28 1928-29 RslOOO 'RslOOO RslOOO S i l k and manufactures 45,971 50,578 50,067 " R a i l w a y p l a n t -and r o l l i n g s tock 32,519 47,687 (a) Instruments e tc ' 40,119 44,652 49,171 L i q u o r s etc 35,286 36,699 35,716 Paper ,pas teboard , etc 39,016 o9,229 43,154 3p i c e s 32,915 2 5,785 29,403 Rubber 21,096 id o j X 6 / 28,613 Chemica ls ,dyes etc 64,760 72,778 7 3,338 C la s s etc 33,570 3 * 3 ? \? X 2 31,058 A p p a r e l 29,137 29,100 31,706 F r u i t s , a n d vegetables 16,17 6 20,194 16,839 Soap 15,241- 16,137 15,810 S a l t X £^ «((3 *3 0 17,484 14,682 P a i n t s etc . 14,423 15,47 9 14,420 B u i l d i n g and eng inee r ing m a t e r i a l s 12,391 12,880 13,092 P rec ious stones and p e a r l s , u n s e t 10,699 13,445 11,683 v/ood and t imber - *7 ^ 3 S$ *^ 8,147 8,346 1%.chine b e l t i n g 8,129 8,730 8,011 A r m s , m i l i t a r y s to re s •'6,887 7,065 7 ,664 H i s c e l l a n e o u s 225,497 ed 5 0 y o X X" 257 ,-885 T o t a l 2 , 313,208 2, 498,4 66 2,533,060 (a) d i s c o n t i n u e d from A p r i l 1928o The bmlk of Ind ian trade i s w i t h c o u n t r i e s of B r i t i s h Empire , to which were sent 38$ of the exports and which s u p p l i e d 57$ of the imports du r ing the four years 1924-(77) Japan and thejunited Sta tes were the bes t f o r e i g n customers dur ing t h i s p e r i o d , r e c e i v i n g 13$ and 10$ r e s p e c t i v e l y of the t o t a l ex-p o r t s , The same two s t a t es l e d f o r e i g n c o u n t r i e s i n the value of goods s u p p l i e d to I n d i a , the share be i i i g 1% i n each case . The f o l l o w i n g t a b l e shows the p r o p o r t i o n s of the trade w i t h va r ious c o u n t r i e s both i n imports and e x p o r t s . ( l ) I n d i a n E x t e r n a l Trade w i t h P r i n c i p a l C o u n t r i e s . Four year Average 1924-28, Percentages of t o t a l . Country Imports Exports Uni ted Kingdom 50 23 Rest of B r i t i s h Empire 7 15 Japan " 7 13 U n i t e d Sta tes 7 10 Germany 6 8 Prance 5 Java 6 Other c o u n t r i e s 170 • ™23__ 100 1 00 Ind ian t rade must be viewed h i s t o r i c a l l y to be p r o p e r l y unders tood . In the dominions h i s t o r y merely shows the ra te at which t r a n s p l a n t e d Europeans have b u i l t up yet another western s t a t e . In I n d i a , i t dea ls w i t h the changing demands of an anc ien t peop le , r e a c t i n g to an a l i e n f o r c e . Ind ian e x t e r n a l t rade has undergone-a complete t rans format ion s ince the beg inn ing of• the n ine t een th cen tu ry . At the s t a r t of t h i s p e r i o d , the p r i n c i p a l exports were i n d i g o and s a l t p e t r e and manufactures of h i g h q u a l i t y , such as co t ton (78) and s i l k t e x t i l e s . In r e t u r n I n d i a r e c e i v e d s p e c i e , w o o l l e n s and misce l l aneous manufactures . Compe t i t ion from B r i t i s h i n d u s t r y soon began to d i sp lace - Ind ian t e x t i l e s i n Europe and l a t e r .• pene t ra ted the "home" market . In the l a t t e r pa r t of the n ine t een th c e n t u r y ,under the s t imu lus of an ex t ens ive r a i l w a y b u i l d i n g program and the opening of the Suez C a n a l , I n d i a n raw m a t e r i a l such a s raw co t ton and j u t e , and food crops such as r i c e r e p l a c e d the former export of manufactured goods.The t rade i n t e a , c o f f e e . , rawhides and o i l seeds a l s o i n c r e a s e d r a p i d l y . Raw- co t ton export's were g iven an impetus: by the Lancash i r e co t ton famine of the s i x t i e s and the export of raw ju t e by the stoppage of supplies- from R u s s i a dur ing the Crimean #ar . Manufactures of ju te and co t ton grew r a p i d l y towards the end of the cen tu ry , but the export of/ raw m a t e r i a l s c o n t i n u e d , f i n d i n g markets i n Japan and Europe as the B r i t i s h demand decreased . B u l l i o n and specie cont inued to be an important i m p o r t , h u t o therwise at the c lose of the n ine t een th century the most important iteoms -were manufactured goods ,mainly co t ton t e x t i l e s , m a c h i n e r y , m i l l w o r k arid p rec ious metals other than s p e c i e . Excep t ions were the inc reased imports of sugar from - M a u r i t i u s , G e r m a n y and A u s t r i a , and of p e t r o l e u m — c h i e f l y for l i g h t i n g p u r p o s e s — from the Un i t ed Sta tes and R u s s i a . Up to: the b e g i n n i n g .of the Great *<ar, I nd ian trade inc reased c o n s i d e r a b l y - - f o m Rs 175,000,000 inl893~99 to Be 2,242,000,000 i n 1913-14— but changed l i t t l e i n n a t u r e . ( l ) Exports cont inued to exceed imports due to payments cm i n v e s t -ments , fo r s h i p p i n g andP governmantal expenses such - is pens ions , Ind ian o f f i c e expenses and f u r l o u g h a l l o w a n c e s . ( l ) A n s t e y . "iSconomic development o f I n d i a " , p 330. (79) The war p e r i o d saw a d e c l i n e i n the volume of imports and a temporary check f o l l o w e d try expansion i n the volume of e x p o r t s . Manu fac tu red a r t i c l e s expor ted i nc rea sed from 25 .1$ of the t o t a l expor t s i n l 9 1 3 - 1 4 to 31$ i n 1917-13 and i n 1926-27 remained a t 28.. :3$. ( l ) Since the war the t r end o f ' I n d i a n e x t e r n a l trade has been c o n t r a r y to tha t i n progress du r ing the n ine teen th cen tu ry . She -is s t i l l dependent on imports f o r a l a r g e though lessened amount.of her c l o t h i n g , t h e h u l k of her machinery, many i r o n and s t e e l goods and a l a r g e number of other i n d u s t r i a l n e c e s s i t i e s . However., imports of l i q u i d f u e l ( i n s p i t e of the growing volume •produced i n Burma) are i n c r e a s i n g as anethe i n p o r t s of sugar . S t i l l , i n 1926-27 , 72*8. $ of her t o t a l imports were manufactured as compared to 76 .6$ before the war.. Goods no?; imported c o n s i s t l a r g e l y of a r t i c l e s which earrnot be produced i n I n d i a , such as*; the h igher q u l n i t y yarns and p iece goods, much of theujnachinery, m i l l w o r k , r a i l w a y p l a n t and r o l l i n g s t o c k , and i n non-manufactur© mine ra l o i l and sugar . In g e n e r a l , I n d i a n products have been ab le to compete s u c c e s s f u l l y w i t h imported manufactures . The ou t s t and ing c h a r a c t e r i s t i c of the. export t rade is- the inc rease i n the export of manufactured goods, such as the manufactured products of j u t e , h i d e s , w o o l , metals and vegetable o i l seeds. Expor t of co t ton y a r n s , i n d i g o and s i l k have dee-reased owing to c o m p e t i t i o n , as f r o m ' Ja p a n , and the use of s u b s t i t u t e s . Regarding the expor t of foods tu f f s fromjlndia i t should be noted that the percentage exported of the t o t a l p roduc t ion has d e c l i n e d ' s ince the war . Expor t s of r i c e have f a l l e n from 9$ before the war to 7$ of the t o t a l c rop , wheat exports have -( l ) Ans tey ."Economic Development of I n d i a . " p 335. (80) decreased from|l4$ to -5$ of the t o t a l c r o p . O i l s seeds have de-c l i n e d In s i m i l a r p r o p o r t i o n s . Since the war Ind ian trade has changed i n d i r e c t i o n as w e l l as i n na tu re . Between 1900 and 1914 u ermany, A u s t r i a - H u n g a r y ^ a p a n and the Un i t ed Sta tes a l l i nc reased t h e i r share , ma in ly a t the expense of China and R u s s i a . Since 1914, the ou t s t and ing f ea tu re s have been the inc rease i n t h e i r shares of Japan and the Uni t ed S t a t e s , the d e c l i n e i n the shares • of the Un i t ed Kingdom, China and F rance , and the wartime d e c l i n e and subsequent r e v i v a l of t rade w i t h u e rmany« In . 1874, Great - B r i t a i n s u p p l i e d about 82$ of Indian impor t s . This p r o p o r t i o n g r a d u a l l y d i m i n i s h e d to 65$ i n 1895, where i t remained u n t i l the Great vV a r . Dur ing the war, B r i t a i n ' s share was about 57$ and has s ince shrunk to approx imate ly 50$ of the t o t a l i m p o r t s . In t h i s r e s p e c t , i t i s necessary to note boyco t t s from Ind ian n a t i o n a l i s t movements. Imports from the r e s t of th empire have d e c l i n e d s l o w l y i n p r o p o r t i o n to t o t a l t rade from 11$ i n 1874 to about c7$ i n 1928. u apan s u p p l i e d on ly about 2$ of the t o t a l at the outbreak of the Great War. between 1914 and 1919, her share averaged 10$, but by 1928 remained a t about 7$, F igu re s f o r the U n i t e d S ta tes imports are almost i d -e n t i c a l , as are those from Java . German trade became important about 1390 and rose to 6$ of the t o t a l imports i n 1914. Since 1918, Germany's share has r i s e n g r a d u a l l y to 6%.{l) In 1874, the U n i t e d Kingdom took about 46$ of Inia's. .A expor t s . This percentage decreased s t e a d i l y to about 25$ i n 1914. Dur ing the Great War i t rose to 31$, but has dropped s ince to about 23$ i n 1928, Expor t s sent to the r e s t fo the B r i t i s h ( l ) Ans tey . "Economic Development of I n d i a " , p 334. (81) Empire have a l s o d e c l i n e d s l o w l y i n comparison w i t h the growth of t o t a l t r a d e . Prom 37$ i n l 8 7 4 , they shrank to 17$ i n 1895, and have s ince f l u c t u a t e d about tha t f i g u r e . "Japan r e c e i v e d about one percent of I n d i a ' s t o t a l expor ts du r ing the n i n e t i e s . By 1914 the percentage had r i s e n to 7$ . D u r i n g the Great P a r , 11$ o f - I n d i a n e x p o r t s were sent to apan, and t h i s f i g u r e has s ince i nc r ea sed to 13$. Expor t s to the U n i t e d Sta tes s tood at 3$ i n 1874,5$ i n 1900, 7$ i n 1914,13$ d u r i n g the war and about 10$ i n 1928. Germany's share s tood a t 8$ i n 1928 compared to 10$ i n 1914. ' The r a t i o of the expor t t rade w i t h P rance has d e c l i n e d s l o w l y from 7$ i n 1874 to 5$ i n 1 9 2 8 . ( l ) ( l ) Ans tey ; "Boon,Development of I n d i a " p . 3 3 4 . . (82) -P-x-Rf T',/0, TIU R33f dp IHB ahfippg, SBC1 1 O R P I V E J THE U K I G B up SuUIZl . P B R I P A . J UJB.C. LIBRARY j what Hew S ealand.prwes to. woo l and Canada, to a l e s s ex t en t , to wheat, the Union ol South A f r i c a owes to g-ola and diamonds. Of the former , South A f r i c a produces about .50$ of t the w o r l d ' s annual ouput; of the l a t t e r about 7 5£> of the w o r l d ' s annual product ion. - These two p roduc t s , a long w i t h c o a l , i r o n and other m i n e r a l s , make min ing the b a s i c i n d u s t r y of the country i n con t r a s t to the pre-eminence of a g r i c u l t u r e and the p a s t o r a l i n d u s t r y i n other B r i t i s h dominions . Bext to m i n i n g , - a g r i c u l t u r e and the p a s t o r a l i n d u s t r y occupy- an important p o s i t i o n i n the B n i o n , maize and sugar be ing the most important c rops , w h i l e wool i s ou ts tanding amonj animal produce. F o r e s t r y and f i s h i n g are of l e s s impor tance , though cons ide rab l e expor ts of w a t t l e bar it, f o r t ann ing purposes , ;Are iiiad e. The m i n e r a l resources of the South A f r i c a n Union are very e x t e n s i v e . The e x p l o i t a t i o n of the go ld and diamond depos i t s has, to a c e r t a i n ex t en t , r e t a rded the development of other m i n e r a l s . Barge depos i t s o f , c o a l and i r o n are found i n the T r a n s v a a l . Al though the whole A f r i c a n con t inen t possesses only .8$ of the t o t a l w o r l d depos i t s of co.,-.l,97$ of th* known A f r i c a n d . p u o i t s are l o c a t e d w i t h i n th -. Un ion , ( l ) The 3* amount to about 55 y 2 0 J , 0 0 0,000 tons .ove r 60$ of t h i s i s to be found i n the T r a n s v a a l , f r o n lodes i n the came ^ rnv ince are e s t i u - ted at 2 ,000,000,000 tons.<2 ) -Less important beds are s i t u a t e d i n Uc . t - . l , ( l ) South and Bas t A f r i c a Yearbook 1928. p338. (2) I b i d p 543. South West A f r i c a and the Cape P r o v i n c e , T in copper and s i l v e r d e p o s i t s a l s o e x i s t and are mined to a. l e s s e x t e n t . Asbestos p r o d u c t i o n i s g rowing , the q u a l i t y of the l o c a l m i n e r a l be ing s u p e r i o r to the average Canadian product which c o n s t i t u t e s n e a r l y 75$ of the w o r l d ' s supp ly , (Rhodesian a sbes tos , more important than tha t of the Union w i l l be de sc r ibed i n i t s proper p l a c e . ) - By v i r t u e of the nature of her c h i e f i n d u s t r i e s , the Union of South A f r i c a enjoys a cons ide rab l e e x t e r n a l t r a d e . T o t a l imports i n t o the Union i n 1927 amounted to £ 7 4 , 0 1 3 , 8 3 6 and i n 1926 to £ 7 2 , 7 5 8 , 8 0 5 . ( l ) Expor t s f o r the same two years were £ 9 6 , 4 5 8 , 6 6 0 and £ 8 0 , 0 2 8 , 5 6 0 r e s p e c t i v e l y . ( 2 ) T o t a l e x t e r n a l t rade e q u a l l e d £ 1 7 0 , 4 7 2 , 4 9 6 and £ 152,787,365 dur ing the two y e a r s . Due to the l a r g e number of n a t i v e s ( about 80$ of the p o p u l a t i o n ) most of whom l i v e under compara t ive ly u n c i v i l i z e d c o n d i t i o n s , per c a p i t a f i g u r e s do not f u r n i s h an adequate b a s i s of comparison w i t h other dominions , or show the importance of the externa-! t rade to the n a t i o n a l w e l f a r e . In 1929, the per c a p i t a aggregate t rade of Canada was $247 .15 , w h i l e tha t of South A f r i c a and Rhodesia was only #91,59.(3) I t i s s u f f i c i e n t to say tha t w i t h the i n d u s t r y of the count ry devoted c h i e f l y to the p r o d u c t i o n of raw m a t e r i a l s , i n the Union of South A f r i c a , as i n A u s t r a l i a and Hew Zea land , the n a t i o n a l p r o s p e r i t y Is c l o s e l y l i n k e d to the maintenance of e x t e r n a l t r a d e . An a n a l y s i s of South A f r i c a n exports shows that go ld i s by f a r the most important commodity sent abroad ,be ing equal to 40.6$ of the t o t a l export t rade i n 1926 (4) and 28.4$ i n 1927.(5) wool ranked n e x t , amounting to about 17,7$ i n 1927.(6) ( l ) S . & E . A f r i c a Yearbook 1928,p 620.(2) I b i d , p 621. (3) Trade of Canada 1930, p 4 3 . ( 4 ) O f f i c i a l Yearbook 1929,pp 629-630 (5) lb i d wo 631. (6) I b i d p631. (84) Diamonds f o l l o w e d i n order w i t h 1 2 . 7 $ . ( l ) The export of maize shows c o ns i d e r a h l e f l u c t u a t i o n s ,due l a r g e l y to crop c o n d i t i o n s . In 1924 the expor t was 143 ,896,566 l b s ; i n 1925 1,859,640,627 l b •and i n 1926 293,131,254 l b s . (2) The f o l l o w i n g t ab l e shos(e the va lues of p r i n c i p a l e x p o r t s . ( 3 ) P r i n c i p a l Expor t s from the Union of South A f r i c a Commodity 1926 1927 £ Gold 32,570,340 27,389,709 Diamonds 10,732,810 12,285,095 Asbestos .raw - 143,491 189,338 Copper, ore and concent ra te (a) T in ore ' 205,614 354,722 O s t r i c h f ea the r s 71,922 45,621 Wool ,scoured 706,754 751,998 Wool ,greasy 11,939,097 16,365,950 Angora h a i r 741,715 807,9 63 H i d e s , c a t t l e 919,989 1,558,688 Goat sk in s . 291,969 358,290 Fresh f r u i t and nuts 707,728 ' 835,635 E g g s , f r e s h 189,869 236,034 Wat t le bark 592,830 868,268 Wat t l e bark e x t r a c t 324,337 291,384 Coal (bunker) 2,291,169 2 ,115,428 Coal (cargo) 1,418,908 1,063,200 Maize 908,541 1,266,111 Sheep sk ins 1,353,658 1,801,135 Sugar 797 ,702- 783,944 ( l ) O f f i c i a l Yearbook 1929.pp629-630. (2)'S. and E . A f r i c a Trbk (3) O f f i c i a l Yearbook 1929 pp 629-630. 1928.p 142 ( 8 5 ) F r i n c i p a l Expo r t s from the Union of South A f r i c a (cont inued) Commodity 1926 1927 <*- ok F i s h , p reserved ' 175,625 202,817 Tobacco ' 90,273 91,589 H e a t s , f r e s h 435,100 225,436 (a) Copper ore and concent ra te was expor ted i n 1925 to the va lue of £56 ,2 .37 . In the import t r a d e , meta l goods,machinery etc form the l a r g e s t ca tegory w i t h a value of £ 2 0 , 0 8 6 , 1 3 0 i n 1926 or 27.5$ of the t o t a l i m p o r t s . t e x t i l e and appa re l c o n s t i t u t e d 25.3$ and f o o d s t u f f s 9$ of the t o t a l.( 1) The f o l l o w i n g t ab l e g i v e s the va lues of imports under the gene ra l c a t e g o r i e s of the South A f r i c a n Union. Customs Department, ( l ) * Imports i n t o the Union of South A f r i c a Class Foods tuf fs A l l beverages Tobacco T e x t i l e s , a p p a r e l e tc M e t a l s , machinery etc" Ea r thenware , ch ina , g l a s s etc O i l s , p a i n t s , v a r n i s h e s C h e m i c a l s , f e r t i l i z e r s Leatner , rubber and manufactur.es Wood,wicker and manufactures Books ,paper -etc J e w e l l e r y , m u s i c a l ins t ruments etc 1,813,145 ( l ) S . and E , A f r i c a Yearbook 1928. p 138. Value(#) 1926 6,630,S88 663,293 95,464 18,434,007 20,086,130 1,227,698 4,022,530 2,322,050 2,580,324 2,521,109 2,180,802 (86) C lass imports i n t o the Union of South A f r i c a ( c o n t i n u e d ) . Value (<£•) 1926 1lanecus 1,482,269 Imports f o r manufac tur ing _!L g 334: $ 2 2.-Q T o t a l Imports from I lo r th and 65,572,342 South Rhodes i a , S . w . A f r i c a 1,805,098 Imports fo r government 5.220,717 opecie 160,648 Grand t o t a l 72,758,805 Examining these c a t e g o r i e s i n more d e t a i l ,mt i s found that g r a i n and coffee c o n s t i t u t e the l a r g e s t items of f o o d s t u f f s impor ted . G r a i n imports i n 1926 were va lued at, £ 1 , 4 5 5 , 7 9 4 . ( l ) Coffe*amounted to £ 9 1 5 , 9 5 3 , ( l ) Tea imported wa worth £ 9 1 5 , 4 0 9 , and r i c e £ 6 2 8 , 7 6 4 . ( l ) F i s h of a l l k inds imported had a value of £ 4 5 8 , 2 3 3 , condensed m i l k £ 3 0 0 , 4 6 0 , and wines and s p i r i t s £ 4 7 1 , 4 1 5 . ( l ) Among imports other than foods t u f f s , a p p a r e l ( e x -c l u d i n g footwear) c o n s t i t u t e d the l a r g e s t i tem i n va lue i n 1926, when the va lue was £ 6 , 4 9 9 , 9 7 7 . C o t t o n Manufactures ( e x c l u d i n g appa re l and b l a n k e t s ) were worth £ 4 , 2 7 2 , 2 2 3 fo r the same y e a r . Next i n value were automobi les worth £ 3 , 1 0 0 , 9 6 6 . ( l ) Other imports cover the whole range of manufactured goods. An examinat ion of the Un ion ' s e x t e r n a l trade under the d i v i s i o n s of raw m a t e r i a l s and manufactured goods emphasizes the devo t ion of l o c a l i n d u s t r y to pr imary produce. Under impor t s , raw m a t e r i a l s ( e x c l u d i n g canned foods tu f f s ,w ine and s p i r i t s ) -amounted to only a s m a l l f r a c t i o n of the t o t a l , ( l ) O f f i c i a l Y earbook 1929. p 623. (87 } : 9 .4$ i n 1925 and 8 . 5 $ i n 1926.Under expor ts the r a t i o i s reversed raw m a t e r i a l s compr i s ing 97$ of the t o t a l expor ts i n 1926, South A f r i c a n manufactures are s t i l l i n t h e i r i n f a n c y , hut show s igns of growth. The p resence of cheap c o a l together w i t h r i c h i r o n , t i n said copper depos i t s augur the u l t i m a t e development •»£ of a more ex t ens ive manufac tur ing i n d u s t r y , though fo r many years i t seems l i k e l y to remain i n c o n s i d e r a b l e . The f o l l o w i n g t ab l e shows the compos i t ion of South A f r i c a n export trade |;>rec ending and f o l l o w i n g the Great War * (l) Expor t s from the Union of South A f r i c a , . Year A g r i c . and pas tora l . . 1910 1914 1921 1922 17 .8 22,9 24.2 29 .9 Produce of mines of 78.3 71 .3 67.0 60,9 manufac tures and other $ 0.5 0,9 1.4 2.1 exports to Rhodes i a & r e - e x p o r t s .3.4 4.9 7 .4 7.1 There remains the d i r e c t i o n of South A f r i c a ' s ex-t e r n a l trade to be c o n s i d e r e d . Over one h a l f of the U n i o n ' s im-por t s are drawn from the B r i t i s h Empi re ; i n 1926 amounting to £ 3 9 , 4 5 9 , 4 6 1 or 54,3$ and i n 1928 £ 4 6 , 0 0 7 , 0 0 0 Or 58.17$ ( l ) . Of t h i s , the share of the Uni ted Kingdom was £ 3 2 , 0 6 9 , 6 3 8 or 42,7$ of the t o t a l imports i n 1926, and 43.53$ of the t o t a l i n 1 9 2 8 , ( l ) The l e a d i n g f o r i e g n s e l l e r i n the South A f r i c a n market, the Un i t ed S ta tes of Amer i ca , sent £ 1 1 , 2 7 1 , 7 7 0 worth of goods i n 1926 and £ 1 2 , 8 6 3 , 4 3 8 i n 1928, w i t h . r e s p e c t i v e p e r c e n t a g e s of 15.4$ and 14.1$ for the two y e a r s , ( l ) O f f i c i a l Yearbook 1930. p 624. (88) The f o l l o w i n g t ab l e shows the shares of l e a d i n g c o u n t r i e s i n the import t rade of the U n i o n . P r i n c i p a l ' S o u r c e s Of Imports i n t o the Union.1926 Country percentage U n i t e d Kingdom 42.70 I r i s h f ree Sta te 0.03 Canada 2.84 I n d i a 3.41 Ceylon 0,99 A u s t r a l i a . . ' 1.92 Hew Zealand 0,04 Kenya 0.11 Other B r i t i s h c o u n t r i e s 2.22 T o t a l B r i t i s h Empire .54,26 Belgium 1.38 Br an c e 1.90 Germany 5.39 H o l l a n d . 