TARIFF COMMISSION.

Appendix to the Journals of the House of Representatives, 1934 Session I, H-28

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1934. NEW ZEALAND.

TARIFF COMMISSION.

Presented to both Houses of the General Assembly by Command of His Excellency.

APPOINTMENT OF CUSTOMS TARIFF COMMISSION, 1933.

Bledisloe, Governor-General. To all to whom these presents shall come, and to George Craig, Esquire, C.M.G., LL.D., Comptroller of Customs ; James Burman Gow, Esquire, of Whakatane, Settler ; Bernard Edward Murphy, Esquire, M.A., LL.B., 8.C0m., Professor of Economics, Victoria University College, Wellington ; and George Augustus Pascoe, Esquire, of Christchurch, Company Director: Greeting ! In pursuance and exercise of the powers and authorities vested in me by the Commissions of Inquiry Act, 1908, and of all other powers and authorities enabling me in this behalf, I, Charles, Baron Bledisloe, Governor-General of the Dominion of New Zealand, acting by and with the advice and consent of the Executive Council of the said Dominion, do hereby appoint you, the said George Craig, James Burman Gow, Bernard Edward Murphy, and George Augustus Pascoe, to be a Commission to inquire into the Customs Tariff of New Zealand, and to recommend for consideration by the Government any alterations therein, having regard to existing trade agreements to which New Zealand is a party and particularly to the agreement concluded at Ottawa in 1932 between His Majesty's Governments in the United Kingdom and in New Zealand ; to the financial, economic, and industrial conditions in the Dominion ; to the reasonable requirements of local industries which are being conducted in an efficient manner and are economically justifiable ; and to all other relevant considerations : And with the like advice and consent I do further appoint you, the said George Craig, to be the Chairman of the said Commission. And you are hereby authorized to conduct any inquiries under these presents at such times and places as you deem expedient, with power to adjourn from time to time, and place to place as you think fit, and to call before you and examine on oath or otherwise such persons as you think capable of affording you information as to the matters aforesaid, and to call for and examine all such documents as you deem likely to afford you information on any such matters ;

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And using all due diligence, you are required to report to me, under your hands and seals, not later than the thirtieth day of September, one thousand nine hundred and thirty-three, your opinion on the aforesaid matter : And you are hereby strictly charged and directed that you shall not at any time publish or otherwise disclose, save to me in pursuance of these presents or by my direction, the contents or purport of any report so made or to be made by you : And it is hereby declared that these presents shall continue in force although the inquiry is not regularly continued from time to time or from place to place : And, lastly, it is hereby further declared that these presents are issued under and subject to the provisions of the Commissions of Inquiry Act, 1908. Given under the hand of His Excellency the Governor-General of the Dominion of New Zealand, and issued under the Seal of that Dominion, this 9th day of May, 1933. J. G. Coates, Minister of Customs. Approved in Council. F. D. Thomson, Clerk of the Executive Council.

EXTENDING THE PERIOD WITHIN WHICH THE CUSTOMS TARIFF COMMISSION SHALL REPORT.

Bledisloe, Governor-General. To all to whom these presents shall come, and to George Craig, Esquire, C.M.G., LL.D., Comptroller of Customs ; James Burman Gow, Esquire, of Whakatane, Settler ; Bernard Edward Murphy, Esquire, M.A., LL.B., 8.C0m., Professor of Economics, Victoria University College, Wellington; and George Augustus Pascoe, Esquire, of Christchurch, Company Director : Greeting ! Whereas by a Warrant dated the ninth day of May, one thousand nine hundred and thirty-three, and issued under my hand and the Seal of the Dominion of New Zealand, you, the said George Craig, James Burman Gow, Bernard Edward Murphy, and George Augustus Pascoe, were appointed to be a Commission to inquire into and report upon the revision of the Customs Tariff of New Zealand : And whereas by the said Warrant you were required to report to me under your hands and seals not later than the thirtieth day of September, one thousand nine hundred and thirty-three, your opinion on the aforesaid matters : And whereas it is expedient that the period within which you are required to report to me should be extended : Now, therefore, in pursuance and exercise of the powers and authorities vested in me by the Commissions of Inquiry Act, 1908, and of - all other powers and authorities enabling me in this behalf, I, Charles, Baron Bledisloe, Governor-General of the Dominion of New Zealand, acting by and with the advice and consent of the Executive Council of the said Dominion, do hereby extend the period within which you are required to report to me, as by the said Commission provided, to the thirty-first day of January, one thousand nine hundred and thirty-four : And in further pursuance of the said powers and authorities and with the like advice and consent I do hereby confirm the said Commission, except as altered by these presents. Given under the hand of His Excellency the Governor-General of the Dominion of New Zealand, and issued under the Seal of that Dominion, this Bth day of September, 1933. J. G. Coates, Minister of Customs. Approved in Council. F. D. Thomson, Clerk of the Executive Council.

