Agricultural Plant

Machinery.

Implements.

From Great Britain 22,833 pds. stg. 36,288 pds. stg.
From the United States 22,253

22,938

(1)

The imports of mining, electrical and sawing machinery stood as follows:

British

189,844 pounds stg.

United States of America 86,444 pounds stg. (2).

In rails the United States had a decided advantage: (3) 103,115 pounds stg.

Great Britain

United States of America 111,769 pounds stg.

The trade in windmills was wholly in American hands. In ploughs and harrows and many of the lighter tools the greater portion of the trade fell to the United States, and the main factor to which this was due was price. (4). Here things took their natural course, but this was not to the liking of Mr. Ransome cum suis. He thought it would be better to introduce an artificial element into the situation and make the people pay more for their goods. He also tells that the Americans "have succeeded in making certain machines and appliances for gold-mining that are more suitable for local requirements than anything made in England." (5). In compressors, steam and other engines, pipes and belting, Englishmen and Americans divided the market equally. Americans had captured the market in conveyors and oils. In rock-drills America was ahead of England, while Switzerland, Germany and the United States of America were cutting them out in electrical machinery. (6). The amount of foreign trade with Cape Colony for instance, steadily increased year by year from 1901 1903, while the volume of British goods proportionately declined. (7).

Now in order to bring England to the top again, to restore her to equilibrium, the British Government in South Africa had to stop "immoral concessions" (8) to the people of the

1. Stafford Ransome: The Engineer in South Africa, (1903),

4. and 5. Ransome, pp. 105 and 120 respectively.

6.

7.

Ransome, pp. 124 - 125.

Letter of Sir L. Mitchell to the "Times": "South Africa," Jan. 6, 1906, p. 50.

8. Morgan: Engineering Trades of South Africa, Introduction.

continent of Europe and the United States. A preferential duty was to be granted on British manufactures. There was to be no fair and square competition - a policy of live and let live — but the markets which England had won by an 'enormous amount of blood and treasure" were to be retained by granting preferential treatment to British goods in order "to improve the manufacturing conditions in England." And after the preference was granted, while the volume of trade declined due to the depression after the war, imperial trade with the Cape Colony had increased by about 6 per cent. (1). It was believed that "there must come a time when under a system of preference, the foreigner, if he is to earn a profit at all, will have to raise the price of his wares, resulting in an immense impetus to British trade." (2).

Thus after all Milner got the Bloemfontein Conference to consent to a preference on British goods. He knew very well that the colonists expected something from England in return, but for the sake of loyalty they had to take the first step; and loyalty there was in abundance so shortly after the roar of the cannon had ceased. Milner encouraged them after the Conference, and wrote "anxiously" to Chamberlain for some token of encouragement from the mother country. (3). He got a discouraging reply (4), for what could Chamberlain do when the Englishman felt that Chamberlain's scheme was going to effect his bread bill? In a speech at Birmingham (5) Mr. Chamberlain pleaded for reciprocity between England and South Africa, after South Africa had given England 25 per cent. preference and expected something in return, but it was of no avail.

There was some doubt after the Conference had agreed upon preference whether the prime minister, Sir Gordon Sprigg, was going to get the assent of the Cape Assembly to the Customs Union, as the Assembly vote was then dominated by J. H. Hofmeyr, who fought for the Dutch element. It must also be remembered that the Cape delegates to the Conference had pledged themselves not to support a motion for preference. They actually opposed preference at the Conference, but claimed that they were forced to accept pre

1. and 2. See Mitchell's letter.

3. See Times History of the War in South Africa, Volume vi, p. 98.

4.

Chamberlain came to South Africa at the end of 1902 and left at the end of February, 1903, so that he was still on the boat 'when he wrote.

5. "South Africa," January 6, 1906, p. 27.

ference. (1). At the Conference "Mr. Wiener made a proposal that preference to the United Kingdom should not be operative till after preference had been given by Australia and New Zealand," two purely English colonies. But Mr. Wiener did not press his proposal. (2).

The decisions of this Inter-Colonial Conference, signed on March 23, were accepted by the Convention in June. The resolution had then to come before the parliaments of the Cape and Natal, while it was already decided for the two late Republics which came under crown colony government after their defeat.

In the Assembly of the Cape Colony, on June 29, 1903, the bill was saved by the casting vote of the Speaker, and it was only J. H. Hofmeyr's decision to support the Customs Union that saved it. When it was noticed that the proposals of the Conference met with strenuous opposition, an amendment "in which the hand of Mr. Hofmeyr can be traced, was moved, adding to the acceptance of the Convention an expression of the opinion, that the Governor should approach the other parties with a view to removing the principle of preferential duties, and obtaining a modification of the provisions in the direction of an increased Protection. This was, however, lost by the casting vote, and the Convention was accepted as it stood." (3). In the Legislative Council the bill was also in peril, where a motion, reading, that the bill be read 6 months afterwards, resulted in a tie, where the bill was again saved by the casting vote of the President. (4). It is strange that it was ratified after all, because it was not the time for this work, both from the practical and from the sentimental point of view. It came too soon after the war, and the financial position of South Africa at that time hardly justified a reduction of revenue for purposes of imperial preference or loyalty.