1.40 I t a l y 1 1.13 Eorway 0.49 Sweden 1.59 S w i t z e r l a n d . 0,81 China 0 . 1 3 Japan 1.41 Uni ted S ta tes 15.49 Argen t ina 0.18 B r a z i l ' 1.3.4 C h i l e 2' 3 0 Other f o r e i g n c o u n t r i e s 12.86 T o t a l " " 45,74. (39) C o n s i d e r i n g the other s i d e of e x t e r n a l t rade ana examinin the d i r e c t i o n of South A f r i c a n e x p o r t s , i t i s seen that over-h a l f the t rade goes to the l imited Kingdom. In 1926, Great- B r i t a i n r e c e i v e d 57 .5$ of the t o t a l impor ts -and i n 1928 53,59$. Dur ing the f i v e years 1925-29 the cor responding f i g u r e averaged 57.07$. I n d i a was the next b e s t customer t a k i n g 9 .5$ i n 1926. The B r i t i s h Empire as a whole r e c e i v e d 69.4$ i n 1926 and 58.17$ i n 1928, w i t h an average share of 60.28$ d u r i n g 1925-29, (1) Outside the B r i t i s h Empi re ,F rance and §e.rrnany were the l e a d i n g purchasers of South A f r i c a n products t a k i n g 4 ,2$ and 3.-1$ i n 1926. ( l ) The Un i t ed b t a t e s took about 2,7 5$ du r ing the same y e a r . Gold ,diamonds and wool form the b u l k of exports to Great B r i t a i n , I n d i a takes ma in ly g o l d , Germany,*rance and Belg ium buy l a r g e q u a n t i t i e s of w o o l . In the c o n s t i t u t i o n of her i n d u s t r y , the ^n ion of South A f r i c a resembles most Hew Zea land , Both have r e l a t i v e l y unimportant manufactur ing i n d u s t r i e s and concentra te on the e x t r a c t i v e i n d u s t r i e s . South A f r i c a ,however has 'a l a rge na t i ve p o p u l a t i o n , , wh i ch d i f f e r e n t i a t e s her problems from those of the other dominions , 'x'he n a t i v e problem i s one of domestic concern , but i n f l u e n c e s e x t e r n a l trade i n tha t cheap n a t i v e l a b o r i n min ing and fa rming , wh ich employ a l a r g e percentage of u n s k i l l e d workers , g ives the Union a comparative advantage i n these i n d u s t r i e s , and p o i n t s to the cont inuance of e x t r a c t i v e i n d u s t r y as the p r i n c i p a l e n t e r p r i s e of the country f o r some time to c ome. (90) ' PART TWO. THE REST OR THuBEIEPlRE, SECTIOR SIXs THE IRISH FREE STATE, The I r i s h ^ree S ta te i s e s s e n t i a l l y an a g r i c u l t u r a l country,- a l though the l a r g e r c i t i e s con t a in a number of b i g manufac tur ing p l a n t s , p r i n c i p a l l y devoted to t e x t i l e s and metal goods-- fo r example, the Henry Ford p l a n t fo r motor t r u c k s . The Free Sta te government has a p o l i c y which aims to encourage a g r i c u l t u r e and c e r t a i n manufactures . This i s be ing done by three met "nods; f i r s t , loans to farmers to enable them to pur-chase the l a n d , second, grants to the sugar beet i n d u s t r y , and t h i r d , a t a r i f f on c e r t a i n commodities i n c l u d i n g boots and shoes, g l a s s b o t t l e s , commercial motor bodies and manufactured tobacco. -A g r i c u l t u r a l p r o d u c t i o n ho lds f i r s t p lace i n the n a t i o n a l economy, In 1928, among vegetable p roduc t s , wheat amounted to 31,763 tons , oa t s '637 ,291 t ons , b a r l e y 131,697 tons , rye 3,761 tons , pota toes 2,246,336 tons , sugar bee ts 141,139 tons and f l a x 1,177 tons . ( l ) l u dw In the same year the f i s h ca t ch was valued a t $1,544,000 w h i l e min ing p roduc t !on i n 1926 was £ 2 4 , 1 9 0 , 0 0 0 . ( 1 ) P a s t o r a l p r o d u c t i o n i s bes t shown by export f i g u r e s wherein c a t t l e exported i n 1924 numbered 948,908 head, i n 1926 635,906, i n 1928 ... 748,767 head,aand i n 1930 857,878 head, (2) In a d d i t i o n , d a i r y p roduc t s , raw wool and cured meats form a s u b s t a n t i a l p o r t i o n of the export t r ade , ' E x t e r n a l trade had a value of £ 1 0 7 , 3 3 0 , 9 8 2 i n 1925, (l)l lew I n t e r n a t i o n a l ^earbook, 1930.p 396. ( 2Commercial I n t e l l i g e n c e J o u r n a l , M a r c h 19,19 32. (91) i n 1927 the f i gu re .was £ 1 0 5 , 6 7 5 , 6 5 3 and i n 1929 the value was £ 1 0 9 , 1 7 1 , 7 5 1 , ( 1 ) fhe f o l l o w i n g t a b l e shows the values of/exports and imports fo r 1925,1927 , and. 1929 . (1) -E x t e r n a l Trade of the I r i s h f ree S t a t e , 1925 1927 1929 Imports 62,950,024 60,823,958 61,501,819 Expor t s 43,373,531 44,168,718 46,803,448 Re-expor t s 1 ,007,427 683,577 1,066,484 Among i m p o r t s , wheat ranked f i r s t i n 1929, w i t h a. va lue of £ 3 , 1 8 6 , 8 4 2 . Other commodities i n order of va lue were m a i z e , c o a l , wheaten f l o u r , i r o n and s t e e l manufactures and machinery . The f o l l o w i n g tab&& g ives the va lues of imports i n 1929. (2) Imports i n t o the I r i s h Free S t a t e , 1929. Commodity Value (£) Horses 1,305,726 Bacon and ham • . •'. 1,627,094 B u t t e r 360,342 "Wheat ' 3,186,842 Maize ' 3,158,840 Wire at en f l o u r 2,438,734 Maize meal 459,418 O i l s e e d , o i l cake and meal 620,877 F r u i t 1,175,318 Cocoa,,chocolate etc 348,743 Confec t iona ry 265,100 Tea 2,345,277 (1) Statesman's Yearbook, 1931. p 86, (2.) I b i d p 87 . (-92) Imports i n t o the I r i s h Free S t a t e , 1929 . ( con t i nued ) Commodity Value (£) Hops ' 273:9834 Sugar 5 r e f i n e d 1,264,502 Tobacco/Unmanufactured 612,409 C o a l 3,145,050 Cement 407,487 I ron and s t e e l manuf a. c tu r es except c u t l e r y and machinery 2,276,762 Hon-ferrous ores and manufactures 627,609 Cu t l e ry ,ha rdware e tc 581,276 Machinery 2,163,650 E l e c t r i c a l goods 615,690 Motor cars 1,360,244 Motor car pa r t s 504,262 Trac to r pa r t s 794,852 Wood and t imber 1,188,659 Cot ton p i e c e goods 1,188,659 Wool len and wors ted t i aaues 889,952 Appare l • 1,449,492 Hoots and shoes , 1,746,221 Hats etc 424,766 H o s i e r y 1,093,637 Other appare l 1,347,920 Leather and manufactures 565,518 Rubber and manufactures 427,540 diaper and cardboard 1,161,482 Petroleum lamp o i l 257,383 Eotor s p i r i t 818,053 (93) Imports i n t o the I r i s h Free S t a t e , 1 9 2 9 . ( c o n t i n u e d ) . Commodity Value {£) f e r t i l i z e r 769,349 Chemica l s , dyes , perfume etc 1,214,316 Books etc 685,665 D i v i d e d i n t o wider c a t e g o r i e s im por t s were as f ol~\lows. Imports by Classes ( l ) C la s s 1929 • 1930 L i v e animals 1,580,224 1,510,910 F o o d , d r i n k and tobacco 22,801,235 19,879,551 Manufactured goods and raw m a t e r i a l s 35,826,258 34,438,023 P a r c e l Post 1,094,102 911,037 Manufactured goods form by f a r the l a r g e r par t of the t h i r d ca tegory above , impor ts of raw m a t e r i a l fo r manufacture be ing s m a l l , w i t h c o a l the l a r g e s t i t e m . Turn ing to expor ts , i t i s found that they c n n s i s t f o r the most p a r t of" f o o d s t u f f s . L i v e c a t t l e i s t h e ' p r i n c i p a l i t e m , f o l l o w e d by beer and a l e , bu t t e r , eggs and b a c o n . T e x t i l e s and motor t r a c t o r s a n d ' p a r t s l e a d the l i s t of manufactured goods. The f o l l o w i n g t a b l e shows the c h i e f a r t i c l e s exported i n 1929.(2) Expor t s from the I r i s h Free S ta t e ,1929 , Commodity Value (£) C a t t l e 13,549,485 Sheep ' 1,381,860 (1) Commercial I n t e l l i g e n c e J o u r n a l ,March 21 ,1931. (2) Statesman's Yearbook,1931 . p 88, (94) Expo r t s from the I r i s h Bree •Commodity P i g s Eorses P o u l t r y Bacon and hams Eresh pork P i s h , f r e s h E i s h , c u r e d (not canned) M i l k -B u t t e r Eats and o i l s , e d i b l e Eggs Oats B i s c u i t s Beer and a l e S p i r i t s Motor t r a c t o r s Botor t r a c t o r p a r t s Potatoes Wo o l , rav; B ine i / ' a rn s and manufactures Woollen and wors ted yarns and manufactures Appare l Hides and s k i n s l e a t h e r s Books etc State , 1 9 2 9 . ( c o n t i n u e d ) . Value (£) 1 s 9 5 3,283 2,517,522 949,081 - 2 ,816,553 1,202,613 334,387 159,203 S jL "-J; j 6 4 ,554,855 212,018 3,218,854 240,164 502,681 4 ,790,353 141,223 9X0 * 151 888,126 56,904 832,7 01 20 5,817 279 ,569 183,105 560,904 140,445 236,344 (95) I t i s worthy of note tha t i n 1950. a l though the value of t o t a l expor ts from the I r i s h ' F r e e State decreased to <£36,27 6 ,118, the value of l i v e animals exported rose to £ 1 8 , 3 2 7 , 6 6 9 or 55$ of the t o t a l e x p o r t s . Of t h i s amount the U n i t e d Kingdom r e c e i v e d £ 1 4 , 2 0 0 , 3 2 6 w o r t h . ( l ) fhe sources of I r i s h imports are widespread . The l a r g e s t s e l l e r i n the I r i s h market i s Great S r i t a i n which i n 1929 supplied 68 .1$ of the total, impor t s . Kext was Nor thern I r e l a n d which contributed 9 .9$ of the t o t a l . T h e U n i t e d S t a t e s , whish ranked t h i r d , was r e s p o n s i b l e f o r 6 .9$ . The British E m p i r e ' s share was over 80$ of the t o t a l impor t s . The f o l l o w i n g table- shows the va lues of goods s u p p l i e d by the l e a d i n g s t a t e s of the wor ld i n 1929. (2) Imports by Coun t r i e s 1929. Country Value (£) Oreat B r i t a i n .41,762,536 Horthern I r e l a n d 6,117,079 Uni ted S t a t e s •4,772,495 A r g e n t i n a 2 ,440-, 717 Germany 1,549,856 Canada 774,637 Belgium 722,7 61 Sweden 554,314 Netherlands 550,924 France 404,867 A u s t r a l i a 567,670 (1) Commercial (2) Statesman's I n t e l l i g e n c e J o u i Ye ar b o o k , 19 31 . p n a l , M a r c h 19. 87. (96) An examinat ion of the d i r e c t i o n of exports shows tha t the B r i t i s h Empire t a k e s - n e a r l y the whole of the I r i s h export t r ade , namely 94$ of the t o t a l . Great B r i t a i n was the bes t customer i n 1929, t a k i n g 82 ,1$ . northern ' I r e l a n d r e c e i v e d 10.8$ of the t o t a l . The f o l l o w i n g t a b l e shows the shares of v a r i o u s c o u n t r i e s i n 1 9 2 9 . ( l ) Expor t s by Coun t r i e s 1929. Country Value (£) Great B r i t a i n 38,420 5 030 nor the rn I r e l a n d 5,045,220 Uni ted S ta tes 993,320 Germany 331,857 R u s s i a 205,504 Brance 181,468 A u s t r a l i a 177,335 I t a l y 174,379 Belgium ' 165,877 Hol l and 139,979 Egypt 86,142 Canada - 85,483 B r i t i s h I n d i a 81,001 S t r a i t s Se t t lements 68,271 Hew Zealand 59,400 S w i t z e r l a n d 54,037 The extent , compos i t i on and d i r e c t i o n of I r i s h e x t e r n a l t rade i s a t present i n a s t a t e of f l u x . Wi th a s t rong n a t i o n a l i s t movement at l i b e r t y to go i t s own way s ince (9?) s e p a r a t i o n from B r j . t a i n , the Free S ta te seems des t ined to i n -s t i t u t e a. s t rong p r o t e c t i v e system of t a r i f f s . The Sinn Pe in p a r t y , a t present i n power, has i n t i m a t e d tha t i t w i l l r a i s e the gene ra l r a t e of d u t i e s on imports to 33 1/3 per cent ad va lorem, w i t h . a r a t e of 25$ on B r i t i s h Empire p roduc t s . There seems l i t t l e reason to doubt tha t B r i t a i n w i l l cont inue to be the Eree S t a t e ' s bes t customer, as l ong as t h e ' l a t t e r country remains w i t h i n the empire . B o t h i n g d e f i n i t e can be s a i d concerning the t a r i f f p o l i c y of • the I r i s h Eree Sta te u n t i l a f t e r the Imper i a l Economic Conference of t h i s year ^1932) , but there i d l i t t l e doubt tha t i n g e n e r a l the t a r i f f d u t i e s w i l l be r a i s e d s t i l l h igher than the i nc reases i n s t i t u t e d s i n c e 1922, (98) PART TWO. THE REST OP THE EMPIRE. SECTIOH SEVEU: BRITISH ABRICA. A d i s c u s s i o n of the trade of Southern and i io r the rn Rhodes ia , South West A f r i c a , Kenya and Uganda, Sudan, Tangan-y i k a , B r i t i s h S o m a l i l a n d , B i g e r i a and the Gold Coast of n e c e s s i t y must "be more a c o n s i d e r a t i o n of p o t e n t i a l i t i e s than of present c o n d i t i o n s . A l though some of these possess ions were a cqu i red compara t ive ly e a r l y i n the h i s t o r y of B r i t i s h overseas expans ion, i n d u s t r i a l development' has Been s low. Reasons fo r t h i s are f i r s t , l o c a l c o n d i t i o n s such as c l i i j a t e and the presence of a r e l a t i v e l y l a rge Backward p o p u l a t i o n ! and second ly , B r i t i s h c a p i t a l and e n t e r p r i s e have Been d i r e c t e d to more a t t r a c t i v e and obvious channels such as the d o m i n i o n s , India and f o r e i g n c o u n t r i e s , p a r t i c u l a r l y the U n i t e d S ta tes and South A m e r i c a . Consequent ly , vas t p o s s i b i l i t i e s of i n d u s t r i a l deve lopment , p a r t i c u l a r l y ' In the e x t r a c t i v e i n d u s t r i e s remain to be e x p l o i t e d i n B r i t i s h A f r i c a , . Each of these possess ions w i l l be dea l t w i t h b r i e f l y , more a t t e n t i o n be ing g iven to those showing g r e a t e s t promise of immediate development ,such as the Rhodesias and 'Kenya, than to others such as Tangany ika and S o m a l i l a n d . S OUIH3RE RHODESIA. Southern Rhodes ia , r esembl ing i n resources the nor thern pa r t of the South A f r i c a n Union , i s p robab ly the most important of the A f r i c a n c o l o n i e s . While up to the present i t has remained 'a l 'odf from the Union , i t s u l t ima te ' i n c l u s i o n i n £ that dominion seems i n e v i t a b l e . B o t h S tuthern and nor thern (99) Rhodesia, are plagued w i t h the t s e - t s e f l y which renders the employment of an imal l a b o r i n a g r i c u l t u r e imposs ib le over larsre ar eas• Southern Rhodes ia possesses ex t ens ive m i n e r a l r e sou rces . • Deposi ts ' .of c o a l are known to e x i s t but l a c k of t r a n s p o r t a t i o n f a c i l i t i e s r e t a r d s e x p l o i t a t i o n . Chrome i r o n , which c o n s t i t u t e s over 6$ of South Rhodesian e x p o r t s , w i l l p robably grow i n im-portance as the count ry a l r e a d y s u p p l i e s about one h a l f of the w o r l d ' s output and other sources of the m i n e r a l (wi th the ex-c e p t i o n of the Transvaa l ) are b e l i e v e d to be approaching ex-h a u s t i o n . Asbestos from Rhodesia i s of f i n e r q u a l i t y them that mined i n Canada, which a t p resent c o n s t i t u t e s n e a r l y th ree -quar te rs of the w o r l d ' s annual p r o d u c t i o n . The min ing of t h i s m i n e r a l shows remarkable growth, the output r i s i n g from 290 tons i n 1913, to 33,344 tons i n 1926 and 59,666 short tons i n 1929, Cold produced i n 1926 t o t a l l e d 593,429 ounces and i n 1929 560,813 o u n c e s . ( l ) The output of t h i s metal has shown l i t t l e f l u c t u a t i o n s ince 1912, the va lue remaining about £ 2 , 5 0 0 , 0 0 0 , Imports In to Southern Rhodesia i n 1926 t o t a l l e d £ 6 , 3 4 9 , 7 9 9 and exports £ 6 , 0 0 0 , 3 4 8 . P r i n c i p a l commodities sent abroad were asbestos £ 3 2 8 , 9 0 6 ; maize £ 2 4 7 , 5 4 6 ; c a t t l e £ 3 3 0 , 6 8 6 ; h ides £ 9 7 , 8 7 6 ; chrome i r o n ore £ 3 8 8 , 9 1 3 ; and maize meal £ 3 7 , 6 4 1 . ( 2 ) Imports were made up of manufactured goods of a l l k i n d s : c h e f f l y t e x t i l e s and hardware, and of f o o d s t u f f s . The e x t e r n a l t rade of Southern Rhodesia as mainly w i t h B r i t i s h countr ies , , Of the t o t a l impor t s , about 77$ were drawn from the B r i t i s h Empire i n 1926, and 74$ in1jL929. (1) Union of S . A . O f f i c i a l Yearbook,1929.p 474. (2) 3. and B . A f r i c a Yearbook,1928. p 166. (100) The share of the Un i t ed Kingdom was 65$ i n 1926 and 45,4$ i n 1929. The Union sent 20 ,3$ of the impor ts i n 1929 . Approx imate ly 78$ of Southern Rhodesian exports are no rma l ly sent to c o u n t r i e s of the empire,, These are d i v i d e d between the U n i t e d Kingdom (about 65$$ and the Union of South A f r i c a . I t would appear tha t i n d u s t r y i n Southern Rhodesia w i l l be concent ra ted on mining and c e r t a i n forms of a g r i c u l t u r e fo r some time to come. The g r ea t e s t handicap to a g r i c u l t u r e and p a s t o r a l i n d u s t r y i s the i s e - t s e f l y . Whether t h i s pest can be e r ad i ca t ed i s c o n j e c t u r a l . The d e s t r u c t i o n of the mosquito i n Panama i n d i c a t e s tha t such a measure i s not i m p o s s i b l e . There i s no doubt tha t c o u l d the tse-tse f l y be des t royed , - f a rming mid c a t t l e - r a i s i n g would f lour i sh i n t h i s coun t ry . II OR THREE RHODESIA. Wi th a European p o p u l a t i o n of about 5000 Northern Rhodes ia as ye t f i g u r e s but s l i g h t l y i n e x t e r n a l t r ade , though her p o s i t i o n i s growing i n imiJortan.ee. Imports i n 1926 were valued at £ 1 , 7 24,032 trad exports a t £ 4 9 2 , 7 1 3 . ( 1 ) , In 1928, imports were £ 2 , 3 6 6 , 3 1 7 and exports £ 823 ,029 . (2) Only a f r a c t i o of t h i s inc rease can be a t t r i b u t e d to r i s i n g p r i c e s . The c h i e f exports i n 1926 were l e a d £ 3 6 , 5 9 3 ; c a t t l e 46,085; maize £ 3 1 , 2 4 6 ; maize meal £ 1 0 , 6 6 5 ; tobacco £ 2 5 5 , 8 3 2 ; copper £23 ,5605 go ld £ 5 , 2 8 1 ; and t imber £4 .1 ,015 . ( l ) The tobacco i n d u s t r y appears to be l o s i n g ground w h i l e copper mining i s g rowing . In 1928,copper ore was exported to the value of £ 9 , 0 6 3 and ingo t s to the value ( l ) 3. and E. A f r i c a Yearbook 1928. p l 6 8 . (2) I b i d , 1 9 3 0 . (101) l a r e of £ 2 3 1 , 3 0 4 . Tobacco expor ts i n 1928 were wor th £ 1 0 0 , 8 4 8 and dropped i n 1929 to £ 5 7 , 8 8 5 . ( 1 ) The bu lk of the e x t e r n a l trade of Nor thern Rhodesia i s w i t h B r i t i s h c o u n t r i e s . About 80$ of her imports came from t h i s source i n 1926 and over 70$ i n 1929. The shr of' the Un i t ed Kingdom dropped from 72$ i n 1926 to 42.6$ i n 1929 The empire n o r m a l l y takes about 55$ of the c o l o n y ' s e x p o r t s , about 30$ going to Great B r i t a i n , Lack of r a i l w a y s has h i t h e r t o r e t a rded the development of t h i s c o l o n y , which i s capable of great expansion-a long a g r i c u l t u r a l and min ing l i n e s . In s p i t e of handicaps , raping i s - i nc reas ing r a p i d l y , cooper and lead be ing the most important m i n e r a l s . Z inc depos i t s a l s o e x i s t . Timber exports , to the Union are mainly ' of tea-k and mahogany, but a g rea t pa r t of the Rhodesian forests have l i t t l e commercial v a l u e . Co t ton , sugar and ' tobacco c u l t i v a t i o n i n nor the rn Rhodes ia i s of recen t i n c e p t i o n . C l i m a t i c c o n d i t i o n s i c a t e cons ide r ab l e expansion i n these i n d u s t r i e s . irio. (102) SOUTH Y.'SST AFRICA South Welt A f r i c a , f o r m e r l y German South West A f r i c a , ' i s mandated to the Union of South A f r i c a , As i n other sec t ions of South A f r i c a ,m i n i n g c o n s t i t u t e s the c h i e f i n d u s t r y of i n t e r -n a t i o n a l importance* Imports i n 1926 amounted to £2 . ,507 ,625 and expor ts to £ 3 , 2 9 2 , 9 8 6 . ( l ) P r i n c i p a l a r t i c l e s expor ted i n 1926 inc lude diamonds £ 1 , 8 6 3 , 8 6 0 ; copper ore £502 ,187 ?- t i n £ 4 4 , 8 8 6 ; vanadium £ 5 8 , 3 3 3 ; animals f o r s l augh te r £ 4 0 8 , 8 1 9 ; f i s h , p r e s e r v e d , £ 2 7 , 5 7 5 ; and b u t t e r £ 9 0 , 9 6 8 , ( l ) Diamonds are found at many p laces i n the t e r r i t o r y , but as the depos i t s appear to be a l l u v i a l , there i s a p o s s i b i l i t y of the f i e l d becoming exhausted . T i n , copper , l e a d , i r onvanadium and marble e x i s t i n cons ide rab l e q u a n t i t i e s . T h e r e are a l s o i n d i c a t i o n s - of pe t ro leum. Good pasturage i s found throughout the t e r r i t o r y , (except i n the dese r t r e g i o n ) desp i t e the s m a l l r a i n f a l l . S h e e p and goat r a i s i n g i n the south and c a t t l e - r a i s i n g i n the no r th show p romis ing r e s u l t s . A g r i c u l t u r e i s hazardous im most d i s -t r i c t s and must w a i t f o r i r r i g a t i o n . F i s h i n g , l i k e other i n d u s t r i e s , shows p o s s i b i l i t i e s of ex tens ive development. The export of preserved f i s h was s t a r t e d i n 1925 and i n tha t year £ 4 8 , 5 3 9 wor th was sent abroad,-France t a k i n g about two t h i r d s of the- e x p o r t s . This trade has grown r a p i d l y , 661,733 l b s b e i n g expor ted i n 1926 and 2,001,792 i n 1930. Over 2,'500,000 of d r i e d f i s h were sent to the Union i n ( l)S-. and F . A f r i c a . Yearbook 1923,p 179. (103) 19.26.The - p r i n c i p a l v a r i e t i e s are s ole - s i l v e r ! i s h and b a r r a c o u t a . ( l ) Fores t s i n South West A f r i c a have p r a c t i c a l l y no com-m e r c i a l v a l u e . F i g u r e s showing the r a t i o of t rade w i t h the empire to t o t a l t rade are not a v a i l a b l e . IGSITYA AED UGANDA Kenya Colony and Uganda • r a p i d l y , are g a i n i n g importance as sources of co t ton and .coffee .A l though the equator passes through the cent re of both co lon ie s , , the h i g h a l t i t u d e of most of the count ry makes i t f a i r l y h a b i t a b l e by Europeans. The whi te p o p u l a t i o n of Kenya, a t l e a s t , i s i n c r e a s i n g ' r a p i d l j r . A g r i c u l t u r e i s p r a c t i c a l l y the sole i n d u s t r y , a l though c a t t l e and goat r a i s i n g , a m o n g the n a t i v e s , has shown dec ided growth , and some go ld has been rained. I n d i c a t i o n s of s i l v e r , copper and i r o n have been d i s c o v e r e d . Signs 03? o i l have been found i n Uganda, where a l s o are l o c a t e d s a l t l akes which form the b a s i s of cons ide r ab l e n a t i v e trade.with the Congo r e g i o n . Lake Magad i i n Kenya has ex tens ive depos i t s of sodium c a r b o n a t e . As ye t l i t t l e development i n the e x t r a c t i o n of mine ra l s has taken p lace i n these c o l o n i e s . E x t e r n a l ' t rade c o n s i s t s i n the e x p o r t a t i o n of raw v e g e t a b l e m a t e r i a l s and the i m p o r t a t i o n of manufactured goods. Imports i n 1925 by the two c o l o n i e s t o t a l l e d £ 8 , 0 6 1 , 4 4 8 and i n 1926 £ 7 , 4 4 0 , 6 4 9 . Expor t s f o r the same two years were £ 7 , 8 2 1 , 8 4 4 and"£6,010,386.