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EXTENDING THE PERIOD WITHIN WHICH THE CUSTOMS TARIFF COMMISSION SHALL REPORT. Bledisloe, Governor-General. To all to whom these presents shall come, and to George Craig, Esquire, C.M.G., LL.D., of Wellington, Comptroller of Customs ; James Burmaisi Cow, Esquire, of Whakatane, Settler ; Bernard Edward Murphy, Esquire, M.A., LL.B., 8.C0m., of Wellington, Professor of Economics ; and George Augustus Pascoe, Esquire, of Christchurch, Company Director : Greeting! Whereas by a Warrant dated the ninth day of May, one thousand nine hundred and thirty-three, and issued under my hand and the Seal of the Dominion of New Zealand, you, the said George Craig, James Burman Gow, Bernard Edward Murphy, and George Augustus Pascoe, were appointed to be a Commission to inquire into and report upon the revision of the Customs Tariff of New Zealand : And whereas by the said Warrant you were required to report to me under your hands and seals not later than the thirtieth day of September, one thousand nine hundred and thirty-three, your opinion on the aforesaid matters : And whereas the period within which you were to report to me was extended to the thirty-first day of January, one thousand nine hundred and thirty-four, by Warrant dated the eighth day of September, one thousand nine hundred and thirty-three, issued under my hand and the Seal of the said Dominion : And whereas it is expedient that such period should be further extended : Now, therefore, in pursuance and exercise of the powers and authorities vested in me by the Commissions of Inquiry Act, 1908, and of all other powers and authorities enabling me in this behalf, I, Charles, Baron Bledisloe, Governor-General of the Dominion of New Zealand, acting by and with the advice and consent of the Executive Council of the said Dominion, do hereby further extend the period within which you are required to report to me, as provided by the said Commission and by the said Warrant dated the eighth day of September, one thousand nine hundred and thirty-three, to the twenty-eighth day of February, one thousand nine hundred and thirty-four : And in further pursuance of the said powers and authorities, and with the like advice and consent, I do hereby confirm the said Commission, except as altered by the said Warrant dated the eighth day of September, one thousand nine hundred and thirty-three, and by these presents. Given under the hand of His Excellency the Governor-General of the Dominion of New Zealand, and issued under the Seal of that Dominion, this 25th day of January, 1934. J. G. Coates, Minister of Customs. Approved in Council. F. D. Thomson, Clerk of the Executive Council.

EXTENDING THE PERIOD WITHIN WHICH THE CUSTOMS TARIFF COMMISSION SHALL REPORT.

Bledisloe, Governor-General. To all to whom these presents shall come, and to George Craig, Esquire, C.M.G., LL.D., of Wellington, Comptroller of Customs ; James Burman, Gow, Esquire, of Whakatane, Settler ; Bernard Edward Murphy, Esquire, M.A., LL.B., 8.C0m., of Wellington, Professor of Economics ; and George Augustus Pascoe, Esquire, of Christchureh, Company Director: Greeting ! Whereas by a Warrant dated the ninth day of May, one thousand nine hundred and thirty-three, and issued under my hand and the Seal of the Dominion of New Zealand, you, the said George Craig, James Burman Gow, Bernard Edward Murphy, and George Augustus Pascoe, were appointed to be a Commission to inquire into and report upon the revision of the Customs Tariff of New Zealand : And whereas by the said Warrant you were required to report to me under your hands and seals %

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not later than the thirtieth day of September, one thousand nine hundred and thirty-three, your opinion on the aforesaid matters : And whereas the period within which you were to report to me was extended to the thirty-first day of January, one thousand nine hundred and thirty-four, by Warrant dated the eighth day of September, one thousand nine hundred and thirty-three, issued under my hand and the Seal of the said Dominion : And whereas such period was further extended to the twenty-eighth day of February, one thousand nine hundred and thirty-four, by Warrant dated the twenty-fifth day of January, one thousand nine hundred and thirty-four, issued under my hand and the Seal of the said Dominion : And whereas it is expedient that such period should be further extended : Now, therefore, in pursuance and exercise of the powers and authorities vested in me by the Commissions of Inquiry Act, 1908, and of all other powers and authorities enabling me in this behalf, I, Charles, Baron Bledisloe, Governor-General of the Dominion of New Zealand, acting by and with the advice and consent of the Executive Council of the said Dominion, do hereby further extend the period within which you are required to report to me, as provided by the said Commission and by the said Warrants dated the eighth day of September, one thousand nine hundred and thirty-three, and the twenty-fifth day of January, one thousand nine hundred and thirty-four, to the thirty-first day of March, one thousand nine hundred and thirty-four : And in further pursuance of the said powers and authorities, and with the like advice and consent, I do hereby confirm the said Commission, except as altered by the said Warrants dated the eighth day of September, one thousand nine hundred and thirty-three, and the twenty-fifth day of January, one thousand nine hundred and thirty-four, and by these presents. Given under the hand of His Excellency the Governor-General of the Dominion of New Zealand, and issued under the Seal of that Dominion, this 21st day of February, 1934. J. G. COATES, Minister of Customs. Approved in Council. F. D. Thomson, Clerk of the Executive Council.

REPORT.

To His Excellency the Right Honourable Lord Bledisloe, G.C.M.G., K.8.E., Governor-General and Commander-in-Chief in and over His Majesty's Dominion of New Zealand and its Dependencies. May it please Your Excellency,— Your Excellency's Commission, dated the 9th day of May, 1933, directed us to inquire into the Customs Tariff of New Zealand, and to recommend for consideration by the Government any alterations therein, having regard to existing trade agreements to which New Zealand is a party and particularly to the agreement concluded at Ottawa in 1932 between His Majesty's Govern merits in the United Kingdom and in New Zealand ; to the financial, economic, and industrial conditions in the Dominion ; to the reasonable requirements of looal industries which are being conducted in an efficient manner and are economically justifiable ; and to all other relevant considerations. Your Excellency's further Warrants dated the Bth day of September, 1933, 25th January, 1934, and 21st February, 1934, respectively, extended the time, within which we were required to furnish our report to the 31st March, 1934. We have the honour to report as follows : — Notification oe Sittings and oe Procedure. In order that the public and all persons interested might have an opportunity of tendering evidence, advertisements were inserted in the daily newspapers of

