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T H I S D O C U M E N T I S T H E P R O P E R T Y OF H I S B R I T A N N I C M A J E S T Y ' S G O V E R N M E N T
Printed for the Cabinet.
January 1932.
MOST SECEET.
Copy No.
C P . 2 5 (32).
TO BE K E P T U N D E R
LOCK A N D
KEY.
It is requested that special care may be taken to
ensure the secrecy of this document.
C A B I N E T .
COMMITTEE
ON
THE
BALANCE
R E P O R T .
2, Whitehall Gardens, S.W. 1,
January 19, 1932.
6461
OF
TRADE.
9
R E P O R T .
I.-INTRODUCTORY.
1. A T t h e i r M e e t i n g on 1 1 t h December, 1931 ( C a b i n e t 88 (31), Conclusion 4),
t h e C a b i n e t h a d u n d e r c o n s i d e r a t i o n t h e P r i m e M i n i s t e r ' s m o s t secret
M e m o r a n d u m ( C P . 311 (31), p a r a g r a p h s 4 (c) a n d 6) a n d a g r e e d —
(a) A s regards the Balance of Trade t h a t t h e f o l l o w i n g a r r a n g e m e n t s should
be m a d e for o b t a i n i n g t h e facts with the least possible
delay:—
(i) T h e i n f o r m a t i o n c o n t a i n e d i n t h e F i r s t R e p o r t of t h e C o m m i t t e e
on Economic I n f o r m a t i o n of t h e Economic A d v i s o r y Council
( C P . 2 7 1 (31)) should be b r o u g h t u p t o d a t e .
(ii) T h e B o a r d of T r a d e should p r e p a r e a M e m o r a n d u m embodying
t h e very l a t e s t figures a n d o p i n i o n s a s to h o w w e s t a n d i n t h e
m a t t e r , a n d a s t o t h e d i r e c t i o n of movements. T h e T r e a s u r y
should c o m m u n i c a t e to t h e B o a r d of T r a d e a n y i n f o r m a t i o n
t h e y m a y h a v e or m a y be able to o b t a i n w h i c h b e a r s on t h i s
s u b j e c t : for e x a m p l e , a s t o m o v e m e n t s of c a p i t a l affecting t h e
b a l a n c e of p a y m e n t s .
(b) T h a t t h e above i n f o r m a t i o n should be c i r c u l a t e d a s soon a s possible to a
C a b i n e t C o m m i t t e e , composed a s follows—
The
The
The
The
The
The
The
The
The
C h a n c e l l o r of t h e E x c h e q u e r (in t h e C h a i r ) ,
Home Secretary,
S e c r e t a r y of S t a t e for F o r e i g n Affairs,
S e c r e t a r y of S t a t e for D o m i n i o n Affairs,
S e c r e t a r y of S t a t e for t h e Colonies,
M i n i s t e r of H e a l t h ,
P r e s i d e n t of t h e B o a r d of T r a d e ,
L o r d P r i v y Seal,
M i n i s t e r of A g r i c u l t u r e a n d F i s h e r i e s ,
w h o should r e p o r t t o t h e C a b i n e t on t h e subjects a r i s i n g o u t of t h e
M e m o r a n d a , m a k i n g such c o m m e n t s a s t h e y m i g h t t h i n k fit for t h e
g u i d a n c e of t h e C a b i n e t .
I n t h e event of a n a d v e r s e b a l a n c e of t r a d e b e i n g disclosed, t h e
C a b i n e t C o m m i t t e e w e r e asked t o a d v i s e w h a t r e m e d i e s w e r e available
a n d w h a t w o u l d be t h e consequences i n each case of t h e i r a d o p t i o n .
2. W e h a v e held five m e e t i n g s , a n d h a v e h a d u n d e r c o n s i d e r a t i o n
m e m o r a n d a b r i n g i n g u p t o d a t e t h e i n f o r m a t i o n r e g a r d i n g t h e b a l a n c e of i n t e r ­
n a t i o n a l p a y m e n t s set o u t i n t h e R e p o r t of t h e C o m m i t t e e of t h e Economic
A d v i s o r y C o u n c i l ( r e f e r r e d t o i n p a r a g r a p h 1 above); e x a m i n i n g t h e c a p i t a l
items in t h e balance sheet; analysing British imports from gold s t a n d a r d and
o t h e r c o u n t r i e s ; d e s c r i b i n g t h e course of e x p o r t s a n d of e m p l o y m e n t i n t h e safe­
g u a r d e d i n d u s t r i e s ; a n d c o n t a i n i n g p r o p o s a l s for r e c t i f y i n g t h e p r e s e n t adverse
t r a d e b a l a n c e of t h i s country.
3. W e a d d r e s s e d ourselves first t o t h e q u e s t i o n of t h e c a p i t a l i t e m s in t h e
b a l a n c e of i n t e r n a t i o n a l p a y m e n t s . N o r e l i a b l e i n f o r m a t i o n is a v a i l a b l e r e g a r d i n g
t h e s e items. Some, such a s those of n e w issues on f o r e i g n account, a r e r e a d i l y
a v a i l a b l e , b u t o t h e r s of e q u a l i m p o r t a n c e , e.g., p u r c h a s e s a n d sales of f o r e i g n
s e c u r i t i e s by B r i t i s h subjects a n d of B r i t i s h securities by f o r e i g n e r s a r e q u i t e
u n k n o w n . Efforts a r e m a d e by t h e U n i t e d S t a t e s D e p a r t m e n t of Commerce to
c o m p i l e s u c h figures for t h e U n i t e d S t a t e s , b u t i t is d o u b t f u l h o w f a r t h e r e s u l t s
o b t a i n e d a r e reliable. A s r e g a r d s t h i s c o u n t r y , we doubt w h e t h e r a n y figures t h a t
could be o b t a i n e d w o u l d give a reliable p i c t u r e s h o w i n g how t h e n e t balance of
e x t e r n a l i n v e s t m e n t is m a d e u p .
4. I t i s often a r g u e d t h a t t h e r e i s n o p r o b l e m of t h e b a l a n c e of t r a d e so
long a s t h e £ i s free t o move, as, if the. b a l a n c e i s adverse, s t e r l i n g w i l l
a u t o m a t i c a l l y fall t o t h e p o i n t n e c e s s a r y to m a i n t a i n e q u i l i b r i u m . T h i s r e a s o n ­
ing, t h o u g h sound, does n o t p r o v i d e a g u i d e t o p r e s e n t difficulties unless, w h i c h is
c e r t a i n l y " n o t t h e case, w e a r e p r e p a r e d t o a c c e p t a n y v a l u e of t h e £ t h a t t h e free
p l a y of economic forces m a y p r o d u c e . T h e r e a l p r o b l e m is, t h e r e f o r e , to s e c u r e
such a b a l a n c e of p a y m e n t s as i s c o n s i s t e n t w i t h a r e a s o n a b l e e x c h a n g e value of
the £ . I n a long p e r i o d , t h e existence of a f a v o u r a b l e b a l a n c e of t r a d e is one of
t h e m a i n f a c t o r s t e n d i n g t o c r e a t e confidence i n u s a b r o a d . W e conclude, there­
fore, t h a t f o r t h e p u r p o s e of o u r p r e s e n t i n q u i r y , we m a y i g n o r e c a p i t a l move­
m e n t s , t h o u g h o w i n g to t h e severe a n d r a p i d effect w h i c h they m a y h a v e on o u r
e x c h a n g e a close a n d c o n t i n u o u s w a t c h should be k e p t u p o n them.
II.-THE
BALANCE
OF T R A D E A N D THE E X T E N T
IMPROVEMENT.
OF P O S S I B L E
(a) The Estimate of the Committee on Economic Information of the
Economic Advisory Council.
5. I n t h e i r R e p o r t s u b m i t t e d i n S e p t e m b e r 1 9 3 1 , t h e C o m m i t t e e o n
E c o n o m i c I n f o r m a t i o n of t h e E c o n o m i c A d v i s o r y C o u n c i l set o u t t h e p o s i t i o n a s
r e g a r d s t h e b a l a n c e of p a y m e n t s i n r e c e n t y e a r s a s follows :—
TABLE 1 .
Estimated Balance of Income and Expenditure
in the Transactions
(other
the Lending and Repayment
of Capital) between the United Kingdom
all other Countries, 1930 and 1 9 3 1 .
than
and
(In million £'s.)
E x c e s s o f i m p o r t s o v e r e x p o r t s of
merchandise
E s t i m a t e d e x c e s s of G o v e r n m e n t
receipts from o v e r s e a s
Estimated net national shipping
income
Estimated net income from over­
seas investments
Estimated n e t receipts from short
interest and commissions
Estimated n e t receipts from other
sources
Total
. . .
..
Estimated total credit or debit
balance o n i t e m s specified a b o v e
1 Q^O
January-June,
1931.
386
183
203
386
21
10
5
15
105
44
41
85
210-230
Julv-December,
1931.
J a n u a r y - D e c e m b e r,
1931.
90-100
55-75
145-175
55
18
12
30
15
5
5
10
-
-106-420
4-1 2 0 t o -f 4 0
167-177
-
6 to -
118-138
16
-
65 t o -
285-315
85
-
71 to -
101
6. T h e C o m m i t t e e o n Economic I n f o r m a t i o n c o n s i d e r e d t h a t a f t e r m a k i n g
all a l l o w a n c e s , t h e n e t d e b i t a g a i n s t t h i s c o u n t r y w a s t h e n r u n n i n g a t a r a t e of
not less t h a n £ 2 m i l l i o n s a week.
(b) Probable Receipts in 1932 in. respect of Invisible Exports.
7. A s r e g a r d s invisible e x p o r t s , we see no r e a s o n to differ from t h e i r
e s t i m a t e s f o r 1931. T h e C o m m i t t e e e s t i m a t e d t h e excess of i m p o r t s over e x p o r t s
of m e r c h a n d i s e for 1931 a t t h e 1930 figure, i.e., £ 3 8 6 millions. A c t u a l l y t h e
excess of i m p o r t s over e x p o r t s exceeded t h e C o m m i t t e e ' s e s t i m a t e by £ 2 0 millions.
T h u s , i g n o r i n g t h e movements of gold on t h e one h a n d a n d c a p i t a l i t e m s on t h e
o t h e r , t h e f a v o u r a b l e b a l a n c e of t r a d e w h i c h i n 1929 a m o u n t e d to £ 1 0 0 m i l l i o n s
a n d i n 1930 to £ 3 0 millions, h a d become i n 1931 a n a d v e r s e balance of between
£ 9 0 a n d £ 1 2 0 millions.
8. T u r n i n g t o 1932, the most serious item is t h a t i n respect of n e t income
from o v e r s e a s i n v e s t m e n t s , w h i c h m a y he a n t i c i p a t e d t o decline still f u r t h e r . I f
t h e hope of recovery i n t h e e x p o r t t r a d e m e n t i o n e d l a t e r i n our R e p o r t is realised,
some i m p r o v e m e n t m a y be a n t i c i p a t e d i n r e s p e c t of t h e n e t n a t i o n a l s h i p p i n g
income. On balance, we conclude t h a t t h e r e i s no p r o s p e c t of t h e income derived
f r o m invisible e x p o r t s e x c e e d i n g i n 1932 t h a t e s t i m a t e d in 1 9 3 1 , viz., a b o u t
£ 3 0 0 millions.
(c) Exports of Merchandise.