(2) Kenya ' s share i n the t o t a l exports was about 40$. ( l ) S . and E . A f r i c a Y e a r b 0 0 k , 1 9 32. 9 291. ( 2 ) I b i d 1928, p 637. (104) C o t t o n . c o f f e e and s i s a l were the three l e a d i n g expor ts i n 1926. Maize and h ides were a l s o impor t an t . Of the £ 5 , 0 5 6 , 9 4 0 wor th of co t ton expor ted i n 1926, £ 3 , 0 5 1 , 7 9 1 came from Uganda. Kenya produced ah out three quar te r s of the coffee expor ted i n the same y e a r , and n e a r l y a l l the s i s a l h ides and maize . The f o l l o w i n g t ab l e shows va lues of the c h i e f expor ts from the two c o l o n i e s i n 1 9 2 6 . ( l ) Chief . Expor t s of Kenya and Ugan&a. 1926, Commodity Value (£) Hides and s k i n s 272,327 S i s a l and tow 579,499 P l a n t a t i o n rubber 136,624 Maize 280,596 Seeds 277,415 Coffee 895,338 Cot ton 3,056,940 Other items i n c l u d e w o o l , i v o r y , s u g a r , t i m b e r and cop ra . Imports c o n s i s t of a l l k inds of manufactured g o o d s , e s p e c i a l l y c o t t o n p i ece goods, and of foods tu f f s such as g r a i n , f l o u r , s u g a r and t e a . About 50$ of the e x t e r n a l t rade of Kenya and Uganda i s w i t h the U n i t e d Kingdom and afjbout 75$ w i t h the B r i t i s h Empire . -( l ) 3 . and E . A f r i c a Yearbook,1928 p 636-637. (105) ABGLQ-BGYETIAR S U M , A n g l o - E g y p t i a n Sudan f u r n i s h e s the g rea t e r pa r t of empire-grown co t ton and i s the w o r l d ' s c h i e f source of gum-a r a b i c . The former product was expor ted i n 1926 to the \ a l u e of <£E 9,834 j 845 and i n 1929 to the value of £B 4,585,3.30.' Values of the gum-arabic expor ts fo r the same two years £E 844 ,198 and BE 687,672 r e s p e c t i v e l y . . E x t e r n a l t rade are as f o l l o w s ( l ) E x t e r n a l Trade of Sudan. Year 1926 Imports £E • 5 ,574,401 Expor t s 4 ,876,236 Re-expor t s £E 314,269 1927 6 ,155,314 4,956,090 273,329 192.8 6,463,206 5,634,769 312 J 23*7 1929 6,856,114 6,526,7 69 283,010 The p r i n c i p a l products of the t e r r i t o r y are c o t t o n , . co t ton seed, gum-arab ic , maize,sesame, da tes , g r o u n d - n u t s , c a t t l e sheep and g o a t s . There has been as ye t l i t t l e min ing development though the f o l l o w i n g m i n e r a l s are known to e x i s t | g o l d , c o p p e r , • i r o n , l e a d , g r a p h i t e , b a u x i t e , m i e a , s a l t and gypsum. Only g o l d and sal t , are at present be ing e x p l o i t e d . l i f 1928, 12,186 tons of s a l t was expor ted to A b y s s i n i a . Important imports i n 1928 were co t t on f a b r i c s , sugar , c o f f e e , f l o u r , tobacco , machinery and i r o n t o o l s and in •implements. In 1 9 2 8 , B r i t a i n took 74 .3$ of the exports and sent 35$ of the i m p o r t s . S i m i l a r percentages f o r Egypt were 7.9$ and 2 6 . $ , w h i l e f o r the Uni t ed S ta tes they were 3.$$ and 2 .7$ . ( l ) Statesman's Yearbook ,1931 , p 267« (1G6) TAFGAPYIKA Tanganyika , f o rmer ly German Eas t A f r i c a , p r o d u c e s a v a r i e t y of t r o p i c a l and s e m i - t r o p i c a l vege tab le p r o d u c t s , o f •which the most important commerc ia l ly i s s i s a l . In 1 9 2 9 , t h i s m a t e r i a l formed 39,9$ of the t o t a l exports from the t e r r i t o r y . Coffee and co t ton were the next i n order w i t h 15.8$ and l3 .1$ r e s p e c t i v e l y . E x t e r n a l t rade values were as f o l l o w s . ( l ) E x t e r n a l Trade of Tanganyika. Year Expo r t s Imports 1926 3 ,152,422 3,129,292 1927 3,672,064 3,440,576 1929 4,285,925 3,988,365 Imports c o n s i s t e d l a r g e l y of co t t on piece goods , food-s t u f f s such as g r a i n , and meta l manufactures . Expor t s , i n order of va lue i n 1929, Inc luded s i s a l , c o f f e e , c o t t o n , h i d e s and s k i n s , c o p r a » g r o u n d n u t s , and s imsim. There are ex tens ive f o r e s t s of commerc ia l ly va luab le t imber (hardwoods) which w i l l p robab ly become an imp)ortant expor t i tem i n the f u t u r e . M i n i n g i s undeveloped though eopper i s known to e x i s t In 1927 5 percentages of Imports fros^Leading sources were as fol lows*. U n i t e d Kingdom 38$, r e s t of Empire 20 .4$ , Germany 11 .1$ , Un i t ed Sta tes 7.2 $ , Nether lands 8.9$ and Japan 6 .3$ . The c l i m a t e of Tanganyika f o r b i d s the es tab l i shment of a cons ide rab le whi te p o p u l a t i o n . ( l ) S. and E . A f r i c a Yearbook 1932, pp 655-656. (107) BRITISH' S01IALILAKD B r i t i s l i Somali l a n d i s s t i l l undeveloped commerc ia l ly , i t s e x t e r n a l trade i n 1929 amounting to only £ 7 1 2 , 1 6 1 . The p o p u l a t i o n , almost e n t i r e l y n a t i v e , i s p a s t o r a l and a g r i c u l t u r a l . Lead ing expor ts are sk ins and h i d e s , gum, ghee , co f fee , c a t t l e , s h e e p and goa t s . P r i n c i p a l imports i n 1929 were r i c e 183,686 cwt ,dates 51,395 cwt, sugar , 43,823 cwt , and t e x t i l e s 2 ,708,423 y a r d s . ( l ) E x t e r n a l t rade va lues are g i v e n be low. (2 ) E x t e r n a l Trade of B r i t i s h S o m a l i l a n d . Year Imports Expor t s £ x? 1926 . .307,423 245,301 1927 427,516 355,517 1928 g 47 3,294 238,867 ( l ) Statesman's Yearbook,1931. p 215, (2) I b i d ,1932, p 650, (108) BIGERIA R i g e r i a , the most impor tan t west coast possess ion i n B r i t i s h A f r i c a , i s compara t ive ly w e l l developed near the c o a s t , hut the i n t e r i o r i s s t i l l savage. The p r i n c i p a l products of the t e r r i t o r y are a g r i c u l t u r a l , hut ex tens ive t i n depos i t s e x i s t , h a v i n g Been worked by the n a t i v e fo r c e n t u r i e s . I ron and l e a d are a l s o found. The f o l l o w i n g t ab l e con ta ins va lues of the e x t e r n a l «s==*\ t r a d e . ( l ) E x t e r n a l Trade of N i g e r i a . Year Imports Expor t s 1926 13,597,480 1 7,339,613 1927 15,664,637 16,340,957 1928 16,663,525 17,206,933 The three l e a d i n g imports i n 1929 were co t ton p iece goods £ 3 , 4 0 1 , 3 2 5 , f i s h £ 7 4 7 , 3 4 5 and coope r ' s s to res £ 190,256. P r i n c i p a l expor ts i n c l u d e d ( i n 1929) palm k e r n e l s £ 4 , 2 6 4 , 5 5 0 , palm o i l £ 3 , 7 6 7 , 3 0 1 , g r o u n d nuts £ 2 , 4 6 5 , 7 1 3 , c o c o a £ 2 , 3 0 5 , 8 3 6 , h ides and s k i n s £ 9 2 8 , 6 1 5 and co t ton l i n t £ 5 4 3 , 2 6 6 . In a d d i t i o n 17211 tons of mahogany and 15,129 tons of t i n ore were exported*(2) Imports from the empire amounted to 72.7$ of the t o t a l i n 1929. Prospec ts of immediate a c c e l e r a t i o n of N i g e r i a ' s development are not f a v o r a b l e , c l i m a t i c c o n d i t i o n s be ing the main r e t a r d i n g f a c t o r . (1)Statesman's Yearbook,1931. p 254. (2) I b i d , p 255, (109) THS GOLD COAST. The Gold Coast expor ts t r o p i c a l vegetable products and c e r t a i n m i n e r a l s and imports c l o t h i n g ,hardware and f o o d s t u f f As w i t h other t r o p i c a l and s e m i - t r o p i c a l c o l o n i e s , the f a c t tha t the preponderant p o r t i o n of the p o p u l a t i o n i s n a t i v e l i m i t s the range of Impor ts . Imports i n 1925-26 were £ 9 , 7 8 2 , 6 1 9 and i n 1928-29 were £ 1 2 , 2 0 0 , 0 4 5 . Expor t s f o r the same two years amounted to £ 1 0 , 8 9 0 , 2 2 3 and £ 1 3 , 8 2 4 , 8 7 5 . ( l ) P r i n c i p a l imports in\L929 are shown be low .(2) P r i n c i p a l imports i n t o the Gold Coast,1929., Commodity "Value (£) Sacks 228,086 Cot ton p i ece goods 1,406,080 C o t t o n , o t h e r 215,853 •Machinery 267 ,306 O t h e r . i r o n and s t e e l manufct rs 552,641 Pet roleum products 545,233 . F lour ,whea ten 248,489 Sucar ' 133,858 S i l k and a r t i f i c i a l s i l k 444,307 Tobacco and manufactures . 349,682 B e e r , a l e e tc 234,692 Other i tems i n c l u d e d canned meats £ 1 4 7 , 7 4 5 , p r e s e r v e d f i s h £ 1 7 0 , 0 6 8 , appa re l £ 1 8 0 , 8 6 1 , and c o a l £ 1 6 4 , 2 8 1 . ( l ) Statesman's Yearbook ,1931 . p257. (2) I b i d , p 258. ( n o ) P r i n c i p a l expor ts sent abroad i n 1929 are shown i n the f o l l o w i n g t a b l e , ( l ) P r i n c i p a l Expo r t s from the Gold Coas t .1929 . Commodity Value (, Cacao 9 ,704,493 Gold 869J863 Manganese 748,286 Diamonds 584,613 K o l a nuts IL2 7 «t 2 3 3 Mahogany 160,364 Palm k e r n e l s 96,447 Rubber 28,423 Copra 21,216 Palm o i l 16,830 Under d i r e c t i o n of t r a d e , i t a p p e a r s ' t h a t 38.9$ sfi1 of imports i n t o the Gold Coast came from the Un i t ed Kpng&oia i n 1929. In the same yea r ,Grea t B r i t a i n took 26.3$ of the export The f o l l o w i n g t a b l e shows the shares of other l e a d i n g c o u n t r i e s , Shares of Leading C o u n t r i e s . i n Gold Coast Trade ,1929. (2) Country , Imports Expor t s cff ef /o t° Uni t ed Kingdom 38.9$ 26.3 Un i t ed S ta tes 13.1 26.5 Germany 9.3 15.0 H o l l a n d 6.0 10.8 Prance 3.3 3.2 ( l ) Statesman's Yearbook,1931.p 257. I b i d , p 258, (111} FAR T TwO. THE REST OF THS SIE?IRE. SECTIOlf EIGHT J ^WFOUISJLAHD A1TF THE WEST IKDIES. The t rade of ITewf oundland i s based upon three i n -d u s t r i e s , namely f i s h i n g , l u m b e r i n g and m i n i n g . O f t h e s e . f i s h i n g Is by far the most important and forms the b a s i s of the c o u n t r y ' s w e l f a r e . The ITewf oundland Banks have been famous as f i s h i n g grounds s ince 1600 and c o n s t i t u t e the c o u n t r y ' s most va luab l e a s s e t . F a r g e t r a c t s of t imber l and ensure the c o n t i n u a t i o n of expor t s of lumber and wood p u l p . As regards m i n i n g , the i r o n ore depos i t s of the i s l a n d are es t imated at about 3,600,000,000 t o n s , w h i l e copper and p y r i t e s a l s o e x i s t i n cons ide rab le q u a n t i t i e s . Manufac tu r ing p lays a very sma l l par t i n the • n a t i o n a l economy and has no p lace i n the export t r a d e , 'The extent of ITewfoundland's t rade i s shown by the f o l l o w i n g t a b l e . ( l ) E x t e r n a l Tra.de of ITewf oundland, 1924-25 1926-27 1928-29 cC Imports 7 ,490,673 5,162,774 5,847,474 Expor t s 4 ,853,948 6,167,772 . ' 7 ,359,541 Imports are d i v i d e d between manufactures and food-s t u f f s , other raw m a t e r i a l s not e n t e r i n g i n t o t h i s t r ade . P r i n c i p a l i tems imported i n ^ 1928-29 i n c l u d e d t e x t i l e s $2 ,561 ,208 , f l o u r $ 2 , 5 3 5 , 7 7 8 , c o a l $1 ,904 ,429 , hardware $466,067, s a l t pork 1591,250, Machinery § 1 , 1 7 5 , 2 9 2 , tea $509,712, and molasses $282,603. ( l ) ( l ) Statesman's Yearbook,1931, p 331, (112.) Exports n a t u r a l l y c o n s i s t almost e n t i r e l y of the products of the -three g rea t i n d u s t r i e s . P r i n c i p a l items ex-por ted i n 1928-29 i n c l u d e d pulp and paper & 1 4 , 8 8 4 , 9 8 8 , d r i e d cod $ 1 1 , 8 2 3 , 5 8 8 , i r o n ore etc $3 ,690 ,726 , h e r r i n g $ 5 7 7 , 0 4 4 , s e a l o i l $422 ,614 , cod o i l § 4 9 8 , 1 3 2 , s e a l sk in s $444,198, and l o b s t e r s (canned) ^ 3 3 1 , 3 4 1 . ( 1 ) llewf oundland ' s imports are drawn almost e n t i r e l y from Canada, the Un i t ed Kingdom and the Uni ted Sta tes as shown b e l o w . ( 2 ) C h i e f Sources of Imports , 1928-29 . Country Value {$) Canada 11 ,832,415 Uni ted Kingdom 6,211,906 Uni t ed S ta tes 9,886,451 B r i t i s h West Ind ies 1,179,528 T o t a l imports 29,237,381 Bewfoundland f s expor ts have a wide range of des-t i n a t i o n s . F r e s h f i s h and l o b s t e r s go to Canada and. the Uni t ed S t a t e s . D r i e d f i s h , p r e s e r v e d f i s h - a n d l o b s t e r s , and f i s h o i l s go to Europe and South A m e r i c a . Wood p u l p and paper i s sent to the U n i t e d Sta tes and Europe. I ron ore goes to Canada and Europe. In 1928-29, l e a d i n g c o u n t r i e s sha r ing Newfoundland's exports i n c l u d e d Un i t ed S ta tes 31 .5$ , Un i t ed Kingdom 20,6$ , Canada 8 .5$ , P o r t u g a l 5 .9$ , Spain 6 .0$ , I t a l y 4 .1$ and B r a z i l 9 . 7 $ . (3) (1) Statesman 's Yearbook,1931. p331. (2) Bewfoundland Yearbook and Almanac, 1932. p329. ( 3 ) i b i d .p 352, (113) T o t a l imports Trade v / i th B r i t i s h c o u n t r i e s as compared to trade w i t h f o r e i g n s t a t e s i s -shown By the f o l l o w i n g t a b l e s ( l ) . Imports i n t o Newfoundland. Year from from U n i t e d Kingdom r e s t of enrpire 1924-25 11,357,585 14,493,059 36,404,674 1926-27 4,527,533 12,199,624 25,813,871 1928-29 6,211,906 12,417,879 29,237,381 Expressed i n percentages of the t o t a l import t rade the share o f the B r i t i s h 'Empire i n 1926-27 was 64.7$ and i n 1928-29 was 6 3 . 7 $ . Expor t s from Newfoundland, f r o m from T o t a l Year U n i t e d Kingdom Res t of empire exports 1924-25 7,146,320 3,071,148 23,590,186 1926-27 6,27 3,344 3,389,164 30,859,859 1928-29 7 ,578,190 4,245,797 36 ,797 ,703 . Expressed i n percentages of the t o t a l export t r ade , the- share of the B r i t i s h Empire i n 1926-27 was 31.3$ and i n 1928-29 was 32 .1$ . ( l ) Dominion O f f i c e and C o l o n i a l O f f i c e l i s t , 1 9 3 1 . p 137. (114) THS BRITISH \7EST I IS EES The B r i t i s h West Indies ( i n c l u d i n g B r i t i s h Su iana , T r i n i d a d and B r i t i s h Honduras) c o n s t i t u t e some of the o ldes t B r i t i s h p o s s e s s i o n s . For a t l e a s t two c e n t u r i e s they have been one of the c h i e f w o r l d sources of cane sugar , a l though dur ing the l a s t f i f t y years they have been surpassed i n t h i s i n d u s t r y by B r i t i s h I n d i a , A u s t r a l i a and Cuba. B r i t i s h Guiana exports diamonds and r i c e , w h i l e T r i n i d a d s e l l s pet roleum and i t s p r o -d u c t s . S e m i - t r o p i c a l vegetable products such as , s i s a l , sponges , bananas and s h e l l s are sent abroad by Jamaica and other i s l a n d s . The t o t a l va lue of exports from a l l these c o l o n i e s i n 1929 was $83,294,683 and imports amounted to $114 ,594 ,683 . (1) T he fo l lowing t ab l e s c o n t a i n the va lues and percentages of t rade w i t h the three l e a d i n g customers of the g r o u p . ( l ) Imports i n t o the B r i t i s h West I nd i e s , 1929 , Country " Va lue ( § ) P e r c e n t . o f t o t a l U n i t e d Kingdom 35,358,792 30,8$ U n i t e d Sta tes 31,887,719 . 2 7 . 8 Canada - 21,016,221 18,2 Expor t s from the B r i t i s h Y/est I n d i e s , 1929. Un i t ed Kingdom 2 1 , 3 3 7 , 1 7 3 26.2 U n i t e d Sta tes 25,423,312 30.5 Canada 18,29 3,871 2 1 , 3 A b r i e f summary of the trade of each of the co lon i e s i nc luded i n t h i s group f o l l o w s , (l)a"est Indies Yearbook,1931.p 63. (115) B r i t i s h Guiana expor ts sugar , timber,- r i c e and diamonds and imports manufactured goods and t e x t i l e s . 'The f o l l o w i n g t ab l e s g ive va lues fo r the c o l o n y ' s e x t e r n a l t r a d e . ( l ) E x t e r n a l Trade . 1926 1927 1928 c1-' el- cC Imports 2,728,746 2,657,265. 2 ,632,511 Expor t s 2,863,923 3,525,274 3,271,108 B i r e c t i o n of trade,1929. imports Expor t s Uni ted Kingdom 1,258,287 823,503 Canada • . 415,852 934.15 3 Uni t ed S ta tes 274,205 181,763 The trade of B r i t i s h Honduras resembles tha t of B r i t i s h Guiana except t h a t diamonds are not i n c l u d e d , d e t a i l s are g iven i n the f o l l o w i n g t a b l e s . ( 2 ) E x t e r n a l Trade. 1928 1929 Imports 4,481,748 5,056,673 Expor t s 4,042,502 ' 4,876,875 D i r e c t i o n of Trade,1929. Imports ' Expor t s Uni t ed Kingdom 888,406 324,009 Canada 1,105,403 233,671 Uni ted S ta tes 1,992,670' 3,485,061 ( l ) Statesman's Yearbook ,1931 . p 326. (2) I b i d , p 328. ( H o ) 1,963 ,77 6 144,021 E x p o r t s from t h e -.Bahamas- i n c l u d e s i s a l . sponges , tomato lumber and s h e l l s , ^ e t a i l s of e x t e r n a l t rade are set f o r t h b e l o w . ( l ) E x t e r n a l Trade, 1927 1928 Imports 1,844,932 1,829,939 Expor t s 483,271 421,085 In 1929, £ 4 2 0 , 4 2 1 wor th of imports came from the Un i t ed Kingdom, ^£740 ,865 from the. U n i t e d S t a t e s , and £ 5 2 1 , 5 0 8 from C a n a d a . B a r b a d o e s expor ts mainly sugar and i t s products , and imports co t ton t e x t i l e s , f o o d s t u f f s , w o o d manufactures and h a r d w a r e . In 1929, sugar expor ts were w o t t h £ 7 2 2 , 3 8 9 , m o l a s s e s £ 2 3 3 , 8 1 3 and rum £ 4 , 5 1 7 , The f o l l o w i n g t ab l e s show f igu res ; fo r e x t e r n a l t r a d e . ( 2 ) E x t e r n a l T r a d e . 1926-27 ' 1927-28 2,155,167 '2,300,108 1,287,161 1,603,531 -D i r e c t i o n of Trade,1929. Imports Expor t s 691,216 82,703 381,704 809,498 358,172 400,219 61,264 Imports Expor t s 1928-29 a 2,337,754 1,531,040 U n i t e d Kingdom Canada Rest of empire U n i t e d S ta tes ( l ) Statesman's Yearbook, 1931. ,J 339. (2) I b i d , p 335 (11?) -.Jamaica, i a second only to Trinidad among the West Indian Co lon i e s i n the value of e x t e r n a l t r ade . Sugar i s no longer i t s p r i n c i p a l p r o d u c t , bananas,coconuts and coffee having- been developed to a considerable degree. F igu res con-c e r n i n g e x t e r n a l t rade are g i v e n b e l o w . ( L ) E x t e r n a l Trade. 1926-27 ' 1927-28 1928-29 '-• s'. Imports 5,635,342 6,001,768 6 ,376 ,398 . Expor t s 4 ,268 ,991 4,257 ,750 4,197,056 ' P r i n c i p a l expor ts i n 1929 were coconuts £ ' 191 ,971 , Sugar £4.82,952 , coffee 264,566, bananas £ 2 , 5 0 9 , 8 7 8 , and cocoa £ 1 1 6 , 0 2 1 . D i r e c t i o n of Erade ,1929. -Imports Expor t s U n i t e d Kingdom 1,775,603 855,906 U n i t e d Sta tes 2,089,306 1,57 6,370 -Ganada 1,076,900 1,137,010 The Leeward I s l a n d s ' e x t e r n a l t rade i n 1926-27 amounted to £ 8 4 2 , 4 6 4 f o r imports and £ 6 6 2 , 1 9 2 fo r expor t s , P a r a l l e l - f i g u r e s f o r 1928-29 were £838,092 and £ 8 9 9 , 5 7 8 re--s p e c t i v e l y . ( l ) fcrinidad i s the most important of t h i s group Of c o l o n i e s i n e x t e r n a l t r a d e . I t r e l i e s f o r i t s i n d u s t r y on i t s pe t ro leum depos i t s and i t s sugar and cacao plantations. D e t a i l s of external trade are given i n the f o l l o w i n g t a b l e s . ( 2 ) ( l )S ta t e sman ' s Yearbk* ,1931 . p 337. (2) I b i d , p 342. {118.) Imp or t s Expor t s Commodmty A S p i i a l t Pet ro leum.crude Fue l s Motor s p i r i t U n i t e d Kingdom Uni ted Sta tes Canada E x t e r n a l Trade. 1926 4,407,074. 