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the Dominion and in the New Zealand Gazette setting forth the dates upon which the Commission would sit at the various centres where evidence was taken. By notification in the Gazette and at the opening of the sittings at each centre visited the public were also advised as to the course of procedure to be adopted by persons desiring to give evidence. Prior to the conclusion of the hearings a notice dated 25th October, 1933, with respect to the taking of evidence, was also published in the Gazette. The Gazette notices above referred to are set out in Appendix A to this report. Sittings held. Sittings at which evidence was taken were held at Auckland, Wellington, Christchurch, and Dunedin. The Commission was engaged in hearing evidence almost continuously from 7th June, 1933, until 9th November, 1933. It was found necessary, however, to hold further sittings at intervals after that date in order to hear applications forwarded by manufacturers in the United Kingdom as these came to hand. Opportunity was also afforded the parties to rebut, if necessary, statements made in evidence opposing their applications. The final sitting was held on Ist March, 1934. Witnesses heard and examined. As can be understood in the case of an inquiry of this nature, the Commission received an enormous amount of evidence and no fewer than 682 witnesses appeared and were examined. In addition to the information supplied by witnesses, a considerable amount of data was obtained from official sources. In many instances investigations were also made by departmental officers with a view to procuring information required in connection with matters under consideration. The Commission wishes to place on record its appreciation of the capable and conscientious assistance rendered to it by the Secretary, Mr. J. P. D. Johnsen, during the course of the inquiry. Manufacturing Establishments visited. The Commission took the opportunity whenever possible of visiting the more important manufacturing establishments representing various classes of industry. In all, some sixty-two such establishments were visited and the Commission feels that the knowledge gained on such occasions was invaluable in considering the evidence given in reference to such industries.

GENERAL REPORT. (a) General Considerations. A revision of the schedules of duties in our Customs Tariff, while presenting difficulties at any time, is peculiarly subject to perplexities at the moment, owing to the abnormal general economic situation, and the lack of a basis for reasonable prevision and calculability in regard to world economics, to which New Zealand, because of its relatively large volume of foreign trade, is susceptible in a marked degree. In particular there are three abnormal factors in our economic life, the first two of which, we think, are likely, if not to disappear, at all events to become very much less pronounced in the future, while no confident statement can be ventured as to the third, which make the task of determining tariff rates a difficult one at present. These are : — (a) Currency instability, both sterling and New Zealand currency being at present unstabilized in reference to an objective basis, gold for example, and the future value of both in terms of gold and in terms of other important currencies, most of which are likewise subject to their own uncertainties, not being ascertainable at the moment.

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(b) The abnormal volume of unemployment in New Zealand and elsewhere, due to causes which seem attributable to the general world depression, and are not the consequences of our tariff policy. (c) The development and spread of the policy of quantitative regulation of international trade embodied in import and or export quotas and similar devices, imposed either in general terms or as the result of international treaties or reprisals. If the quota system comes to supersede the older system of tariffs as a general regulative principle in world trade, or to supplement it on a considerable scale, then our tariff policy might require material alteration, and many of the duty schedules might have to be reconsidered. The recommendations in the present report are based on the assumption that the present world depression, and the trading restrictions arising peculiarly out of it, will pass, and that world economic life and international trade will be restored in substantially the same form, and governed by substantially the same principles, as prevailed before the depression. There are some general principles which in our view should be borne m mind when considering our tariff policy. A sound Customs Tariff should embody a, long-range and long-period policy, and cannot properly be framed to meet temporary fluctuating economic conjunctures. " Few devices are more unsuitable than a tariff for dealing with an emergency situation. Its inevitable crudity must result in the dislocation of industry and trade, the loss of markets, and acute disappointment even to those who anticipate the greatest favours." (Beveridge and others, " Tariffs : The Case Examined," p. 193.) A tariff should be framed on the assumption and for the conditions of economic stability, and in particular it cannot be framed to function satisfactorily as an equilibrating factor in regard to a currency liable to marked irregular short-period fluctuations in value of an unpredictable type, In the absence of reasonable currency stability, indeed, all economic calculation becomes chaotic. If the currency is stable within close limits over a considerable period economic values will adjust themselves to it, but if the currency is constantly fluctuating in value, an attemptto compensate this by tariff adjustments would be likely to make the position worse. It would be a series of shots at a target subject to a double set of movements. Both currency variations and tariff adjustments to compensate them take time to produce their effects, and are liable to complex and incalculable economic and social interferences and reactions, and taken in conjunction, they do not seem sufficiently controllable by administrative action to secure a definite result at a definite moment. Such a policy would result in a double measure of uncertainty . uncertainty as to the currency, and uncertainty as to the real effect of the tariff variations. A tariff could not be framed primarily and rapidly to absorb a temporarily swollen margin of unemployment. The causes of our currency instability and abnormal unemployment are largely extraneous to our tariff policy, as is shown bv the fact that this policy has not varied over a great many years, whereas currency values and volume of unemployment have done so. Broadly speaking the tariff has been, and should be, a long-period matter. To employ tariff variations to adjust stresses in other parts of the economic structure, especially short-period stresses which are not consequent or ancillary phenomena to the tariff itself, merely adds further elements of instability to an already unstable situation. Admittedly no tariff tariff policy can be permanently binding on the future, but a broad continuity of tariff policy, undisturbed by reactions to transitory stresses in other parts of the economic organism, is very desirable. _ . Our past tariff policy has embodied as its principal objectives the collection of revenue, moderate protection to local industries, preferential treatment to goods of British Empire origin, and, more recently, most favoured nation treatment in the case of certain foreign countries. This policy, as far as the United Kingdom is concerned, appears to have been based on the tacit assumption that the British