9. I n c o n s i d e r i n g the p o s i t i o n a s r e g a r d s t h e e x p o r t s a n d i m p o r t s of
m e r c h a n d i s e i n 1 9 3 1 , we have t h o u g h t i t c o n v e n i e n t in t h e first p l a c e to use for
c o m p a r i s o n t h e figures for t h e twelve m o n t h s e n d e d t h e 3 0 t h S e p t e m b e r last, a s
d u r i n g t h a t p e r i o d the decision of t h e 2 0 t h S e p t e m b e r to a b a n d o n t h e gold
s t a n d a r d c a n h a v e h a d l i t t l e o r no effect on t h e t o t a l s t o be considered.
10. E x p o r t s in the twelve m o n t h s e n d e d S e p t e m b e r l a s t w e r e v a l u e d a t
£ 4 2 2 m i l l i o n s a s c o m p a r e d w i t h £ 7 2 9 m i l l i o n s in 1929. T h e difference between
these figures i s d u e p a r t l y to a r e d u c t i o n in t h e volume of e x p o r t s a n d p a r t l y
to t h e severe f a l l i n prices. I n o r d e r to keep d i s t i n c t t h e influences o p e r a t i n g on
these t w o f a c t o r s , w e consider below w h a t t h e figures would h a v e been in 1931
as c o m p a r e d w i t h 1929 if the differences between t h e price-level of the t w o p e r i o d s
h a d been e l i m i n a t e d .
TABLE
Exports
2.
Valued at the Prices of July-September
£ million.
Twelve Months
ended
September 1931.
£ million.
51
39
67
476
20
48
299
16
614
402
Calendar Year
1929.
Eood, d r i n k a n d tobacco
R a w materials and articles mainly
unmanufactured
...
A r t i c l e s wholly or m a i n l y m a n u f a c t u r e d
Other articles
Total
1931,
11. B y h o w m u c h it m a y be f o u n d possible t o e x p a n d e x p o r t s d u r i n g t h i s
year, h a v i n g r e g a r d to t h e effect of t h e E x c h a n g e i n f a c i l i t a t i n g c o m p e t i t i o n
w i t h t h e p r o d u c t s of c o u n t r i e s still o p e r a t i n g u n d e r t h e gold s t a n d a r d , m u s t be
l a r g e l y a m a t t e r of c o n j e c t u r e . W e d e a l l a t e r w i t h possible m e a n s of e x p a n d i n g
e x p o r t s . T h a t e x p a n s i o n w i l l u n d o u b t e d l y p r e s e n t g r e a t difficulties, b u t the
c a l c u l a t i o n s w h i c h follow a r e b a s e d o n t h e a s s u m p t i o n t h a t i t m a y be possible
for t h e q u a n t i t i e s of e x p o r t s i n t h e a g g r e g a t e to e x p a n d i n 1932 to t h e e x t e n t of
one-half of t h e difference between t h e e x p o r t s of t h e y e a r 1929 a n d those of the
twelve m o n t h s e n d e d S e p t e m b e r 1931.
(d) Imports (Net) of Merchandise;
12. R e t a i n e d i m p o r t s i n t h e t w e l v e m o n t h s e n d e d S e p t e m b e r l a s t were
valued a t £ 8 1 4 m i l l i o n s , as c o m p a r e d w i t h £ 1 , 1 1 1 m i l l i o n s i n 1929.
After
m a k i n g t h e s a m e a d j u s t m e n t o n a c c o u n t of c h a n g e s in t h e price-level, a s we have
m a d e in T a b l e 2 above i n r e s p e c t of e x p o r t s , w e find t h a t t h e v a l u e a n d c h a r a c t e r
of t h e i m p o r t s i n t o t h i s c o u n t r y , d e d u c t i n g r e - e x p o r t s i n b o t h p e r i o d s , a r e as
follows : —
TABLE
Net Imports
3.
Valued at the Prices of July-September
Calendar Year
1929.
£ million.
Food, d r i n k a n d tobacco
R a w materials and articles mainly
unmanufactured
...
...
A r t i c l e s wholly or m a i n l y m a n u f a c t u r e d
Other articles
...
...
...
Total
1931.
Twelve Months
ended
S e p t e m b e r 193*1.
£ million.
351
377
193
230
11
160
227
10
785
774
1 3 . I t will be seen from t h e above t a b l e t h a t , since 1 9 2 9 , t h e r e h a s been am
i n c r e a s e i n net i m p o r t s a m o u n t i n g to a b o u t 7 p e r cent, in " F o o d , d r i n k a n d
t o b a c c o . " I f alcoholic l i q u o r s a n d tobacco a r e e x c l u d e d , the i n c r e a s e i n i m p o r t s
of food-stuffs a m o u n t s t o 8-1 p e r cent. P r o v i d e d t h e r e is no f a l l i n g off of s u p p l i e s
f r o m h o m e sources, i t m a y p e r h a p s b e a s s u m e d t h a t no h a r d s h i p w o u l d follow a
r e d u c t i o n in the v o l u m e of i m p o r t s of t h i s class to t h e 1 9 2 9 figure. A t the
J u l y - S e p t e m b e r 1 9 3 1 price-level t h i s w o u l d secure a r e d u c t i o n i n p a y m e n t s on
t h i s a c c o u n t of £ 2 6 millions.
14. A t the J u l y - S e p t e m b e r 1 9 3 1 price-level, t h e n e t i m p o r t s r e t a i n e d of
a r t i c l e s wholly or m a i n l y m a n u f a c t u r e d w e r e p r a c t i c a l l y the same in 1 9 3 1 a s i n
1 9 2 9 . T h e i r d e c l a r e d v a l u e in t h e twelve m o n t h s e n d e d S e p t e m b e r 1 9 3 1 a m o u n t e d
to £ 2 4 3 millions. Of t h i s , a b o u t £ 6 0 m i l l i o n s r e p r e s e n t e d i m p o r t s of goods which
could n o t be replaced, even i n p a r t , i n t h i s c o u n t r y . T h e b a l a n c e , r e p r e s e n t i n g
n o n - e s s e n t i a l s a n d g o o d s r e p l a c e a b l e by B r i t i s h i n d u s t r y , is t h u s a l i t t l e over
£ 1 8 0 m i l l i o n s , of w h i c h a b o u t £ 2 6 m i l l i o n s w e r e subject to d u t i e s o n i m p o r t a t i o n
before the i m p o s i t i o n of t h e d u t i e s u n d e r t h e A b n o r m a l I m p o r t a t i o n s legislation.
T h e B o a r d of T r a d e e s t i m a t e t h a t i t m i g h t be possible to secure a r e d u c t i o n i n
t h i s p o r t i o n of t h e i m p o r t s of m a n u f a c t u r e d a r t i c l e s by a b o u t o n e - t h i r d , w i t h o u t
g i v i n g too m u c h i m m e d i a t e shock to t h e t r a d e of t h i s c o u n t r y . T h i s is e q u i v a l e n t
to a r e d u c t i o n of a b o u t o n e - f o u r t h of t h e a g g r e g a t e n e t i m p o r t s of t h i s class. A t
t h e J u l y - S e p t e m b e r 1 9 3 1 price-level, t h i s w o u l d secure a r e d u c t i o n i n t h e value
of i m p o r t s of such a r t i c l e s f r o m £ 2 2 7 to £ 1 7 0 millions.
A f t e r m a k i n g a d j u s t m e n t s of t h e a m o u n t s d e s c r i b e d above, we e s t i m a t e t h a t
t h e t o t a l v a l u e of n e t i m p o r t s in 1 9 3 2 a t t h e price-level of t h e q u a r t e r J u l y S e p t e m b e r 1 9 3 1 w o u l d be as follows : —
TABLE
4.
-
Estimated
net Imports
in 1 9 3 2 valued at the Prices of Jidy-Sept
E s t i m a t e for
1932.
377
351
Food, d r i n k a n d tobacco
R a w materials and articles mainly
unmanufactured
...
...
A r t i c l e s w h o l l y or m a i n l y m a n u f a c t u r e d
Other articles
....
...
...
Total
...
...
ember 1 9 3 1 .
Twelve Months
to S e p t e m b e r , 1 9 3 1 .
...
160
227
10
774
1 5 . Since 1 9 2 9 t h e n e t i m p o r t s of r a w m a t e r i a l s h a v e declined by a b o u t
1 7 p e r cent. On t h e a s s u m p t i o n m a d e in p a r a g r a p h 1 1 above, t h a t one-half of
t h e e x p o r t t r a d e lost since 1 9 2 9 m i g h t possibly be recovered i n 1 9 3 2 , i t w o u l d be
n e c e s s a r y to a n t i c i p a t e t h a t t h e i m p o r t s of r a w m a t e r i a l s i n t h i s y e a r would
b e i n c r e a s e d by a b o u t 1 0 p e r cent. T h i s w o u l d m e a n a n i n c r e a s e of about
£ 1 6 m i l l i o n s a t t h e price-level of J u l y - S e p t e m b e r 1 9 3 1 . A f u r t h e r i n c r e a s e in
t h e i m p o r t s of r a w m a t e r i a l s w o u l d be r e q u i r e d if goods h i t h e r t o h a b i t u a l l y
i m p o r t e d w e r e r e p l a c e d by B r i t i s h i n d u s t r y . I f i t w e r e possible to r e d u c e t h e
i m p o r t s ( m e a s u r e d by value) of a r t i c l e s wholly or m a i n l y m a n u f a c t u r e d by
£ 6 0 m i l l i o n s , i m p o r t s of r a w m a t e r i a l s t o t h e v a l u e of a b o u t £ 1 5 m i l l i o n s would
b e n e c e s s a r y to p r o v i d e for t h e i r r e p l a c e m e n t . O n these a s s u m p t i o n s , t h e n e t
i n c r e a s e i n i m p o r t s of r a w m a t e r i a l s w o u l d a m o u n t to £ 3 1 m i l l i o n s .
(e) Summary of Preceding Estimates.
1 6 . T h e a s s u m p t i o n s involved i n t h e e s t i m a t e s g i v e n i n t h e p r e c e d i n g
p a r a g r a p h s for t h e possible r e d u c t i o n i n t h e volume of i m p o r t s a n d e x p a n s i o n of
e x p o r t s i n 1 9 3 2 m a y be s u m m a r i s e d a s follows :—
(a) T h a t t h e q u a n t i t y of r e t a i n e d i m p o r t s of " Food, D r i n k a n d Tobacco " is
r e d u c e d to t h a t of 1 9 2 9 , a r e d u c t i o n of a b o u t 7 p e r cent.
(b) T h a t t h e q u a n t i t y of r e t a i n e d i m p o r t s of " A r t i c l e s w h o l l y or m a i n l y
m a n u f a c t u r e d " is r e d u c e d by o n e - q u a r t e r , a n d r e p l a c e d , so f a r a s
they a r e r e p l a c e d , by m a n u f a c t u r e i n t h e U n i t e d K i n g d o m .
(c) T h a t t h e q u a n t i t i e s of e x p o r t s a r e i n c r e a s e d t o t h e extent, in t h e a g g r e ­
g a t e , of one-half t h e difference b e t w e e n t h e e x p o r t s of t h e y e a r 1929
a n d t h o s e of t h e twelve m o n t h s e n d e d S e p t e m b e r 1 9 3 1 .
(d) T h a t a d d i t i o n a l r a w m a t e r i a l s sufficient to m e e t t h e r e q u i r e m e n t s a r i s i n g
from a s s u m p t i o n s (&) a n d (c) a r e i m p o r t e d .
