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this 25 per cent of the customs was for cost of collection and port charges, and not in consideration of the vast expenditures incurred for harbour improvement and railway extension.
Another difficulty in the way of the Convention was whether the tariff was to be protective in its nature or not. On this point, Mr. Hofmeyr tells us, there was not much argument. (1). A resolution in favour of protection had been carried in the previous session of the Cape House. The Government was requested that, when negotiating with the neighbouring Governments for a Customs Union, it should “take such steps, as it deems expedient, to relieve the farmers from the existing depression, and secure for them such protection as may be found practicable against the severe competition, to which they are now subject by the importation seaward of foreign articles." This was more or less the policy adopted in the framing of the new tariff
According to the Times History of the War in South Africa the tariff was largely framed in the interests of the agricultural classes. (2). But though this might have been the case, there were other interests looked after as well, and perhaps better looked after. The Customs Union tariff, however, made void the Act No. 18 of 1887 which exempted machinery imported for manufacturing purposes from the liability of customs duties, but agricultural implements had likewise to pay the high duty of 10 per cent. ad valorem. The wine industry was looked after with a duty of 6s. per gallon on wine and 10s. 6d. per gallon on spirits. Moreover, staves, and other things used in connection with the wine industry, were allowed importation on paying a duty of 5 per cent. The cart and waggon-building industry was protected with a duty of 20 per cent. Many other duties were high enough to serve protective purposes. For example, the duty of 2 d. per pound on candles, and that of 16s. 8d. per 100 pounds (weight) of confectionery, were high enough to protect these industries – were high enough to encourage the manufacture of these articles in the Union. And as a matter of fact, these industries were early developed at the Cape. Moreover, a rebate of customs duties was allowed to wholesale consumers of sugars for the manufacture of jams, and so forth.
Wilmot, for instance, has but very few kind words for the tariff. (3). He says that this Union was a most lamentable
1. The Life of J. H. Hofmeyr, p. 334.
3. The History of Our Own Times in South Africa, Volume iii, pp. 3, 4 and 6. See Act No. 1 of 1889, Article 9.
beginning for a South African political Union. trated injustice and inflicted on the people subject to it a very badly considered tariff bristling with errors and anachronisms. He calls the 3d.-per-pound duty on turmeric a “specimen of haphazard absurdity." This, of course, depends upon the angle from which one looks at the tariff. There was also a differential duty on flour and wheat: wheat paid 2s. duty on every 100 pounds and flour 5s. This, he asserts, “immensely enriched wealthy milling companies. Taking the average price of flour in Cape Town to be 16s. 2d. per 100 pounds, and the average price of wheat as 10s. 2d. per 100 pounds, it will be seen, that the millers have thus a margin of 6s. on every 100 pounds,” which he considers very high in comparison with the margins of millers of Europe and the United States of America. And protected interests are not slow to make use of such an opportunity. The price usually goes up to something very near the home price plus the duty levied on the article protected. “It is an accepted fact at Ottawa," says Porritt, “by the Government and Parliament, that Canadian manufacturers and all other tariff beneficiaries, such as the coal interests of Nova Scotia, exact to the full every cent of protection that the tariff affords them. Just as soon as additional protection is granted, price lists are revised, and prices are advanced.” (1). The man who thinks that this does not take place, takes it for granted that protected interests do not try to come to some sort of an understanding between themselves. But more of this later.
There was established by this Customs Conference the principle of free trade in South African produce and manufactures only Natal sugar was not included in this category. Instead she was offered a rebate on imported sugar. The Cape thus did not want to give up her tax on Natal şugar,
but diminished it by one-half, and gave Natal substantial protection against external competition. This was one of the reasons why Natal did not join the Customs Union. (2). It was also provided by this tariff, that duties upon spirits produced in the South African Republic on importation into the Union were to be the same as those imposed by the South African Republic on spirits imported into the Republic from the Union (being the produce of either party). If, thus, spirits was imported into the Orange Free State from the South African Republic, and exported into the Colony, the Orange Free State had to
1. Porritt: Sixty Years of Protection in Canada, p. 4.
68. 2. See Cana: South Africa from the Great Trek to the Union, pp. 130, 131.
levy another duty on it equal to the difference between the 10s. 6d. per gallon imposed on it and the rate charged by the South African Republic.