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market for our exports was indefinitely open at prices satisfactory to us. If this should cease permanently to be the case as a result of the application of a quota system or other restrictive device to our staple exports, doubtless attention would be directed to some modification of our policy, such as a search for alternative export markets, or the expansion of our home market and a consequent redistribution of the balance of our productive resoixrces. It seems certain, that this would lead at all events to some change in our past policy, but we are assuming that the policy hitherto pursued is the policy of the country at the present time. Some of the duties levied in New Zealand are clearly of a purely revenue type, since they are imposed upon goods not produced in the Dominion ; while some others are primarly designed for protective purposes, and are substantially effective for this purpose. Many duties are in practice of the dual-purpose type, bringing in revenue and conferring incidental protection. In this way our revenue tariff in the past has led to the establishment of certain industries which have sheltered themselves in the protective vacuum incidentally created by a duty the primary purpose of which was revenue rather than protection. We think it should be made clear as a matter of future policy that the benefit of the so-called " vested interest " principle will enure only for those industries which come into existence under a tariff primarily and deliberately designed for protective purposes, and that industries which come into existence fortuitously, under the protection of duties primarily designed for revenue purposes, or as a result of currency depreciation, or otherwise, have no claim on the community in the event of the accidental protective factors upon which they have depended being eliminated. This is a matter of considerable practical importance, because it appears that New Zealand will continue to rely very largely upon Customs duties for revenue purposes. It is possible in some cases to prevent a revenue duty from having a protective effect by imposing an equivalent excise duty on local production. The extent to which such excise duties can be levied depends chiefly upon two factors—(i) the administrative practicability, and (ii) the amount of revenue likely to be obtained. In view of our relatively small population, there are only a few articles with respect to which an excise duty can successfully and economically be levied. Subject to these general observations, we think that the Customs Tariff should be as simple as is consistent with effecting its objects. The general characteristics of a tariff, whether levied for revenue, or protection, or both, should in our opinion be : (a) Simplicity and uniformity of duties. (h) Stability of rates of duty, and as little variation therein as possible, to reduce trading uncertainty to a minimum and avoid too frequent redistributions of the national productive powers. Owing to our very large external trade per head, commerce as distinct from manufacture is, and appears likely to remain, very important in New Zealand economic life. (c) Rates as low as are consistent with carrying out the desired policy, in order that the burden on consumers shall be as small as possible. While Customs duties are normally passed on to the consumer, frequently with profit accretions, the burden of tariff duties is often exaggerated. In some instances the existence of a New Zealand industry appears to have kept the prices of competing imports down, notably in cases where competition overseas is restricted or in abeyance. In many cases, too, the excessive cost of commodities to the final buyer is the result of wasteful and duplicated tradingservices, and is not wholly the result of higher manufacturing or importing costs due to the tariff. New Zealand is highly specialized to international trade, and the value and volume of imports and exports per head are abnormally large. In a broad sense, therefore, few countries have a stronger interest in. the freest possible international trade than our own. As we are organized at present, our prosperity is bound up

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with a large export trade in primary products for which we must in the long-run, allowing for adjustments on loan capital account and other items, take equivalent imports. At the same time the reasons which make our country a heavy exporter of primary produce contribute to make it relatively unsuited for intensive industrial operations. This should not be taken to imply that in our opinion New Zealand has no industrial present and no industrial future. Certain industries, for example, will probably be kept in operation as an insurance against oversea exploitation, or to diversify the economic and social structure, and thus avoid some of the dangers arising from an over-specialised economic life in a world of rapid change and development. It is, however, essential to retain a population perspective. In New Zealand we have approximately a million and a half people, not the population of a large city in more densely peopled parts of the world. This consideration sets a limit to our possibilities of industrial expansion at the present time. It is not proposed to deal on an academic basis with the general problem of Free Trade or Protection. We consider that our tariff policy, its continuance or modification, is a matter for the Legislature, and in any case such a discussion would be otiose as far as New Zealand is concerned. The important question is not whether New Zealand shall or shall not have a protective tariff ; that issue is practically decided. The point is how high the tariff shall be, and on what commodities and by virtue of what principles it shall be levied. For this reason it is not deemed necessary to refer in set terms to general arguments placed before the Commission as to the desirability of Free Trade or Protection, because it is considered that that issue is definitely decided, for the present at all events, on a basis of moderate Protection. At the same time the arguments placed before the Commission in this connection by witnesses have been carefully considered. (b) The Ottawa Trade Agreement, Article 7. It is, however, necessary for us to consider our tariff policy in connection with the Ottawa Trade Agreement of 1932. We are, of course, not called upon to express an opinion as to whether, as a matter of policy, this Agreement should have been made, or as to the theoretical validity of the principles on which it is based. Our duty is merely to interpret it. The clauses of this Agreement to which our attention has been particularly directed are Articles 7 and 8. Certain difficulties in the interpretation of these clauses were brought out by witnesses before the Commission, and analogous differences of opinion in respect of substantially similar clauses seem to have arisen in other Dominions. Article 7 reads as follows : — " His Majesty's Government in New Zealand undertake that protection by tariffs shall be afforded against United Kingdom products only to those industries which are reasonably assured of sound opportunities for success." It was strongly pressed upon us by some witnesses that the effect of this clause was that no Customs duties could be levied in New Zealand even for purely revenue purposes, on imported commodities, unless there was in New Zealand an industry actually manufacturing such commodities. This interpretation, if correct, involves a surrender by New Zealand of the right to levy Customs duties for purely revenue purposes. We have no hesitation in rejecting this interpretation. The clause clearly means, in our opinion, that where duties are levied for protective purposes on United Kingdom goods, the industries so privileged shall be such as are suited to the economic circumstances of the Dominion, and therefore reasonably assured of sound opportunities for success. It is important to notice that the undertaking given in this article does not involve any change of policy as far as the Dominion is concerned, but rather crystallizes and embodies continuity of the policy we have pursued for many years. An examination of Dominion tariffs against the United Kingdom discloses the fact that our tariff is generally much lower than those levied by certain other Dominions. It is further considered that this clause does not contemplate that duties levied in accordance with it should be merely to cover a temporary educative period for the industry protected. We think it is quite consistent with a policy of permanent protection for industries coming within its scope.