5,546,376 1929 5,594,314 7,122.857 P r i n c i p a l Expor t s ,1929 Value (£-) Commodity 432,085. Cocoa 216,311 Copra 1,6 8 3 , 0 30 Sugar 1,110,7 54 D i r e c t i o n of Trade,1929. Imports 32 o 3 26.0 17.0 E x p or t s /o 26.5 8.5 Value (£) 1,714,010 209,7 32 1,049,863 Taken as a whole , the ^ r i t i s h West Ind ies w i l l p robab ly not show a'ny cons ide rab l e r a t e of development. Sugar has been produced f o r c e n t u r i e s but i t s q u a n t i t y cannot be g r e a t l y expanded. Fewer forms of a g r i c u l t u r e , such as the growing of bananas,cocoa and tomatoes, may increase i n im-por tance . T r i n i d a d i s i n a more for tuna te p o s i t i o n , be ing one of the few empire sources of pe t ro leum. (119) PART TWO. THE REST OP THE SUPIRS. SECTION HIKE: MALAYA AND CEYLON. BRITISH BJALAYA. B r i t i s h Malaya iiBRcludes the B r i t i s h c o l o n y , t h e S t r a i t s Se t t l emen t s , and the p r o t e c t o r a t e , the f ede ra t ed B a l a y S t a t e s . The i n d u s t r y of the. c o u n t r y , s o f a r as overseas t rade i s concerned, c o n s i s t s i n the p r o d u c t i e n of t r o p i c a l and semi-t r o p i c a l vege tab le p r o d u c t s , and t i n and pe t ro leum, A c e r t a i n amount of r e - e x p o r t t rade i s c a r r i e d on w i t h ne ighbor ing coun-t r i e s but da ta as to i t s ex tent i-e. not a v a i l a b l e . Rubber i s the p r i n c i p a l • p r o d u c t , w i t h t i n next i n impor tance . S p i c e s , c o p r a and ;p ineapples a l s o are expor t ed . -Expo r t s i n 1927 amounted to £ 1 2 4 , 6 8 1 , 0 0 0 , w h i l e imports were wor th £ 1 1 8 , 7 4 4 , 0 0 0 . In 1929, the t o t a l s were £ 107,9 63,000 and £ 1 0 2 , 8 0 3 , 0 0 0 r e s p e c t i v e l y . The f o l l o w i n g t ab l e shows imports and exports from 1925 to 1 9 2 9 . ( l ) E x t e r n a l Trade of B r i t i s h Ma laya . Year Imports Expor t s £1000 . £1000 1925 117,606 150,487 1926 122,513 148,572 1927 118,744 124,681 1928 102,602 99,403 19 29 102,803 107,9 68 The share of the Federated Malay S t a t e s , - P e r a k , Se langor , N e g r i Sembilan and Pahang— i n 1928 and 1929 was as f o l l o w s . (2) ( l ) Statesman's Yearbook,1931. p 176. (2) I b i d . p 182. ( 1 2 0 ) Year 1 9 2 8 1 9 2 9 E x t e r n a l Trade of Federated Malay S t a t e s , Imports Expor t s and Re-expor t s 2 2 , 2 7 7 , 7 0 8 3 2 , 4 2 2 , 7 0 5 2 3 , 4 5 5 , 8 2 7 4 0 , 6 3 2 , 7 9 5 ••-Manufacturing i n Malaya i s n e g l i g i b l e , a f a c t that i s r e f l e c t e d i n the compos i t ion of e x t e r n a l t r a d e . Raw m a t e r i a l s make up almost the e n t i r e export t rade, , w h i l e the imports aifje d i v i d e d between manufactures and f o o d s t u f f s . Cot ton piece goods, r i c e , rubber and s p i c e s f u r n i s h the main r e - e x p o r t s . P r i n c i p a l expor ts and imports f a r 1929 are shown b e 1 ow. {1 ) Imports and Expor t s , 1 9 2 9 , Imports Commodity £1000 Expor t s Commodity £1000 R i c e 1 1 , 1 3 7 Para rubber 5 0 , 4 7 5 Rubber 9 $ 5 22 Tin 2 1 , 2 4 8 Motor s p i r i t 6 , 2 9 3 Motor s p i r i t 4 , 2 6 2 C i g a r e t t e s 3 , 2 0 2 Copra 3 , 8 4 1 Cot ton p iece goods 4 , 4 9 9 R i c e 3 , 2 7 0 Machinery 2 , 5 2 9 Pepper 2 , 0 5 2 Pepper 2 5 1 1 0 F i s h , d r i e d 1 , 6 3 4 Petroleum 2 , 0 2 8 Areca nuts 1 , 6 8 1 M i l k , c o n d e n s e d 1 g o o 5 Cot ton p iece goods 1 , 1 0 1 F i s h , d r i e d 1 ,537 Preserved p ineapples 1 ,077 Sugar 1 , 437 Rattans 446 Coal 1 , 1 2 9 Sago • 437 ( l ) Statesman's Y e a r b o o k , 1931 . p 177c (121) The share of the B r i t i s h Empire i n the t rade of iS t l aya i s s m a l l e r than i n .any other B r i t i s h country except Canada,, This p a r t l y due to the f a c t tha t a cons ide rab le pa r t of M a l a y a 1 s e x t e r n a l t rade i s l o c a l , w i t h the Nether lands East I n d i e s , S i a m and C h i n a . In a d d i t i o n ,cheap t e x t i l e s from Japan and cheap hardware from the U n i t e d S t a t e s and Germany have an important p l ace i n Malayan marke ts . The f o l l o w i n g t ab l e s show the extent of B r i t i s h t rade i n M a l a y a .(1 ) Imports i n t o Malaya-. (£1000 ) . • Year from from K e s t T o t a l U n i t e d Kingdom of Empire Imports 192.6 18,063 23,918 122,513 1927 16,131 24,354 118,744 1928 16,822 20,922. 102,602 1929 16,718 19096 102,803 Expor t s from M a l a y a . ( £ 1 0 0 0 ) . to to T o t a l Year U n i t e d Kingdom ' Res t of Empire impor ts 1926 24,236 15,821 -1927 .18,544 14,983 1928 11,485 12,929 99,403 1929 15,515. 12,402 148,572 124,681 107,968 Expressed i n percentages of the t o t a l t r ade , the share of Great B r i t a i n i n imports was- 13.6$ i n 1927 and 16.1$ i n 1929. In expor ts her share was 14.9$ i n 1927 and 14.4$ i n 1929. The r e s t of the empire s u p p l i e d 20.5$ of the imports i n 1927 and 18.6$ i n 1929. P a r a l l e l f i g u r e s fo r exports were 12.0$ i n 1927 and 11.5$ i n 1929. ( l ) Statesman's Yearbook,1931. p 176. (122) The i s l a n d of Ceylon i s devoted almost e n t i r e l y to agriculture.- Manufactures are conf ined to h a n d i c r a f t s such as c a r v i n g and cabinet making. The only m i n e r a l mined to any extent i s plumbago, though l e s s e r gems such as sapphi res and onyx are q u a r r i e d i n c e r t a i n d i s t r i c t s . The t o t a l commercial va lue of these i s s m a l l . Tea i s the s t a p l e p r o d u c t , c o n s t i t u t i n g n e a r l y one h a l f of the e x p o r t s . Coconut products are next i n importance, though the p r o d u c t i o n of rubber i s s t e a d i l y i n -c r e a s i n g . The f o l l o w i n g ^ t a b l e se ts f o r t h the value of e x t e r n a l t r ade . ( l ) E x t e r n a l Trade of C e y l o n . Imports Expor t s Year? • £ £ 1926 27,191*141 33,576,599 1927 . 28,075,198 29,951,583 1928 27,479,643 26,171,332 1929 - 28,619,688 . 27,158,187 Among expor ts i n 1929, t ea c o n s t i t u t e d 50.4$ of the t o t a l , rubber 22 .8$ , and cocQnut products 15 .2$ . Values of commodities exported i n c l u d e d tea £ 1 3 , 6 7 9 , 6 0 6 , r u b b e r £ 6 , 2 2 1 , 1 7 2 , cacao £ 2 8 2 , 4 0 9 , c i n n a m o n £ 2 5 2 , 2 9 6 , c o i r and manufactures £ 3 0 5 , 8 7 0 , copra £ 1 , 7 5 4 , 3 9 9 , coconut o i l 1 ,201,624, plumbago £ 1 8 1 , 9 7 6 , and cocnuts (dess i ca t ed ) £ 7 9 1 , 7 1 9 . ( l ) ( l ) Statesman's Yearbook,1951. p 167. (123) Lead ing commodities among imports i n 1929 i n c l u d e d co t t on manufactures £1,635,045, r i c e £ 6 , 9 0 2 , 3 7 8 , c o a l and'cole £ 1 , 1 7 6 ,422, s p i r i t s £ 2 5 1 , 1 8 9 , sugar £ 1 , 0 5 1 , 2 1 9 , manures £1,011,258, and "bu l l i on and spec ie £1,7 52,753. As i n the case o f , M a l a y a , manufactures and foods tu f f s c o n s t i t u t e p r a c t i c a l l y • the. whole import t r a d e . The q u a l i t y and type of manufactures impor ted i s determined by the low l i v i n g standards of the m a j o r i t y of the n a t i v e p o p u l a t i o n . The share of B r i t i s h c o u n t r i e s i n C e y l o n ' s t rade i s shown i n the f o l l o w i n g t ab l e s f l ) Imports i n t o C e y l o n . from Year U n i t e d Kingdom Rs 1927 9 5,27 6,344 192.8 93,033,890 1929 90,47?,077 from r i e s t of empire Rs 221,008,217 202,723,824 220,246,102 from Elsewhere Rs 421,127 976 412,119,639 429,295,323 E x p o r t s from C e y l o n , ftom Year U n i t e d Kingdom . Rs " 1927 187,007,550 1928 153,479,303 1929 161,760,513 :• to. Rest of-empire Rs , 7 6,945,47 5 75,514,943 85,37 5,610 f torn Elsewhere Rs 185,320 5 789 163,575,729 160,236,687 Expressed i n p e r c e n t a g e s , u r e a t B r i t a i n ' s share of the imports i n 1929 was 12,3$ and of Exports 39.8$.Corresponding-shares of the r e s t /of the empire were 29.8$ and 20.9$ for the same y e a r » • " ( l ) Dominions O f f i c e and C o l o n i a l O f f i c e B i s t , 1 9 3 1 . p 259. (124) P/J?T_ TERES. . IMPERIAL SC03J0MIC UPITY. SECT I Oil GPS; I1TTR ODU C T CRY, The p reced ing s e c t i o n s of t h i s essay have o u t l i n e d the recen t development of the B r i t i s h Enp i r e .The re remains to he cons ide red the f u t u r e , tha t i s to say the p o s s i b l e p o l i c i e s t ha t - B r i t i s h c o u n t r i e s may adopt f o r the. purpose of promoting t r a d e . I t i s only n a t u r a l that,when B r i t i s h goods are f i n d -i n g t h e i r f o r e i g n markets i n c r e a s i n g l y r e s t r i c t e d , tha t g rea t e r i n t e r e s t should be taken i n the fo rmat ion and development of a s h e l t e r e d empire t rade a r e a . Al though such schemes be or a resemblance to the o l d m e r c a n t i l i s t t h e o r i e s , they are not h e i r t o many of the obvious c r i t i c i s m s to which the l a t t e r d o c t r i n e s •are.OTjen, i n as much as the proposed, p ro t ec t ed area i s of such ex ten t and of such d i v e r s i t y of c l ima te and resources tha t e f f o r t s to make i t s e l f - s u p p o r t i n g do not i n v o l v e an economic l o s s com-pa rab l e to tha t necessary under a s i m i l a r p l a n f o r the B r i t i s h I s l e s a l o n e . Empire "preference d i f f e r s from the B r i t i s h C o l o n i a l P o l i c y of the e ighteenth- century i n that under the o l d p o l i c y B r i t i s h possess ions abroad were r egarded as mere subse rv ien t appendages to the mother country .Today they are i n , name, and are becoming i n c r e a s i n g l y i n f a c t , the equals of Great B r i t a i n . This new r e l a t i o n of the B r i t i s h c o u n t r i e s , w h i l e a l l o w i n g a f r ee r a n d • t h e r e f o r e sounder p l ay of economic p r i n c i p l e s c a r r i e s w i t h i t a p s y c h o l o g i c a l c o n s i d e r a t i o n tha t operates , to a c e r t a i n ex t en t , i n o p p o s i t i o n to the p l a n for a s e l f - s u p p o r t i n g empire. This p s y c h o l o g i c a l f a c t o r i<$ the growth of n a t i o n a l i s m i n the dominions , One of i t s man i f e s t a t i ons i s a des i r e fo r a (125) -var ied economic development, i n v o l v i n g the promotion of i n -d u s t r i e s -which compete w i t h those of Great B r i t a i n and other p a r t s of the empire . N a t i o n a l i s m i n I n d i a i s a l s o l i k e l y to h inder the adop t ion of an empire-wide scheme of t a r i f f B e n e f i t s , ^though as Ind ian n a t i o n a l i s m i s at present ma in ly p o l i t i c a l i n ' i t s o u t l o o k , i t s u n f a v o r a b l e economic e f f ec t s may he changed By a se t t lement of c o n s t i t u t i o n a l q u e s t i o n s . • • r he adopt ion of any scheme of empire p r o t e c t i o n i s dependent upon the advantages wh ich i t w i l l confer on the v a r i o u s p a r t s of the empire.. The i n d u s t r i a l ambi t ions of the dominions a t present l i m i t such a scheme to the exchange of 'mutual t a r i f f p r e f e r ences . As long as t h e i r manufacturers are assured of some measure o f - p r o t e c t i o n , the dominions , as l a rge s c a l e producers of raw m a t e r i a l s , are i n f avor of i n t r a - e m p i r e r e c i p r o c i t y . I t i s from Great B r i t a i n tha t o p p o s i t i o n to an empire-wide t a r i f f may c o n f i d e n t l y be expected. In tha t coun t ry , i n s p i t e of r ecen t t a r i f f i n c r e a s e s , - p e r s i s t s a s t r o n g - l o y a l t y to f ree t rade d o c t r i n e s . The o f f e r of p ro t ec t ed markets i n the dominions i s o f f s e t by the p r o s p e c t • o f - c o n s i d e r a b l e f u r t h e r loeses i n f o r e i g n t r a d e , and here looms l a rge the f ac t tha t B r i t i s h expor ts to the dominions and other empire c o u n t r i e s amount only to about 45$ of the t o t a l expor t s . When i t i s r e c a l l e d tha t E r j . t a i n i s now r e c e i v i n g preferences i n the g rea tes t of the dominion markets , there i s l i t t l e reason to wonder that she - is doub t fu l whether these markets cou ld expand enough to com-pensate f o r the l o s s of much of her f o r e i g n t r a d e . However, the ex igenc i e s of the cur ren t dep res s ion , coupled w i t h the post -war d e c l i n e i n B r i t a i n ' s f o r e i g n t r ade , (126) - have caused the people of tha t co imt ry to ff -osake , f o r a time a t l e a s t , t h e i r deep-rooted a l l e g i a n c e to Cobdenism. As matters s t and , - B r i t a i n fo r some time to come i s • committed to a p r o t e c t i v e t a r i f f . She has granted a rough and ready measure of i m p e r i a l p re fe rence , and,most i m p o r t a n t of a l l , by abandoning free tre.de she has taken the step necessary before any scheme of i m p e r i a l preference cou ld be adopted. In the p a s t , B r i t a i n has had no' me ah s to respond to p r e f e r e n t i a l t reatment accorded her by the dominions,, Bow she has those means to her hand and has begun to use them. (127 ) PART THREE, IIVIPERIAL 3C0IT0KIC U E I T Y . 3BCTICE TV, 0 i THS POSSIBILITY O S A S B L P / S U P E I C m a E I H I R E . . , G E P E R A L SURVEY O P RESOURCES A l l p roposa l s of i n t r a 1 - i m p e r i a l t rade behind empire-v i d e t a r i f f w a l l s have as t h e i r background the dream o f a s e l f - s u f f i c i n g empire . P roposa l s to create such a s e l f - s u f f i c i n g empire are the extreme form of t h i s t rend of .thought and have l i t t l e gene ra l suppor t , S t i l l , before the v a r i o u s schemes f o r f o s t e r i n g i n t r a - i m p e r i a l t rade can p r o p e r l y be examined, i t i s necessary to a s c e r t a i n to what extent the empire i s . capable of suppor t i ng i t s e l f . On t h i s p o i n t depends the p r a c t i c a b i l i t y of the va r ious p roposa l s p r e s e n t l y to be cons ide red . I t need s c a r c e l y be s t a t e d tha t any scheme fo r a comple te ly s e l f -suppor t i ng empire w i l l f a l l ' to the ground i f i t i s shown that B r i t i s h c o u n t r i e s cannot produce q u a n t i t i e s of any necessary commodity s u f f i c i e n t / / to s a t i s f y empire needs. On the other hand i f i t i s proved tha t the empire can produce fo r i t s e l f an adequate supply of important or v i t a l m a t e r i a l s , t h e n schemes f o r an i m p e r i a l t a r i f f may be cons idered to possess a v a l i d i t y tha t e n t i t l e s them to s e r ious r e g a r d . In t h i s respec t , i t i s not necessary tha t e m p i r e ' p r o d u c t i o n be l a rge enough to f i l l e n t i r e l y empire needs at present - but only l a rge enough to eoual the g rea te r par t of the demand, w i t h a reasonable prospect of expansion under encouragement to meet comple te ly a l l r e -qui rements . However, i n cases where the p o s s i b l e p roduc t ive c a p a c i t y of the empire i s s u f f i c i e n t to s a t i s f y i m p e r i a l needs but where producing cos ts i n comparison w i t h f o r e i g n cos ts render .such p r o d u c t i o n economica l ly unsound,, a se r ious o b j e c t i o n a r i s e s to empire t a r i f f p r o p o s a l s , namely that the economic l o s s i n v o l v e d outweighs the advantage .main ly p o l i t i c a l , g a i n e d . Empire p r o d u c t i o n as compared to empire i m p o r t a t i o n of tne p r i n c i p a l . s tap le commodities the re fore w i l l be dea l t w i t h i n order to the p r e s e n t - - tha t i s the post-war normal (1925-27)— r e l a t i o n of B r i t i s h p roduc t i on and consumption of these m a t e r i a l s . The commodities to be cons idered are i r o n , c o a l , l u m b e r , c o t t o n , w o o l , hemp, f l ax and j u t e , wheat and other g r a i n , s u g a r , m e a t , c o p p e r , g o l d , a s b e s t o s , l e a d , t i n , p e t r o l e u m , n i t r a t e s , rubber , t e a and c o f f e e . T o t a l B r i t i s h Empire p roduc t ion of i r o n ore i n normal t imes ( l92b) i s 13,834,000 tons . I t i s d i v i d e d as f o l l o w s * " u ni ted Kingdom 10,146,000 t o n s , B r i t i s h Ind ia 1,544,000 tons , Newfoundland- 1,132,000 tons , A u s t r a l i a 739,000 tons , B r i t i s h ^ a l a y a 272,000 tons , and Southern Rhodesia 1,000 t o n s . ( l ) Impor ta t ions of. i r o n ore are made c h i e f l y by the U n i t e d K i n g -dom 4,299,000 Canada 911,000 t o n s / T h i s t o t a l s 5,201,000 t o n s , or 38$ of empire p r o d u c t i o n . As Ind ia i s the only B r i t i s h count ry that expor ts i r o n gxe i n any quant i t i es—about 1,000,000 t o n s — i t i s apparent tha t the empire of n e c e s s i t y imports approx imate ly 4,000,000 tons of i r o n ore per annum from f o r e i g n sources . I ron resources of B r i t i s h I n d i a M a l a y a and to a l e s s ex t en t , Southern Rhodes ia , could doubt less be developed to s a t i s f y the g rea t e r pa r t of t h i s need. ' I n regard to p i g i r o n , the t o t a l empire p roduc t ion ec-uals 4 ,966,000 tons and impor t a t ions amount to 364,000 tons ( l ) H e r b e r t , B r i t i s h Empire L i m i t e d , p 101. (12S) or 7$ of the t o t a l p r o d u c t i o n . ( l ) Expor t s of t h i s commodity t o t a l 938j000 tons . This i n d i c a t e s a s a t i s f a c t o r y s t a te of a f f a i r s from the p o i n t of view of the empire p r o t e c t i o n i s t , and shows t h a t a great pa r t of the imports i r o n ore are r e -expor t ed a f t e r a degree of manufacture. Tor example.Great B r i t a i n exports 333,000 tons of p i g i r o n i n excess of that Imported, A l l important p a r t s of the empire produce c o a l , t o t a l p roduc t i on amounting to 305,980,000 tons i n 1925, Imports are only 20,744,000 tons no rma l ly or 1% of the t o t a l output , w h i l e exports are 62,285,000 tons or 20$ of the t o t a l p r o d u c t i o n . ( 2 ) I t i s apparent tha t as regards t h i s m a t e r i a l the empire can e a s i l y supply i t s own needs. The trade i n lumber and wood p u l p cannot be trotted i n the same way as tha t of the m a j o r i t y of other p r o d u c t s , s i n c e the growing importance of Ruso.ia ascandexporter of wood excludes 1925 from be ing cons ide red a normal y e a r , -^ere i s a case where comparat ive cos t s make . i t d o u b t f u l whether the e x c l u s i o n of cheap f o r e i g n s u p p l i e s would b e n e f i t s u f f i c i e n t l y the empire as a whole to j u s t i f y such a course . While Canada ' ,Aus t r a l i a , and Newfoundland could".supply empire needs for some time to come,(Canada cut 2 ,880,137,911 c u . f t . of s t and ing t imber i n 1 9 2 7 ( 3 ) ) , s h i p p i n g cos t s on t h i s commodity p lace i t at a d i s -advantage i n i t s l a r g e s t empire marke t , the B r i t i s h I s l e s , As egards the a b i l i t y of the wood produc ing coun t r i e s of the smpire to meet empire needs, there seems l i t t l e reason to doubt that w i t h a c a r e f u l r e - f o r e s t a t i o n program they cou ld supply a l l w a n t s . This/however would n e c e s s i t a t e a .great change i n the ( l ) B r i t i s h Empire L i m i t e d , pp 104-105. (20* I b i d . pl20, (3) Canadian Annual Review,1928-29 . p 252, re e (150) present d i r e c t i o n of imports Canada hav ing huge markets i n the "Uni ted S t a t e s ( l ) and growing ones i n the -o r i en t , w h i l e B r i t a i n has p laced con t r ac t s w i t h R u s s i a and the B a l t i c n a t i o n s . Cot ton produced a n n u a l l y w i t h i n the empire reaches a t o t a l of 25,726,000 c e n t a l s . I t s sources are d i s t r i b u t e as f o l l o w s t A u s t r a l i a . 