A Protectionist Setback.

Press, Volume LVII, Issue 17206, 25 July 1921, Page 6

A Protectionist Setback.

On Saturday it was reported that the House of Commons had inserted an important new clause in the Safeguarding of Industries Bill. This iB the measure | prescribing the imposition of a Customs Duty of 83 1-3 per cent, on a number of specified articles (to which the Board) of Trade may from time to time add other articles) on the.ground that the industries engaged in manufacturing 'these articles in Britain are "key" industries. The Bill also provisions ostensibly designed to prevent "dumping"; a duty of 33 1-3 percent, may be imposed in respect of any for-eign-made articles sold or offered for sale at prices beloiw the cost of production or at prices which, as a result of exchange depredation, "are belojfr the "prices at which similar goods can be "profitably manufactured in the Unit' "ed Kingdom." The Bill has been- before the .House of Commons for some timej, and although its passage has been far from smooth, and the honours of the deb&tefl have throughout been with those who are opposing the measure as a Protection Bill of a specially bad sort, the Government's majority has been steady and sufficient. Now, However, as we have stated, an amendment disagreeable to the Protectionists has been carried. It Was proposed bytheGovernment, and is to the effect <that no' order for the imposition of the antidumping duty shall be made unless Board of Trade is satisfied that the industry which it is desired to protect is being carried on reasonably efficiently and economicilly. In his surprise and cßagrin at this disturbance of. the successful progress of conscienceless Protectionism through Parliament, an ardent Protectionist member attacked this obviously reasonable -amendment as* a ."wrecking" amendment "engineered "t»y the Freetrade supporters of the "Government." The practical effect of the new-clause in mitigating the'noxious charaoter of the Bill need ribt amount to much, but the thoroughgoing Protectionists desire no mitigation whatever. It is possible, of course, that the Board of Trade may adopt such standards of efficiency and economy, in applying the clause, as will embarrass some manufacturers who were .looking forward to the 33 1-3 per cent, [duty as simply a means of increasing i their prices and profits. The need for i some such provision is obvious enough, | and we may illustrate it by citing the i case of arc-lamp carbons (one of the articles in the protected "key" list). Practically there is only one firm mating these things in Britain, and many tisera prefer the American article, spying that they cannot. get good results from'.the British-made carbons. It is obvious, and it was pointed out in the House, that the new duty would in this case buttress up a monopoly, and remove the- foreign - competition - which would force the maker to improve his methods. This consideration applies to almost every article on the ''key" list, ditd it must also apply to any article subjected to the anti-dumping duty. The fact that the Government adopted the new clause is evidence that Ministers shrink from the full application of the Piptectiorißts' idea, and that sound economic principles are very far from lying inactive. Although the Bill will no doubt become la#, it is most unlikely that it will remain. law ; For there is no answer to the argument that if there are "key" industries which "must be fortified for Stat© reasons it will .be ! better for the State to subsidise them directly or to take them over arid run. them itself, and the publio ia not likely to endure inSefinitely an anti-dumping tariff which can only substantially raise the prices of the commodities it consumes.