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(c) Principles on which Tariff Protection should p.e granted. In determining what industries come within the ambit of article 7 of the Ottawa Trade Agreement, or should on other grounds receive tariff protection in New Zealand, the major consideration in our view should be the extent to which it is probable that the producers in. question are or will be able within a reasonable period to attain such efficiency as will enable them to turn out products of a quality, and at a price, reasonable in comparison with the price of competing products landed in New Zealand. In addition, regard should, we think, be had to the following considerations, which are not necessarily stated in order of importance : — 1. The extent to which the industry is dependent upon or likely to make use of imported raw materials as compared with raw materials of local origin. To the extent that an industry uses locally produced materials, and utilizes the waste or by-products of other New Zealand industries, it is worthy of consideration from the protective point of view. On the other hand, the greater the reliance of an industry on imported raw materials, the weaker its claim for protection. We endorse the following statement in the Report of the 1927 Tariff Commission : " In our view, the use of imported material is not, in itself, a valid objection to the granting of protection, but where the material so imported constitutes a relatively high proportion of the value of the finished product, protection should be given only under very special circumstances. Where the competitive position in cases of this kind is shown to be such as to necessitate a relatively high rate of duty, it seems clear that the industry is not one which should be established in New Zealand as a result of tariff assistance. " We are of the opinion that the essential distinction which may be drawn between industries using imported and those using locally produced raw materials arises from the beneficial effects of the latter class of industry in increasing other forms of local production." (Report of 1927 Tariff Commission, pp. 6-7.) 2. The extent to which the industry affords employment for industrial labour. We endorse the following passage from the report of the 1927 Tariff Commission : — " One of the main claims which has been made in favour of protection for local industries has been based upon the fact that employment is afforded to persons in New Zealand and that wage rates paid result in a cost of production high in relation to that of most other countries. In so far as employment in appreciable measure is afforded by such industries the Commission considers that, under our accepted national tariff policy, this fact constitutes a valid reason for the granting of protection." (Report of 1927 Tariff Commission, p. 7.) To this should now be added : " Provided that the industry in other respects conforms to the provisions of the Ottawa Trade Agreement." It has always been, we consider, an ancillary object of our protective tariff to safeguard the standard of living of our industrial workers. Whether this can be done as amply in the future as it has been in the past is a difficult question on which it is not necessary here to express an opinion. The following quotation appears to us relevant in this connection : — " Broadly speaking, a country can have any given industry at any given standard of life by paying for it, because this is a problem of distributing the national dividend. But it cannot generalize this for all industries. It cannot raise the standard of living of the population as a whole by Act of Parliament, whether a Minimum Wage Act or a Tariff Act, because the standard of living of the population as a whole is a simple quotient, is the total of all good things produced by the population divided by the number of the population." (Beveridge and others, " Tariffs : The Case Examined," p. 51.)

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The problem of the absorption of industrial labour is of particular importance at the present time, and, owing to the abnormal, intractable, and prolonged volume of unemployment, we think that any tariff readjustments that would have the effect of causing a considerable displacement of labour should be made only after mature consideration. The popular protectionist argument that a tariff creates additional employment in a community is, in the main, in circumstances of normal prosperity, fallacious, but nevertheless there are conceivable circumstances in which, even in a highly industrialized country, a tariff readjustment might increase the net volume of industrial employment, or prevent it from falling. In the circumstances of New Zealand the reverse application of this principle, namely, that withdrawal of tariff protection already granted would narrow the range of industrial employment, or prevent it from expanding, has some cogency, owing to the restricted avenues of employment available in a country of so simple and undifferentiated an economic structure as ours, and it applies with special force to-day. The following quotation appears relevant in this connection :— ■ " The fundamental argument for unrestricted Free Trade does not apply without qualification to an economic system which is neither in equilibrium nor in sight of equilibrium. For if a country's productive resources are normally fully employed, a tariff cannot increase output, but can only divert production from one direction into another, whilst there is a general presumption that the natural direction for the employment of resources, which they can reach on their merits and without being given special advantages at the expense of others, will yield a superior national dividend. But if this condition of full employment is neither fulfilled nor likely to be fulfilled for some time, then the position is totally different, since a tariff may bring about a net increase of production and not merely a diversion." (Addendum I to the British Report of the Committee on Finance and Industry —The Macmillan Report, p. 201.) If a considerable proportion of the rising generation of young people in our towns are not absorbed into industrial employment it is difficult to see what economic occupation will be available for a great many of them. This must not be taken to indicate our approval of the establishment under a protective tariff of uneconomic industries. It does not seem probable that a great proportion of the growing urban population could be absorbed into occupations ancillary to importation. There seems under present conditions little probability of any large number of them being absorbed into farming pursuits; in fact, owing to the increasing mechanization of farming, the labour requirements per unit of output of primary produce are being restricted. Witnesses before the Commission who advocated further land settlement as a means of immediately absorbing labour were vague in detail. It is questionable whether in the present position of New Zealand further extensions of primary production are likely to be as important a potential absorbent of labour as manufacturing industries. On the whole the trend of civilization is to enable us to satisfy our primary wants with progressively less labour, and to release labour from the land for the satisfaction of secondary wants. We get our food supplies with the expenditure of a diminishing proportion of human effort. This fact partly explains the tendency for the countryside to become less populous, and for city life to expand. Without expressing a definite conclusion on these difficult matters, we think that a careful consideration of them is a matter of crucial importance in the formulation of a long-period tariff policy. A correct decision in regard to them will determine the enduring factors and forces which underlie the future economic distribution of employment facilities between primary industries in the country and secondary industries in the towns. To the extent that our people cannot find work, the burden of supporting them will fall on the community in any case, and a soundly devised tariff may" easily prove on investigation to be less burdensome than a direct dole or allowance, and would almost certainly be less demoralizing. For these reasons we are of opinion that any downward adjustment of the tariff that would put New Zealand industries which are large employers of labour out of operation at the present time would in the short run, and probably for many years, increase the number of our