65,000u c e n t a l s , South A f r i c a 83,000 centa B r i t i s h I n d i a 25,000,000 c e n t a l s , B a l t a 3,000 c e n t a l s , C y p r u s 14 ,0000 centa ls , - Southern Rhodesia 27 ,000 c e n t a l s , N o r t h e r n Rhodesia 2,000 c e n t a l s , N y a s a l a n d 2 2 , 0 0 0 c e n t a l s , Sudan 509,000 c e n t a l s , C e y l o n 1000 c e n t a l s . ( 2 ) Bmpire imports of co t ton amount to 2 9 , 3 7 6 , 0 0 0 ' centa ls , ( 1 8 , 9 4 2 , 0 0 0 c e n t a l s going to the U n i t e d Kingdom)* and expor ts t o t a l 13,733,000 c e n t a l s , almost e n t i r e l y from I n d i a and Sudan. While i t i s r e a s o n a b l e to assume tha t an i m p e r i a l t a r i f f would s t i m u l a t e p roduc t i on s u f f i c i e n t l y to make up the d i f f e r e n c e between exports and i m p o r t s , f o r a time i t would inc rease cos t s i n one of Great B r i t a i n l a r g e s t i n d u s t r i e s , co t ton t e x t i l e s . , Wool I s a product of wh ich the empire produces much more than i t consumes . E x p o r t s from Aus t r a l i a , 1 , 4 ew Zea land and South A f r i c a , and r e - expo r t s from Great B r i t a i n t o t a l 9,544,000 c e n t a l s . C h i e f empire i m p o r t i n g c o u n t r i e s are Cnada 144,000 c e n t a l s , B r i t i s h I n d i a 203,000 cen ta l s and Grea t B r i t a i n 7 ,269,000 c e n t a l s . Thus i n normal times the empire produces about 2,000,000 cen t a l s more than i t consumes. Hemp,f lax and j u t e resemble wool i n that the empire produces more, of these a t a p l e s than i t consumes. T o t a l empire p r o d u c t i o n i n 1924-25 was 1,672,000 tons , of which 1,628,000 tons (1) 2)237 ,577,203 i n 1929-30. Trade of Canada, 1930. pp68-69 (2) B r i t i s h . E m p i r e L i m i t e d , p 81 . (131) v/ere r a i s e d i n I n d i a , ( l ) Empire imports of h e i a p,flax and ju te are n o r m a l l y 325,800 tons , almost e n t i r e l y by the U n i t e d Kingdom, and exports are 729,000 tons from I n d i a . This leaves a balance of about 400,000 tons which the empire does not consume. Manu-fac tu res of these products were sent out of the empire to the value of £ 4 3 , 5 0 0 , 0 0 0 i n 1925. Wheat i s produced i n n e a r l y a l l pa r t s of the empire but i s exported only by Canada , - A u s t r a l i a and B r i t i s h Ind i a i n l a r g e q u a n t i t i e s . P r o d u c t i o n v a r i e s w i t h c l i m a t i c c o n d i t i o n s and the area, sown i n a n t i c i p a t i o n of market demands. The average p r o d u E t i o n of the empire i s about 900,000,000 b u s h e l s . Empire imports i n 1925 amounted to 196,778,000 bushels w h i l e exports reached '337,302,000 b u s h e l s . I t i s apparent tha t the empire nan absorb only- a par t of the wheat i t produces . F l o u r i s i n the same category as wheat, empire im-por t s add up to a value of £ 1 5 , 1 8 3 , 0 0 0 i n normal t imes , w h i l e exports reach the sum of £ 2 8 , 6 4 2 , 0 0 0 . ( 2 ) Canada,United Kingdom, A u s t r a l i a and I n d i a are 'the c h i e f expor te rs of t h i s product i n the order named. Empire sugar ' i s at present not s u f f i c i e n t fo r empire needs. As t h i s commodity i s produced i n many p a r t i a l l y developed coun t r i e s of the empire i t i s f a i r l y c e r t a i n that w i t h proper encouragement s u p p l i e s c o u l d be inc reased to s a t i s f y i m p e r i a l demands. B r i t i s h p r o d u c t i o n of cane sugar i n 192 6-27 was as f o l l o w s (3) « West Ind ies 222,000 tons , Mauritius 192,000 tons , B r i t i s h I n d i a 3,208,000 tons , A u s t r a l i a 416,000 t o n s " , F i j i 85,000 t ons , and B a t a l 216,000 tons , making a t o t a l of 4,339,000 ( l ) B r i t i s h Empire L i m i t e d . p 91 . (2) I b i d , pp 67-63 . (3) Year Book of the B r i t i s h West I n d i e s , 1 9 3 1 . p 2 3 . (132) tons or 27.2$ of w o r l d p r o d u c t i o n . B r i t i s h p roduc t i on of beet s u g „ r i s n e g l i g i b l e w h i l e w o r l d product! JU was 7,518,000 tons . Thus out of the w o r l d " p r o d u c t i o n of both k inds of sugar , the share of the empire was 19 .0$ , 'd ra ins , such as b a r l e y and oats .are a l s o produced i n excess of empire needs, though not to such an extent as i s wheat . In the case of maize , the amount ' imported by the empire i s n e a r l y twice the amount exported but the d i f f e r e n c e i s s m a l l when compared to the t o t a l empire p r o d u c t i o n . The maize crop i n the. l ead ing , e x p o r t i n g B r i t i s h coun t r i e s ,South A f r i c a , R h o d e s i a and Kenya, c o u l d be inc reased i f necessary by i n c r e a s i n g the acreage sown. The empire p o s i t i o n as regards r i c e i s s i m i l a r to tha t conaerning wheat. Imports are spread over n e a r l y the whole empire and reach, a t o t a l of about 33,935,000 c e n t a l s , w h i l e ' ex-p o r t s , c h i e f l y from I n d i a ,*%laya,Aden and B r i t i s h Guiana , amount to 51,250,000 c e n t a l s . ( l ) K-eat exported by c o u n t r i e s of the empire does not balance the demand fo r i t by ^ r i t i s h c o u n t r i e s . However,the p roduc t ion of the dominpns i s capable o f great expans ion . •Exports of beef i n 1927 from ^ r i t i s h c o u n t r i e s t o t a l l e d .about 500,000,000 l b s , w h i l e u r e a t B r i t a i n alone imported i n the same year 1,834,663,000 l b s . ( 2(). In the case of pork , u anada and the I r i s h Free State together exported 182,472,000 l b s , wh i l e the Un i t ed Kingdom imported 1,358,270,000 lb s i n 1927.(2) Mutton i s produced by A u s t r a l a s i a i n excess of empire demands. B r i t i s h empire p r o d u c t i o n of copper and cbpper ore , 110,000 tons , i s approximate ly equal to i t s needs. However, the ( 1 ) B r i t i s h Empire L i m i t e d . p p 68 and 80. (2) iComJaerce.-Year JB00k,-.19.32. p68.8.... (133) fu ture of t h i s i n d u s t r y i s dub ious , as the recent opening of the h i g h grade Katanga mines i n B e l g i a n Congo w i l l p r o b a b l y inaugurate an era of compe t i t i on which may l e ad to the c l o s i n g down of many -°r i t ish mines . Canada ,a t present r e s p o n s i b l e fo r h a l f the empire p r o d u c t i o n , would s u f f e r the most. Gold i s found i n a l l the l a r g e r s ec t i ons of the C e m p i r e , p a r t i c u l a r l y i n bouth A f r i c a and .anada. P r o d u c t i o n i n 1926 was as f o l l o w s % Union of South A f r i c a 9,954,762 ounces, Canada 1,754,228 oz , A u s t r a l a s i a 652,171 oz, Southern Rhodesia 593,429 'oz, B r i t i s h I n d i a 383,970 oz , making an empire t o t a l of 13,338,560 ounces or 69$ of the w o r l d output , ( l ) In a sbes tos , the B r i t i s h Empire possesses the greater-pa r t of the w o r l d ' s r e s o u r c e s . Canada has f o r long been the c h i e f source of asbestos fo r the w o r l d , b u t South A f r i c a and Rhodes ia are g a i n i n g an i n c r e a s i n g share of the market . In 1928,out of a wor ld t o t a l of 381,823 tons , c anada mined 273,033 tons or 71 .4$ , w h i l e the Union produced 24,039 tons and Rhodesia 39,960 t o n s , making the empire percentage i n excess of 88$. (2) T i n - i s another m i n e r a l which i s produced w i t h i n the empire in excess of, I t s needs. Empire p roduc t i on of t i n i s no rma l ly about -93,000 tons , of which 79,000 tons come from E a l a y a and about 6Q000 tons from N i g e r i a . Imports i n t o B r i t i s h c o u n t r i e s t o t a l / about 66,000 tons w h i l e exports amount to 88,000 jsons . (3) The B r i t i s h Empire imports 335,000 tons of lead and exports about 180,000 tons , l e a v i n g an import balance of about 155,000 t ons , t h i s i s i about equal to h a l f of i t s annual (1) Union of South A f r i c a O f f i c i a l Yearbook ,1929-30 .p 474. ( 2 ) S. and E. A f r i c a Yearbook,,1932. p351. (3) B r i t i s h Empire L i m i t e d , p' 109 (134) p r o d u c t i o n of t h i s m a t e r i a l namely 321,000 tons , whi le the n a t u r a l resources of the c h i e f B r i t i s h l e ad -p roduc ing coun t r i e s C a n a d a , A u s t r a l i a and Southern Rhodes ia , cou ld p o s s i b l y be de-veloped to supply par t of t h i s demand, i t i s doub t fu l i f t h i s cou ld be done Without great cos t f o r sons time to come. Pet roleum Is the most important substance not found i n l a rge q u a n t i t i e s w i t h i n the empire. A c c o r d i n g to a re >ort of the U n i t e d S ta tes Department of'Commerce i n 1927 ( l ) , the f o l l o w i n g i s . t h e r e l a t i v e order of the pe t ro leum producing coun t r i e s fo the w o r l d , w i t h percentages of the t o t a l wor ld p r o d u c t i o n - - 1,254,145,000 b a r r e l s i n 1927. Uni ted S ta tes 72 ,23$, R u s s i a 5 . 7 7 $ , Venezuela 5.14$, A i e x i c o 5.12$. P e r s i a 2 .93$. Rumania 2 ,08$ , Dutch ^as t Ind ies 1.71$. B r i t i s h I n d i a ,65$, T r i n i d a d .42$. Sarawak .40$, Canada ,09$. T o t a l ^ r i t i s h 1.51$, I t i s obvious tha t the empire i s almost comple te ly dependent on f o r e i g n sources fo r i t s supp l i e s of p e t r o l e u m . l t i s t rue that B r i t i s h companies c o n t r o l most of the P e r s i a n and Mesopotamia!! o i l f i e l d s and have an i n t e r e s t i n the - ' e ther land Sast Ind ies resources and to a l e s s extent i n the Rumanian f i e l d s Yet t h i s i s but a s l i g h t m i t i g a t i o n of the f ac t of the empire 's pover ty i n respec t to t h i s important form of f u e l . Al though the empire does not con ta in any ex tens ive depos i t s of n i t r a t e s at present developed, the improvements i n methods of producing .and r e c o v e r i n g t h i s m a t e r i a l by s y n t h e t i c means,which has taken p lace s ince 1914, makes the posses s ion of n a t u r a l depos i t s of l e s s importance. ( l ) Encyc loped ia B r i t a n a i c a , 14th e d i t i o n . Rubber i s an important m a t e r i a l of vrhich the empire produces a supply w e l l i n excess of i t s immediate needs. Empire p r o d u c t i o n is no rmal ly about 6,000,000 c e n t a l s . Empire exports ( i n c l u d i n g r e - e x p o r t s of crude rubber) have over twice the va lue of the imports,, Empire imports of t e a , 642,000,000 l b s , are g rea te r than i t s e x p o r t s . T o t a l p roduc t ion i s ' n o r m a l l y about 575,400,000 l b s , almost a l l b e i n g r a i s e d i n I n d i a and C e y l o n . The net excess of imports equals 11$ o f , B r i t i s h p r o d u c t i o n , and defending as i t does on i t s p e c u l i a r q u a l i t y ( b e i n g most ly Chinese tea) i s not l i k e l y to be a f f e c t e d g r e a t l y by a t a r i f f . Coffee imported i n to the c o u n t r i e s of the empire amounts to over three times the empire product ion . •Product ion cou ld be inc reased i n i k enya , the .West Indies and perhaps I n d i a , but i s not l i k e l y to be ab le to supply empire needs fo r some time to coree. Thus i t w i l l be seen i n summary t h a t , w h i l e the em-p i r e can support i t s e l f i n respec t to many important s t a p l e s , i t i s d e f i n i t e l y unable to supply i t s own needs at present in regard to c o t t o n , meat, t e a , co f f ee , l e ad , ema ize and pet ro leum. I t s ouput of the l a t t e r substance can never be inc reased to f i l l more than a t t rac t ion of" i t s needs. On t h i s f a c t must be wrecked, a l l hopes of those who v i s u a l i z e a s e l f - s u f f i c i n g empire. (136) PART THREE, I O S R I A L S C 0 1 T C 1 I I C UlTITY, SECT 1 0 1 ; THREE i PROPOSES IKPSRIAL SCQPGICIC POLICIES. Proposed economic p o l i c i e s fo r - the s t i m u l a t i o n of i n t r a , - i m p e r i a l trade d i v i d e themselves i n t o three types . These are f i r s t , the p roposa l that the empire should e rec t t a r i f f w a l l s s u f f i c i e n t l y h i g h to exclude f o r e i g n p r o d c i t s , t h u s l e a v i n g the empire dependent on i t s own r e sou rces ; second, the p roposa l of "empire f ree t rade 1 ' w i t h a gene ra l i m p e r i a l t a r i f f ; and t h i r d , the p roposa l of a system of i nc reased i n t r a - i m p e r i a l p re fe rences . C o n s i d e r a t i o n of t h e . f i r s t type of p r o p o s a l - that , i s . of a s e l f - s u f f i c i n g empire - # 1 1 1 he b r i e f . The p roposa l has two f a t a l f laws/The f i r s t i s the l a c k of petroleum f i e l d s w i t h i n the-empire, In other words, 'the resources of the. empire are not suf-f i c i e n t to support i t by i m p e r i a l i n d u s t r y a lone . Petroleum products ho ld an important and growing p lace i n i n d u s t r y . Hot or t r anspo r t i s -completely dependent on m i n e r a l o i l . Ocean t r an spo r t i s coming to r e l y more on the sa^m*mater ia l , w i t h the growth i n the number of motor sh ips and o i l - b u r n i n g steamers. A i r t r an spo r t a l s o r e l i e s upon motor . s p i r i t fo r i t s motive power. That i s to say,- the empire must cont inue td> import l a rge q u a n t i t i e s of petroleum products fo r i t s i n d u s t r i a l f u n c t i o n i n g . I t i s an economic commonplace that imports are p a i d f o r by exports and v i c e v e r s a . To secure the necessary impor t s , the empire must export i t s p roduc t s ,wh ich means tha t f o r e i g n trade must con-t inue to e x i s t , . The second f l aw i n the ' p roposa l l i e s i n the f a c t tha t at present the empire produces more than i t r equ i r e s i n (13?) c e r t a i n commodities* Rubber .asbestos .and wool are a few of these . 'To make the empire s e l f - s u f f i c i n g e n t a i l s the c e s s a t i o n of exports to f r o e i g n c o u n t r i e s , s ince exports are p a i d f o r by im-por t s and imports mean dependence (not n e c e s s a r i l y complete dependence) on f o r e i g n sources of supp ly . Such a c u r t a i l m e n t of exports would ca r ry w i t h i t the r e d u c t i o n of the output of c e r t a i n i n d u s t r i e s w i t h i n the empire, which would mean the c r i p p l i n g of i n d u s t r y of many i f not most of the B r i t i s h coun-a t r i e s . I t would mean the fo rego ing by Cnada of her growing markets i n the ^ r i e n t ; the d e s t r u c t i o n of A u s t r a l i a ' s and Hew Zealand s wool and mutton t rade w i t h Europe; She l o s s of a l a y a ' s expor ts of rubber to Europe- and the Uni t ed S t a t e s ; the r e d u c t i o n .of Canada's and Rhodes i a 1 s asbestos p r o d u c t i o n as w e l l as South A f r i c a ' s t rade i n gold and diamonds. In a d d i t i o n t o . a l l t h i s , i t would n e c e s s i t a t e sucha complete r e - d i r e c t i o n of 'Sreat B r i t a i n ' s e x p o r t s , t h a t the r e s u l t a n t chaos and i n d u s t r i a l s u f f e r i n g p r o -h i b i t s such a p l an from the ou t s e t . So much fo r i m p e r i a l s e l f - s u f f i d i e n c y 9 The second type of p roposa l has f o r i t s essence the .phrase , "Empire Eree Trade . " This scheme is, f a r more worthy of c o n s i d e r a t i o n than the p r e c e d i n g . The i d e a behind such a p lan i s no more and no l e s s than free t rade w i t h i n the empire5 tha t i s to s a y , i t proposes an i m p e r i a l t a r i f f i n a l l par t s of -the empire a l i k e aga ins t f0reigv.;- made goods, 1 eaving empire made goods free from p r o -t e c t i v e d u t i e s . Viewed from the d i spas s iona t e s tandpoin t of pure economics, f ree t rade i s the i d e a l c o n d i t i o n under which commerce and i n d u s t r y m a y ' f u n c t i o n . I t would l e a d to a geographic (133) s p e c i a l i z a t i o n of i n d u s t r y Y/tuch would ensure lowest cos ts of p roduc t i on throughout the . o r I d . However ,despi te the arguments and t each ing of l e a rnea economists of a l l n a t i o n s , the c o u n t r i e s of the wor ld have adopted,a lmost w i thou t e x c e p t i o n , the a l t e r n -a t i v e and s p e c i o u s l y a t t r a c t i v e system of " p r o t e c t i v e " t a r i f f s , Doubt less d e s p a i r i n g of seeing u n i v e r s a l free t rade i n s t i t u t e d , many peop le , of whom Lord Beaverbrook and h i s ''Empire Crusaders 1* may he cons ide red the mouthpiece, have advocated a p a r t i a l ap-p l i c a t i o n of f ree t rade c o n d i t i o n s , tha t i s the es tab l i shment of f ree t rade w i t h i n the ^ r i t i s h Empire . Along w i t h these p roposa l s goes a scheme of empire wide t a r i f f s , not n e c e s s a r i l y the r e s u l t of a s i n g l e economic p o l i c y fo r the whole group oi' B r i t i s h nwtionsr^ dependencies and c o l o n i e s , but n e v e r t h e l e s s •-< t a r i f f d i r e c t e d by a l l par t s of the empire aga ins t f o r e i g n c o m p e t i t i o n . The p r o j e c t does not propose to make the empire s u f f i c i e n t unto i t s e l f as d i d the scheme p r e v i o u s l y examined. I t aims a t removing a l l a r t i f i c i a l obs tac les to trade between the aons t i t uen t par t s of the empire and at the same t ime , checking f o r e i g n compe t i t i on i n those c l a s s e s of goods which the c m produce i n l a rge q u a n t i t i e s at wor ld p r i c e s . I t i s not proposed to exclude m a t e r i a l s and goods which can be produced outs ide the empire at . . r ices c o n s i d e r a b l y below the cos t of s i m i 3 x r B r i t i s h nude goods. The most f o r c i b l e o j e c t i o n to t h i s p roposa l i s p o l i t i c a l i n na tu re . The theory i n i t s f o r m u l a t i o n does not i n c l u d e the f a c t o r of psycho]ogy. I t i s a theory b u i l t around the f3moos f i c t i o n of the "economic man." Empire Tree Trade, wh i l e co lo r ed and sh--peu by p s y c h o l o g i c a l emotions u r g i n g on (139) p a t r i o t i s grounds the economic u n i f i c a t i o n of the B r i t i s h Empire , f a i l s to app rec i a t e the s t r e n g t h of n a t i o n a l i s t i c am-' b i t i o n s i n the dominions and I n d i a . To the U n i t e d Kingdom,Empire Eree Trade means the- abandonment of her t r a d i t i o n a l p o l i c y of f ree t r a d e - - a r s tep she lm s taken r e c e n t l y - - coupled w i t h the safeguard that no cons ide rab l e increase In the c o s t ' o f important raw m a t e r i a l s w i l l take . p l a c e . Advantages would be considerable , , B r i t a i n would have f ree en t ry i n t o dominion markets i n s t e a d of paying du t i e s as at p resen t , w h i l e her compet i tors would s t i l l be handicapped t o a r e l a t i v e l y g rea t e r degree. The ob jec t ions to Empire Eree Irade corae f rom the domin ions . I t i s t rue that the p lan would g ive them a sub- • s t a n t i a l advantage over f o r e i g n compet i tors i n the markets of Breat B r i t a i n . But t h i s advantage would be j u s t as grea t i f the United kingdom would merely t r e a t the dominions as they have treated. Great B r i t a i n f o r y e a r s , by means of " B r i t i s h p re fe rence . In other words, Empire Eree A rade of fe rs the dominions what they have Been g i v i n g Great B r i t a i n BincB" :-r.about 1900, and asks i n exchange the f a r - r e a c h i n g concess ion of f ree en t ry of B r i t i s h go ods. Al though numerous manufactur ing i n d u s t r i e s , e s p e c i a l l y i n Canada, can no?/ compete w i t h E n g l i s h and f o r e i g n i n d u s t r i e s i n w o r l d markets , there are many others which would perforce disappear i f f o rced to compete i n the open market w i t h goods from the Uni ted Kingdom. A u s t r a l i a i n p a r t i c u l a r would s u f f e r , i t s manufac ture rs ' r e l i a n c e on t a r i f f p r o t e c t i o n . b ein ' shown by the f a c t tha t 96$ of t h e i r products are s o l d (140) w i t h i n the•Commonwealth. Kor would the dominions welcome the f ree en t ry of products from t h e i r s i s t e r domin ions j fo r example, Canadian d a i r y farmers demand p r o t e c t i o n aga ins t New Zealand b u t t e r . Moreover ,even w e l l - e s t a b l i s h e d i n d u s t r i e s i n the dominions would not a l l o w wi thou t p r o t e s t the f ree en t ry of goods i n t o t h e i r p r e v i o u s l y p r o t e c t e d home market . In these days of p a r t y p o l i t i e s ' , ob j ec t ions of t h i s so r t appear to outweigh c o n s i d v r a t i o n s of a more gene ra l economic c h a r a c t e r . These disadvantages to Empire Free ^rade would be the probable ' immediate Consequences of i t s adop t i on . Over a per iod . a>f time the inconveniences would tend to disappear as i n d u s t r i a l re-adjustments took p l a c e . A u s t r a l i a n manufactures would be har^ h i t , but her pr imary producers would gain by lower c o s t s . Canadian manufac tur ing would by no means be wiped out . Adjustments would have to take p l a c e , but the country as a whole would b e n e f i t by lower p r i c e s . C a n a d i a n motor car manufactures would be encouraged by the removal of the B r i t i s h "PbHenna d u t i e s " . South A f r i c a , ^ e w Zea land , I n d i a and other par t s fo the empire would su f f e r l i t t l e . • ... ' To summarize, a l though "Empire i 'ree Trade" o f fe r s many tang ib le - advantages of an economic na tu re , i t s adopt ion would r e q u i r e a d r a s t i c change i n dominion p o l i c y . The dominions i n genera l have pursued a course of " p r o t e c t i o n " as a means to the development of t h e i r i n f a n t i n d u s t r i e s . A growing n a t i o n a l i s m demands a many sided, n a t i o n a l l i f e . I t has been t h e i r aim to achieve a balanced economic o r g a n i z a t i o n , not i n order to ga in s e l f - s u f f i c i e n c y , but to cause to be l o c a t e d w i t h i n the s ta te those secondary i n d u s t r i e s which depend for t h e i r raw- m a t e r i a l (141) o n . t h e p r i m a r y i n d u s t r i e s o f t h e a f o r e s a i d s t a t e , Upon s u c h s e c o n d a r y i n d u s t r i e s d e p e n d s t h e growth o f c i t i e s , t h e d e v e l o p -ment o f a n a t i o n a l c u l t u r e , l i t e r a t u r e e t c , w h i c h t h e p r i d e o f n a t i o n a l i s m demands f o r i t s own c o u n t r y . t h e r e f o r e , w h i l e "Empire E r e e T r a d e " d o u b t l e s s w o u l d b r i n g about i n the l o n g r u n 'an i n d u s t r i a l o r g a n i z a t i o n o f the e m p i r e which..would be s o u n d e r a n d les-s w a s t e f u l t h a n t h e p r e s e n t system o f compl i ca t ed t a r i f f s , i t s adopt ion appears b e y o n d the scope o f p o s s i b i l i t y f o r many years t o come, c o n t i n g e n t on t h e growth o f a s t r o n g sentiment of i n t r a - i m p e r i a l c o o p e r a t i o n to r ep lace the present a m b i t i o n s of i n d u s t r i a l n a t i o n a l i s m i n the d o m i n i o n s . The t h i r d type of p r o p o s a l f o r the s t i m u l a t i o n o f i n t r a - e m p i r e t r a d e i s