The Convention now came in force for a period of two years from July 1st, 1903. (5). The Transvaal, as stated above, had to enter this Union. This was to the great advantage of the coastal colonies, because it opened an exceptionally good market to them, especially after there had been begun the process of reconstruction. It also meant some gain to the

1. Lemonnier: La Politique des Tarifs Preferentiels dans l'Empire Britannique, p. 224.

2. See Pulsford: Comferce and the Empire, p. 148.

3. See J. H. Hofmeyr: The Life of J. H. Hofmeyr, p. 607.
4. See Pulsford, p. 148.

5.

See Cd. 1,640 for minutes, et cetera, and Cd. 1,559 for the Draft Customs Union Convention.

Transvaal and Rhodesia, as the 3 per cent. transit dues were abolished. Moreover, the coastal colonies no longer received 25 per cent. or 15 per cent. on the duties collected on goods passing through their ports to the inland communities. Every contracting party had to collect the duties payable upon all goods imported within its borders from outside the limits of the Union, for removal from the collecting colony into any other part of the Union, except on goods removed in bond, and pay over to the Government of the colony into which the goods were removed for consumption the duties so collected, minus 5 per cent., which was to cover the cost of examination and the cost of collection. When the Orange Free State got 75 per cent. under the Union of 1889, that was considered a princely treatment by Sir John Robinson, while Mr. Worsfold regarded 5 per cent. as rather extravagant. (1).

Under the new agreement, also, some articles which were formerly admitted free of duty into Southern Rhodesia, were taxed, but the administration was authorized — and exercised the right to suspend until further notice the whole or part of the duties on corn and grain, blasting compounds, butter, all substitutes for butter, and many other articles. Moreover, the abolition of the transit dues brought an increase in the customs returns for Rhodesia in 1904. (2). Rhodesia further obtained the right to keep the "Rhodes Clause" of her constitution intact. This was Clause 47 of the Southern Rhodesia Order-in-Council of 1898, which read: "No customs duties levied on any articles produced or manufactured in any part of Her Majesty's Dominions or any British Protectorate and imported into Southern Rhodesia, shall exceed in amount the duties levied on such articles according to the tariff in force in the South African Customs Union at the commencement of this Order, or the Tariff contained in the Customs Union Convention concluded between the [Cape] Colony, the Orange River Free State and Natal, in May, 1898, whichever is higher." (3).

As to the Transvaal, there was much agitation there prior to the Customs Union of 1903 against the tariff which had been in force under the late South African Republic, and some of the duties were provisionally lowered in October, 1902, by

1. Worsfold: Reconstruction of the New Colonies under Lord Milner, Volume i, pp. 235 — 242.

2. See Report of the Acting Controller of the Customs for the Year ended March 31, 1904, pp. 1 and 2.

3. State Papers, Volume 90, p. 236. October 20th, 1898.

Date of Order-in-Council

Ordinance 22 of 1902 (1) but it was left for the Customs Conference at Bloemfontein to create a new tariff. The aim of the people was to get the cost of living at the Rand reduced as much as possible in order to enable settlers to come to the country, and in order to help the mining industry. It was stated that some of the poorer mines had either to look for cheaper labour or shut down. The Transvaal had also to look for lower railway rates, and the Cape and Natal had nothing to lose, as they would under a customs union agreement have free access of their goods to the Transvaal. Bleloch even goes so far as to say that the Transvaal had to have agricultural and mining machinery, and all the necessaries of life enter free of duty. (2). The actual tariff which came in force in 1903 under the Customs Union pleased the Transvaal to a certain extent, in that foodstuffs were lightly taxed, while luxuries paid heavily. But taken in the average, foodstuffs imported into the Transvaal paid a high duty, (3), because of the fact that the tariff had to be framed in such a way as to protect, in some measure, the farming industry of the Cape and Natal, and especially the sugar industry of Natal, sugar being an article of very inelastic consumption which always. take a high place among the imports of a country which does not produce it. Under this tariff sugar imported from abroad was taxed higher than under the original tariff of the Transvaal, while Natal sugar was admitted duty free. The comparatively high duties on foodstuffs helped to bring about an increase in local production, and might in this way have brought down prices on the Rand, as there was now also a substantial decrease in railway rates.

The general results of the Customs Union Convention might be summed up as follows:

a. A preference of 25 per cent. was granted on British goods where such goods were classified under an ad valorem rate, and the whole duty, when that did not exceed 22 per cent. ad valorem. These advantages could be extended to any British colony or possession which itself grant "equivalent reciprocal privileges to the colonies and territories belonging to the Customs Union." The preference so granted was created by raising the duties on imports from countries outside the area of preference.

1. See Johannesburg Chamber of Commerce Report for period 1 March, 1899, to 28 February, 1902, pp. 22 and 23. See also Cd. 1552. Bleloch: The New South Africa, pp. 251-253 and 305. See Worsfold, Volume ii, pp. 139 146.

2.

3.