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centage of 45.5 compares with an average for the previous six years of nearly 56 per cent. and is lower than in the years of war and in those pre-war years when Germany was an active competitor ... Japan has lost rather than gained ground.. The gainers have been the United States, who have strengthened their hold in the market at the expense of Great Britain." This happened "in spite of the fact that the expected German. dumping did not come and the American manufacturers have,. as the year progressed, been to an increasing extent handicapped by exchange rates, and British manufacturers have to a proportionately increasing extent been assisted in competition. In many directions ground has been lost, and it may almost be surmised that if Germany had been able to compete, and if America had not been handicapped by exchange rates, it would have been found difficult for the United Kingdom even to keep the leading place as a supplier of goods to South Africa."

The review of South African trade by the Standard Bank of South Africa, at the end of January, 1920, states, among other things: "The rise in American exchange rate has afforded Great Britain an exceptional opportunity for recovering her position in the South African markets." (1). This is an unfortunate statement indeed. The exchange rate will mend itself again when the extreme indebtedness of the European nations becomes somewhat better; beaten rivals for the time will be out of the field only to return again, especially after they have become acquainted with the opportunities the South African markets offers. In spite of the preferential tariff, in spite of the adverse exchange rate towards the end of 1919, and in spite of the fact that freight rates were cheaper from the United Kingdom to South Africa than from the United States to South Africa, American trade has maintained its position as compared with the pre-war position. (2).

India is another country not accorded preference. Here,. too, we see an increase of Indian exports to South Africa: 1907 1908 1909 1910 1911 1912 1913 1914

1915

3.0%

3.1% 3.0% 2.3% 2.4% 2.7% 2.8% 3.2%

4.3%

1916 1917 1918 1919

3.8% 6.1% 7.1% 5%

1. Board of Trade Journal, March 11, 1920.

2. Report of H. M. Commissioner on the Trade of South Africa

in 1918: Board of Trade Journal, October 9, 1919.

(1). The total import trade of South Africa from the nonpreference countries stands as follows:

1907 1908 1909 1910 1911 1912 1913 1914

28.6% 29.7% 29.9% 30-4% 31.4% 32.2% 33-4% 30.6% 1915 1916 1917 1918 1919 1920 1921 1922

30.5% 29.8% 32.2% 30.9% 38.0% 33.6% 33.8% 33.9% (2). Here too, there is shown a steady increase from 1907 to 1914, when Germany's elimination caused a set-back. This was offset again when American competition made itself felt.

Turning now to the countries which get preferential treatment in South Africa, what does their export trade to South Africa indicate? Let us take the figures for New Zealand after the reciprocity treaty with South Africa:

1907 1908 1909 1910

1911 1912 (3)

0.3% 0.5% 0.5% 0.2% 0.1% 0.3%

For the years immediately after the reciprocity treaty there is shown no increase, but a relative decline.

Canada: (4)

1907 1908 1909 1910 1911 1912 1913 1914 1915

1.6%

1.7% 1.9% 1.8% 2.8% 2.8% 2.4% 2.5% 3.4% 1916 1917 1918 1919

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here we have a steady increase. This might be attributed to the large amount of agricultural machinery which is being

1. Cd. 7023, p. 22 and Cd. 9155. See also Board of Trade Journal, September 18, 1918, p. 361, and that for May 27, 1920, p. 709.

2. Cd. 7023, p. 24, and Half-Yearly Abstract of Union Statistics, iii, for 1921, p. 698, and Report of the Trade and Shipping of the Union of South Africa for 1912.

3. Cd. 7023.

4. Ibid., Cd. 9155, and Board of Trade Journal, May 27, 1920, page 704.

procured from Canada. Take, for instance, the case of agricultural tractors. In 1919 these were imported as follows:

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Here is another relative decline. This might be due to the fact that South Africa is becoming more and more self-supporting in articles of food which were formerly imported from Australia to a great extent. (3). But in spite of this fact, the preferential tariff ought to enable Australia easily to gain the lost ground in some other field of production. Everything seems to indicate that there is something radically wrong with the system as a whole. Trade seems on the whole to select its own way in spite of artificial obstacles.

Speaking of American competition, Mr. Wickham says in his report: (4) "The United Kingdom can, no doubt, retain her share, if not her proportion, of world trade, by strengthening her organization and improving her methods." This was in 1917. On November 29, 1920, Sir Robert Horne, then President of the Board of Trade, speaking at Manchester on the same subject, said: "The proportion of goods received by the Dominions from Great Britain is less now then before the war. The United States has got into the colonial market. Great Britain must do everything to recover in full measure

1. Report on the Trade of South Africa for 1919: Board of Trade Journal for May 27, 1920, p. 709.

2. Ibid. and Cd. 7023 and Cd. 9155.

3. Note, for example, the decline in imports of the following foodstuffs from 1913 to 1917, much of which came from Australia: Beef and Mutton (frozen) Jams 1,000 lbs. 1,000 lbs.

