guarding of Imperial resources from falling under the control of foreigners, and the development of so-called "keyindustries" within the Empire. In discussing the Dominions Royal Commission, Third Interim Report, (Cd. 7505), and the Dominions Royal Commission, Minutes of Evidence, (Cd. 7706 and 7707), Professor R. A. Lehfeldt, of the Witwatersrand University, says:

"The Commission treats South Africa as a business proposition to be developed to the best pecuniary advantage... But the report does not touch upon any question of nationmaking." (1)

It seems, however, safe to say, that the general train of events called into existence by the War, and bearing on South Africa, contributed powerfully to the industrial development of the country.

1. See Economic Journal, (London), March, 1915, pp. 143 and 144. The Dominions Royal Commission was to inquire into and report upon: (a) The natural resources of the 5 self-governing Dominions, and the best means of developing these resources; (b) The trade of these parts of the Empire with the United Kingdom, each other, and the rest of the world. (c) Their requirements, and those of the United Kingdom in the matter of food and raw materials, together with the available sources of supply. Cd. 8462, Pt. IV.

CHAPTER X.

SOUTH AFRICA AND IMPERIAL PREFERENCE.

The preferential treatment which British goods enjoyed under British legislation in British colonies and dependencies up to the triumph of free trade in England, was a natural outgrowth of mercantilism. While Britain was still striving for industrial and commercial supremacy she adopted this preferential tariff scheme. By the middle of the 19th century England had attained supremacy. She needed foreign markets and for the development of foreign markets for her goods she had to mete out the same treatment to all nations alike. This policy was held out to the British colonies as an example, and a very good example it was, too. We have seen, for instance, that the Cape Colony received its simplest tariff in 1855. It was a strict tariff-for-revenue-only. Gradually the Colonies developed their own tariff policies in accordance with their own ideals and circumstances. They no longer had any preferential treatment of their produce in the "home" market, and they were forbidden to grant preferential treatment to British goods. During the latter quarter of the 19th century, after Germany and America had embarked on an era of unprecedented industrial development, England could no longer hold her own. Some scheme had to be devised to keep the colonial markets safe for British goods and to check the inroads of the "foreigner." Accordingly we have a reversal to mercantilism again. Legislation favouring the mother country had to keep the thing straight. In Canada the American inroads received a serious check in 1897 and the years following, according to professor W. J. Ashley, (1), while the German and American invasions in the South African market had to be stopped by the same means in 1903. This measure, however, failed as completely in the case of South Africa as it did in the case of Canada. "In operation, the preferential system, however it might have encouraged British-Canadian commerce, did not prevent American-Canadian commerce from growing rapidly. The United States has advantages in competition for the Canadian market which the measures actually adopted. could not overcome." (2).

1. W. Ashley: The Tariff Problem, Ch. V.

2. Reciprocity and Commercial Treaties: United States Tariff Commission Report for 1919, p. 36.

Hofmeyr started the ball rolling in 1887. Ten years later Canada followed by granting preference to English goods. Six years later, South Africa, at Lord Milner's behest, followed suit. Says Ashley, Chamberlain's right-hand man: "It will be necessary to get a gradually increasing amount of the Colonial trade away from other nations, or the Colonies will drift further and further away from Great Britain and become economically independent." (1). This sounds like an echo of mercantilism in the enlightened twentieth century.

This imperial preference scheme of a necessity involves protection. The aim is to make the British Empire a selfsufficing economic unit, standing "four-square" in the face of the world. The Dominions, so it seems, think that they have nothing to lose by this discriminating tariff, while Great Britain is more careful. Her trade relations with the United States, for example, are of such a nature, that her adopting a protective tariff, in order to grant preferential treatment to the Dominions, might lead to serious consequences. At any rate, if the complicated web of imperial preferential tariffs is to be made complete, it would involve a considerable amount of care on the part of England to handle the whole affair successfully. (2).