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unemployed, or prevent that number from falling. Unemployment is a more serious potential menace in a simple and undifferentiated economic environment such, as New Zealand than it is in a country of widely diversified industry. 3. The extent to which the industry requires heavy investment in machinery and plant of a hind that must be imported. As things are, and seem likely to remain in New Zealand, most industrial plant and machinery must be imported, because it could not be produced economically in the Dominion, and its initial cost as a productive asset is thus greatly increased. Particularly is this the case if an industry is subject to rapid advances in technique, so that it suffers greatly from obsolescence. In our view the fact that an industry requires a heavy expenditure on imported fixed plant which is likely to depreciate rapidly is pro tanto an argument against granting it protection, though this circumstance is only one of many to be taken into consideration. 4. The extent to which the industry is in an experimental and rapidly developing state. To the extent that it is so this is an objection to granting it tariff protection. Where technical processes are in course of rapid evolution, it would be difficult for an industry in this remote part of the world to keep abreast of contemporary technical developments, and the consumer might suffer through excessive costs or antiquated service. This difficulty is accentuated if the industry requires special detailed technical skill that must be continually refreshed to keep up to date. When an industry, further, requires specialized raw material and plant the production of which is actually or virtually the monopoly of some oversea country, and this is liable to interruption of supply, this group of disadvantages applies with special force. 5. The extent to which the local market can absorb the whole output of a unit working in the industry at the technical optimum. efficiency point. Many industries today are economic and reasonably assured of sound opportunities for success only if operated on a large scale. It is not implied that New Zealand industries in general are inefficient, but it is suggested that in many cases they are on too small a scale. Efficiency in some branches of production is bound up with size. Size depends on output, output depends on market. For this type of production the local market is too small, and it does not seem likely that we can get a market abroad owing to high costs of production and transport. In addition we lack local supplies of the basic industrial factors of pig iron and cheap coal, and have no developed machine industry for the manufacture of essential plant. In many instances the Dominion market is so small that it could not absorb the whole product of a single optimum efficiency plant, even if that plant were to secure the whole business available in the country. Prima facie, an industry in this position should not, we think, receive tariff protection. Large scale production, generally speaking, to be economical, requires! larger markets than are afforded by the local demand of a country with a population of about a million and a half. In other cases, however, where the optimum efficiency scale of production is small, a strong prima facie case can be made out for protection, for the purpose of allowing a local industry to expand its output to the limit of the local market, and thus secure the economies of maximum output. While this could conceivably take place, it must not be forgotten that there is nothing in tariff protection of itself to cause industrial plants to expand to the optimum efficiency point. Experience in New Zealand and elsewhere suggests that in many cases tariff protection is just as likely to increase the number of independent plants out of proportion to the real requirements of the" community, and thus to load the industry with unnecessary overhead. There is always a tendency under a protective tariff for too many plants to come into operation ; and there is the further danger, if the tariff is sufficiently inviting, that large and powerful oversea concerns may find it worth while to set up local factories within the tariff, barrier, and make the economic position of the previously established local concerns difficult

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and precarious. This is particularly the case where the protection afforded by the tariff is higher than is necessary to enable industries working to optimum efficiency point to succeed. It is important not to confuse total volume of output with scale of production. A given output from a small number of plants working to capacity may be economic, but the same output from twice that number of plants operating below capacity would be uneconomic. When the tendency of protection to lead to the multiplication, of an excessive number of concerns, most of which are below the optimum efficiency point, is taken into consideration, this type of argument for protection loses much of its cogency. Excessive protection, by encouraging a surplus of partially unutilizable productive power, is detrimental to the national interests. In this connection, too, regard should be had to the capital outlay for plant, the costs of operation, and the rate of obsolescence. For very heavily capitalized industries New Zealand with its limited market is not in general suitable, but there are a number of industries that admittedly can make out a case under this principle. Put in economic phraseology, a prima facie case can as a general rule be sustained for tariff protection in the case of industries subject to the law of increasing return or diminishing cost as output expands ; and, conversely, there is a presumption against tariff protection to industries subject to diminishing return or increasing cost, where expansion of output brings no appreciable economies, but may actually increase costs. Jt would appear that the timber and perhaps the wheat industry would come into this latter category, so that there is an initial presumption, on purely economic grounds, against affording them tariff protection. 0. The extent to which the industry dovetails into or co-ordinates with other industries established in the Dominion, or 'with fuel or power supplies. To the extent that it does this, and in particular makes use of local supplies of coal, electricity or other sources of power that otherwise would remain less completely utilized, this is a point, as far as it goes, in favour of granting it protection. 7. The extent to which the industry is affected by the freight and transport situation. Certain types of imports are useful bulky inward freight, and it would not be economic in the absence of strong countervailing considerations to cut this off by subsidizing local industry if the result will be to raise outward freights and penalize our export industries because of a shortage of inward cargoes. As it happens, imports likely to have this effect usually suffer a considerable natural disadvantage through their bulk and consequent freight charges. A further consideration is the cost of internal and coastal transport, which is heavy in New Zealand, and perhaps over-developed. If it could be more fully utilized by local industries that would be a national advantage. Generally to the extent that a local industry enjoys elements of natural protection such as bulk reflected in relatively high freight charges from overseas, special liability to damage, or difficulty of preservation, its claim for tariff protection is weakened. 8. The extent to which the industry presents probabilities of extension, growth, and permanence ; or caters to a temporary demand, or makes use of rapidly exhaustible local resources. If the latter, then it is clearly not suitable for tariff protection. An analogous consideration is whether it is specially liable to destructive or intermittent dumping competition from abroad. Protection by tariff should, we think, be accorded only to industries that are expected to be a permanent constituent in the national industrial life, since it is presumably granted in the national interest, and not to reward individuals. 9. The extent to which the industry is already established, or 'merely contemplated. We consider that only in exceptional circumstances should tariff protection be granted in the case of a contemplated industry. If it is desired to encourage such an industry, the bounty method or some other method may in many cases be

