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policy” as in the case of Canada, but the stimulus came from an unexpected quarter, namely the recent World War. The war not only acted as a protection to South Africa's infant industries, but it almost forced South Africa into industry. If one traces the industrial development of the country for the last quarter of a century, and also the development during the recent World War, (which will be the subject for discussion in the next chapter), this becomes clear at once.
THE EFFECTS OF THE GREAT WAR (1914 - 1918).
During the Napoleonic Wars the United States forged ahead in the manufacturing industries, while Europe was busy making war. After the war the American manufacturers felt the "dumping" policy of the European manufacturers intensely, and one finds a protective tariff adopted in 1816, which was at first opposed — especially in New England — but which gradually became a settled policy, although the protective duties were regarded as temporary. (1). During the Civil War in America, again, not only new financial methods were resorted to, but the tariff was raised, and the high duties which were thus imposed as a result of the revenue requirements of the United States during the war, were retained and even increased after the war. In this way a system of extreme protection was developed in spite of the fact that the duties were regarded as temporary at first. (2). In South Africa both these factors were in operation during the late World War. There were the high revenue requirements which constantly demanded higher and higher duties, while South Africa was not only forced into industry because she could not get all the articles which she required, as a civilized community, from war-torn Europe, but she had at the same time no competition from the same quarter, while America's energies were involved in supplying the belligerents, and later she herself became a belligerent.
Moreover, definite steps were taken to protect the industries besides the protection incidentally afforded by the abovementioned causes. Thus by the tariff of October, 1915, a rebate or refund of duty was allowed under certain prescribed regulations on:
i. Raw, semi-manufactured materials used in the manufacture of dynamite and the like explosives on its export from the Union. This was a war measure, to be sure, but it meant encouragement to the industry.
1. Taussig: Tariff History of the United States, (Putnam) Part i, Chapter 2.
2. Ibid., Part ii, Chapters 1 and 2.
ii. Boxes, wooden, imported into the Union in pieces or in shooks, put together therein, and re-exported as containers of Union produce or manufacture.
iii. Soap used for the wool-washing industry.
Besides, in 1914 a dumping duty was levied. (1). It provided that in case of goods imported into the Union of a class or kind made or produced in the Union, if the export or actual selling price to an importer in the Union be less than the "true current value” (2) of the same goods when sold for home consumption in the usual and ordinary course in the exporting country at the time of their exportation to the Union, there may, in addition to the duties otherwise prescribed, be charged on these goods on their importation into the Union, a special dumping duty equal to the difference between the selling price of the goods for export and the “true current value” thereof for home consumption. It was, however, provided that the dumping duty should not exceed 15 per cent. ad valorem.
A dumping duty is justifiable under certain circumstances, as was pointed out above. When the dumping is intended to be sporadic, then a dumping duty is highly essential — especially in the case of infant industries which cannot stand sudden shocks. However, it seems, that the dumping duty came rather early. It would have been much better policy to wait with the dumping duty, until after the war, (1914 – 1918), when “dumping” was sure to make its appearance.
There was really no need of a dumping duty at the very start of the war or even great need for it shortly before the war. Now it is not only desirable, but essential. The rivalry for foreign markets is stronger than ever. If the European countries and others want to adopt a policy of uninterrupted dumping, and want to present us with their articles in South Africa, then
1. See Act No. 26 of 1914, Section 7.
2. “The value of goods subject to ad valorem duty shall be taken to be the true current value for home consumption in the open market of similar goods in the principal markets of the country from which, and at the time at which, the goods were imported, including carriage to the port of shipment and the cost of packing and packages, but not including agents' commission when such commission does not exceed 5 per cent. provided that in no case shall the value for purposes of duty, as above defined, be less than the cost of the goods to importer at the port of shipment."
by all means let there be no dumping duty. But such is not going to be the case. (1).
The same Act which provided against dumping provided against bounty-fed goods. It was enacted that when a bounty was granted in an exporting country on any goods, which were also made and produced in the Union, an additional duty equal to the amount of the bounty was to be charged on such bounty-fed goods on their importation into the Union.
Before political union, there were many things in the way of applying a protective tariff in South Africa, but many industries developed under the tariff as it stood. Even before Union the President of the Johannesburg Chamber of Commerce was able to say: “A peculiarly satisfactory feature of the imports for 1909 is the reduction not only in the percentage but also in the actual value of the articles of food and drink, which, in 1909, amounted to 5,723,260 pounds sterling, or 21.1 per cent. of the total imports, as against 6,062,272 pounds stering or 24.8 per cent. of the total for 1908, which goes to show that South Africa as a whole is becoming more and more selfsupporting in its daily necessities, and is slowly but surely awakening from its sloth and forsaking the most wasteful extravagance of exporting money to pay for what can be equally well, if not better, produced from its own soil, given the necessary intelligence, enterprise and energy" (2); and in 1916 he said amongst other things: “The year has been particularly favourable to all the many industries that are now springing up in various parts of the country, and upon the successful development of which so much of the future depends. Many causes have contributed to assist them. The increase in the cost of goods in Europe and America; the prohibition against the export of certain classes of goods; the urgent needs of the Defence Department; the breaks that have frequently occurred in the stream of regular supplies to which we have become accustomed, are all causes that have assisted the local manufacturer very largely, and consequently, from the manufacture of 15-ton castings right down to that of Epsom salts, there has been activity of a particularly satisfactory kind... The British Empire has resources so vast that
1. Take for example the boot and shoe industry in South Africa. A Government Commission had recently been appointed to investigate irto the conditions of the industry. It pointed to the fact that of the sixty factories which worked in 1919, many were closed down, and others were working half of the time or less. The cause of the trouble was inter alia attributed to dumping.
2. Johannesburg Commercial Year Book for 1919, pp. 106 — 107.
almost everything that civilization demands can be found within its limits, and it is in the direction of making the Empire a complete self-supporting unit, standing four-square to the world, that we must concentrate all our efforts. It behoves every unit of the Empire to remember that it has its duty to do in striving after the utmost efficiency in every form of manufacture," because, “in a report issued by the Liverpool Chamber of Commerce, Mr. Lancaster writes as an addendum: 'In most comparable cases we find that machinery per 1,000 workers is about three times as powerful in the United States of America as it is here [in England] and that the output per worker is about three times as great... The value of the produce per worker per week totals 47 pounds 10 shillings in Great Britain and 120 pounds 3s. 6d. in the United States of America?” (1).
This ideal of a self-sufficing Empire, which was especially strong during the War, was another potent factor in the marvellous industrial development of the Union in the four years of the War. Thus in a report of a Special Committee on Trading after the War, which was adopted at a special meeting of the Johannesburg Chamber of Commerce on Monday, April 3, 1916, it was recommended that:
i. The co-operation between the Imperial Government and the Dominions should be strengthened so as to make the Empire self-sufficing.
ii. Raw materials within the Empire should be controlled by legislative enactments so as to prevent them from being controlled by foreigners.
iii. The Imperial and Dominion Governments should encourage for a period of years the continuance by subsidy or otherwise, of new and "key" industries established within the Empire prior to or since the commencement of the War, or which may be established hereafter.
iv. That the assistance of the Imperial and Dominion Governments in the organization of industries essential to the more complete development of the Empire's resources, with a view to ensuring that each industry shall be enabled to obtain all its requirements from sources within the Empire itself.
v. That steps be taken to prevent dumping and undervaluation of all foreign goods imported into the British markets after the War. Certificates of origin should be re
1. Johannesburg Commercial• Year-Book, pp. 82 — 85.