17. On t h e f o r e g o i n g e s t i m a t e s a n d on t h e a s s u m p t i o n t h a t t h e p r i c e s w e r e
t h o s e p r e v a i l i n g d u r i n g t h e t h i r d q u a r t e r of 1931, w e o b t a i n t h e following e s t i m a t e
of i m p o r t s r e t a i n e d a n d e x p o r t s ( U n i t e d K i n g d o m p r o d u c e ) for 1932, a s c o m p a r e d
w i t h 1931 : TABLE 5.
Estimate
of Imports retained and Exports for 1932.
( V a l u e d a t t h e p r i c e s of J u l y - S e p t e m b e r 1931.)
T w e l v e M o n t h s ended
Septembt r 1931.
V a l u e d at t h e
P r i c e s of J u l y September 1931.
V a l u e d a t th"i
P r i c e s of J u l y ­
September 1931
£ million.
£ million.
£ million.
406
377
351
155
160
191
227
10
170
10
814
774
722
422
402
508
392
372
214
As actually
declared.
Imports retained—
Food, d r i n k a n d tobacco
R a w materials and articles
mainly unmanufactured
A r t i c l e s w h o l l y or m a i n l y
manufactured
Other articles
Exports (United
produce)
Excess of i m p o r t s
Kingdom
1932.
As estimated
on certain
Assumptions
( s e e p a r a . 16)..
243
10
*
(f) Effect of the Depreciated Exchange on the Cost of Imports.
18. I n t h e p r e c e d i n g a r g u m e n t , no a c c o u n t h a s been t a k e n of t h e effect o f
t h e d e p r e c i a t e d e x c h a n g e o n t h e cost of i m p o r t s , a n d t h e r e f o r e on t h e b a l a n c e of
t r a d e . T h e m a t e r i a l a v a i l a b l e is as yet insufficient to p r o v i d e a secure f o u n d a t i o n
for a definite conclusion. T h e B o a r d of T r a d e e s t i m a t e , however, t h a t if i n 1932
s t e r l i n g i m p o r t p r i c e s w e r e on t h e a v e r a g e t o r i s e 10 p e r cent, above t h o s e r u l i n g
in t h e p e r i o d J u l y - S e p t e m b e r 1931, t h e excess of i m p o r t s i n 1932 ( e s t i m a t e d in
T a b l e 5 above a t £ 2 1 4 millions), w o u l d , o t h e r t h i n g s b e i n g e q u a l , be r a i s e d to
£ 2 8 6 millions. O n t h e s a m e b a s i s , a n i n c r e a s e of 15 p e r cent, w o u l d r a i s e t h a t
figure t o £ 3 2 2 m i l l i o n s .
U p to the p r e s e n t , t h e r e c o r d s of o u r i m p o r t t r a d e h a v e shown n o u p w a r d
t e n d e n c y i n t h e a v e r a g e v a l u e s a s s i g n e d to t h e goods i m p o r t e d a n d t h e e x t e n t of
t h e effect of the c o n t i n u e d d e p r e c i a t i o n of s t e r l i n g on a v e r a g e i m p o r t p r i c e s c a n n o t
be m e a s u r e d w i t h a n y confidence. H a v i n g r e g a r d to t h e o p t i m i s t i c a s s u m p t i o n
w e h a v e used i n o u r c a l c u l a t i o n s of e x p o r t t r a d e e x p a n s i o n , w e a r e of o p i n i o n
t h a t a n y r e s t r i c t i o n of i m p o r t s t h a t m a y be caused by ' ' s t e r l i n g d e p r e c i a t i o n ''
s h o u l d be r e g a r d e d a s off-setting t h e p r o b a b l e f a i l u r e t o r e a l i s e t o t h e full the
e s t i m a t e d e x p a n s i o n of e x p o r t s .
A t p r e s e n t w h o l e s a l e s t e r l i n g p r i c e s a p p e a r to be r a t h e r less, on t h e a v e r a g e ,
t h a n 10 p e r cent, above s t e r l i n g (gold) p r i c e s i m m e d i a t e l y before t h e gold
s t a n d a r d was suspended.
A s a g a i n s t t h e s e increases, some a l l o w a n c e should,
however, be m a d e for t h e i n c r e a s e d s t e r l i n g p r i c e s of B r i t i s h e x p o r t s r e s u l t i n g
f r o m t h e d e p r e c i a t e d e x c h a n g e . F o r t h e f o r e g o i n g reasons, we t h i n k i t s a f e r to
i g n o r e t h i s c o n s i d e r a t i o n a n d to a s s u m e t h a t t h e r e will be a 10 p e r cent, increase
in t h e cost of i m p o r t s . "We t h e r e f o r e atiow for a n a d d i t i o n a l £ 7 z nrTliiohs "orTthis
account.
"
1
W
1 9 . I n t h e l i g h t of t h e whole of t h e a s s u m p t i o n s c o n t a i n e d in t h e p r e c e d i n g
p a r a g r a p h s , w e t h e r e f o r e e s t i m a t e t h e excess of i m p o r t s over e x p o r t s or
m e r c h a n d i s e in 1 9 3 2 as follows : —
TABLE 6.
Estimated
Estimated
prices
Estimated
10 per
Excess of Imports
over Exports
in 1932.
v a l u e of i m p o r t s r e t a i n e d (valued a t t h e
of J u l y - S e p t e m b e r , 1 9 3 1 )
...
...
i n c r e a s e i n p a y m e n t s o n a c c o u n t of
cent, i n c r e a s e i n cost of i m p o r t s
...
£
million.
722
72 "
E s t i m a t e d t o t a l v a l u e of i m p o r t s
E s t i m a t e d v a l u e of e x p o r t s
...
...
...
...
...
794
508
E x c e s s of i m p o r t s over e x p o r t s ...
...
...
286
2 0 . T h e f o r e g o i n g e s t i m a t e of t h e excess in 1 9 3 2 of i m p o r t s over e x p o r t s ,
viz., £ 2 8 6 m i l l i o n s , is, a s w i l l be seen from p a r a g r a p h 8 above, i n t h e n e i g h b o u r ­
hood of the,, e s t i m a t e d r e c e i p t s i n t h a t y e a r i n respect of invisible e x p o r t s .
If,
t h e r e f o r e , t h e r e d u c t i o n in i m p o r t s ( £ 5 2 millions) a n d t h e increase i n e x p o r t s
( £ 1 0 6 millions) c o n t e m p l a t e d i n t h e p r e c e d i n g p a r a g r a p h s could be achieved, t h e
a d v e r s e b a l a n c e of t r a d e w o u l d be reduced t o u n i m p o r t a n t a n d w e should come
out m o r e or -less on a n even keel f o r t h e y e a r . W e t h i n k t h a t t h i s should be our
objective a n d w e propose n o w to e x a m i n e possible m e t h o d s of s e c u r i n g t h i s end.
III.-MEANS
OF INCREASING
EXPORTS.
2 1 . I n t h e p r e c e d i n g S e c t i o n , we h a v e a s s u m e d t h a t i t m i g h t be possible to
i n c r e a s e t h e q u a n t i t i e s of e x p o r t s to t h e e x t e n t , i n t h e a g g r e g a t e , of one-half of
t h e difference b e t w e e n e x p o r t s of t h e y e a r 1 9 2 9 a n d t h o s e of t h e twelve m o n t h s
e n d e d S e p t e m b e r , 1 9 3 1 . A t t h e price-level of t h e t h i r d q u a r t e r of t h a t year,
t h i s w o u l d involve a n i n c r e a s e i n e x p o r t s of £ 1 0 6 millions. U n f o r t u n a t e l y , i t
is f a r m o r e difficult for G o v e r n m e n t s to i n c r e a s e t h e volume of e x p o r t s t h a n t o
r e s t r i c t t h e volume of i m p o r t s . T h e r e a r e , however, c e r t a i n f a c t o r s w h i c h a r e
l i k e l y to p r o m o t e some e x p a n s i o n i n e x p o r t s . Of these, by f a r t h e m o s t i m p o r t a n t
i s t h e d e p r e c i a t i o n of t h e £ w h i c h , so l o n g a s s t e r l i n g costs of p r o d u c t i o n r e m a i n
u n c h a n g e d , is e q u i v a l e n t to a c o r r e s p o n d i n g a d v a n t a g e i n f a v o u r of t h e e x p o r t
t r a d e . T h e first effect of d e p r e c i a t i o n is to reduce the gold p r i c e s a t w h i c h
e x p o r t s a r e sold. T h u s , u n t i l t h e volume of o u r e x p o r t s is i n c r e a s e d p r o p o r ­
t i o n a t e i y , t h e n e t effect is t o r e d u c e t h e i r a g g r e g a t e gold value. I t is reasonable,
t h e r e f o r e , to a n t i c i p a t e t h a t some t i m e m u s t e l a p s e before t h e b a l a n c e of p a y m e n t s
i n r e s p e c t of i m p o r t s a n d e x p o r t s is m a t e r i a l l y i m p r o v e d by t h e d e p r e c i a t i o n
of t h e £ . F u r t h e r , a f a c t o r of u n c e r t a i n t y is i n t r o d u c e d by t h e i n s t a b i l i t y of t h e
e x c h a n g e a n d t h i s h a s p r o b a b l y t e n d e d to d e l a y t h e increase in the volume of
e x p o r t s . F o r these reasons, w e conclude t h a t full a d v a n t a g e of t h e d e p r e c i a t i o n
of s t e r l i n g h a s n o t y e t been r e a p e d by B r i t i s h m a n u f a c t u r e r s a n d t h a t in t h e
course of t h e y e a r some i n c r e a s e i n e x p o r t s m a y be h o p e d for on t h i s account.
2 2 . A n o t h e r f a c t o r w o r k i n g t o w a r d s a n i n c r e a s e i n e x p o r t s m a y be f o u n d
i n t h e r e d u c t i o n of costs f o l l o w i n g a n i n c r e a s e in o u t p u t of e x i s t i n g f a c t o r i e s a s
t h e r e s u l t of t h e i m p o s i t i o n of a revenue tariff! A g a i n , i t m a y be a n t i c i p a t e d
t h a t a f u r t h e r r e d u c t i o n in costs of p r o d u c t i o n m a y r e s u l t a f t e r a t i m e from t h e
r e o r g a n i s a t i o n a n d r a t i o n a l i s a t i o n of i n d u s t r y c o n s e q u e n t u p o n the m e a s u r e s
c a l c u l a t e d t o s t i m u l a t e those processes r e f e r r e d to in a l a t e r p a r t of o u r R e p o r t .
T h i s should h e l p t h e e x p o r t t r a d e a s a n d w h e n i t occurs, b u t i t i s u n l i k e l y t h a t
t h e process w o u l d h a v e m a d e s u c h p r o g r e s s i n t h e course of 1 9 3 2 a s to h a v e m u c h
significance in connection w i t h t h a t y e a r ' s e x p o r t s .
;
2 3 . If, a s we h o p e , i t is f o u n d possible t o secure by n e g o t i a t i o n a r e d u c t i o n
i n t h e tariffs i m p o s e d by f o r e i g n ^ c p j m t r i e s a n d the^Domjiiioiis on o u r m a n u f a c ­
t u r e s , a f u r t h e r i n c r e a s e nia"y"be a n U c i p a l e a " n r ^ u c c e e d i n g y e a r s i n t h e e x p o r t of
U
s
t h e goods affected. I n t h i s connection c o n s i d e r a t i o n is b e i n g given t o the possible
efficacy of a n I m p o r t s ( F o r e i g n D i s c r i m i n a t i o n ) A c t a s a check u p o n d i s c r i m i n a ­
t i o n by a n y foreign c o u n t r i e s a g a i n s t o u r e x p o r t t r a d e .