This Convention was supported by the Free State and the Cape Colony, while Natal's interests were voiced by the Durban Chamber of Commerce, which was against a tariff of over 5 per
Besides the Conference at Cape Town, there was also a Customs Convention held at Bloemfontein. It met on March 20, 1889. The Transvaal was again unrepresented. President Reitz, who was elected to preside over the Conference, made the following remarks in his opening speech: “I would suggest that this Conference should at the outset entertain the question of the feasibility of the Customs Union upon the lines identical with or similar to those adopted by the Conference held at Cape Town in February, 1888, or should it unfortunately be found, that we cannot unanimously come to an agreement upon the terms of such a Union, then it seems to me, that it would be expedient to consider whatever arrangement might be entered into, to avoid the necessity of our planning customs houses on the borders of the Free State, or upon any portion of those borders." No agreement could be arrived at with Natal, and it was resolved that the agreement arrived at at the Cape Town Conference in February, 1888, was to be taken as the basis of the Customs Union between the Free State and the Cape Colony.
This Convention was signed by Reitz, at Bloemfontein, on March 28, 1889, and by Robinson, at Cape Town, on April 5, 1889. (2). It came in force on July 1, 1889. It was: agreed upon as a step towards a general South African Customs Union between all the South African territory, South of the Zambesi, on the basis of:
A uniform tariff on all imported goods consumed within such Union;
b. An equitable distribution of the duties collected on such goods amongst the parties to such a Union; and
Free trade between the colonies and states in respect of all South African products imported overland. It was also considered desirable to enter into this preliminary union, because the Free State and the Cape Colony were respectively entitled to a share in the duties of customs collected on goods
1. J. H. Hofmeyr, p. 338.
imported through either and consumed in the other Colony or State.
Provision was made that every civilised State of South Africa could enter the Union after the expiration of six months. from the receipt by the Governor of the Colony of a request for admission. In 1890, 1891 and 1892, protocols to the Convention were signed, admitting British Bechuanaland, Basutoland and Bechuanaland Protectorate respectively into the Union as from July 1st, 1890, 1891 and 1893. (1). The Customs Union was made to embrace East and West Pondoland by Proclamation No. 342 of 1894.
Something that was highly unsatisfactory about the South African tariffs, was, that from now on, they were drawn up by negotiation and not in Parliament, where they could have been subjected to the necessary criticism. There is in general a peculiar lack of interest in the tariff in South Africa. The only people who ever seem to watch the tariffs carefully, are the members of the different Chambers of Commerce as will be seen later on. Customs duties had so to say become a custom in South Africa, and the consumers, the voting public in general, seem to be very passive in their attitude towards the tariff. As late as 1909 we find Mr. Fremantle complaining that “the tariff is inflated with a number of petty imposts which yield little more than cost of collection, and which cost merchants and the people more in time and trouble than in customs dues. Hundreds [ ?] of items in the tariff might be swept away with little loss to the Treasury and great gain to the public." (2). These “neither produce revenue, nor sensibly protect industry, but choke up the stream of commerce, and so keep back the natural expansion of the country... Some of the revenue duties should be stiffened up, and also some of the protective duties." (3). This is, however, part of the management of a Customs Union.
Thus when the bill for constituting this Customs Union was brought before parliament, the members were informed, that the slightest alteration in the tariff could not be allowed, and in this way there was, of course, left no room for constructive or destructive criticism.
1. State Papers, Vol. 83, p. 357; Vol. 82, pp. 637, 640 and 642; Vol. 90, p. 1,069.
2. H. E. S. Fremantle: The New Nation, p. 167.
Before leaving this topic it will be well to note a serious difficulty in the way of this Customs Union between a British Colony and an independent State. This difficulty arose in connection with the most-favoured-nation treaties between England and Belgium (1862), and England and Germany (1865). Davidson states that they did not stand in the way of the United Kingdom granting preferences to the colonies or of the colonies granting preferences to each other, but only prevented differential treatment by the British colonies in favour of Great Britain without extending the same privileges to foreign contracting parties. (1). But this is not the whole truth, (2), and the law which established the Customs Union was approved of by the British Government, but it was not at first promulgated, because there were differences of opinion between the Foreign and Colonial Offices as to whether this step was compatible with the two most-favoured-nation treaties: mentioned above. But this difficulty was overcome by application of the so-called "limitrophe" (conterminous) doctrine, which made distinction between inland and sea boundaries countries adjoining colonies were different from countries separated from colonies by the sea. (3). This solution of the problem was entirely successful, and no nation which had most-favoured-nation treatment from Great Britain objected against this application of the doctrine in South Africa.
The Union of 1889, thus, resulted from two main causes: (a) The inland states had a right to a share of the customs duties collected at Cape and Natal ports on goods passing to these states; (b) The barriers between the states and colonies were felt to be unnatural, and there was a general desire for union — commercial as well as political. Natal refused to join the Union for the following reasons : (a) The Union tariff was too high; (b) Natal wanted to retain her inland trade with the Transvaal, which did not enter the Union because : (i) It was vexed at the attitude of the Cape; (ii) Its railway to Delagoa-Bay was not yet finished; (iii) Its tariff was, perhaps, more definitely protective than that of the Union.
1. Davidson: Commercial Federation and Colonial Trade, p. 4..