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preferable. Analogous to this objection is the question whether an industry is of too trivial a nature to be worthy of consideration. It is not worth while to use a steam hammer to crack a nut. We think that in general protection should not be extended to very minor industries with so limited a trade that economic manufacture is not practicable. 10. The extent to which there are special circumstances in the nature of the demand for the 'product of the industry that would cause special hardship to consumers or other industries if protection were granted. In general a protective tariff on raw materials, plant, and high-grade consumptive specialties is undesirable. The finished products of one industry are frequently the raw materials of another, and it is undesirable to load the price of raw materials, particularly in the constructional industries. In this connection the Commission is impressed with the burdens imposed by the existing tariff on the building and constructional industries. It will be noticed that in some cases we have recommended reduction of these rates and in others have suggested that the duties under the British Preferential Tariff should be abolished. With respect to the latter class, if our proposals are accepted, a relatively small number of persons may be thrown out of employment, but we believe that the advantages gained by lower costs will stimulate building and constructional activities so that in the aggregate a greater number of persons will be employed than formerly. It will, of course, be obvious that in most if not all cases a manufacturing industry which is a candidate for a protective tariff would come under some but not all of the above canons, and that these canons are in some cases interrelated, and in some perhaps incompatible. In the case of such incompatibilities it would seem that each industry must be judged, on balance, 011 its own merits. We think that in principle the onus of proof of the need for the imposition or continuance of tariff protection is always on the applicant. There can be no vested interest in the strict sense in any particular duty or rate of duty, but for practical purposes the status quo cannot be ignored. Perhaps the strongest practical argument for a protective tariff is that it exists, and has created a situation that must be met. If a community has allowed industries to grow up under tariff protection, on the reasonable expectation that protection will continue to be extended, such, industries are entitled to the continuance of a measure of protection, and it should not be withdrawn, if at all, except pursuant to a considered policy. As Salter says: " When the economic life of a country has been built 011 a basis of tariffs, it creates a situation which makes radical reform almost impossible. It is not just a matter of a few vested interests (as it is when new tariffs are first proposed) : for a vast capital expenditure has been, incurred which, if the basis were removed, might be largely lost. A mass of population has become trained and specialized in certain occupations, which they cannot easily change. A national psychology inimical to reform has been created. A prospect of greater but uncertain prosperity is weaker than the apparently certain loss of something already possessed.'' (Salter, " Recovery," p. 178.) The same point is made by Taussig : " . . . No rational person, even though he were the most radical free-trader, would propose to abolish at one fell swoop protective duties, to which a great industrial system had accommodated itself. We may not like the result, but it is there, and not to be suddenly modified without widespread loss. Moreover, those engaged in the industries may plead with weight that they have entered on their operations with, the sanction of the Government, nay, with its direct encouragement, and that the Government cannot in justice leave them in the lurch." (Taussig, " Free Trade, the Tariff, and Reciprocity." pp. 143-4.)

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Subject to these considerations, protection already granted should, we think, be the subject of periodic investigation, with a view to determining, in the case of each industry:— (1) That the protection is still needed ; (2) That a tariff is the best and cheapest way to give it; (3) That the protection granted is not excessive ; (4) That the industry is efficiently managed ; (5) That the industry is suitable to New Zealand conditions ; and (6) That the protection granted is not unreasonably injurious to other interests. An industry requiring continued protection is asking an economic favour from the State, which has the right and is under a duty to its citizens to determine the conditions under which the privilege shall be granted. (d) The Ottawa Trade Agreement, Article 8. The interpretation of Article 8 of the Ottawa Agreement raises difficult questions. It reads as follows :— " His Majesty's Government in New Zealand undertake to institute an inquiry into the existing protective duties, and, where necessary, to reduce them as speedily as possible to such a level as will place the United Kingdom producer in the position of a domestic competitor—that is, that the protection afforded to the New Zealand producer shall be on a level which will give the United Kingdom producer full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production." It would appear that there is little doubt in a broad sense as to the intention of this clause, which is obviously designed to give the United Kingdom manufacturer a reasonable chance to compete on this market. It forbids protective duties of such a nature that they are in effect prohibitive of United Kingdom imports. In other words, it is intended to give the United Kingdom manufacturer a " fair deal" in this market in the sense in which that popular though vague expression would be understood by a reasonable and fair-minded man. The expression " place the United Kingdom producer in the position of a domestic competitor " is employed, but it is obviously a physical and economic impossibility to give literal effect to this clause, any more than a Dunedin producer could be put literally on the basis of a domestic competitor in Auckland. As long as environmental factors differ, and transport charges from one place to another have to be met an outsider cannot literally be placed in the position of a domestic competitor. We think, however, that the interpretation of this phrase is a matter of little importance in view of its subsequent amplification in the Article itself. Generally Article 8, and for that matter all other clauses in an Agreement of this kind, should, we think, receive that large and generous interpretation which was presumably intended by its signatories, and should not be whittled down by verbal quibbles or captious literal interpretation. Apart from this point, however, the clause lays down as the regulative principle of our protective system the difference between the relative costs of economical and efficient production in the United Kingdom and New Zealand. In other words, we undertake to impose a tariff intended to equalize costs of production as between home producers and United Kingdom producers. As is well known, this has been the basis in the past of the " solution " of the tariff problem in the United States of America, which has been hailed as " scientific " by its advocates, and frequently derided by academic opponents. It has been pointed out that, carried to its logical conclusion, the principle would be destructive of all foreign trade whatever, and that a country adopting it, to the extent that it carries it out, cuts itself off from the full advantages of international commerce. There is no need to express any opinion as to whether this principle is a scientific basis for a tariff or not, because New Zealand has agreed to adopt it. It should be noticed, however, that in our case the formula is intended to keep tariff rates down rather than raise them. In any case the word " scientific " more or less