24. T h e f o r e g o i n g f a c t o r s t a k e n t o g e t h e r m a y r e s u l t in a s u b s t a n t i a l
increase i n e x p o r t s , b u t , h a v i n g r e g a r d t o t h e p r e s e n t i n t e r n a t i o n a l outlook, w e
a r e not justified in c o n c l u d i n g t h a t t h e whole of t h e d e s i r e d increase of £ 1 0 6
millions could be achieved t h i s y e a r by these m e a n s . If, however, t h e r e w e r e any
e a r l y i m p r o v e m e n t in t h e w o r l d s i t u a t i o n , r e s u l t i n g from the c a n c e l l a t i o n of
r e p a r a t i o n s a n d w a r debts, a n i m p o r t a n t e x p a n s i o n of e x p o r t s m i g h t be expected.
A n y steps, t h e r e f o r e , t h a t the G o v e r n m e n t c a n t a k e to c o n t r i b u t e t o w a r d s the
i m p r o v e m e n t of the w o r l d s i t u a t i o n w o u l d d i r e c t l y benefit o u r e x p o r t t r a d e .
IY.—MEANS OF R E D U C I N G IMPORTS.
25. I n t h e p r e c e d i n g Section, w e h a v e discussed possible w a y s of s e c u r i n g
a n i n c r e a s e in e x p o r t s ; w e now t u r n to t h e o t h e r a s p e c t of our policy, namely,
t h e r e d u c t i o n of r e t a i n e d i m p o r t s by £ 5 2 millions.
26. W e h a v e e x a m i n e d v a r i o u s possible m e t h o d s of r e a c h i n g t h i s objective
a n d h a v e come t o t h e conclusion t h a t t h e best m e t h o d w o u l d be a c o m b i n a t i o n
of a flat r a t e tariff w i t h selective s u r t a x e s o n n o n - e s s e n t i a l a r t i c l e s .
(a) Prohibition of Imports.
27. I f w e w e r e p r e p a r e d to view the m a t t e r solely from t h e s t a n d p o i n t of
r e d u c i n g i m p o r t s , a n d to d i s r e g a r d e n t i r e l y all o t h e r c o n s i d e r a t i o n s , o u r object
m i g h t be a t t a i n e d by t h e a d o p t i o n of m e a s u r e s d e s i g n e d to secure t h e t o t a l
p r o h i b i t i o n of i m p o r t s in selected cases, as, for e x a m p l e , p r o h i b i t i o n of e n t r y , or
w h a t i n p r a c t i c e w o u l d a m o u n t t o t h e s a m e t h i n g , t h e i m p o s i t i o n of v e r y h i g h
r a t e s of d u t y .
28. I t m a y be a r g u e d t h a t t h e a d o p t i o n of such a course w o u l d be p r e f e r a b l e
to t h e i m p o s i t i o n of a flat r a t e tariff o n a w i d e r a n g e of a r t i c l e s , because i t would
n e i t h e r p r e j u d i c e m a n u f a c t u r e r s for e x p o r t , n o r r a i s e the cost of living.
A p a r t f r o m T r e a t y difficulties, p r o h i b i t i o n of i m p o r t r a i s e s , however, v e r y difficult
q u e s t i o n s a n d involves d i s t u r b a n c e of t r a d e a n d c o m p l i c a t i o n s w i t h p a r t i c u l a r
f o r e i g n c o u n t r i e s w h o s e e x p o r t s w o u l d be affected. I t w o u l d be impossible to
base a p e r m a n e n t policy on t h e g r o u n d s of f o r e s t a l l i n g , w h i c h justified e m e r g e n c y
m e a s u r e s such as t h e A b n o r m a l I m p o r t a t i o n s l e g i s l a t i o n . Such a course would,
moreover, be o p e n t o t h e following f u r t h e r g r a v e difficulty. E v e n if all l u x u r y
i m p o r t s , u s i n g t h e e x p r e s s i o n in a w i d e sense, were t o t a l l y excluded, t h e s a v i n g
t h a t w o u l d r e s u l t w o u l d n o t exceed £ 1 3 m i l l i o n s per a n n u m . * I n o r d e r to a t t a i n
t h e d e s i r e d r e d u c t i o n of i m p o r t s by £ 5 2 millions, i t w o u l d , t h e r e f o r e , be necessary
to e x c l u d e i m p o r t e d commodities of t h e n o n - l u x u r y c a t e g o r i e s to the e x t e n t of a
f u r t h e r £ 3 9 millions. T h e r e is n o r e a s o n to s u p p o s e t h a t t h e r e a r e a r t i c l e s or
classes of a r t i c l e s of a n y t h i n g like t h i s value the w h o l e of w h i c h could be
p e r m a n e n t l y excluded. F o r these reasons, we a r e satisfied t h a t t h e exclusion by
a p r o h i b i t o r y tariff of specific i m p o r t s w o u l d n o t alone secure t h e e n d w e h a v e
i n view.
(b) Flat Rate Tariff of (say) 10 per Cent.
29. W e have a c c o r d i n g l y c o n s i d e r e d w h e t h e r i t w o u l d be possible to secure
t h e b u l k of t h e effect d e s i r e d by a g e n e r a l , b u t relatively slight, r e d u c t i o n in t h e
volume of i m p o r t s over a w i d e r a n g e of commodities.
30. T h i s could be secured by a r e v e n u e tariff of 10 per cent, ad valorem
u p o n a l l i m p o r t s i n t o t h i s c o u n t r y , w h i c h a r e n o t a l r e a d y d u t i a b l e , subject to
c e r t a i n exceptions, t h e s e e x c e p t i o n s b e i n g g e n e r a l l y on t h e l i n e s of t h e
c o m m o d i t i e s e x e m p t e d from d u t y i n t h e tariffs of E u r o p e a n c o u n t r i e s , such as
H o l l a n d , w h i c h a p p r o a c h n e a r e s t to t h e F r e e T r a d e system. Possible v a r i a t i o n s
i n t h e schedule of a r t i c l e s t o be e x c l u d e d , a n d t h e i r effect on t h e b a l a n c e of
* Note.—See
Appendix I — L i s t A.
N o n - d u t i a b l e articles which can be r e g a r d e d as non-essential.
p a y m e n t s , a r e set out i n A p p e n d i x I I .
A f t e r careful c o n s i d e r a t i o n , w e
r e c o m m e n d t h a t s t a p l e foodstuffs—wheat, m e a t ( i n c l u d i n g bacon), a n i m a l s f o r
food, a n d (subject t o possible revenue considerations) t h e p r i n c i p a l r a w m a t e r i a l s ,
i n c l u d i n g cotton, wool, i r o n ore, should be e x e m p t e d from t h e p r o p o s e d
duty.
T e a is a n o t h e r i t e m w h i c h i t is proposed to exclude, a s t h i s is
m o r e effectively d e a l t w i t h o n a specific basis. W e feel t h a t f u r t h e r t i m e
w o u l d be r e q u i r e d to compile a full l i s t of a r t i c l e s to be excluded. I f o u r g e n e r a l
r e c o m m e n d a t i o n s a r e a d o p t e d , d e t a i l s c a n be r e a d i l y w o r k e d o u t by t h e B o a r d
of T r a d e i n c o n s u l t a t i o n w i t h t h e T r e a s u r y a n d o t h e r D e p a r t m e n t s concerned.
31. T h e q u e s t i o n h o w to deal w i t h t h e case of a r t i c l e s w h i c h a r e a l r e a d y
d u t i a b l e p r e s e n t s some difficulty. T o a d d t h e 10 p e r cent, to t h e e x i s t i n g d u t y
w o u l d p r o b a b l y cause some h a r d s h i p w h e r e t h a t d u t y a l r e a d y s t a n d s a t a high,
level. O n t h e o t h e r h a n d , to s u b s t i t u t e t h e 10 p e r cent, for, say, t h e 3 3 ^ p e r c e n t ,
now levied o n i m p o r t e d m o t o r c a r s w o u l d a t once i n c r e a s e t h e volume of i m p o r t s
a n d w o u l d t h u s be o u t of h a r m o n y w i t h o u r declared object. T h e r e a r e o n l y
t w o or t h r e e insignificant cases w h e r e t h e e x i s t i n g d u t i e s a r e n o t e q u i v a l e n t to
a t least 10 p e r cent. I t is t h e r e f o r e p r o p o s e d t h a t t h e e x i s t i n g d u t i e s s h o u l d
r e m a i n as t h e y a r e w i t h o u t a l t e r a t i o n .
32. W e have c o n s i d e r e d w h e t h e r i t w o u l d be advisable to give a n y d r a w b a c k s
in r e s p e c t of t h e p r o p o s e d 10 p e r cent, tariff. W e a r e advised t h a t t h e n e e d s of t h e
e n t r e p o t a n d r e - e x p o r t t r a d e c a n be a d e q u a t e l y m e t by a n e x t e n s i o n of t h e e x i s t i n g
f a c i l i t i e s for t r a n s h i p m e n t a n d w a r e h o u s i n g i n bond. A n y g e n e r a l system o f
d r a w b a c k w o u l d involve very g r e a t p r a c t i c a l a n d a d m i n i s t r a t i v e difficulty, a n d
a f t e r c a r e f u l c o n s i d e r a t i o n w e h a v e come t o t h e conclusion t h a t i t w o u l d b e
i n a d v i s a b l e t o give a n y d r a w b a c k s save i n v e r y e x c e p t i o n a l c i r c u m s t a n c e s .
3 3 . T h e figures g i v e n i n t h i s R e p o r t a r e on t h e a s s u m p t i o n of t h e g r a n t t o
t h e D o m i n i o n s of a p r e f e r e n c e or r e b a t e of o n e - t h i r d of t h e 10 p e r cent, tariff, t h i s
b e i n g i n a c c o r d a n c e w i t h t h e g e n e r a l p r a c t i c e , in recent y e a r s . W e do n o t ,
however, i n fact p r o p o s e t h a t t h i s p r e f e r e n c e should a u t o m a t i c a l l y come i n t o
o p e r a t i o n , t h o u g h w h e n t h e 10 p e r cent, tariff is m a d e public, w e s u g g e s t t h a t some
i n t i m a t i o n should be g i v e n t h a t t h e w h o l e 10 p e r cent, w o u l d f o r m t h e subject of
discussions a t t h e O t t a w a C o n f e r e n c e , a n d m i g h t be modified, or even s u s p e n d e d
a l t o g e t h e r , i f a n a d e q u a t e r e t u r n could be o b t a i n e d , a n d t h a t a p r o v i s i o n e n a b l i n g
such modification or s u s p e n s i o n to b e p u t i n t o effect by O r d e r in Council w o u l d
be i n c l u d e d in t h e l e g i s l a t i o n i m p o s i n g t h e tariff.
34. W e h a v e n o t f o u n d i t possible to d e a l w i t h t h e case of I n d i a , as we h a v e
h a d n o o p p o r t u n i t y of o b t a i n i n g t h e necessary i n f o r m a t i o n . B e f o r e t h e scheme
t a k e s i t s final f o r m , i t could be a r r a n g e d , if t h o u g h t desirable, for p r e f e r e n c e s to
be g i v e n to I n d i a n p r o d u c t s on lines s i m i l a r to those p r o p o s e d for D o m i n i o n
products.