To return to South Africa in particular: treaties of reciprocity were agreed to by South Africa with Canada on July 1, 1904; with Australia on October 1, 1906; with New Zealand on January 1, 1907. (3). Under the Act of 1906, the South Africa Preference Act, Australia granted preference to a long list of South African articles on importation into Australia. (4). In the schedule preference is granted amongst other things to agricultural and mining machinery - which were not made in South Africa. Moreover, Australia in 1906 raised the duty on harvesters from the ad valorem duty, amounting to about 5 pounds sterling each, to the specific duty of 12 pounds sterling. Under the South Africa Preference Act harvesters were admitted at a reduction on the former duty, that is about 4 pounds from South Africa, as against 12 pounds sterling from Canada and the United Kingdom. But Australia very well knew that harvesters were not manufactured in South

1. W. Ashley: The Tariff Problem, Chapter 5.

2. Cf. Final Report of the Committee on Commercial and Industrial Policy after the war (1918, Cd. 9035) paragraphs 237 to 239. 3. Under the New Zealand and South African Customs Duties Reciprocity Act of 1906, No. 63 of 1906.

4. See Cd. 8094 and also 7641, British Parliamentary Papers, 1915, Volume 26; 1914, Volume 25. For list of duties see Appendix 1.

Africa. (1). If they were there would not have been preference for South Africa. Sugar, the produce of the cane, when produced by white labour paid 4s. per hundredweight; when produced wholly or partly by black labour, it paid 5s. per hundredweight. This was really ridiculous, because all South African sugar is produced wholly or partly by black or coloured labour in Natal. As was noted above, Coolies were imported into Natal in the early sixties for the sugar industry. South Africa, on the other hand, accorded Australian products the same preference granted on goods the product or manufacture of the United Kingdom on importation into South Africa. (2).

The Dominion of New Zealand was much more explicit in its action. Under an Order-in-Council of January 7, 1907, and as later amended, (3), all goods, except spirits, the produce and manufacture of the colonies and territories which formed part of the South African Customs Union, were accorded preferential rates of duty, with effect from July 1, 1907, on importation therefrom into the Dominion of New Zealand. (4). This preferential treatment of South African products was continued by Act No. 2 of 1907, for an indefinite period.

These reciprocal treaties between the Dominions carry great responsibility with them. The Colonial Secretary stated in the House of Commons after these treaties were made, that "it has always been an accepted principle that any trade. advantages granted by one dominion or colony to another shall

1. See Senator Pulsford: The Empire Aspect of Preference,

page 13.

2.

3.

Jebb: The Colonial Conference, p. 370.

By an Order-in-Council of March 31, 1909.

4. The following are the rates on South African produce imported into New Zealand:

Feathers, ad valorem, 15 per cent.

Fruits, dried and green, free.

Fish, per pound, 1d.

Maize, per 100 pounds, 6d.

Sugar, free

Tobacco, manufactured, per pound, 2s. 6d.

Tea, per pound, 1d.

Wines, sparkling, per gallon, 5s.

Other than sparkling, 2s.

all other articles, except spirits, 3 per cent. less than the duties which would otherwise be payable in the case of ad valorem rates. In case of specific duties, it was 25 per cent. less.

be extended to the United Kingdom." Senator Pulsford thinks,. that if Australia and New Zealand had known of this underlying "principle," they would never have accepted these treaties at all. These reciprocal agreements between South Africa and Australia and between South Africa and New Zealand, are the only ones of their kind between the selfgoverning parts of the Empire. As far as South Africa and Canada are concerned, the one merely extended to the other advantages extended to the United Kingdom, i.e. South African articles are admitted into Canada under the British Preferential tariff, and vice versa.

South Africa is getting the worst of the reciprocal preference. The amount granted in preference is increasing every year. One member of Parliament said: "Under the preferential rates in 1912, for every one pound sterling rebated by Australia for the benefit of South Africa, this country rebated 18 pounds 10 shillings for the benefit of Australia." For example, when the bill to validate the reciprocal agreement between Australia and South Africa was brought into the Commonwealth Parliament, on October 2, 1906, the minister said: "South Africa takes much from us and we very little from it." In New Zealand the bill was passed in July, 1906, with great speed. "In both Australia and New Zealand it was accepted for a certainty that the balance of advantages was with them and not with South Africa." (1).

The following table clearly shows the position:

Exports from the Union of South Africa. (Value is given in pounds sterling).

1.

Senator Pulsford: Commerce and the Empire, pp. 151 and 152.

2. In 1912 an exceptional quantity of maize was imported into Australia and New Zealand, 162,635 pounds worth into the former, and 6,750 into the latter country.