l e s s s t r i k i n g t h a n t h e o t h e r t wo. B r i e f l y , i t c o n s i s t s E n i a n l e x t e n s i o n a n d u n i f i c a t i o n of t h e B r i t i s h p re fe rence system ' that h a s f o r some t i m e b e e n , p r e s e n t i n t h e t a r i f f s o f most of t h e d o m i n i o n s . The i d e a h a s been, t o u c h e d u p o n v a g u e l y b y v a r i ous d o m i n i o n s t a t e s m e n a t I m p e r i a l C o n f e r e n c e s f r o m time to t i m e , but a n y p r o g r e s s t o w a r d the i n s t i t u t i o n of s u c h a p r o j e c t h a s b e e n p r e c l u / d e d b y ^ rea t B r i t a i n ' s l o y a l t y t o f r e e t r a d e . The r e c e n t a d o p t i o n o f a t a r i f i By t h e U n i t e d K i n g d o m h a s t h u s b r o u g h t n e a r e r t h e p o s s i b i l i t y o f an e m p i r e p o l i c y of p r e f e r e n c e . before g o i n g on t o d i s c u sa t h i s t h i r d t y p e o f p ro-p o s a l , an o b s e r v a t i o n on t h e f u n d a m e n t a l n a t u r e o f t h e scheme w i l l be p e r t i n e n t . T a r i f f c h a n g e s h a v e f o r so l o n g b e e n h e r a l d e d as the p e r f e c t cure - a l l f o r e c o n o m i c i l l s t h a t t h e y a r e n a t u r a l l y r e g a r d e d w i t h s u s p i c i o n . E e r e i s t h e o p i n i o n o f (14S) i i r .Leacoc.ic, an advocate of the type of t a r i f f change a t present under d i s c u s s i o n , ( l ) . " T a r i f f systems do not of themselves create n a t i o n a l w e a l t h . T h a t depends cn n a t i o n a l r e s o u r c e s , n a t i o n a l c a p i t a l and l abo r ,The t a r i f f i s a consequence not a cause j and t a r i f f p o l i c y i n the Empire as elsewhere i s secondary to the fundamental p roduc t i on of w e a l t h . B u t the - ta r i f f , has the p e c u l i a r advantage -of o f f e r i n g an immediate means of a p p r o a c h . l t represents some- • t h i n g i n which a c t i o n can be taken immediate ly and e f f e c t i v e l y . This a c t i o n can then -lead on to g rea te r changes." There Is another aspect of the d i s c u s s i o n which may be c o n s i d e r e d . t a r i f f changes may be judged i n the l i g h t of pure• economic theory or in- the l i g h t of the a c t u a l e x i s t i n g c o n d i t i o n of mAngled p o l i t i c s , n a t i o n a l sentiment and ves ted i i n t e r e s t . The former view i s d i s p a s s i o n a t e . I t s exponents seek only the ab-s o l u t e t r u t h and draw* va r ious conc lus ions . I t i s no concern of-t h e i r s , i f the adop t ion of t h e i r t heo r i e s would e n t a i l a com-p l e t e r e v o l u t i o n of modern i n d u s t r y c a r r y i n g w i t h i t misery and m i g r a t i o n f o r m i l l i o n s of human beings.. - This i s the case w i t h f ree t r a d e . Undoubtedly the removal rufix of a l l t a r i f f b a r r i e r s throughout the w o r l d would l e a d i n the long run to a l e s s was te fu l l o c a t i o n -of i n d u s t r y .With' each country s p e c i a l i z i n g on the i n -dus t ry or i n d u s t r i e s i n which i t has a comparative advantage, cos ts would be at a minimum. That i s how the pure economis t , to .. whom the present age i s but a chapter i n a h i s t o r y book,regards the problem. A he statesman (or p o l i t i c i a n ) sees the problem d i f f e r e n t l y . H e sees the c r i p p l i n g and d e s t r u c t i o n of i n d u s t r i e s ( l ) Economic .Prosper i ty of the B r i t i s h Empire , p 149-(143) the subsequent mise ry of some of the people ; the long and p a i n -f u l a d a p t a t i o n of na t ions to meet the new c o n d i t i o n s j the m i g r a t i o n of people whose homeland can no longer support them. L . 3 . A m e r y , i n an a r t i c l e e n t i t l e d " B r i t i a n i n Recon-s t r u c t i o n ", "(l ) se ts f o r t h the modern p o l i t i c a l view of f ree t rade from the s tandpoin t of n a t i o n a l i s m . In r e v i e w i n g c o n d i t i o n s l e a d i n g to the i n a u g u r a t i o n of <*reat B r i t a i n ' s l a t e s t f i s c a l p o l i c y , he s t a t e s : "The e s s e n t i a l p o s t u l a t e of f ree t rade 'was a wor ld of i n d i v i d u a l s r e c o g n i z i n g no f r o n t i e r s , and owing no l o y a l t i e s and no r e s p o n s i b i l i t i e s , so f a r as the f i e l d of economica was con-ce rned . " He c o n t i n u e s , - "The task of the s ta te was to see to the f u l f i l l m e n t of con t r ac t s and the suppress ion of c r ime , and not to i n t e r f e r e i n the -free p l ay of economic forces ,whether between-d i f f e r e n t s ec t i ons of the community a t home, or between i t s c i t i z e n s and the ou t s ide w o r l d . " There has grown up a new.coneept ion o f " t h e . s t a t e as an o rganic e n t i t y whose permanent we l fa re and s t r eng th t ranscend the immediate i n t e r e s t or inconvenience, of any or a l l of the i n d i v i d u a l s who compose -at. Th i s new concept ion c a l l s fo r a new p o l i c y f o r both e x t e r n a l and i n t e r n a l a f f a i r s . " E x t e r n a l l y , the p o l i c y of the s t a te has become to secure the g rea tes t p o s s i b l e share of the w o r l d ' s w e a l t h , and the f u l l e s t a l l r o u n d develop-ment f o r the 'ijai't i c u l a r s t a t e . I n t e r n a l l y there has been i n c r e a s i n g s o c i a l reform and the c r e a t i o n and maintenance of a n a t i o n a l s tandard of l i v i n g . "Both these i d e a s , based on the s a c r i f i c e of immediate ( l ) F o r t n i g h t l y Review.-^arch, 1932. (144) compe t i t i ve c a p a c i t y to u l t i m a t e n a t i o n a l e f f i c i e n c y . l o g i c a l l y j u s t i f y p r o t e c t i o n to prevent t h e i r f u s t r a t i o n by outs ide f o r c e s . " Eree trade ,-according t o K x . A m e r y , i s a l s o l o s i n g i t s t e c h n i c a l advantages . C o s t l y machinery and h i g h l y pa id t e c h n i c a l s t a f f s have made a "secure market of adequate s i z e more important than an u n c e r t a i n w o r l d m a r k e t . R a t i o n a l i z a t i o n , the very essence of which l i e s i n the adjustment of p roduc t ion to the market,has emphasized-the same demand. Of recent y e a r s , i n d e e d , t h i s t e c h n i c a l aspect ol the problem has set i t s l i m i t s to the i n c r e a s i n g ten-dency of every n a t i o n to adopt i n d i s c r i m i n a t e h igh p r o t e c t i o n . In many a r t i c l e s today, the minimum output fo r e f f i c i e n t p ro -d u c t i o n i s so l a r g e tha t ou ts ide the Uni t ea Sta tes there are no n a t i o n a l marke t s - r ea l l y - adequa t e to s u s t a i n i t . To h o l d i t s own n a t i o n a l i s m - w i l l be fo rced to. extend i t s ou t look ,and to find, i n the c lose economic a s s o c i a t i o n of p o l i t i c a l l y or g e o g r a p h i c a l l y k i n d r e d n a t i o n a l groups a new b a s i s fo r the f u t u r e . " R e t u r n i n g to the d i s c u s s i o n of si system of im-p e r i a l p r e fe rences , i t may be s a i d tha t such a system i s a nearer approach to the p r i n c i p l e s of f ree trade than would otherwise o b t a i n . *'or example , u ana da ' s p r e f e r e n t i a l r a t e of duty granted' to B r i t i s h c o u n t r i e s i s a m i t i g a t i o n of the duty deemed necessary t o ' p r o t e c t ' the Dominion ' s i n d u s t r y from outs ide c o m p e t i t i o n . I f i s a form of s a c r i f i c e fo r the sake of r a c i a l and p o l i t i c a l t i e s . In a d d i t i o n i t has the good e f f e c t of keeping down, p r i c e s of c e r t a i n commodities w i t h i n the countEy below the l e v e l to which they might r i s e i f the "Intermediate T a r i f f " was i n e f f e c t aga ins t the whole outs ide w o r l d . On the other hand i t i s im-p o s s i b l e to say whether or not the p r e f e r e n t i a l ra te i s tha t (145 ) which i s deemed h i g h enough to g ive Canadian i n d u s t r y s u f f i c i e n t p r o t e c t i o n s and whether there fore the in te rmedia te t a r i f f i s an a d d i t i o n a l t ax over and above t h i s . In t h i s connect ion , i t may be noted that the new B r i t i s h t a r i f f w i l l make i t p o s s i b l e fo r the Un i t ed Kingdom to ba rga in w i t h the dominions for au r e d u c t i o n of the r a te of duty on B r i t i s h goods, . I t be ing safe to assume' tha t the key p o s i t i o n i n any system of i m p e r i a l preference w i l l be h e l d fo r .some time to come by the U n i t e d Kingdom, the a p p l i c a t i o n of the preference s y s t e m , i f kept w i t h i n r ea son , must a l l o w fo r the i m p o r t a t i o n of f o r e i g n products ' , not ob ta inab le i n l a rge q u a n t i t i e s w i t h i n the empire , .at r a t e s ve ry l i t t l e h igher than at wor ld p r i c e s . Tor example, beef and i t s products were imported i n t o the Un i t ea kingdom i n 1927 to the amount of 1,834,563,000 l b s , wh i l e Hew Zealand and A u s t r a l i a together exported only 367,241,000 l b s . .( i) A t a r i f f on Argen t ine beef imposed by B r i t a i n would g ive a pre-ference to the a f o r e s a i d two dominions that would s t i m u l a t e the beef i n d u s t r y . But empire sources not be ing a t present s u f f i c i e n t to s a t i s f y B r i t a i n ' s demand,in s p i t e of the i n e v i t a b l e increase i n home p r o d u c t i o n , t h e ' p r i c e would r i s e and the consumer would s u f f e r . Any such duty the re fore should be smal l enough to keep the r i s e i n p r i c e to normal p r o p o s i t i o n s . The example chosen i s not recommended -as a measure. Moreover , i t i s not l i k e l y to be adopted by Great B r i t a i n , except as a gac tor in b a r g a i n i n g , due to the w e l l - e s t a b l i s h e d o p p o s i t i o n of the B r i t i s h people to food t a x e s , and a l s o due to the value of B r i t a i n ' s trade w i t h A r g e n t i n a . There i s a l s o the case of preferences on commodffities ( l ) Commerce Year Book ,1931 . p 689. (146) of wh ich the empire produces more than s u f f i c i e n t for i t s needs. As an example, P ro fe s so r Leacock ( l ) takes the case of wheat, wheat i s expor ted by s e v e r a l c o u n t r i e s of the e m p i r e , p a r t i c u l a r l y by Canada and A u s t r a l i a . A s m a l l duty on f o r e i g n wheat would leave the market i n B r i t a i n to producers from these two c o u n t r i e s . However,he m a i n t a i n s , t h i s would not r e s u l t i n an app rec i ab l e r i s e i n p r i c e s s ince compe t i t i on between; them would tend to keep p r i c e s near t h e i r former l e v e l . At the same t ime, empire wheat growers would be assured of a l a rge market . In t h i s . c o n -n e c t i o n - i t i s worth n o t i n g that at the 1930 Impe r i a l Conference a "wheat quojja" was proposed. In i t s s imp les t form t h i s i s merely .a p l an guarantee ing that empire grown wheat s h a l l c o n s t i t u t e a a s p e c i f i e d p r o p o r t i o n of the- t o t a l wheat imports of the Un i t ed Kingdom. Whi le a quota scheme doubt less would achieve r e s u l t s c l o s e l y comparable to those a r i s i n g from empire p re fe rence , i t i s doub t fu l i f i t c o u l d be appl ied , to many commodit ies , due to the inconvenience of e n f o r c i n g i t . To summarize the advantages c la imed for im-p e r i a l p re fe rence , i t Is s t a t ed that the above scheme would inc rease and s t a b i l i z e empire p roduc t i on of c e r t a i n commodit ies , p a r t i c u l a r l y raw m a t e r i a l s , by a s s u r i n g them of a steady market; a l s o i t would g ive Great B r i t a i n a •ba rga in ing power (of which more anon) , which would be l a c k i n g under f ree t r ade , to secure lower du t i e s on her goods esnt to f o r e i g n c o u n t r i e s . In a d d i t i o n there are the s t o c k - i n - t r a d e p r o t e c t i o n i s t arguments of an assured honse market and the r e s t , The scheme has s e v e r a l drawbacks, not so much from (l)Bconomic P r o s p e r i t y of the B r i t i s h Empire . Bar t I I , C h a p t . 1. l l - = 7 ) the v i ewpo in t of the dominions as from that of the Uni t ed K i n g -dom.iaoreover . there i s the a t t i t u d e of I n d i a . As regards the l a s t , t h e a t t i t u d e of I n d i a , i t i s apparent tha t the extreme n a t i o n a l i s t s would not he l i k e l y to f avor any such system of p r e f e r ence , except perhaps as a f a c t o r i n b a r g a i n i n g fo r a f u r t h e r ex tens ion of c o n s t i t u t i o n a l'power. Even apar t from the e x t r e m i s t s , Indian' op in ion cannot be ex-pected to lend i t s approva l to a p roposa l to r a i s e i t s t a r i f f s . This i s s t a t ed c l e a r l y by Anstey i n her "Economic development of India ,page 356. She says : "The advantages which Ind ia can o f fe r the r e s t of the empire from p r e f e r e n c e are s t r i c t l y l i m i t e d . A preference on manufactures would s e v e r e l y i n j u r e e i t h e r the pockets of the consumers .or government r e f e n U B , "Trade w i t h the dominions might e a s i l y be promoted, as Ind i an co t t on p iece goods , ju te goods and tea might ga in from p re fe rence , w h i l e the sa le of C o l o n i a l ( s i c ) coa l ,motors R a i l -way j - l j in t and manufactures might b e n e f i t i n r e t u r n , b u t here p o l i t i c a l motives a f f e c t the s i t u a t i o n . G r e a t d i s t r u s t and % b i t t e r n e s s have been caused i n Ind ia by the treatment accorded Ind ian emigrants , and i t i s a l s o ' feared that the adopt ion of a ' p r e f e r e n t i a l system might be p r e j u d i c i a l to I n d i a ' s hard-won f i s c a l autonomy.For these reasons a lone , any f a r - r e a c h i n g p o l i c y of i m p e r i a l preference appears ,a t p resen t , to be e n t i r e l y out of the q u e s t i o n . " The c r i t e r i o n by which i m p e r i a l preference w i l l be judged w i l l be tho b e n e f i t s which i t would g ive to the Uni t ed Kingdom,Upon B r i t a i n w i l l r e s t the r e s p o n s i b i l i t y of caus ing the (148) adop t ion of i m p e r i a l preference as an empire p o l i c y . The dominions have long extended, t a r i f f favors to the mother c o u n t r y .A oer-manent ( i n s o f a r as tha t a d j e c t i v e can he a p p l i e d to a p o l i t i c a l measure) p o l i c y of r e c i p r o c a l treatment by B r i t a i n would be a great step towards the u n i f i c a t i o n , i n / p r i n c i p l e at l e a s t , of preference throughout the empire . Consequently the a t t r a c t i v e / ness of preference to t h e - U n i t e d Kingdom as the c r u c i a l cons ide r -a t i o n i n the d i scuss ion- of i m p e r i a l preference becoming an empire p o l i c y . B i r s t of a l l , a s the' empire takes only about 45 / of the U n i t e d Kingdom's expor t s under the cu r ren t range of p re fe rence , , i t i s reasonable to expect that B r i t a i n would demand lower du t i e s i n r e t u r n f o r the favors granted the dominions . Unless -Oreat B r i t a i n can r e c e i v e an increase i n i m p e r i a l t rade to make up for the loss, of" f o r e i g n trade r e s u l t i n g from a t a r i f f on impor t s , she would l o se by g r a n t i n g preference to the r e s t of the empire . Increased preference fo r B r i t i s h goods i n the dominions by means of h igher du t i e s on f o r e i g n goods would be l e s s a t t r a c t i v e than lower abso lu te d u t i e s . Doubt less B r i t a i n cou ld ob ta in such r educ t ions by agreement i n r e t u r n fo r favors under her own t a r i f f . ^ rof e s sor Leacock and others po in t to the ba r -g a i n i n g powers a t a r i . f i would confer on Great B r i t a i n , l e acock takes the case of B r i t i s h t rade with A r g e n t i n a , p o i n t i n g out tha t the Un i t ed kingdom buys produce to the value of #350,000,000 (1928) from the r e p u b l i c . On the other hand, the U n i t e d Sta tes s e l l s more to the South American r e p u b l i c than does Great B r i t a i n inw many c l a s ses of goods that the Uni ted Kingdom could {149 ) s u p p l y i n g r ea t e r q u a n t i t i e s . P ro fes so r Peacock argues t ha t , v/.ith4 B r i t i s h t a r i f f , G r e a t B r i t a i n cou ld ob ta in a. r educ t i on i n the Argent ine d u t i e s l e v i e d on her goods i n r e t u r n fo r r e c i p r o c a l t rea tment , w h i l e the Uni t ed Sta tes cou ld noy, f o l l o w s u i t , due to the p o l i t i c a l i n f l u e n c e of her f a r m e r s / w h o would not permit a r e d u c t i o n of the American t a r i f f on a g r i c u l t u r a l p roduc t s . By the semeans Oreat B r i t a i n supposedly would be able to make grea t gains i n the Argen t ine market. He remarks fu r the r s "And n o t i c e tha t a f t e r the ba rga in had been made and f i n i s h e d and was i n o p e r a t i o n , A r g e n t i n e whea t , g r a in and meat would come i n t o England j u s t as cheaply as e v e r , " HOT/ P r o f e s s o r Leacock seems to have fo rgo t t en h i s che r i shed v i s i o n of i m p e r i a l p re fe rence . I f Great B r i t i a n i s going to admit Argen t ine produce "as cheaply as ever",where has i m p e r i a l preference gone? ^et the Un i t ed Kingdom would have l i t t l e to o f f e r A r g e n t i n a u n l e s s she cou ld g ive treatment equal to t h a t a f fo rded the r e p u b l i c ' s g rea te s t compet i tors ,Canada and A u s t r a l i a , Another a s p e c t of "ba rga in ing" i n i n t e r n a t i o n a l tar i f f emitters concerns the "most favored n a t i o n " d o c t r i n e g e n e r a l l y admi t ted by most n a t i o n s , Trade agreements between s t a t e s g e n e r a l l y c o n t a i n a p ro v i s o guarantee ing tha t the p a r t i e s s h a l l r e c e i v e treatment by the other equ iva l en t t o ; t h a t g i v e n to the most favored n a t i o n . This need not i n t e r f e r e with* i m p e r i a l p r e -ference as shown by the experience of the dominions , But t h i s usage tends to remove the b e n e f i t s of most t a r i f f b a r g a i n s , i n -sofar as the advantages ga ined are a u t o m a t i c a l l y extended' to many o t h e r n a t i o n s , Thus w h i l e Great B r i t a i n might secure ( l c O ) advantages over the Un i t ed S t a t e s , she i s u n l i k e l y to ob ta in any cons ide r ab l e ones over her Jurope&n compe t i t o r s . A g a i n , as po in t ed out i n the r e p o r t of the B a l f o u r Committee (1924), B r i t a i n i s not handicapped r e l a t i v e l y to f o r e i g n na t ions by the t a r i f f s of other s t a t e s s ince she has been r e c e i v i n g .fmost f avored n a t i o n " treatment g e n e r a l l y throughout the w o r l d . Consequent ly the power of ba rga in ing- conferred::, by a t a r i f f i s not - such an e f f e c t i v e weapon as the p r o t e c t i o n i s t m a i n t a i n s . A fu r t he r cons ide ra t i on .pe rhaps the most important of a l l , which must be weighed 'by - B r i t a i n before embarking per-manently on a p r o t e c t i o n i s t preference p o l i c y , i s whether or not empire markets can take the p lace of the present f o r e i g n marke ts . I t appears I n e v i t a b l e tha t decreased imports from f o r e i g n c o u n t r i e s w i l l l e a d to decreased exports to those c o u n t r i e s , I n a d d i t i o n , r e s p e c t e d op in ions to the c o n t r a r y , i m p e r i a l preference must mean inc reased cos ts even i f only to a s m a l l degree. These cos t s must be r e f l e c t e d i n manufac turers 1 p r i c e s w i t h ran unfavorable Inf luence on B r i t i s h sa l e s abroad. Great S r i t i a n the re fo re must be prepared fo r decreased trade w i t h f o r e i g n c o u n t r i e s , to be compensated by l a r g e r sti les to the empire. A rough method of measuring the empire ' s a b i l i t y to increase i t s purchases i n Great - ° r i t a l n presents i t s e l f i n the form of an examinat ion of the value of empire purchases from B r i t a i n both as percentages of B r i t a i n ' s t o t a l export t rade and of the empire ' s t o t a l import t r a d e . Out of t o t a l H r i t i s h ~ i m p o r t s i n 1928 of £ 3 3 4 , 7 6 8 , 0 0 0 i n raw m a t e r i a l s , t h e empire s u p p l i e d £ 1 2 1 , 5 4 3 , 0 0 0 or 36.4%. ( 1 5 1 ) Of a t o t a l i m p o r t o f f o o d s t u f f s o f £ 5 0 4 , 1 8 5 , 0 0 0 the empure p r o v i d e d £194,673,000 or 3 8 . 6 $ . o u t o f £578,869,000 w o r t h o f m a n u f a c t u r e s e x p o r t e d b y G r e a t B r i t a i n i n 1928 t h e e m p i r e t o o k £275,650,000 or 4 7 . 