Safeguarding of Industry

If the report was satisfactory, the Board of Trade was given power, but not required, to make an order applying the act, so long as it was not at variance with any engagement with any f or eign state. The draft of the order must, however, be approved by the House of Commons before it became operative. Such an order, unless renewed, would not be valid for more than three years, and if made on the ground of depreciation of currency for more than three years after the passing of the act, after which period these provisions of the act were to lapse (i.e., in Aug. Four Classes of Goods Safeguarded.—Most of the applica tions received were adversely reported upon ; but four having been adjudged to fulfil all the conditions, formed the subjects of a draft order laid before the House of Commons in June 1922, and approved by resolution of the House at the end of July. In each instance the complaint had been made on the ground of depreci ated exchanges. The order applied to four descriptions of goods manufactured in Germany: fabric gloves and glove fabric, do mestic glassware, illuminating glassware and domestic hollow ware. The case of fabric gloves had previously been referred back to the committee that it might consider the assertion that the Lancashire cotton trade would be injured by the effect which the duty would have on the export of yarn from England, and it had reported, repeating its former recommendation. In the case of glassware, though the report of the committee had included im ports from Czechoslovakia, that country had been so successful in stabilizing its currency before the order was actually prepared, that the president of the Board of Trade, in the exercise of his discretion under the act, determined to limit the imposition of duties to imports from Germany. In Oct. 1922 a further order was made with respect to gas mantles from Germany, the com plainants having satisfied a committee that the conditions of the act were in fact satisfied.

The time required by so elaborate a procedure and the limited duration of the promised safeguarding prevented any further action being taken before the fall of the first Baldwin administra tion at the end of 1923. As to the effect of the orders it is difficult to form any confident opinion, in view of the continuance, outside the particular trades under the act, of the severe general depres sion of trade. But there is some evidence that in the case of do mestic hollow-ware some improvement was discernible, and that in the other cases the trades were enabled to keep alive, and were saved from the still greater decline they would otherwise have experienced.

A Change in Procedure.

On the formation of the second Baldwin administration a new procedure was adopted. The gen eral conditions on which safeguarding duties would be granted were announced on Feb. 3, 1925, in a White Paper (Cmd. 2327, 1925), together with the intention of the Government, when a prima facie case had been made out and reported on favourably by a special committee, and the imposition of a duty had been con curred in by the Board of Trade and the Treasury, to proceed by the ordinary methods of financial legislation, with all their cus tomary safeguards. To the conditions imposed by the earlier act were now added (I) that the applicant industry should be "of substantial importance, on account of the volume of employment or the nature of the goods," and (2) that the competing imports should be "abnormal." And it was now made necessary to prove that the competition came "largely from countries where the con ditions are so different . . . as to render it unfair." "Unfairness"

was limited to one or more of the following causes : (a) Depreciation of currency, operating so as to create an export bounty.

(b) Subsidies, bounties and other artificial advantages.

(c) Inferior conditions of employment of labour.

The special committee in each case might "call attention to any special circumstances by reason of which the industry in the United Kingdom was placed at a serious relative disadvantage." Finally, the committee was called upon, in the event of the claim to a duty being made out, to express its opinion as to the rate of duty which "would be reasonably sufficient to counteract the un fair competition." The operation of the previous act had been restricted by exist ing treaty obligations, and a commercial treaty had recently been made with Germany extending to that country most favoured nation rights. The Government therefore now determined that any safeguarding duties imposed under the new act should be gen eral in their application and not limited to imports from particular countries.

Further Applications Granted.

The following applications had been granted under the new procedure in 1928: The lace, cutlery and glove trades were deemed important by reason of the volume of employment they provided. The gas mantle industry was considered important in view of its character. During the war it had been discovered that there was vital need in every branch of gunnery of the rare metals thorium and cerium for the manufacture of searchlights, and it was held that the only chance of maintaining the production of these metals was to give those engaged in their extraction the one commercial market fur nished by the gas mantle trade.

The following were the subject of applications referred to but not recommended by the Committees : superphosphates, alumin ium-hollow-ware, brooms and brushes, worsted and woollen fab rics, enamelled hollow-ware, hosiery and light leather goods and metal fittings.

An application was made in June 1925 for duties on pig-iron, wrought iron, heavy steel products and wire, but the Government refused to submit this to a committee. It should be added that no applications under the "dumping" provisions of the Act of 1921 have been successful.

The report of the committee appointed by the Board of Trade upon : (a) The effect of Part I. of the Safeguarding of Industries Act 1921 on the development of the industries manufacturing the goods covered by the schedule to that Act.

(b) The question of the desirability or otherwise of an extension of Part I. of the Act after its expiry on Aug. 19, 1926.

(c) The question of the desirability of inclusion within the ambit of the schedule of any articles or substances not now covered.

was published on April 22, 1926 (Cmd. 2631 of 1926). The com mittee recommended the continuation, and in certain cases, the increase or extension of rates of duty, and the continuation of the safeguarding duties for ten years. These recommendations were carried into effect by the Finance Act, 1926.

See Reports of Board of Trade committees; Final Report of the committee on commercial and industrial policy after the war (Cd. 9035, 1918) ; Official Reports of parliamentary debates (Han sard's), especially those in the House of Commons (Aug. II, 1921; July 31, 1922 ; and Dec. 9, 1925), and of the committee on industry and trade factors in industrial and commercial efficiency (1927).

(C. TE.)