SAFEGUARDING OF INDUSTRY. This is a term which has come into use to designate a policy, entered upon by Great Britain after the World War, of tariff protection to particular industries under certain definitely prescribed conditions. The idea took shape at the Economic Conference of the Allies in Paris in 1916. The first of the resolutions concerning permanent meas ures, as distinct from war and reconstruction measures, was as follows The Allies decide to take the necessary steps to render them selves independent of the enemy countries in so far as regards the raw materials and manufactured articles essential to the normal development of their economic activities.
The signatories—including, of course, Great Britain—retained complete freedom as to the nature of the measures to be adopted, and expressly added that, in deciding upon them, they would "have regard to the principles which govern their economic policy." The Balfour Committee.—The further consideration of the matter was at once referred by H. H. Asquith, the prime minister, to the "committee on commercial and industrial policy after the war," presided over by Lord Balfour of Burleigh. In an interim report in March 1917 it drew a distinction between the great staple industries of the country and those producing "certain special commodities essential to national safety as being absolutely indis pensable to important British industries, which were supplied before the war entirely or mainly from present enemy sources or from sources under present enemy control." The report also set forth the position with respect to synthetic dyes, spelter, tungsten, magnetos, optical and chemical glass, hosiery needles, thorium nitrate, gauges and drugs, as pivotal or "key" industries.
The committee presented its final report on Dec. 3, 1917, def initely recommending that "some Governmental action should be taken to promote and safeguard the development in the United Kingdom of industries of a special or pivotal character"; and also expressing the opinion that "the producers of this country are entitled to require from the Government that they should be protected in their home market against dumping." Dumping was defined as "the sale of goods at prices lower than those at which the goods are currently offered in the country of manufacture." No action was taken on these recommendations until Aug. 1921, when the Coalition Government secured the passage of the Safe guarding of Industries Act, 1921. This dealt, in Part I., with the safeguarding of key industries, and in Part II. with the preven
tion of dumping, authorizing, in each case, a duty of one-third of the value.
Key industries were specified in a schedule to the Act ; the Board of Trade was authorized to issue lists in accordance there with ; and complaints as to improper inclusion in, or exclusion from, the lists were to be considered by a referee appointed by the Lord Chancellor. The duration of this part of the Act was for five years. The enactment as to dumping in Part II. was restricted to goods other than articles of food or drink; and dumping was de fined by implication as sale "at prices below the cost of produc tion," which was itself defined as "95% of the wholesale price at the works." These provisions were unlimited in point of time. But under Part II. were now included conditions beyond those contemplated in 1917. The depreciation of the exchanges of con tinental countries, especially of Germany, had been accompanied by a "lag" between the internal and external value of their cur rencies, which, so long as it continued, gave their exports an ad vantage in foreign markets, thus exposing the home manufactures of those markets to an exceptional but, it might be, ruinous competition.
Accordingly the act added to the goods with respect to which action could be taken those sold "at prices which, by reason of depreciation in the value in relation to sterling of the currency of the country in which the goods are manufactured (not being a country within His Majesty's dominions) are below the prices at which similar goods can be profitably manufactured in the United Kingdom." On complaint being made to the Board of Trade, the Board must satisfy itself that the value of the currency of the country in question had fallen by at least one-third in relation to sterling. Whether it was alleged that the imports were being "dumped" in the usual sense, or sold cheaply on account of the rate of exchange, the Board was required to satisfy itself that there was a prima facie case for maintaining that such imports were seriously affecting employment. It might then refer the com plaint to a special committee, selected from a permanent panel mainly of persons of commercial or industrial experience, which was directed to report as to whether the conditions were satisfied; into the effect which the imposition of a duty would exert on any other industry using the goods as materials ; and also as to whether the threatened industry in the United Kingdom was being carried on with reasonable economy and efficiency.