35. I n t h e case of t h e Colonies a n d D e p e n d e n c i e s , we p r o p o s e t h a t s p e c i a l
a r r a n g e m e n t s s h o u l d be m a d e , i n c l u d i n g t o t a l e x e m p t i o n f r o m d u t y of some
i m p o r t s t h e r e f r o m in c e r t a i n cases. M a n y of t h e Colonies a r e in such
financial
difficulties t h a t t h e only a l t e r n a t i v e to t h e g r a n t of such e x e m p t i o n w o u l d be t h e
i n c r e a s e of t h e B r i t i s h G r a n t in A i d to Colonies a l r e a d y i n r e c e i p t of such
a s s i s t a n c e , o r t h e g i v i n g of g r a n t s to o t h e r s w h i c h a r e a t p r e s e n t s e l f - s u p p o r t i n g .
36. T h e figures g i v e n u s by t h e B o a r d of T r a d e i n d i c a t e t h a t , if w e e x c l u d e d
t h e p r i n c i p a l foodstuffs a n d r a w m a t e r i a l s f r o m t h e o p e r a t i o n of t h e tariff,
w e m i g h t e x p e c t a r e d u c t i o n of £ 3 3 millions, w h e r e a s if these w e r e i n c l u d e d , t h e
r e d u c t i o n w o u l d a m o u n t to £ 4 6 millions. F o r o u r p u r p o s e s , a n d a s s u m i n g t h a t
r a w m a t e r i a l s a r e d e a l t w i t h a s suggested i n p a r a g r a p h 30, w e t h i n k i t m a y be
t a k e n t h a t £ 3 4 m i l l i o n s w o u l d r e p r e s e n t t h e r e d u c t i o n of i m p o r t s to be expected.
T h i s falls s h o r t by £ 1 8 m i l l i o n s of t h e r e d u c t i o n in i m p o r t s of £ 5 2 millions a t
w h i c h w e a r e a i m i n g , a n d t h i s difference m u s t t h e r e f o r e be m a d e u p by f u r t h e r
measures.
[6461]
c
(c) Selective Duties on Non-essential Commodities.
37. W e t h i n k t h a t t h e s e f u r t h e r m e a s u r e s should t a k e t h e form of selective
d u t i e s on n o n - e s s e n t i a l a r t i c l e s , i.e., a r t i c l e s w h i c h i n d i v i d u a l s c a n do w i t h o u t or
w h i c h t h e n a t i o n c a n do w i t h o u t b e c a u s e i t c a n p r o d u c e t h e m itself.
38. T o m a k e o u t a l i s t of such a r t i c l e s a n d to embody i t i n a schedule t o a
B i l l w o u l d n o t o n l y p r o v o k e i n t e r m i n a b l e discussions i n P a r l i a m e n t , b u t would
also d e p r i v e t h e G o v e r n m e n t of a v e r y p o w e r f u l lever w h i c h could b e used to
b r i n g a b o u t t h e r e o r g a n i s a t i o n of i n d u s t r y w h e r e i t h a s h i t h e r t o p e r s i s t e n t l y h u n g
fire. M o r e o v e r , e x p e r i e n c e of t h e A b n o r m a l I m p o r t a t i o n s A c t h a s s h o w n t h a t it
is a l m o s t impossible to avoid m a k i n g some e r r o r s i n d e v i s i n g a n e w policy of t h i s
k i n d . I t is also very convenient t o h a v e m e a n s a t h a n d to correct s u c h e r r o r s as
soon a s t h e i r e x i s t e n c e is d e m o n s t r a t e d .
39. W e a r e t h e r e f o r e of o p i n i o n t h a t t h e most p r a c t i c a l p l a n w o u l d be to
t a k e p o w e r t o i m p o s e w i t h i n d e n n e d l i m i t s a s u r t a x on non-essential a r t i c l e s as
defined i n p a r a g r a p h 37. H e r e , a g a i n , t h e e x p e r i e n c e of t h e w o r k i n g of t h e
A b n o r m a l I m p o r t a t i o n s A c t h a s been useful in s h o w i n g t h e difficulties to be
s u r m o u n t e d . I f t h e r e s p o n s i b i l i t y for t h e a d m i n i s t r a t i o n of m o r e p e r m a n e n t
p r o v i s i o n s w e r e to rest solely on t h e s h o u l d e r s of a single M i n i s t e r , i n consulta­
t i o n w i t h t h e T r e a s u r y , t h e b u r d e n m i g h t p r o v e w e l l - n i g h i n s u p p o r t a b l e . We,,
a c c o r d i n g l y r e c o m m e n d t h a t t h e r e s h o u l d be set u p for t h e p u r p o s e a n i n d e p e n d e n t
A d v i s o r y C o m m i t t e e of t h r e e j u d i c i a l l y - m i n d e d p e r s o n s , a n d t h a t it should be
l a i d d o w n t h a t t h e a r t i c l e s u p o n w h i c h a s u r t a x is to be levied a n d t h e r a t e of
s u r t a x should be decided on t h e r e c o m m e n d a t i o n s of s u c h a body. W e a r e satisfied",
however, t h a t i t s h o u l d be necessary to reserve p o w e r to t h e M i n i s t e r (a) to refuse
t o a c c e p t a r e c o m m e n d a t i o n , (b) to s u s p e n d or remove a s u r t a x if he w e r e satisfied
t h a t i t w a s b e i n g i m p r o p e r l y m a d e use of to r a i s e p r i c e s to t h e c o n s u m e r , or (c) to
v a r y t h e r a t e of s u r t a x d o w n w a r d s i n o r d e r to enable tariff r e d u c t i o n s to be
negotiated w i t h other countries.
40. T h e r e a r e c e r t a i n a d v a n t a g e s a t t a c h i n g to o u r p r o p o s a l f o r selective
s u r t a x e s or d u t i e s on non-essential c o m m o d i t i e s to w h i c h w e w i s h to d r a w t h e
s p e c i a l a t t e n t i o n of t h e C a b i n e t .
4 1 . I n t h e first place, we a r e satisfied t h a t t h e p r o p o s a l to e m p o w e r the
M i n i s t e r to a t t a c h c o n d i t i o n s to h i s s a n c t i o n for a d u t y w i l l be a useful m e a n s
of e n c o u r a g i n g i n d u s t r i a l r e o r g a n i s a t i o n a n d r a t i o n a l i s a t i o n . I t is, w e believe,
d e s i r a b l e , t h a t t h e r e should be t h i s m e t h o d of a p p l y i n g p r e s s u r e upon the
b u l k of t h e s t a p l e i n d u s t r i e s of t h e c o u n t r y to r e o r g a n i s e a n d t h i s p r o p o s a l
c o n s t i t u t e s t h e t y p e of p r e s s u r e w h i c h those w h o h a v e h i t h e r t o failed to
p a r t i c i p a t e in r e o r g a n i s a t i o n m a y a p p r e c i a t e a n d to w h i c h they m a y b e expected
to respond.
42. W e a g r e e t h a t it should be m a d e clear i n a n y a n n o u n c e m e n t on the
s u b j e c t t h a t t h e i m p o s i t i o n of a selective s u r t a x to e n a b l e r e o r g a n i s a t i o n to t a k e
p l a c e does n o t i m p l y t h a t t h e i n d u s t r y concerned w i l l be e n t i t l e d to such
p r o t e c t i o n indefinitely a f t e r r e o r g a n i s a t i o n h a s been effected.
4 3 . Secondly, w e t h i n k t h a t t h e e x i s t e n c e of t h i s p o w e r to i m p o s e a s u r t a x ,
if coupled w i t h a 10 p e r cent, flat r a t e tariff, w i l l be of assistance
in f u t u r e t r a d e n e g o t i a t i o n s w i t h foreign c o u n t r i e s , in p a r t i c u l a r , in
f u r t h e r i n g t h e policy of a r e d u c t i o n of f o r e i g n tariffs t h e i m p o r t a n c e of w h i c h is
e m p h a s i s e d e a r l i e r in t h i s "Report. F r o m t h e p o i n t of view of convenience of
n e g o t i a t i o n w i t h f o r e i g n c o u n t r i e s , t h e p o i n t a t w h i c h t h e d a t u m l i n e is placed
is n o t of g r e a t i m p o r t a n c e .
I t follows, i n o u r o p i n i o n , t h a t t h e M i n i s t e r
s h o u l d h a v e p o w e r to lower a p a r t i c u l a r selective d u t y if for p u r p o s e s of
n e g o t i a t i o n w i t h f o r e i g n c o u n t r i e s t h i s is t h o u g h t to be necessary o r desirable.
A t t h e same t i m e it w i l l be a p p r e c i a t e d t h a t i t w i l l be difficult to reduce the
p r o t e c t i o n afforded t o one i n d u s t r y because a f o r e i g n c o u n t r y is r e a d y to m a k e
tariff concessions i n r e g a r d to t h e p r o d u c t s of a n o t h e r .
44. F i n a l l y , w e would e m p h a s i s e t h e value of t h e p r o p o s a l from t h e
p o i n t of view of E m p i r e t r a d e . T h e s u r t a x m a c h i n e r y will enable t h e U n i t e d
K i n g d o m to offer t o t h e D o m i n i o n s , in t h e case of i m p o r t s to w h i c h i t a p p l i e s a n d
in w h i c h t h e D o m i n i o n s a r e i n t e r e s t e d , h i g h e r r a t e s of p r e f e r e n c e t h a n u n d e r t h e
flat r a t e tariff i n r e t u r n , of course, for a d e q u a t e tariff concessions by t h e
D o m i n i o n s on e x p o r t s t o t h e m from t h e U n i t e d K i n g d o m .
(d) A Combination of a Flat Rate Tariff with Selective Duties.
45. I n t h e foregoing- p a r a g r a p h s of t h i s section of o u r R e p o r t , w e have
shown t h a t a r e d u c t i o n of r e t a i n e d i m p o r t s by £ 5 2 millions c a n n o t be secured by
t h e p r o h i b i t i o n of specific i m p o r t s , t h a t a flate r a t e tariff of 10 p e r cent., subject
to c e r t a i n e x c e p t i o n s , w o u l d d i m i n i s h our t o t a l n e t i m p o r t s o n t h e 1931 figures by
some £ 3 4 millions, a n d t h a t t h e difference, viz., £ 1 8 m i l l i o n s , between t h i s a n d
£ 5 2 m i l l i o n s could be m e t by t h e i m p o s i t i o n of selective d u t i e s on n o n - e s s e n t i a l
articles.
Y.-SUMMARY
46.
OF CONCLUSIONS
AND
RECOMMENDATIONS.
Our report to the Cabinet may be summed up as follows : ­
(a) This country had a credit balance on income account (including both
visible and invisible items) of about £100 millions in 1929 and of
about £30 millions in 1930. In 1931 there was a debit balance of
£90 to £120 millions. In the absence of remedial measures this large
debit balance will probably be still further increased in 1932.
(b) Our adverse balance is not caused by movements of capital. Owing to
the severe and rapid effect which these may have on our exchange, a
close and continuous watch should be kept upon them.
(c) In 1931 a serious feature was the decrease in the net receipts
from invisible exports. These are unlikely to improve until there is
an increase in international trade. No action by the Government
can affect it except slowly and indirectly.