Year Butter

1,000 lbs.

Cheese
1,000 lbs.

Eggs
Value

1,000 lbs

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See Official Year Book of South Africa for 1910-1917, p. 603.

4. Cd. 9155.

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its trade with the great Dominions. (1). Root in his book on "The Trade Relations of the British Empire" expressed the opinion that a "South African preferential tariff so constructed as to place all nations of the British Empire on an equal footing, was likely in the first place to be detrimental to Great Britain itself." (2).

If the imperial trade organization is further strengthened, what will be the result? South Africa is developing a fairly large export trade. If this has to be tied up by manipulations for imperial interests, a severe depression might result. (3). By further strengthening her organization, in other words, by increasing the preference, England might retain her share of the trade, but South Africa might suffer. Union export trade is no longer finding an outlet only in the markets of the British Empire; more of it goes to foreign countries. This means that South Africa, by discouraging foreign trade and encouraging imperial trade, wants foreign countries to buy from her without giving them a chance to sell to her. This is mercantilism, and it has never succeeded. Note the following figures of South African exports (exclusive of specie): (Per centum):

Country

1913 1918 1919 1920 1921 1922

To United K'dom: 88.5 47.9 60.1 75.3
Rest of Empire

Total

78.9 78.3

3.1

16.9

7.8

5.1

5.7

2.6

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To foreign countries 8.4 35.2 32.1

1. New York Times, November 30, 1920. See also the "Statist" of January 1, 1921, p. 14. "An interesting statement was recently made by the President of the Board of Trade to the effect that much of Britain's pre-war trade with the Dominions had been lost to America and Japan. In India also these two countries have, since the outbreak of the war, increased their share in the total trade from 12 per cent. in 1913 1914, to 26 per cent. in 1919-1920." 2. p. 139.

3. South Africa is not a self-sufficing economic unit. She is dependent on foreign countries for many commodities. She, like all other countries, have to pay for her imports by means of her exports. "A country which depends on international trade for obtaining commodities essential for its economic well-being and not procurable at home, must look to its exports as the means whereby these essentials shall be secured; and such a country must have a watchful eye on the continuance and growth of its exports." See Professor Taussig: Free Trade, the Tariff and Reciprocity, p. 4. Consequently it is dangerous for South Africa to discriminate.

(1). Foreign countries, notably the United States, have imported a large quantity of South African produce which was formerly destined for the United Kingdom. Exports to the United States during 1918 were valued at 5,988,380 pounds sterling as compared with a value of 536,217 pounds in 1913. The principal new destination for South African wool now is the United States and Japan. (2).

The United States has a decided advantage over the United Kingdom in the manufacture of certain articles. Motor cars had to pay a duty of 15 per cent. ad valorem, while British cars paid 12 per cent. (3). Yet in twelve months the importation from the United States into South Africa increased by 235 per cent. In 1911 the value of such imports amounted to 144,005 pounds sterling. (4). In 1919 4,000 cars more were introduced than during 1918. In 1918 there was a decrease from the United States due to that country's participation in the war and its Government's instruction to factories to limit the output of pleasure cars. (5). No Britishmade car can compete with the ordinary Ford car on the rough roads of South Africa. British-made agricultural machinery and implements, likewise, are on the whole not as well suited to South African conditions as the American article. Let us take a few cases where the United States captured the South African market: Power lorries and parts:

Value of Imports for 1912 1913 1917 1918 (pds. stg.)

From United K'dom: 325,595 460,797 37,708 23,407
From United States: 144,305 389,057 537,340 310,476

The case for motor bicycles and parts is still more striking:
From United K'dom: 136,553 201,378 62,896 30,122
From United States: 4,311 6,664 73,509 60,660

This latter article was formerly supplied almost wholly by England. Now it seems that the Red Indian is getting into the market.

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The odds are against the United States in the case of mining machinery on account of the preferential treatment of

1. Half-Yearly Abstract of Union Statistics, June, 1919, and later statistics.

2. Report on the Trade of South Africa for 1918. See Board of Trade Journal, October 9, 1919.

3. Raised to 20 per cent. and 17 per cent. respectively in 1915. Cd. 7023.

4.

5. Board of Trade Journal, May 27, 1920, p. 709.

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