7 $ . ( l ) I t i s apparent f r o m t h e s e f i g u r e s t h a t t h e U n i t e d K i n g d o m c o u l d r e a d i l y t a k e f a r l a r g e r q u a n t i t i e s o f e m p i r e p r o d u c e , a nd c o u l d e a s i l y s u p p l y the- e m p i r e w i t h more m a n u f a c t u r e d goods. I t now must be d e t e r m i n e d -to w h a t e x t e n t t h e e m p i r e c a n t a k e t h i s e x t r a s u p p l y . I n 1930, • u anada d e r i v e d l 5 $ of h e r t o t a l i m p o r t s f r o m G r e a t - ^ r i t a i n and J5*$ f r o m t h e r e s t of t h e e m p i r e , w h i l e the United S ta tes s u p p l i e d 6 8 $ , The other d o m i n i o n s a nd the c o l o n i e s show less p o s s i b i l i t y of e x p a n s i o n . S o u t h A f r i c a i n 1928 drew 4 3 , 5 3 $ o f h e r i m p o r t s f r o m G r e a t B r i t a i n and 5 8 , 1 7 $ f r o m t h e e m p i r e . A u s t r a l i a i n 1927-28 r e c e i v e d 4 2 . 6 5 $ of her i m p o r t s from B r i t a i n a n d 5 5 . 7 1 $ from the empire. Hew Z e a l a n d t a k e s an. e v e n l a r g e r r e l a t i v e s h a r e , 4 7 . 4 3 $ of" h e r i m p o r t s o r i g i n a t i n g i n the U n i t e d K i n g d o m and 68,64$ i n t h e e m p i r e i n 1928 .Of I n d i a ' s t o t a l i m p o r t s i n 1928,46.2$ came f r o m t h e U n i t e d K i n g d o m and a b o u t 54$ f r o m t h e e m p i r e , ' I t becomes -apparent that , w h i l e t h e r e s t o f t h e % e m p i r e c a n a b s o r b l a r g e r q u a n t i t i e s o f B r i t i s h g o o d s , t h e e x t e n t t o w h i c h t h e y c a n do so i s l i m i t e d , B r i t a i n a l r e a d y d o m i n a t e s t h e m a r k e t i n A u s t r a l i a , I n d i a , Few Z e a l a n d a n d S o u t h A f r i c a , aa well a s i n t h e c o l o n i e s . Am i n c r e a s e i n h e r s a l e s i n t h e s e m a r k e t s i s , o f c o u r s e p o s s i b l e , b u t t h e e x t e n t o f t h a t i n c r e a s e i s n o t l i k e l y t o be g r e a t enough t o do more t h a n b a r e l y com-p e n s a t e f o r l o s s e s o f f o r e i g n t r a d e due t o t h e p r o p o s e d t a r i f f p o l i c y . C a n a d i a n t r a d e f o r m s t h e o n l y e x c e p t i o n . - ^ e r ^ B r i t a i n ' s (l) A m e r y . L . S , " E m p i r e and P r o s p e r i t y " ( a s q u o t e d i n " S a t u r d a y B i g h t , a u g . 2 9 , 1 9 3 1 . ) (152) snare of 1D> i s , a t f i r s t s i p h r , a , „ a i e n t l y capable of great expans ion . But i t must be remembered tha t Canada was t h e f i r s t - u B m o n tu give B r i t i s . i x - n a - r c ^ , and that i n a p i t e of - more them t h i r t y y s j ± s cf f. v u r f b l . . t r « . t. e-it Great B r i t a i n ' s share has been d e c l i n i n g . Geographic c o n t i g u i t y and s i m i l a r i t y of standards o l l i v i n g are great f a c t o r s i n the domination of the Canadian warket bp the U n i t e u S t a t e s . Bor i s inc reased B r i t i s h A r * f e r e n c ? 1 1 2 : 1 / to g t l y ufi'het t h i s . The recent (1931) Canrdiari t a r i f f i n c r e r s e s -gainst Un i t ed States goods brought about the es tab l i shment i n Canada of over seventy American branch f a c t o r i e s , , This may have b e n e f i t t e d Canada but i t d i d a B r i t a i n no good. B r i t a i n s hope of c a p t u r i n g a l a r g e r share, of the Canadian market l i e s not i n a r t i f i c i a l t a r i f f favors but i n a more v igo rous s a l e s p o l i c y , a n d i n adapt ing the q u a l i t y , form and. appearance of her goods to s u i t Canadian t a s t e s . I f the re fore appears , i n summary, tha t the b e n e f i t s c la imed f o r a p o l i c y of i m p e r i a l p r o t e c t i o n are a l l s t r i c t l y l i m i t e d i n t h e i r ex t en t . The main drawback i s the je o p a r d i z a t i o j n of a cons ide rab l e p o r t i o n of B r i t a i n ' s , f o r e i g n t rade by decreased f o r e i g n imports , h i g h e r cos ts of p r o d u c t i o n , and. p o s s i b l e r e -t a l i a t o r y t a r i f f s , pen d ing the c o n c l u s i o n of tra.de agreements wi th the va r ious f o r e i g n s t a t e s concerned. I t i s worthy of note t h a t P ro fes so r L e a c o c k , i n h i s ,< e x p o s i t i o n of i m p e r i a l p re fe rence , advocates the adopt ion of improved methods ol' p roduc t ion i n B r i t a i n , a long w i t h s tandard-i z a t i o n of goods,and m e a s u r e s c a l c u l a t e d to f a c i l i t a t e s a l e s . In the w r i t e r s o p i n i o n - i f such changes could be adopted, the e labora te preference proposa ls would, s c a r c e l y be needed. I t (155) i s admit ted tha t r a t i o n a l i z a t i o n of B r i t i s h i n d u s t r y i s bound up i n and r e t a r d e d hy other c o n d i t i o n s . such as the l a c it of . • a v a i l a b l e c a p i t a l due to t a x a t i o n b u r d e n s ( l ) , so tha t an a r t i f i c i a l s t imulus may be needed before r a t i o n a l i z a t i o n can take p l a c e . This c o n s i d e r a t i o n p layed a l a rge part i n the adopt ion of a t a r i f f by the Uni ted Kingdom and w i l l be touched upon i n the c o n c l u s i o n to t h i s essay. ( l ) See antea . Pa r t I ,S e c t i o n s 2 and (154) P.YRT THREE'e I IEBRIAL ECOITCPIC BPITY SECTIOE l.'OUR; PRESEHT TARIFFS AMI) AGREEl-iEHTS. Before a d i s c u s s i o n of i m p e r i a l preference can be cons ide red c o m p l e t e , i t i s necessary to review b r i e f l y the the r a t e s on a l l poods i s o b v i o u s l y Mit of the q u e s t i o n . I s h a l l conf ine myse l f to the .outstanding fea tures of the dominion t a r i f f s , t h e Ind ian t a r i f f and the new B r i t i s h gene ra l t a r i f f . The Dominion of Canada has long favored du t ies on imports fo r p r o t e c t i o n or revenue. I t s g radua l change from a count ry e x p o r t i n g raw m a t e r i a l * to a l e a d i n g expor te r of manu-f ac tu r e s may be taken i n some respec t s to be a j u s t i f i c a t i o n of p r o t e c t i o n as a s t imulus f o r i n f an t i n d u s t r i e s . However/ there i s l i t t l e l i k e l i h o o d of du t i e s be ing removed even i n cases where they are no longer needed, w i t h a consequent p e n a l t y on the consumer. The lowes t , Iiyporce aga ins t most B r i t i s h c o u n t r i e s , i s designed to extend p re fe rence . The in te rmedia te r a te i s extended to a l l c o u n t r i e s hav ing trade agreements w i t h the Domini on.The genera l t a r i f f , h i g h e s t of a l l , i s designed as a b a r g a i n i n g and r e t a l i a t o r y measure,imposed on goods from coun t r i e s w i t h h i g h du t ies on Canadian produce, such as the Uni t ed States of Amer i ca . The l a t e s t r e v i s i o n of the t a r i f f occurred i n 1£30 , './hen the du t i e s on about 200 items were changed,almost e n t i r e l y i n an upward d i r e c t i o n . -In most cases B r i t i s h p r e -ference was not decreased. Classes of imports concerned were present fr.tr i f f s w i t n i n the empire.A d e t a i l j e d examination of The Canadian t a r i f f con ta ins three r a t e s of du ty . (155) f o o d s t u f f s such as m e a t . d a i r y products ,canned f r u i t and vegetable tea and maize ; ray/ m a t e r i a l s such as c o a l ; and manufactured goods such as s t e e l p l a t e , n e t t i n g , m a c h i n e r y , w i r e , l i n e n f a i r i c s . p u r e s i l K f a b r i c s , p r e p a r e d r o o f i n g s , c l o c k s and g l a s s . The duty on g la s s was subsequent ly removed on the ground t h a t , a l though the p r i c e had r i s e n C a n a d i a n manufacturers had made no e f f o r t to inc rease p roduc t ion to supply the Canadian ..market. The Canadian in te rmedia te t a r i f f averages from '20% to 25% ad v a l o r e m , w i t h the B r i t i s h preference ra te about 1\% to 10 / l o w e r . A s p e c i a l ant i-d.umping t a r i f f on ten k inds of f r u i t and vegetables was passed i n August , 1930. In i 'ebruary 1931, a duty of 20% was- p l a c e d on American au tomobi les . The A u s t r a l i a n t a r i f f resembles the Canadian i n i t s genera l f e a t u r e s , h a v i n g three r a t e s of duty.The average r a t e of the gene ra l t a r i f f i s about 48/2, w h i l e that of the p r e f e r e n t i a l t a r i f f i s about 33 / . T h e value of t h i s preference to Great B r i t a i n may be judged from the f a c t that i n 1928, r i t i s h goods p a i d £8,618,-713, which was £7,204,411 l e s s than they would have pa id under the genera l t a r i f f . ( l ) This amount saved was equa l to 1 3 . 9 / of the value of a l l imports from B r i t a i n / T h e p r i n c i p a l c l a s se s of goods b e n e f i t t i n g were t e x t i l e s - , meta ls and manufactures ,machinery, appare l and p a p e r . About 9 5 / of the goods imported from Great B r i t a i n were a f f e c t e d by the t a r i f f . P r e f e r e n c e on Canadian goods i n 1928 was £333,211 or 9 . 8 / of the t o t a l va lue of imports from Canada. The t a r i f f of Mew Bea land a l s o grants preference to B r i t i s h goods. The f o l l o w i n g t ab le shows the p r o p o r t i o n of ( l ) Commonwealth O f f i c i a l YearBook,1950. p 107. (156) B r i t i s h goods g iven preference over s i m i l a r f o r e i g n a r t i c l e s Hew Zealand Imports ,1928. (1) B r i t i s h Foreism f1 free i n any case 6,463,899 4 ,034,692 Pree when B r i t i s h , d u t i a b l e when f o r e i g n 9,693,190 . 2 ,590,066 D u t i a b l e a t same r a t e f o r B r i t i s h and f o r e i g n 2,533,921 2,579,422 D u t i a b l e art lower r a te when B r i t i s h 12,114,179 4,871,897 Thus about h a l f the imports from th empire were ad-m i t t e d f r ee , and about three quar te rs were g iven p re fe rence . South A f r i c a adopted the p r i n c i p l e of i m p e r i a l 'pre-ference i n 1903 and extended i t to C a n a d a , A u s t r a l i a .and Hew Zealand a few years l a t e r In r e t u r n fo r r e c i p r o c a l p r i v i l e g e s . The t a r i f f of 1925 p rov ided two ra tes on c e r t a i n a r t i c l e s , t h e lower of which may a p p l y to goods f rom countries g r a n t i n g l i k e p r i v i l e g e s . T h e a c t u a l va lue of preference granted B r i t a i n i s qu i t e s m a l l , £ 4 2 1 , 0 0 0 i n 1927, average preference favors be ing about 3$ to ad valorem ovei/a l i m i t e d range of manufactures. The Ind ian t a r i f f i s avowedly fo r revenue,not p ro -t e c t i o n . T h e a r t i c l e s a f f e c t e d a r e - m a i n l y ' m a n u f a c t u r e s . B r i t i s h preference e x i s t s only i n a few cases of i r o n and s t e e l p a r t i a l l y manufactured p roduc t s . '''he B r i t i s h genera l t a r i f f which went i n t o e f f ec t on l i a r c h l , 1932, i s a d m i t t e d l y , a temporary measure. About f o u r months p reced ing i t s enactment, the B r i t i s h Par l i ament ' passed the Abnormal Importa t ions A c t , which l e g a l i z e d du t ies of 50$ ad valorem to be p laced on c e r t a i n manufactured which were be ing . put on the -British market at extremely low p r i c e s by f o r e i g n s t a t e s . The empire was exempt from t h i s du ty . (l)Bew Zealand Yearbook ,1932 . P 342, (157) The g ene ra l t a r i f f imposed a duty of 10 / over a wide range of goods ,most ly manufactures,, I t must -be po in t ed out ,however, t h a t whi-le the p r i n c i p l e s of p r o t e c t i o n and p r e -ference are brought i n t o be ing w i t h t h i s t a r i f f , t h e measure i n i t s e x i s t i n g form i s both temporary and t e n t a t i v e . The f i x i n g of the present gene ra l r a te a t 10% seems l e s s m a t e r i a l than the e s t a b l i s h m e n t of the p r i n c i p l e . The Act i t s e l f r e a l l y p rov ides a b a s i s upon which a more e labora te t a r i f f can be cons t ruc ted a f t e r the for thcoming I m p e r i a l Economic Conference. vVlde powers are g i v e n to the Import D u t i e s A d v i s o r y Committee.'^his body i s a u t h o r i z e d to m a i n t a i n , r e v i s e or c a n c e l the e x i s t i n g r a t e s of import duty on commodit ies i n c l u d e d , n o t only i n the genera l t a r i f f , but i n the Abnormal Impor ta t ions A c t , and i f d e s i r e d , to in t roduce a d d i t i o n a l d u t i e s . The genera l t a r i f f a f f e c t s p r a c t i c a l l y a l l manufactures but exempts important, raw mater ia l? 5 .The c h i e f except ions i n c l u d e gold, and s i l v e r b u l l i o n and coin,wheat ,meat and bacon, l i v e a n i m a l s , t e a , m a i z e , b o o k s , c o t t o n ( r a w ) and waste, f l a x ( r a w ) , w c o l ( r a w ) , c o t t o n s e e d , l i n s e e d , h ides and sk ins ( raw) newspr in t and wood pu lp , rubbe r ( r a w ) , m e t a l l i c ore and concentra tes i r o n ore(except chromeiron o r e ) , scrap i r o n and s tee l ,unwrought c o p p e r , c o a l and coke. Al though these except ions inc lude most of the important exports from the dominions and colonies- , fne measure gives a s u b s t a n t i a l preference on many commodit ies , s u c h as f l o u r and ce rea l s , canned f r u i t s and v e g e t a b l e s , f r e s h f r u i t s , d a i r y products canned f i s h , t imber and s§(gar. Canada i n p a r t i c u l a r can take advantage of du t i e s on manufactured goods, p a r t i c u l a r l y (158) wooden ware,paper boards e tc t r a p p i n g paper , rubber footwear , g l o v e s , s i l l - h o s i e r y , m e t a l o f f i c e f u r n i t u r e , a g r i c u l t u r a l machinery and e l e c t r i c a l household a p p l i a n c e s . ( l ) The B r i t i s h genera l t a r i f f may be cons idered as an e x t r a o r d i n a r y measure a t tempt ing to meet the f i n a n c i a l and commercial c o n d i t i o n s aggravated by the cur ren t w o r l d dep re s s ion . B r i t a i n has been e x p e r i e n c i n g a d e c l i n e i n exports r e l a t i v e l y much g rea te r than the d e c l i n e i n impor t s . The u n s e t t l i n g f i n a n c i a l e f f e c t s of t h i s one-s ided change have been increased by the n e c e s s i t y of meeting her war debt o b l i g a t i o n s to the Un i t ed S t a t e s , I t i s easy to b e l i e v e t h a t the adopt ion of the p r i n c i p l e of p r o t e c t i o n was caused by, de spe ra t i on . The economic s i t u a t i o n s ince 1929 w i l l be d i scussed fu r the r i n the c o n c l u s i o n to t h i s essay. Before c l o s i n g t h i s s e c t i o n on present t a r i f f s of the e m p i r e , s p e c i a l t r e a t i e s between the dominions must be mentioned.The most iimportant of these are between Canada and A u s t r a l i a , H e w Zealand and A u s t r a l i a , Canada and South A f r i c a , and Hew Zealand and South A f r i c a . . v anada has had t r e a t y r e l a t i o n s w i t h A u s t r a l i a f o r a number of y e a r s , the l a t e s t r e v i s i o n be ing in. J u l y , 1 9 3 1 . "Under t h i s agreement, 'Canada r e c e i v e s B r i t i s h preference ra tes on 415 out of the 435 items on the A u s t r a l i a n t a r i f f . Canadian canned salmon, newspr in t and c e r t a i n types of lumber are hence-f o r t h admit ted at d u t i e s lower than B r i t i s h p r e f e r e n c e . I n r e t u r n A u s t r a l i a r e c e i v e s s p e c i a l preference on thaftty i t e r n s , i n c l u d i n g beef and mutton,canned m e a t s , t a l l o w , e g g s , c h e e s e , b u t t e r , f r u i t s , r i c e , veneers and wines , and the B r i t i s h preference ra te .on a l l ( l ) Commercial I n t e l l i g e n c e Journa l ,L ia rch5 ,1932 , (159) other p r o d u c t s . Bew Zealand and A u s t r a l i a have had a. r e c i p r o c a l trade agreement s ince 1922.Hew Zealand r e c e i v e s s p e c i a l r a t e s on 129 i t ems , these r a t e s "being in/some cases l e s s than B r i t i s h p reference and i n others more. Increased exports under ra tes lower than ^ r i t i s h preference have been n o t i c e d i n f i s h , c h e e s e , bacon,ham and t a l l o w . A u s t r a l i a r e ce ive s B r i t i s h preference over a vride range of goods. Canada's t rade agreement w i t h the Union of South A f r i c a secures preference on the - f o l l o w i n g , h o s i e r y , m e t a l p i p e s , mechanics t o o l s , n e w s p r i n t , w h e a t and rubber t i r e s . T h e d i f f e r e n c e between duty charged and. duty chargeable under the a l t e r n a t e r a t e i n 192S was £52 ,08 .9 . South A f r i c a gains B r i t i s h preference on a number of i t ems, the most imoortant be ing sugar. and 'maize • Mew Zealand r e c e i v e s favorab le treatment firorn South A f r i c a i n r espec t to bu t t e r , cheese ,hops,ana f r e sh meats. The amount of t rade a f f e c t e d i s n e g l i g i b l e . x rade agreements between A u s t r a l i a and South A f r i c a , and between Bew Zealand and Canada have been te rmina ted , though a new t r e a t y between the l a t t e r two dominions has been drawn up. Canada i s a l s o n e g o t i a t i n g 1 or a new t r e a t y w i t h South A f r i c a . Another important trade agreement u s that between-Canada and the - ° r i t i s h w e s t Ind ies .Under i t s terms a l l Wesjs Ind ian products except tobacco and s p i r i t u o u s l i q u o r s pay a duty of no more than 50 / of the Canadian genera l t a r i f f . Canadian goods pay du t i e s of not maore than the f o l l o w i n g per-centages of the ra tes imposed by the Vest Indies on f o r e i g n (160) goods?- Bahamas 75$, Barbadoes 50$, B r i t i s h Guiana 5 0 $ , B r i t i s h Honduras 66 2/3 $ , Jamaica 75$, Leeward ^slands 66 2/3 $ , T r i n i d a d and Tobago" 50$, and Windward I s l ands 66 2/3 $ . Canada undertook to e s t a b l i s h steamship s e r v i c e s to the i s l a n d s the c o l o n i e s c o n t i b u t i n g annua l l y to the expense. Under t h i s t r e a t y the Canadian share of West I n d i a trade inc reased from 8,6$ i n 1912 to 1 3 , 9 $ ' i n 1920 and 20.0$ i n 1 9 2 7 . ( l ) ( l ) West i n d i e s Yearbook,1932. (161) PART THREE. El l lSRIAL., EC0170EIC U1TITY. SSOTIGIf BB/B4 GuBCBUSICB. I t i s a t r u i s m tha t the Great"? War wrought a wor ld wide upheaval i n economic c o n d i t i o n s . The outs tanding r e s u l t s were a- tremendous d i m i n u t i o n In the purchas ing ^ower of Europe and an unprecedented volume of i n t e r n a t i o n a l indebtedness , pa t j e f cu l a r ly to the U n i t e d S t a t e s . Great B r i t a i n , dependent to a g rea te r extent than any other n a t i o n upon her f o r e i g n t r ade , suffered- a s e r ious f a l l i n g o f f i n the volume of her commerce p r i o r even to 1929. The r e s u l t was s t agna t ion i n many i n d u s t r i e s , e s p e c i a l l y t e x t i l e s and s t e e l , w i t h consequent unemployment. Taxa t ion a r i s i n g from unemployment insurance and the enornijsous n a t i o n a l debt c a r r i e d on a v i c i o u s c i r c l e by handicapping f u r t h e r B r i t i s h i n d u s t r y . This s i t u a t i o n , m u l t i p l i e d i n i n t e n s i t y by the cur ren t dep re s s ion , i s doubtless- the most important f a c t o r l e a d i n g to the f o c u s s i n g of B r i t i s h . p u b l i c a t t e n t i o n upon #he p o s s i b i l i t y of g rea t e r development of i n t r a - i m p e r i a l t r ade . The dominions and other pa r t s of the empire d i d not f e e l the e f f e c t s of the- post-war' s i t u a t i o n as a c u t e l y as d i d the mother country5 f i r s t , b e c a u s e they -are not so dependent upon t rade w i t h Europe, and second ly , because as r a p i d l y deve lop ing t e r r i t o r i e s , t h e i r abso lu te progress has tended to d i s g u i s e any s l a c k e n i n g of abso lu te p rog res s . The Uni ted S t a t e s , d u r i n g the war ,en te red a pe r iod of u n p a r a l l e l e d m a t e r i a l p r o s p e r i t y which showed no s ign of d i m i n u t i o n u n t i l 1929. In s p i t e of stubborn adherence to a p o l i c y of heavy p r o t e c t i o n , t h i s f e d e r a t i o n invaded markets a l l over the (162) w o r l d and gained a l a r g e share of t rade main ly a t the expense of Europe . The Uni t ed . Sta tes was able to do t h i s because of the. e f f i c i e n c y of her manufactur ing i n d u s t r i e s , w h i c h , w o r k i n g under mass -p roduc t ion , had an ensured market of 110,000.000 people at home, and w i t h low per u n i t cos ts due to the la rge volume of p r o d u c t i o n , c o u l d u n d e r s e l l the - s m a l l - s c a l e , h e a v i l y -taxed European producer . With her p o l i t i c s dominated by i n d u s t r i a l s e c t i o n a l i s m , the Un i t ed S ta tes has been t r y i n g to a v o i d the economic con-sequences of her own p o l i c i e s . T h e ' r e p u b l i c everywhere has ex-panded her e x p o r t s , but seeks to prevent payment i n k i n d by r a i s i n g f . t ^ i f f b a r r i e r s . In a d d i t i o n , she demands payment of her war loans abroad but debars the i n e v i t a b l e form of repayment from e n t r y „ C o n s e q u e n t l y she has acqu i red a preponderant share of the w o r l d ' s g o l d , f o r c e d a c u r t a i l m e n t of c r e d i t throughout the r e s t of the wor ld and inc reased the s e v e r i t y of the present d e p r e s s i o n . This has r e - a c t e d on her own p r o s p e r i t y by d i m i n i s h i n g sa l e s abroad and th rowing her i n d u s t r y i n t o confus ion . Other na t ions have p l a y e d . t h e i r par t i n the imbrog l i d . • T a r i f f s have been inc reased throughout the w o r l d , s e r i o u s l y c u r t a i l i n g i n t e r n a t i o n a l t r ade . F r a n c e , w i t h h igh t a r i f f w a l l s and the payment to her of r e p a r a t i o n s , ha« a l s o secured wore g o l d than she normal ly needs. I t i s es t imated that Trance and the Uni t ed States have acqu i r ed possess ion of over 70a of "the w o r l d ' s a v a i l a b l e s tore of g o l d . The -great enigma of the present day i a Kussii-- . F o l l o w i n g the es tab l i shment of the Sov ie t stcote, R u s s i a has been s t r i v i n g fo r i n d u s t r i a l development.The famous " f i v e year p l a n " (163.) o i i n d u s t r i a l r e - o r g a n i z a t i o n i s a l ready producing r e - a c t i o n s i n t'.i- -;;he&t,f i s h and lumber t rades,where compe t i t ion lias he en f e l t by Vanaua.