(d) The most favourable assumptions which can be made for 1932 are as
follows:—
(i) That the quantity of retained imports of " Food, Drink and
Tobacco" is reduced to that of 1929, a reduction of about
7 per cent.
'
(ii) That the quantity or retained imports of "Articles wholly or
mainly manufactured" is reduced by one-quarter, and
replaced, so far as they are replaced, by manufacture in the
United Kingdom.
(iii) That the quantities of exports are increased to the extent, in the
aggregate, of one-half the difference between the exports of
the year 1929 and those of the twelve months ended
September 1931.
(iv) That additional raw materials sufficient to meet the require­
ments arising from assumptions (ii) and (iii) are imported.
[6461]
c 2
­
(e) If these assumptions were fulfilled, the balance sheet of visible items for
1932 would take the following form, as compared with that for tile
twelve months ended September 1931. (The values are expressed in
terms of the prices prevailing from July to September 1931) :—
£ million.
Twelve Months
ended
September 1931.
Increase ( 4 - )
or
Decrease ( - ) .
1932.
Retained imports
...
Exports
of
United
Kingdom produce...
774
722
-
402
508
4 - 106
Adverse visible balance
372
214
- 158
52
(f) This estimated excess of imports will be further increased by a rise in
sterling import prices, resulting from currency depreciation, which
might be put at an average of 10 per cent, in the aggregate or
£ 7 2 millions.
(g) Upon this basis the total adverse visible balance
£286 millions. The favourable balance on invisible
at about the same figure, and we should therefore
less on an even keel for the year. We recommend
aimed at.
for 1932 will be
items is calculated
come out more or
that this result be
(h) There will be great difficulty in achieving so large an increase of visible
exports as £106 millions in one year, although some advantage has
been gained by the fall in our exchange. The means we recommend
are:—
(i) Negotiations with foreign countries and the Dominions to secure
a lowering of their tariffs on British manufactures.
(ii) The reduction of our manufacturing costs by the acceleration of
reorganisation in the production and marketing of our staple
industries (see (m) below).
(i) Apart from Treaty difficulties, the reduction of our imports by
£52 millions a year, by the exclusion of certain imports by a
prohibitory tariff, is impracticable. Any attempt to do so would
result in the undue disturbance of trade and would create
embarrassing disputes with foreign countries,
(j) A reduction of £34 millions could be obtained by a revenue tariff of
10 per cent, (if accompanied by an average preference of one-third
of the duty to the Dominions and India and by free entry in certain
cases for the Colonies and Dependencies) on all imports save those set
out under paragraph 30 above. Save in exceptional circumstances no
drawbacks would be granted, and existing duties, other than those
under the Abnormal Importation Acts, would remain at present
rates.
(k) Of the commodities excluded the food-stuffs are exempted to avoid
raising the cost of living to a point which would involve a rise in
wages; the raw materials (if revenue considerations admit of
their exclusion) in order not to handicap the expansion of our
export trade. Further substantial exemptions would lessen the
check to imports and would make further duties necessary under
paragraph (I) below.
(1) A further reduction of imports of £18 millions would still be required,
and this could be secured by imposing selective surtaxes on non­
essential articles, i.e., articles which individuals can do without or
which the nation can do without because it can produce them itself.
The Minister responsible, on the advice of an independent Advisory
Committee, should have power to bring the duties into operation by
Order.
(m) The Minister should have power to refuse or to attach conditions
(e.g., reorganisation of an industry) to his approval of a duty and
afterwards to suspend or remove a duty (e.g., if it were misused) or
to lower it in return for tariff concessions from other countries. He
should also have power to grant preferential reductions to the
Dominions and India (in return for concessions to United Kingdom
trade), and to grant reductions, or even exemption, to the Colonies
and Dependencies without any such return.
(n) The above measures would reduce our imports by £52^millions a year.
If accompanied by an expansion of our export tradeby £106 millions,
our adverse balance of payments would be rectified, if the invisible
items remained as in 1931.
(o) Immediate action is imperative. Our existing balance of trade implies
a steady deficit on income account and a steady worsening of our
capital position. In such circumstances our foreign exchanges could
not long be maintained. We could, it is true, allow our volume of
payments to be automatically adjusted by permitting our exchanges
to fall indefinitely, but such a policy is unthinkable.
47. We therefore recommend the following proposals to the Cabinet as a
matter of urgent necessity :—
(1) A flat rate revenue tariff of 10 per cent " ad valorem " upon all imports
into this country which are not already dutiable, with the exclusion
of staple foodstuffs—wheat and meat (including bacon and animals
for food), tea and (subject to possible revenue considerations), the
principal raw materials.
(2) Selective surtaxes on non-essential articles, i.e., articles which
individuals can do without, or which the nation can do without
because it can produce them itself; these surtaxes to be imposed on
the advice of an independent Advisory Committee, subject to the
reservation of certain powers (cf. those set out in paragraph 46 (m) )
to the Minister in consultation with the Treasury.
48. T h e L o r d P r i v y Seal, w h o h a s c e r t a i n g e n e r a l objections to t h e above
proposals, and the Home Secretary who prefers certain alternative proposals,
h a v e u n d e r t a k e n to c i r c u l a t e t h e i r views in s e p a r a t e m e m o r a n d a to t h e C a b i n e t
d i r e c t , i n o r d e r to save t i m e .
F o r these m e m o r a n d a see C P . 31 (32) a n d
C P . 32 (32) respectively.
Supplementary Recommendation in regard to Trade with Russia.
49. W e c a n n o t close t h i s R e p o r t w i t h o u t m a k i n g a s p e c i a l reference to
R u s s i a n t r a d e . F o r m a n y y e a r s R u s s i a n e x p o r t s to t h i s c o u n t r y h a v e g r e a t l y
exceeded h e r i m p o r t s from u s , a n d the c r e d i t s o b t a i n e d by R u s s i a n sales here have
been l a r g e l y used to buy from A m e r i c a , t h u s c o n s t i t u t i n g a s t e a d y d r a i n on t h e
dollar exchange.
I n 1930 B r i t i s h e x p o r t s t o R u s s i a w e r e a p p r o x i m a t e l y
£ 9 ^ m i l l i o n s , t h e bulk of w h i c h w e r e sold on c r e d i t , w h i l e t h e i m p o r t s from R u s s i a
tovhe U n i t e d K i n g d o m w e r e £ 3 4 millions, t h e whole of w h i c h w e r e p a i d for in
cash. D u r i n g t h e same p e r i o d , the" U n i t e d S t a t e s e x p o r t e d t o R u s s i a £23^-millions,
a n d i m p o r t e d f r o m R u s s i a only £ 5 millions. W e a c c o r d i n g l y s u g g e s t t h a t t h e
subject of t r a d e w i t h R u s s i a should be c o n s i d e r e d i n t h e l i g h t of i t s b e a r i n g
u p o n the^adyerse b a l a n c e of t r a d e , a n d possibly t h e C a b i n e t m a y decide to r e f e r
the question toaH^onunittee.
S i g n e d on behalf of the C o m m i t t e e :
N. C H A M B E R L A I N ,
Chairman.
2, Whitehall Gardens,
S.W.1,
January 19. 1932.
to
A p p e n d i x I.
/Von-Dutiable A rticles which can be regarded as non-essential or which are, or
can be, -produced in the United. Kingdom in Quantities
Substantial
in
Relation to
Consumption.
T H E a p p e n d e d lists c o m p r i s e —
(A) C e r t a i n i m p o r t e d c o m m o d i t i e s not a t p r e s e n t d u t i a b l e (except in some
i n s t a n c e s u n d e r t h e A b n o r m a l I m p o r t a t i o n s A c t , which c a n be
r e g a r d e d as wholly non-essential : a n d
(B) c e r t a i n i m p o r t e d a r t i c l e s , wholly or m a i n l y m a n u f a c t u r e d , n o t a t p r e s e n t
d u t i a b l e , e x c e p t in a n u m b e r of cases u n d e r t h e A b n o r m a l I m p o r t a ­
t i o n s A c t , w h i c h a r e or c a n be p r o d u c e d i n t h e U n i t e d K i n g d o m i n
q u a n t i t i e s s u b s t a n t i a l in r e l a t i o n to c o n s u m p t i o n ,
together w i t h t h e d e c l a r e d v a l u e of t h e r e t a i n e d i m p o r t s (estimated i n some cases)
into the U n i t e d K i n g d o m in 1931.
T h e h e a d i n g s g i v e n a r e f r e q u e n t l y of a very g e n e r a l k i n d , a n d d e t a i l e d
e x a m i n a t i o n a n d p r a c t i c a l e x p e r i e n c e w o u l d n o d o u b t show t h a t in a n u m b e r of
cases (e.g., m a c h i n e r y ) , they c o m p r i s e c o m m o d i t i e s to w h i c h t h e above d e s c r i p ­
tions do n o t a p p l y . I t is impossible to e s t i m a t e a t all precisely t h e allowance
to be m a d e i n t h a t respect, b u t a d e d u c t i o n of 25 p e r cent, f r o m l i s t B w o u l d
p r o b a b l y be a s a f e one, w h i l s t t h e d e d u c t i o n f r o m L i s t A w o u l d p r o b a b l y be
t r i v i a l . T h i s w o u l d h a v e t h e effect of r e d u c i n g t h e t o t a l of the t w o lists, to w h i c h a
d u t y h i g h e r t h a n 10 p e r cent, ad valorem m i g h t be a p p l i e d , from £ 1 1 8 - 8 millions
to £ 9 0 - 8 m i l l i o n s . A n d as to t h i s i t m u s t be r e m e m b e r e d t h a t it h a s been a s s u m e d
in t h e p r e v i o u s e s t i m a t e s t h a t t h e 10 p e r cent, d u t y on a r t i c l e s wholly or m a i n l y
m a n u f a c t u r e d w o u l d r e s u l t in a r e d u c t i o n of i m p o r t s by 10 per cent, i n v a l u e ; w h e n
allowance is m a d e for t h i s , t h e v a l u e of i m p o r t s of a r t i c l e s wholly or m a i n l y
m a n u f a c t u r e d t o w h i c h a h i g h e r d u t y m i g h t be a p p l i e d , a m o u n t s a p p r o x i m a t e l y
to £ 8 0 m i l l i o n s .
I t m u s t be p o i n t e d o u t t h a t a r e d u c t i o n i n t h e i m p o r t a t i o n of some of t h e
c o m m o d i t i e s c o m p r i s e d in t h e s e l i s t s ( p a r t i c u l a r l y in L i s t B) w o u l d involve a n
increased i m p o r t a t i o n of t h e m a t e r i a l s necessary for t h e i r m a n u f a c t u r e i n t h i s
country, should t h e c o n s u m p t i o n of such c o m m o d i t i e s h e r e be m a i n t a i n e d , but
the i n c r e a s e in t h e v a l u e of t h e m a t e r i a l s i m p o r t e d would n o t be so l a r g e as to
offset t h e d e c r e a s e in t h e v a l u e of t h e m a n u f a c t u r e d a r t i c l e s i m p o r t e d .
(A.)—Non-dutiable Articles
which can be regarded
as
Non-essentials.
E s t i m a t e d V a l u e of t h e R e t a i n e d I m p o r t s i n t o t h e U n i t e d K i n g d o m in 1931.
1931.
Shell fish of all s o r t s £'000.
Fresh
...
...
...
...
...
300
G a m e (dead a n d alive)
...
...
...
...
61
P i c k l e s a n d vegetables p r e s e r v e d in v i n e g a r ...
