IMPERIAL PREFERENCE.

New Zealand Herald, Volume LXVII, Issue 20621, 21 July 1930, Page 7

IMPERIAL PREFERENCE.

MR. SNOWDEN'S POLICY.

CENSURE BY LABOUR PEER.

RUIN LOOMING OVER COLONIES.

There has been no more effective criticism of the British Labour Party's repudiation of protective duties and Imperial preference than an address delivered by Lord Olivier on the West Indian sugar crisis, at a meeting of the Royal Empire Society. A full report has been published in tho society's journal and the greater part of it has also beeg issued, under Lord Oliver's signature, in a special supplement on British Empire products, published by the Times. Lord Olivier was for 25 years on tho staff of the Colonial Office, he has been closely associated with the administration of the West Indian colonies, lie was secretary of tiie Royal Commission which investigated the sugar industry there in 1897 and recently was head of a commission appointed to report on its present situation. Ho has had a .life-long connection with the Socialist Party and was Secretary of State for India in the first Labour Government. Threat to Abolish Duties. There is at present £> duty on sugar, with a preferential rebate on Empirft sugar of £3 14s 8d a ton. The Chancellor of the Exchequer, Mr. Philip Snowden, has declared that as soon as the revenues permit the duties will be abolished. Lord Olivier declares that without the aid of bounties, subsidies, or a liighly-pro-tected market, no sugar production today in the whole world can pay its working expenses. Ho shows the wide disparity between cost of production and the price of sugar in London, and says that if tho preference is withdrawn, through tho abolition of the sugar duty, the complete ruination of the colonies of British Guiana, Barbados, St.. Kitts and Antigua must bo swift and inevitable, unless effectual measures are instituted to avert it. Sugar • production for export must cease in Jamaica, Trinidad and St. Lucia, with great permaiieiv; damage to tho wealth and economy of those islands and to tho livelihood of their labouring classes. Trinidad, like British Guiana, will have to repatriate many Indians at heavy expense to the public revenue. " The existing position is immediately and progressively ruinous," Lord Olivier continued. " The position further threatened by the extinction of preference promised by the Chancellor of the Exchequer as soon as he can spare the revenue now received from the duties on sugar cannot fail tc effect disastrous economic and social dissolution and degradation in the four specially sugar-pro-ducing communities. ~ . . By the

maintenance of the preference for this year a modified reprieve has been given. It is to be hoped that, the Colonial Office and the local governments will employ that period in preparing for the impending contingency of the abolition of preference early next year. Heavy Sacrifice for Cheapness.

" Assuming that no moral or constitutional obligation is recognised as attaching to His Majesty's Government to preserve from ruin and disorganisation colonies for whose administration the Colonial Office is directly responsible (for they are not democracies), is the policy of leaving them t.o whatever fate the sugar market conditions of the next few years may bring them economically advantageous, and if so, to whom ? The advocates of such a fatalist inactivity argue—preventive measures will cost this country several million pounds a year, by which they mean that British consumers will have to forgo an increased cheapening of sugar to an extent which, at- any rate for some years to come, would have saved that amount, cf their expenditure. Those who consider this attitude mean and inept must not shun the basal issue, which is—Do we prefer to have cheaper sugar or to preserve our oldest colonies, which regard themselves as part of our own community ? " The world production of sugar is about 27,000.000 tons. The cost of production of sugar in the West Indies, Mauritius and Fiji, the colonies involved in this policy, falls within the rate of cost of the cheapest third of this.world production. The cost of production of the other two-thirds—including, I may observe, that of British beet sugar production —is higher, ringing up to double tlio British colonial cost. Is it good world economy to scrap six or seven million pounds worth of this comparatively cheap coloninl production ? An omnipotent world administrator would surely not do so. At any rate, he would presumably scrap the less economical British beet sugar industry first.. Both industries have, of course, subsidiary and indirect values, but the West Indian sugar industry is much more important to those communities than beet-growing is to British farming, besides the latter costing £5,500,000 to the Exchequer for direct subsidy. j ' Destruction of Trade. < " Our home consumption is about 1,800,000 tons a yeir, of which we may put our colonial supply at about onethird. It is argued that we should buy this 600,000 tons from Cuba, Santo Domingo, Havti and other sources operated by American mass production, which, under present market conditions, are prepared to offer it two-fifths of a penny a pound cheaper. (They cannot and will not continue to do so, but that would be about the immediate difference.) If vfQ sacrifice an importation of 600,000 tons at £ll 6s od and regard the colonies' loss of that, income as no concern of ours, how will that affect our trade? We shall sacrifice the sale of nearly £7,000.000 worth of goods, machinery and freights to our colonies, and will incur bills of £4,500,000 to Cuba. Will Cuba take our exports in.return? Not on present appearances. She buys goods from the United States of America and corn from the Argentine, and we shall have to send goods or remit to America to pay for our sugar. Will America give us a profitable market for exports to meet those bills ? It is her settled policy not to do so, and we have already quite enough American hills to meet. 1 have no doubt that the result would be to. aggravate unemployment in this country. e should ceitainly destrov a'considerable quantum of our export trade in sugar machinery and supplies, for Cuban sugar producers will not demand them. American commercial policv sees to that. . "the destruction of wealth in these colonies cannot fail to impose direct claims upon the Imperial Government for financial assistance." Arc such claims to be refused ? There would be just. *s good ground for refusing them—-namely, that it will cost money to meet them—»r.t tor jefusing to meet the charge which would prevent their arising and avoid the destruction of colonial wealth and good will. „ ~ " White sugar is now 2|d per ib. wholesale. With the duty remitted, the Commission'*, proposal would have onabied it to bo, sold at ljjd. Is not thut cheap enough? Protection by free im* portation of colonial sugar alone, reserving for revenue a reduced duty on foreign sugar (a method we suggested as a stop gap) would leave the price ?.*■ 2d. Would even that be too dear ? "