(The Canadian embargo on imports from R u s s i a must be cons ide red as a f u t i l e gesture of d i s a p p r o v a l r a the r than a s e r i o u s economic measure.) As R u s s i a i s a r e l a t i v e l y poor coun-t r y a t present , the f i n a n c i a l ex igenc ies of the "p lan" cannot be co^ed w i ta by t a x a t i o n and the issuance of governmental bonds. The n e c e s s i t y of b u i l d i n g up c r e d i t s abroad to pay fo r p roduc t i on gouus imported u n d e r l i e s the e f f o r t s be ing made to develop the • Russ i an export t r a d e . N a t i o n a l i s m i n I n d i a and b a n d i t r y i n China have a l s o been u n s e t t l i n g i n f l u e n c e s on trade fo r a. number of y e a r s . Into a w o r l d d i s o r g a n i z e d by the above f a c t o r s has come the depress ion s t a r t i n g i n 1929. Two aspects mark I t o f f i rom tne ^.jsj-war p e r i o d up to 1929. The f i r s t i s the great f a l l of . . r ices which has cont inued s ince the beginning o:> the c r i s i s . The caooud i s the c e s s a t i o n of American p r o s p e r i t y .aid i n d u s t r i a l . loans -Jbr ^aa .Beginning w i t h the s tock market c rash i n October, ",929 ,prices began to d e c l i n e and i n t e r n a t i o n a l t rade l angu i shed . The f.pcre-p- i n i n t e r n a t i o n a l t rade i s shown i n the f o l l o w i n g , (l)* Percentage Decrease of Trade in l930 AS Compared to Trade i n 1929. Imp or t s Bxp orts(dome o t i c ) /o United .States 30.4 26.7 ier .mny 22.7 10.7 Uuiteo Kingdom 13.8 21.8 I t a l y - 19.9 20.4 Erance 10,1 14.6 Bol iwiid 12 .1- 13.6 Belg ium ' 12.7 . 17.4 Total(, 11 c o u n t r i e s ) 1 8 . 9 / 1 9 , 9 / (1)Bound Tab le . June , 19 31. (164) This d e c l i n e i s not merely i n values but."in volume ' ' s f i £ dhc \ n furtn.-r by the f o l l o w i n g f i g u r e s fo r Great Br I t a ins Expor t s of p iece -oods ( m i l l i o n yards ). ( l ) 1929--3671.7 , l--30--.°40'5..7 , 1931—1716 .3 Expor t s of yarns ( m i l l i o n l b s ) ( l ) 192.9—166.6 1930--136.7 1931—133.5 fhe d imin i shed value and volume of trade have reduced p r o f i t s c o n s i d e r a b l y . A n a n a l y s i s of over 5 0 0 ^ r i t i s h companies which i s sued r epo r t s i n the l a s t quar te r of 1930 showedja d e c l i n e of 18$ i n p r o f i t s . (2)' S i m i l a r c a l c u l a t i o n s fo r the Uni ted Sta tes where p r o f i t s i n previous years had been very much h igher showed that the earnings of 171 r a i l r o a d s f e l l by 50.6$ and those of 860 i n d u s t r i a l companies by 41.6$ i n comparison w i t h 1929.(3) Unemployment has inc reased the w or Id over , the g r ea t e s t numbers be ing i n Great B r i t a i n , 2 ^ m i l l i o n , the Uni ted •States about 7 m i l l i o n , and Germany 3-g- m i l l i o n i n 1931. Wages have 'been reduced throughout the w o r l d p a r t i c u l a r l y i n uermany ana I t a l y . Considering-, r i t a m s problem i n p a r t i c u l a r , s e v e r a l e s s e n t i a l fea tures are seen which d i f f e r e n t i a t e i t from the r e s t of the w o r l d . F i r s t , f o r ten/years B r i t a i n has been suppor t ing an unemployed p o p u l a t i o n never l e s s than one m i l l i o n . I'rom 1924 to 1929, cons ide rab l e I n d u s t r i a l a c t i v i t y and development was seen i n the Uni t ed Kingdom,and unemployment d id not i ncease , but i n s p i t e of t h i s temporary p r o s p e r i t y over a m i l l i o n men remained w o r k l e s s , ( l ) L i v e r p o o l 'A'rade K e v i e w , « e b ' t A S 3 2 . (2)Economist ,June 1931. (3) The T i m e s , A p r i l 7 ,1931. (165) Secondly , the B r i t i s h economic system wv-s "buil t around the export i n d u s t r i e s , T h e s e have fo r years faced growing compe t i t i on and inc reased t a r i f f s . T h i r d l y , _ r i t i s h i n d u s t r i a l l i f e i s marked by ex-treme r i g i d i t y . S a l a r i e s and wages have remained h igher than those o b t a i n i n g i n the' . res t of Europe . There i s a d i s p a r i t y i n wages between the s h e l t e r e d and unshe l t e r ed ' t rades . Jhe i m m o b i l i t y of l abo r has been inc rea sed by unemployment insurance.Overhead charges such as the s e r v i c e of l oan c a p i t a l , r a t e s and taxes c o n s t i t u t e a p r o g r e s s i v e l y i n c r e a s i n g burden as p r i c e s f a l l . T h e r e l a t i v e inc rease i n cos t s of p roduc t ion due to the f a l l i n p r i c e s i s shown by the f a c t tha t between 1924 and the end of 193o ,whi le sa le p r i c e s f e l l by 37^ , (1) and r e t a i l p r i c e s by 13^#2')f w h i l e money wages f e l l by l e s s than 2%,(3) Under the above c o n d i t i o n s B r i t a i n ' s share i n the . o r l u ' o t raae s.nlc from 12,9 4% i n 1924 to 10 .86 / i n '1929 , though d u r i n g the same p e r i o d other i n d u s t r i a l coun t r i e s of Europe i nc rea sed t h e i r p r o p o r t i o n .(4 ) This c o n s t i t u t e d a great s t r a i n on c t c r l i n ^ exchange as sho~wn by the Board of Trade 's c a l c u l a t i o n of "°x i t a i n 1 s l e t b a l a n c e a v a i l a b l e fo r f o r e i g n investment . This b uc = , . h i c h \, >.s £181 m i l l i o n i n 1913, and £138 m i l l i o n i n 1929 , s_.n': bo £39 m i l l i o n i n 1930.(5) The f a l l i n the n a t i o n a l income ,:os e s t i M - t e u wt £Pi00 m i l l i o n , a drop from <w40QQ m i l l i o n to £3600 m i l l i o n . ( 6 ) In the f i r s t quar ter of 19 31 B r i t i s h . e x p o r t s were 36 / l^v/er than a year p rev ious and imports were 2.6/i lower . (<2) ( l ) ^ t ab l e t Index ( 2 ) E i h i s t r y of l a b o r , O o c t oz L i v i n g Index. (3) Br of .Bow l e y ^s Eidex,nondun and C j i d r i c / ° Economic S e r v i c e . (4) Bound T-Pc 1-7 June ,19 31 . (5)Bo_rd ol Tr"_ ae •) ournal,I 'eb , 1931. ( o ) B . o l C o u i . i O i ' j u .-bates , ^ r c n , 1950. (7) Boy-1 Bcon . ~>ocl ^ ty ' c r epor t on Current J c o n . C o n d i t i o n s , A p r i l , '3 Ad (166) In connect ion w i t h the cur ren t depress ion , the r « p o r t od the h e c h i l l m i Committee i s wi thou t douht the most wuthv . r i t r . t ive a n a l y s i s oi' the s i t u a t i o n ye t compi led .Appoin ted i n November 1929 to examine f i n a n c i a l and i n d u s t r i a l c o n d i t i o n s the committee m-tue i t s r e p o r t i n June, 1931. In b r i e f , t h e con-c l u s i o n s of the committee are as f o l l o w s , The main cause of the depress ion w i R a f a l l i n p r i c e s unr co oi:i_ nnied by/a r e d u c t i o n i n money cos t s .To cure t h i s c o n d i t i o n p r i c e s must r i s e o± money cos ts be reidaped, It educ t ion o i cos t s means r e d u c t i o n of wages, a process i n which some c lasses \ ould gam at the expense of o the r s ; that i s to say , the r e n t i e r c l a s s would keep i t s f i x e d income and c e r t a i n :.;:< go-earners w^uld be able to r e s i s t r e d u c t i o n s . The M a c h i l l a n Committee recommends i n s t e a d that p r i c e s be r a i s e d through monetary means.-It sug.gets f i r s t , a r e d u c t i o n o f loan i n t e r e s t . w t p s ? w a r t imulus to bus iness? and secondly the buying of goverrao.--.nt s e c u r i t i e s on the open market by the banks . This Cvcor . d e t i o n \ ,oulu i i i s e the p r i c e of government s e c u r i t i e s ano o l low t n 3 mvernu t i i t to i ssue new bonds at lower ra tes and thus ^ry o f i tue o lu d e b t s , b r i n g i n g about a r educ t i on of i n t e r e s t charges tha t would be passed on to the taxpayer . A second r e -s u l t would be the c r e a t i o n of bank c r e d i t s fo r those who had s o l d government s e c u r i t i e s . The spending or re - inves tment of these c r e d i t s would a l s o be a s t imulus to i n d u s t r y . The B r i t i s h government has not fo l lowed the recom-mendations of thx L l a c l l i l l a n r epor t .Doubt less cond i t i ons had become too acute to a l l ow the adopt ion of the prowjs.als p /h i ch would, be g radua l i n t h e i r word ing . I n t e r n a t i unal coopera t ion was (167 ) one o i the c o n d i t i o n s necessary fo r the p l a n and the s ecu r ing of tna t would have meant long debates and delays and conferences Instead;, B r i t a i n went o f f the g o l d s tandard aga ins t the op in ion of the committee /which cons idered that such an a c t i o n would j e o p a r d i z e B r i t a i n ' s p o s i t i o n as ' i n t e r n a t i o n a l banker and cause m i s t r u s t and p o s s i b l y c r i s i s i n the r e s t fo the w o r l d . l t i s t rue however that the s i t u a t i o n had changed between the issuance of the r epor t and the a c t i o n of the B r i t i s h government. The government d i s regarded the committee i n a second way.by c u t t i n g wages and s a l a r i e s as an economy measure. In t a k i n g i t s f l a s t s tep to combat the depress ion i n B r i t a i n , t h e new t a r i f f on impor t s , the government f o l l o w e d the advice of a m i n o r i t y r epo r t of s i x members of the committee. The background of the present wor ld c o n d i t i o n may be -out l ined i n summary as f o l l o w s . Three major f a c t o r s i n i n t e r n a t i o n a l f inance and commeree today are war d e b t s , h i g h t a r i f f s and the r a p i d i t y of t e c h n i c a l changes. M f a r debts , by i n c r e a s i n g t a x a t i o n , h a n d i c a p debtor c o u n t r i e s i n commerce.In a d d i t i o n , a s the Uni ted s t a t e s furces payment i n g o l d , the supply a v a i l a b l e as a b a s i s of c r e d i t i n the r e s t of the wor ld has. been . c u r t a i l e d w i t h a ten times ; r ea t e r shr inkage i n c r e d i t . i ! ranee and the u n i t e u b t a t e s , instead of r e - i n v e s t i n g abroad,have"hoarded" t h e i r g o l d , l e a v i n g the w o r l d s h o r t . A l i t t l e i n t e r n a t i o n a l coopera t ion .v/ould put an end to t h i s tendency. The debtor coun t r i e s i n an attempt to balance t h e i r budgets and meet payments have increased t h e i r t a r i f f s i n an e f f o r t to b u i l d f o r e i g n c r e d i t s , w h i c h would cance l the need (168) of e x p o r t i n g - o l a . A ' h i e p o l i c y of " d e v i l take the hindmost" has brought no other r e s u l t than . t o ' r educe fu r the r the volume of i n t e r n a t i o n a l t r ade . fhe Hoover moratorium came too l a t e and most c o u n t r i e s have been o b l i g e d to abandon the go ld s tandard . ^ a p i d i t y of t e c h n i c a l change i s a more fundamental f a c t o r i n that i t i s not p e c u l i a r to the wor ld s ince 1829 . I t s e f f e c t s have been growing s ince 1800. I t merely means that l abor sav ing machines are be ing invented and employed f a s t e r than i n d u s t r y can absorb the d i s p l a c e d men. Elementary ergonomics teaches- tha t t e c h n i c a l improvements are b e n e f i c i a l i n the long r u n , but over a s h o r t - p e r i o d of time the added unemployment due to t h i s cause i nc r ea se s the s e v e r i t y of a w o r l d problem. There are a l s o many minor f a c t o r s such as armaments and s p e c u l a t i o n , w h i c h have p l ayed t h e i r par t i n the post-war p e r i o d . ^ rea t B r i t a i n , where the c r i s i s has been more acute than i n any other country except uermany,ha.s been d r i v e n to,what are to h e r , desperate measures i n an attempt to amel io ra te the s l t u a t i b n . The abandonment of the go ld s tandard gave a temporary r e v i v a l due to the deprecia ted, pound. Vhether the new t a r i f f w i l l • have the f avo rab le r e s u l t s c la imed for i t remains to be seen , In any care the t a r i f f opens the /way to t 'h° adopt ion of empire preference as a p o l i c y . I m p e r i a l preference froiija p o l i t i c a l v iewpoin t i s d e s i r a b l e to a l l l o y a l subjec ts of the empire. From a- wor ld economic po in t of view i t s development determines i t s d e s i r a b i l i t y , depending on whether i t r a i s e s or reduces t a r i f f s . I t seems l i k e l y that B r i t a i n w i l l not impose any du t ies at a l l on e s s e n t i a l raw m a t e r i a l s , the very commodities which, c o n s t i t u t e the bu lk of the 3 69 ) empires e x p o r t s . In a n y case the t a r i f f w i l l not pruve a w i r -icu lous panacea of B r i t a i i ' s economic i l l s . x e r t roub le i s caused main ly by n igh cos ts or p r o d u c t i o n , a r i s i n g from t a x a t i o n due t c • ar debts , x . o b l i c uel ts and t n : cost of s o c i a l reforms, to obsolescent machinery ana i n d u s t r i a l o r g a n i z a t i o n , and to a r e l a t i v e l y high s t mdard of coii iuxb i n con junc t ion w i t h that o r g a n i z a t i o n . Impe r i a l preference may p o s s i b l y increase B r i t a i n ' s exports by a f r a c t i o n/but i t s e i i „ r t s on unemployment are not l i i c e l y .to b r i n g about an economic r e v i v a l . The B r i t i s h B-nuijf m o .7 be ured i or b a r g a i n i n g , b u t hope frum t h i s sonrcc oe^ms sma l l v.hen i t i s r e c a l l e u that European na t i ons have been b a r g a i n i n g fo r years, and t a r i f f s are h igher than ever . The r e s t o f the empire i s i n a f a i r l y sound s t a t e e c o n o m i c a l l y , a l t h o u g h A u s t r a l i a has ye t to s t a b i l i z e her f i n a n c e s . Preference i rom Great r i t a i n would be a cons ide rab le he lp to empire i n d u s t r y , but the p r o s p e r i t y o i nthe whole empire i s too cn bound up w i t h i n t e r n a t i o n a l traae to make a r e v i v a l ol; empire t raae p o s s i b l e before a wor ld-wiue r e t u r n to normal c o n d i t i o n s . '•hen the empire delegates meet at Ottawa t h i s yea r , i t i s . -x t i eae ly l i k e l y t h r t B r i t i s h pr'-i e-once w i l l be ^ f f i r n e ^ ns an i m p e r i a l p o l i c y . The export of minor products w i t h i n the einoiJ.'L , i l l be s t imula ted w n i l ? ^ di » r t ,w ool and cutuu-i aw- almost cerB-£"> to remain untouched. B r i t a i n may r e c e i v e .a greater cegr te o_ p v i e - e n c e i n tne uominions :ru. hex customs _<: venue may reduce d i r e c t t a x a t i o n . I n d i a 5 B r i t a i n ' a most cher i shed mar-k e t ' s not l i x e l y to confer any f a v o r s . F i n a l l y a f t e r these plans are out i n t o e f f e c t i t w i l l be seen tha t Great B r i t a i n ' s i n -d u s t r i a l problem remains unso lved . mt BIBLIOGRAPHY (1) Anstey,V. Batten,E. Benham,F.C. Bowley,A.L. Campbell ,P.: ThetEconomicPDevelopment of India. Longmans,Green;:aM Co. London 19229 National Economics Sir Isaac Pitman and Sons Ltd. London 1926 The Prosperity of Australia. P.S.King and Sons,Ltd. London 1928 Some. Economic Consequences of the Great War..-. Thornton Butterworth Ltd. London 1930 Mills,R.C. and Portus.G.V. (editors) Studies in Australian Affairs. Macmillan and Co.Ltd. Melbornue 1928 Condliffe,J.B. New Zealand in the Making. George Allen and Unwin Ltd. London 1930 Gr i f f i n , W, Canada , the Country of the Twentieth Century, Department of Trade and Commerce. Ottawa 1915 Gadgil,D.R. Herbert,G. Hobson,J.A. and others Industrial Evolution of India in Recent Times Oxford University Press Madras, 1924 Bri t i s h Empire Limited. Hodder and Stoughton Ltd. London,no date Some Aspects of Recent Bri t i s h Economics. University 4>f Chicago Press. Chicago, 1923 Hoover,H. (chairman) Reportof Committee on Recent Economic Changes. McGraw-Hill Book Co.Inc. New York,1929 Knowles,L»C.A. The Economic Develppment of the British Empire. G.Routledge and sons Ltd. London, 1924 Laureys,H. Leacock.S. Lewin.E. Lippincott,I The Foreign Trade of Canada. The Macmillan Co of Canada Ltd. Toronto,1929. Economic Prosperity in the Brit i s h Empire. Macmillan Co of Canada Ltd. Toronto,1930 The Resources of the British Empire W.Collins Sons and Co.Ltd. London,3.924 The Economic Resources and Industry of the World B.Appleton and Co. New York,1929 Mazur.P.M. McDougall,H. BIBLIOGRAPHY (2) American Prosperity, Jonathan Gape. Sheltered Markets J.Murray MacMillan.W.M. Complex South Africa Faber and Faber Ltd. London London London 1988 1925 1930 Pousette, H.R. The India Empire as a Market for Canadian Products. Department of Trade and Commerce Ottawa,1922 Pulsford,J. Shah.K.T. Shann,E. Siegfried,A. Woolf,L. Commerce and the Empire P.S.King and Son,Ltd. London,1917 Trade.Tariffs and Transport in India The national Book Depot Bombay, 1923 The Economic History of Australia Cambridge University Press, Cambridge,1930 Post War Britain Jonathan Cape Ltd. Empire and Commerce i n Africa George Allen and Unwin,ltfi London,1924 London,no date, BIBLIOGRAPHY ( 3 ) . Year Books and O f f i c i a l P u b l i c a t i o n s . The Dominions O f f i c e and C o l o n i a l Of f i ce L i s t , 1 9 3 1 . Aater low and S o n s , L t d , London, 1931. Statesman's Yearbook,1931 ( a l so 1930) I i ac ld i l l an and C o , L t d . London ,19 31. S t a t i s t i c a l A b s t r a c t fo r the Uni ted Kingdom. Board of Trade. H . P . S t a t i o n e r y O f f i c e . London, 1951 Canada 19 32. ( a l so 1931,1930) Dominion Bureau of S t a t i s t i c s . Ottawa, 1931, Trade of Canada,1930,Condensed P r e l i m i n a r y n e p o r t . Department of Trade and Commerce. Dominion Bureau of S t a t i s t i c s Ottawa, 1930, Canadian Annual Review. 1929-30 (a l so 1928-29) The Canadian Review C o , L t d , Toronto ,1950. Commercial I n t e l l i g e n c e «J o u r n a l , (weekly ) department of Trade and Commerce. Ottawa o f f i c i a l Year Book of the Corn.. onwealth of A u s t r a l i a , 19 50 . (&I929 ) H . J.Green,Government -P r in t e r . Melbourne ,1930. Q u a r t e r l y Summary of A u s t r a l i a n S t a t i s t i c s , B u l l e t i n HQ 120. H,J.Greon,Government P r i n t e r . Canberra , June ,1950, New Zealand O f f i c i a l Y e a r - B o o k . 1 9 3 2 . ( a l s o 1950) V/,A. G,,Skinner,Government P r i n t e r . W e l l i n g t o n , 1931. Report on 'C_ „v. rd S ' n ^ J n g i n theDominion of Hew Zealand 1929. ( l = o I t . 7 arid 1928) „ a u .0 S t a t i s t i c s Of f ice vVell iugt on, 1950 The Indian Year Book, 19 30. (a l so 1931)' Bennet t ,Coleman and Co L t e d . Bombay, 1930. Ind i a ii? 1929-30. Govt, of Indfa C e n t r a l P u b l i c a t i o n s Branch C a l c u t t a , 1931 O f f i c i a l A2ar Bouk of t h e Union of South A f r i c a . 1 9 29-30 (28-29) Govt . P r i n t i n g and S t a t i o n e r s Off i c e . P r e t o r i a , 1 9 3 0 . South and B a s t A f r i c a Year-Book, 1932. (a l so 1928 2nd 1950) <i> a w I? SQ n w, M ^ r i f o w A*- do Aaf d . ]_0 K ^ «? icl3(. The Ygar Book of the B r i t i s h best Ind ies ,1931 / Thos Skinner of CanadaLtd. Loridon^'ng) 1931. r > l O - ! u - "10 Intern:-.t io ;_B B c ; , H . 5 . ( J l J ! . ; - -0 U.d . ALn?rrac ui •e .ft on;;, n c B l t s i l\f o - : - r B o w l c .,11" Z'J e d i t o r } Cc I S 01. trcwuL-,11 2 5 . U n i t e d -Ecaber Be -r-K ^- -f -- , v - x . i c c . ,/ = b r i i u rcon , li " f l i I G l - •-- -' m :con. a t • fT ' t e 3 ~^£-U Iner t o l G 0 i i . „ e r c e o » 2 . . r o v e rnr.ic at J . r i at i n l / T T 1 p a t o n sl£50 

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