...
6
P r e c i o u s a n d semi-precious stones u n s e t , for jewellery
D i a m o n d s , &c.
...
...
...
100*
Feathers, ornamental, undressed
...
...
...(-)
t
Flowers, fresh
...
...
...
...
...
1,065
Plants, shrubs and trees—
N o t p r o d u c i n g edible f r u i t s
...
* ...
...
327
B u l b s a n d flower r o o t s ...
...
.,.
...
1,478
* I m p o r t s b y p o s t and w i t h t r a v e l l e r s a r e n o t i n c l u d e d iu t h e
figures.
T h e T r a d e R e t u r n s of S o u t h
A f r i c a s h o w e x p o r t s of r o u g h d i a m o n d s to t h e U n i t e d K i n g d o m in 1 9 3 0 of £ 2 . 7 6 6 , 3 7 0 ( U n i o n of S o u t h
A f r i c a ) and £ 1 , 1 8 4 , 2 1 7 ( S o u t h - W e s t A f r i c a n T e r r i t o r y ) , b u t t h e s e are a l m o s t w h o l l y r e - e x p o r t e d t o t h e
Continent for cutting.
E x p o r t s from S o u t h Africa including ( S o u t h . - W e s t T e r r i t o r y ) declined consider­
a b l y d u r i n g n i n e m o u t h s e n d e d S e p t e m b e r 1 9 3 1 , b u t d e t a i l s of e x p o r t s t o U n i t e d K i n g d o m a r e n o t y e t
available.
t Negligible.
Cotton manufactures—
L a c e a n d n e t ...
...
...
...
...
E m b r o i d e r y (except linen e m b r o i d e r y ) ...
...
...
L i n e n e m b r o i d e r y ...
...
...
...
...(-)
L a c e (other t h a n of cotton, silk or artificial silk)
...
F e a t h e r s , o r n a m e n t a l , dressed, dyed, &c. .
...
...
F a n c y l e a t h e r goods ( i n c l u d i n g artificial l e a t h e r )
...
R u b b e r balls
...
...
...
...
...
Toys, wholly or m a i n l y of rubber', n.e.s.
...
...
A r t , w o r k s of (other t h a n p i c t u r e s )
...
...
...
B e a d s a n d b e a d t r i m m i n g s ...
...
...
...
Curios
...
...
...
...
...
...
F a n c y goods (other t h a n of l e a t h e r or artificial l e a t h e r ) ...
Flowers, artificial ...
...
...
...
...
M a n u f a c t u r e s of s k i n s a n d f u r s
...
...
...
J e w e l l e r y a n d g o l d s m i t h s ' a n d s i l v e r s m i t h s ' w a r e s (except
spoons a n d forks, & c , n o t of p r e c i o u s metals)
...
P e r f u m e r y , &c, o t h e r t h a n c o n t a i n i n g alcohol ...
...
P i c t u r e s a n d p r i n t s , e n g r a v i n g s , &c. ...
...
...
P i p e s for s m o k i n g tobacco ...
...
...
...
Sports goods
...
...
...
...
...
Toys a n d g a m e s (not of r u b b e r or l e a t h e r , not electrical) ...
S p o r t i n g g u n s , c a r b i n e s a n d rifles, a i r g u n s , s p o r t i n g
ammunition
...
....
...
...
...
E s t i m a t e d t o t a l retained i n 1931 ...
...
£'000.
174
578
t
7
135
850
50
150
150
100
44
2,077
336
633
140
815
520
175
178
2,265
143
12,857
(B.)—Articles Wholly or Mainly Manufactured, not at present Dutiable
(except
in some cases under the Abnormal Importations
Act) which are or can be
Produced in the United Kingdom in Quantities Substantial
in Relation to
Consumption.
E s t i m a t e d V a l u e of t h e R e t a i n e d I m p o r t s into t h e U n i t e d K i n g d o m i n 1931.
1931.
Class III.—Articles
Wholly or Mainly
Manufactured—
£'000.
M a n u f a c t u r e d fuel ...
...
...
...
...
B r i c k s of b r i c k e a r t h or clay ...
...
...
...
Tiles
...
...
...
...
...
...
Sanitary ware
...
...
...
...
...
P o r c e l a i n for i n d u s t r i a l use ...
...
...
...
E l e c t r i c a l w a r e of p o r c e l a i n , &c.
...
...
...
G e n e r a l e a r t h e n w a r e , p o t t e r y , r e f r a c t o r y goods, &c.
...
Electric l a m p bulbs...
...
...
...
...
Globes a n d s h a d e s ...
...
...
...
...
Domestic a n d f a n c y g l a s s w a r e
...
...
...
P l a t e a n d sheet glass
...
...
...
...
G l a s s bottles a n d j a r s
...
...
...
...
" O t h e r " k i n d s of glass a n d g l a s s w a r e
...
...
A b r a s i v e s a n d g r i n d i n g wheels other t h a n oil stones
...
Asbestos m a n u f a c t u r e s
...
...
...
...
Cement, p r e p a r e d chalk, p l u m b a g o crucibles a n d g y p s u m
Granite—setts and curbs and monumental
...
...
OlclLCS
xui
xuuinig
...
...
...
...
...
W h e t s t o n e s a n d g r i n d s t o n e s ...
...
...
A l u m i n i u m — p l a t e s , sheets, b a r s , &c. ...
...
...
A l u m i n i u m — h o l l o w - w a r e a n d miscellaneous m a n u f a c t u r e s
Antimony manufactures
...
...
...
...
B r a s s a n d copper alloys—
Wire and tubes...
...
...
...
...
Sheets a n d s t r i p s
R o d s ...
...
...
...
...
...
Miscellaneous manufactures
...
...
...
f
Negligible.
18
413
654
82
3
118
571
60
345
1,6S7
1,844
669
126
137
280
282
535
ALI
17
620
355
4
170
85
20
470­
C o p p e r rods, p l a t e s , sheets, &c.*
...
C o p p e r w i r e a n d t u b e s a n d miscellaneous m a n u f a c t u r e s
L e a d p i p e s , foil a n d miscellaneous m a n u f a c t u r e s
L e a v e s of m e t a l (gold, &c.) ...
N i c k e l - m i s c e l l a n e o u s m a n u f a c t u r e s ...
Nickel alloys—miscellaneous m a n u f a c t u r e s
Tin-foil a n d miscellaneous manufactures
Zinc—miscellaneous manufactures
W h i t e m e t a l alloys of all k i n d s
Cutlery and h a r d w a r e
I m p l e m e n t s a n d tools
Dental, surgical, medical and veterinary instruments and
appliances
...
Sensitised p h o t o g r a p h i c p a p e r , p l a t e s a n d films...
E l e c t r i c a l goods a n d a p p a r a t u s (excludes d u t i a b l e as f a r
a s possible)
...
...
Machinery and p a r t s thereof...
M a n u f a c t u r e s of wood a n d t i m b e r ( e x c l u d i n g p l y wood) .
C o t t o n m a n u f a c t u r e s , except lace a n d e m b r o i d e r y
Woollen a n d w o r s t e d m a n u f a c t u r e s
...
Coir m a t s a n d m a t t i n g a n d miscellaneous m a n u f a c t u r e s .
C o r d a g e , cables, r o p e s , & c , a n d m a n u f a c t u r e s of c o r d a g e .
L i n e n piece goods a n d m a n u f a c t u r e s (except lace a n d
e m b r o i d e r y ) i n c l u d i n g m a d e - u p c a n v a s goods a n d
miscellaneous linen m a n u f a c t u r e s
J u t e m a n u f a c t u r e s ...
Textile manufactures—miscellaneous
A p p a r e l , e x c e p t o r n a m e n t a l f e a t h e r s (excludes d u t i a b l e a s
f a r a s possible)
Acetone and Acetic acids
Citric Acid
Sulphuric Acid
T a r t a r i c A c i d ( i n c l u d i n g t a r t r a t e s , n.e.s.)
A m m o n i u m compounds, barium compounds and bleaching
materials
...
Coal T a r p r o d u c t s , n.e.s. (not a l r e a d y liable to d u t y )
S u l p h a t e of C o p p e r
Disinfectants,
Weed
killers,
Sheep
and
Cattle
D r e s s i n g s , &c. ...
Formaldehyde a n d glycerine
Lead compounds
Sodium compounds, except n i t r a t e
M e t h y l alcohol, n o t purified so a s t o be p o t a b l e ...
Potassium Chromate a n d bichromate, Cyanide and Iodide
C r e a m of t a r t a r , t i n salts, s u l p h a t e of z i n c a n d zinc o x i d e
C h e m i c a l m a n u f a c t u r e s a n d p r o d u c t s , n.e.s.
S u g a r of M i l k
P r o p r i e t a r y m e d i c i n e s , n.e.s.
Painters'
colours
and
materials,
except
certain
descriptions
...
...
...
Candles
S o a p , n o t c o n t a i n i n g d u t i a b l e alcohol ...
...
V a r n i s h , n o t c o n t a i n i n g d u t i a b l e alcohol
D r e s s e d u p p e r l e a t h e r (other t h a n p a t e n t , enamelled, &c.)
L e a t h e r m a n u f a c t u r e s , except f a n c y l e a t h e r goods a n d
apparel
P a p e r , p r i n t i n g , other t h a n n e w s p r i n t
...
W r i t i n g p a p e r i n l a r g e sheets
P a c k i n g and w r a p p i n g paper (excluding tissue paper)
C o a t e d a n d roofing p a p e r
* S o m e proportion of
"United K i n g d o m ,
t Negligible.
[6461]
this total
c o n s i s t s of
w i r e r o d s , of
which
1931.
£'000.
1,502
490
184
177
24
11
94
107
66
1,381
937
125680
4,506
14,130
5,138
7,800
9,177
575
719
675
1,966
197
9,500
430
100
4
229
330
28
4
93
96
110
310
43
t
267
1,208
31
490
1,720
23
647
25
5,160
165
665
307
3,275
672
t h e r e is n o m a n u f a c t u r e
D
in
the
S t a t i o n e r y , p a p e r b a g s a n d boxes a n d c a r t o n s ...
...
C a r d b o a r d a n d p a s t e b o a r d ...
...
...
...
M i s c e l l a n e o u s m a n u f a c t u r e s of p a p e r . . .
...
...
Vehicles (including ships and aircraft and excluding
m o t o r c a r s a n d m o t o r cycles a n d p a r t s )
...
...
R u b b e r m a n u f a c t u r e s , except r u b b e r balls a n d toys of
rubber
...
...
...
...
...
A r m s , a m m u n i t i o n a n d m i l i t a r y a n d n a v a l stores (except
s p o r t i n g g u n s , c a r b i n e s a n d rifles, a i r g u n s a n d
sporting ammunition)
...
...
...
...
Baskets and basketware
...
...
....
...
L a u n d r y blue
...
...
...
...
...
Brooms and brushes
...
...
...
...
Cork manufactures
...
...
...
...
Celluloid, x y l o n i t e a n d t h e like
...
...
...
D r u g g i s t s ' w a r e s , n.e.s.
...
...
...
...
R o o f i n g felt
...
...
...
...
...
F u r a n d o t h e r d r e s s e d s k i n s ...
...
...
...
G e l a t i n e , glue a n d size
...
...
...
...
H a r d h a b e r d a s h e r y (except b u t t o n s a n d studs) ...
...
H a i r , m a n u f a c t u r e s of
...
...
...
...
Spoons, forks a n d o t h e r such w a r e s o t h e r t h a n of p r e c i o u s
metal
...
...
...
...
...
L a m p s a n d l a n t e r n s (except electric) ...
...
...
L i n o l e u m . a n d cork c a r p e t ...
...
...
...
M a c h i n e r y b e l t i n g o t h e r t h a n of l e a t h e r
...
...
M a n t l e s for i n c a n d e s c e n t l i g h t i n g
...
...
...
M o u l d i n g s for p i c t u r e f r a m e s
...
...
...
Oilcloth
...
...
...
...
...
...
Polishes, p r i n t e r ' s ink and synthetic resins
...
...
S t a r c h , d e x t r i n e , f a r i n a a n d p o t a t o flour
...
...
S t a t i o n e r y , o t h e r t h a n p a p e r ...
...
...
...
M a t s , m a t t i n g a n d miscellaneous m a n u f a c t u r e s of s t r a w ,
g r a s s , &c.
...
...
...
Umbrellas and w a l k i n g sticks
...
...
...
E s t i m a t e d t o t a l r e t a i n e d i n 1931
...
1931.
£'000.
249
250
813
750
3,126
75
406
3
668
657
770
115
16
4,941
1,025
314
34
101
59
151
46
25
59
251
251
1,572
370
271
207
... £103,944,000
Appendix I I .
Summary
of Imports
to which an Additional
Duty of 10 per cent, might
T h e figures given below r e l a t e to I m p o r t s (net) i n 1931.
I . — ( a ) Food and Drink not at present
dutiable—
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
Wheat
Barley
...
Oats
Maize
W h e a t Flour
O t h e r g r a i n a n d flour
F e e d i n g Stuffs for A n i m a l s
Meat
L i v i n g A n i m a l s for F o o d . . .
Poultry and Game
Butter
Cheese
Eggs
F i s h , fresh, s a l t e d , c u r e d or c a n n e d
F r u i t a n d n u t s u s e d as f r u i t
E d i b l e Oils a n d F a t s , refined, a n d
M a r g a r i n e ...
(xvii) V e g e t a b l e s
...
....
(xviii) O t h e r food n o t n o w d u t i a b l e
(xix) T e a
£ million
30-2
4 1
1 -9
9 -5
4 0
5 1
£ million.
88-0
16 0
3-3
44-4
8-9
16-4
9-9
33-3
104 0
10-3
14-9
7-9
54-8
5-2
149-3
23-7
337 0
(&) F o o d a n d D r i n k s u b j e c t
present
(c) Tobacco, subject t o d u t y
to
duties
at
490
10-8
59-8
II.—Materials Raw or simply
prepared-
Wood a n d T i m b e r
(i)
(ii) C o t t o n
(iii)
(iv) S i l k
...
(v) O t h e r t e x t i l e m a t e r i a l s
(vi) Oilseeds a n d n u t s , f a t s , oils a n d
resinsCrude petroleum
O t h e r ...
(vii) W o o d p u l p a n d o t h e r p a p e r - m a k i n g
materials
...
...
(viii) N o n - f e r r o u s m e t a l ores a n d s c r a p ...
(ix) N o n - m e t a l l i f e r o u s m i n e r a l s
(x) H i des a n d s k i n s ...
(xi) R u b b e r
(xii) I r o n O r e a n d S c r a p
(xiii) V a r i o u s m i n o r m a t e r i a l s ...
Total R a w Materials
*
[6461]
28-9
26-0
23-7
1-2*
6-6
3 0*
21 1
9-9
7-0
3-7
3-3
2-7
2-3
8-2
147-6
Dutiable.
E
Apply.
III.—Articles wholly or mainly
manufacturedT. .tal.
(i) I r o n
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(xvii)
(xviii)
(xix)
a n d Steel a n d m a n u f a c t u r e s
thereof
Non-Ferrous Metals
and manu­
f a c t u r e s thereof
Machinery
Cotton Yarns a n d Manufactures
Woollen a n d W o r s t e d Y a r n s a n d
Manufactures
Silk Y a r n s a n d M a n u f a c t u r e s
M a n u f a c t u r e s of o t h e r t e x t i l e s
Apparel
Chemicals,
Drugs,
Dyes
and
Colours
Oils, F a t s a n d R e s i n s m a n u f a c t u r e d
L e a t h e r a n d m a n u f a c t u r e s thereof..
Paper and Cardboard
P o t t e r y , Glass, A b r a s i v e s , &c.
Cutlery, H a r d w a r e , Implements and
Instruments
E l e c t r i c a l Goods a n d A p p a r a t u s
M a n u f a c t u r e s of W o o d a n d T i m b e r
Vehicles, d u t i a b l e
not dutiable
Rubber Manufactures
O t h e r a r t i c l e s ...
£
Of w h i c h d u t i a b l e .
million.
£
million.
19-5
0-2
19-9
14-2
8-6
0-1
...
12-4
7-8
13-4
18-7
ca.
7-8
7-5
7-5
12-7
27-6
11-7
16-3
9-5
ca. 1-0
ca. 1 3 - 6
6-3
6-0
7-1
3 1
0-7
3-3
25-7
ca.
ca.
6-8
2-7
0-3
3-1
3-4
244-5
48-0*
* C o m p l e t e i n f o r m a t i o n for 1 9 8 1 is n o t yet a v a i l a b l e .
T h e figures g i v e n a r e b a s e d on c o n s i d e r a ­
t i o n of t h e t r a d e a c c o u n t s f n r 1 9 3 1 a n d t h e p a r t i c u l a r s of d u t i a b l e i m p o r t s in 1 9 3 0 .
Summary,
distinguishing
Articles subject to Duties
Forestalling
Orders.
than
under
At present
dutiable.
£ million.
O t h e r Articles.
Total.
£ million.
£ million.
59-8
4-2
48-0
337-0
143-4
196 - 5
396-8
147-6
244-5
Class I
Class I I
Class I I I
A n i m a l s n o t for F o o d a n d
Parcels Post
Total
other
...
112 0
9-2
9-2
686 1
798 1
I t i s e s t i m a t e d t h a t a b o u t £ 4 5 million of t h e £ 1 9 6 - 5 m i l l i o n s h o w n i n the
t h i r d line of figures i n t h i s s u m m a r y r e p r e s e n t s goods c h a r g e a b l e a t p r e s e n t w i t h
a d u t y of 50 p e r cent, u n d e r O r d e r s m a d e i n a c c o r d a n c e w i t h t h e A b n o r m a l
I m p o r t a t i o n s A c t . I n a d d i t i o n a b o u t £ 1 0 million of t h e £ 4 8 m i l l i o n s h o w n a s
a t p r e s e n t d u t i a b l e in C l a s s I I I r e p r e s e n t s goods also d u t i a b l e u n d e r t h e fore­
stalling Orders.
T h e b a s i s of c a l c u l a t i o n of t h e r e s t r i c t i v e effect i s t a k e n , i n a c c o r d a n c e w i t h
t h e e s t i m a t e u n d e r s t o o d to h a v e been m a d e by t h e C u s t o m s , as t h e f o l l o w i n g : —
Reduction
of Imports
resulting from a 1 0 per cent. Duty
One-third on Empire
Goods.
Class I
Class I I
Class I I I
...
...
...
...
...
...
...
...
...
...
...
...
with a Preference
P e r cent.
6
3-4
10
of
Assumption
A.
10 p e r cent, d u t y w i t h 33-^- p e r cent, p r e f e r e n c e on all goods e x c l u d i n g w h e a t ,
m e a t , t e a , cotton, i r o n o r e a n d goods a l r e a d y d u t i a b l e , e x c e p t u n d e r f o r e s t a l l i n g
Reduction
Esti mated.
£ million.
Class I
Class I I
Class I I I
O t h e r ...
...
...
...
Total
Value of G o o d s
(Jli a i g e a b l s .
£ million.
...
...
...
...
...
...
...
...
10-8
4-5
19-7
0-9
168-3
111-7
176-8
8-3
...
...
35-9
465 1
T h e r e d u c t i o n e s t i m a t e d is t h u s , r o u n d l y , £ 3 6 million.
Assumption
B.
10 p e r cent, d u t y w i t h 3 3 ^ p e r cent, p r e f e r e n c e on a l l goods except g o o d s
a l r e a d y d u t i a b l e (other t h a n those d u t i a b l e u n d e r f o r e s t a l l i n g o r d e r s ) .
f
Class I
Class I I
Class I I I
O t h e r ...
...
...
...
...
Total
Reduction
Ksrimated.
£ million.
Value of Goods
Chargeable.
£ million.
...
...
...
...
...
...
...
...
20-2
5-5
19-7
0-9
316-8
137-9
176-8
8-3
...
...
46-3
639-8
T h e r e d u c t i o n e s t i m a t e d is t h u s , r o u n d l y , £ 4 6 million.
Assumption
C.
A s at. B , b u t w i t h w h e a t a n d m e a t also e x c l u d e d .
T h e exclusion of £ 1 3 4 - 2 m i l l i o n b r i n g s t h e r e d u c t i o n d o w n , i n Class I , b y
£ 8 m i l l i o n to £ 1 2 - 2 m i l l i o n , t h e t o t a l b e i n g r e d u c e d to £ 3 8 million.
Assumption
D.
A s a t C, b u t w i t h r a w m a t e r i a l s a l s o excluded.
T h e exclusion of t h e £137-9 m i l l i o n , of Class I I , n o t n o w d u t i a b l e , t a k e s o u t
the £5-5 million shown against t h a t Class in Assumption B, a n d brings the
a g g r e g a t e r e d u c t i o n t o £ 3 3 million.
Note.—The
d i v i s i o n of t h e r e t a i n e d i m p o r t s a c c o r d i n g t o t h e i r o r i g i n ,
i.e., B r i t i s h E m p i r e or F o r e i g n , is n o t y e t available. A division in t h e p r o p o r t i o n s
shown by t h e 1930 r e c o r d s w o u l d g i v e —
.
British.
Foreign.
£ million.
£ million.
Class I
...
...
...
146-4
250-4
Class I I
...
. . . . . .
42-8
104-8
Class I I I
...
...
...
21-7
222-8
O t h e r ...
...
...
...
5-2
40
Total
...
...
...
216-1
582-0
T h e s e p r o p o r t i o n s h a v e been u s e d above as a p r o v i s i o n a l basis for e s t i m a t i n g
t h e effects of E m p i r e P r e f e r e n c e o n t h e r e s t r i c t i o n of i m p o r t s r e s u l t i n g f r o m t h e
suggested duty.
Estimated
Revenue on the above
Assumptions.
Assumptions
Class I
Class I I
Class I I I
Other
Total
T h e s e figures
T h e y do n o t t a k e
i m p o r t s o w i n g to
i m p o r t s , b u t some
A.
million.
14-9
9-9
17-2
0-7
42-7
B.
£ million.
27-6
12-4
17-2
0-7
57-9
C.
million.
£
16-5
12-7
17-2
0-7
D.
£ million.
16-5
47-1
34-4
17-2
0-7
m a y i n d i c a t e t h e g e n e r a l m a g n i t u d e of t h e possible revenue.
a c c o u n t of t h e p r o b a b l e effects of t h e r i s e i n a v e r a g e values of
t h e gold p r e m i u m . T h a t r i s e w i l l have its effect i n r e s t r i c t i n g
i n c r e a s e i n t h e i r a g g r e g a t e v a l u e m a y r e s u l t , nevertheless.