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begs the question, because all tariffs must of necessity be empirical and approximate. The theoretical objections to a tariff based on equalization of costs of production seem to us to be irrelevant in the case of a country which in fact has adopted a protectionist policy. New Zealand is a country of moderate protection, and is aware that in adopting this policy it has cut itself off to some extent from some of the benefits of international trade in the form of cheaper goods, but this is the price which we are willing to pay for the presumed direct and indirect advantages of a tariff. The suggestion that the equalization of costs principle carried to its ultimate extreme would be destructive of practically all foreign trade begs the question, because we think there is no intention of carrying the principle beyond what appears to be warranted in the national interest, and we are now bound by agreement not to carry it to the point where it would prevent United Kingdom manufacturers from enjoying an opportunity for reasonable competition in this market. Moreover, by virtue of Article 7 of the Ottawa Agreement, it is limited in its operation to industries that come under the scope of that claixse. When these points are taken into consideration the arbitrary element largely disappears and the application depends on applying common sense to the data available. Finally, assuming moderate protection as the country's policy, it is not easy to formulate any rational principle, apart from the equalization of relative costs of economical and efficient production, that could be applied to determine what our tariff rates should in fact be. General arguments in regard to Free Trade and Protection give no guidance here ; they may determine whether there should or should not be a tariff, but they cannot determine on what commodities the tariff should be levied, and what the rates should be. It is difficult to see, apart from the equalization of costs principle, any alternative basis for a tariff beyond sectional pressure brought to bear on the legislative body. In applying the principle, however, there are considerable difficulties. The first springs from the difficulty of obtaining reliable data of a fairly comparable nature. There is something arbitrary in all costings, and as costings do not appear to be definitely standardized, they are frequently made on such different bases that only a detailed knowledge of the figures from which they are built up would be sufficient to establish their comparability in detail. Apart from that, in some instances the cost data submitted to the Commission were incomplete and ambiguous. We think it desirable to mention that those of our recommendations which are based on cost data do not involve any reduction in the level of money wages now paid in New Zealand. In our view cost data in regard to primary products are of limited value for the purposes of this inquiry, owing to the difficulty of determining the extent to which land values enter into costs of production. There are certain broad elements in industrial costs on which, from the nature of the case, exact or even approximate quantitative data cannot be secured. These may be regarded as environmental constituents or indirect costs. Among these are such factors as the following : (a) The relative weight and incidence of taxation. As is well known, the extent to which certain forms of direct taxation, notably income-tax, enter into costs, if at all, is a problem upon which there is no unanimity, and upon which in any case quantitative data for comparison between two countries would be almost unobtainable. (b) The relative weight and incidence of social services, such as education, old-age pensions, and so on ; (c) The incidence and effects of the recently adopted protective tariff in the United Kingdom ; (d) Complications arising out of varying degrees of currency depreciation ; (e) Relative cost of capital for both long and short period uses ; (/) Relative levels of real wages ; and (g) Relative climatic conditions, and assistance or hindrance offered to industry by natural environment, showing itself in variations of transport burdens, and in other directions.

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These considerations are summarized in. the following passage " The higher cost of production in the importing country may be due to any of several distinct causes or a combination of them —to the higher wages of the workman, to the greater cost of materials, to heavier taxation, to the lesser suitability of climate, geographical position or other physical conditions, or to lower efficiency of management in relation to technical appliances, organization, and half a dozen other matters." (Beveridge and others, " Tariffs : The Case Examined," p. 48.) On many of these points adequate statistical material is not available, and from the nature of the case could not in any circumstances be available. These difficulties, however, are not collectively as formidable as they appear, but they prevent anv recommendations made on the basis of comparative costs of economical and efficient production from possessing an approach to mathematical accuracy. It is not considered, however, that a very high degree of exactitude is necessary to permit their useful application to the problems we have had to consider. There is a further difficulty, that even if the statistical difficulties above referred to could be overcome, the position that would be created as a result of a tariff based on the information required would not remain static, in that the relative share of the market going respectively to locally made and imported commodities would almost certainly vary, in consequence of varying costs of manufacture, transport and distribution. If that happened, the economies of mass production would from a competitive point of view exert themselves powerfully for the time being in favour of that class of commodities which was expanding its share of the market. But this difficulty is inevitable, and there appears no method of overcoming it. It should be noticed, however, that locally made and imported commodities are not as closely competitive as they may prima facie appear to be. In many cases they are of different qualities and price levels, and appeal to different types of consumer because of variations in taste or sentiment. The more expensive market will take the better and therefore the dearer goods, so that where there are considerable differences in quality, get-up, finish, and so on, the commodities are not really fully competitive. This circumstance should go a long way in assuring to each class of goods a reasonably stable market. The result of this discussion is to show that a high degree of mathematical accuracy cannot be expected or attained m the actual calculation of tariff rates based on comparisons of the relative costs of economical and efficient production. Still this drawback must be put up with, since there seems no alternative principle capable of application, and we have undertaken by treaty to adopt it. All practical tariff framing must be to some extent approximate, and cannot make an exact allowance for imponderable factors or for the reactions which a tariff will bring about upon demand and supply, owing to the complex interrelations of various industries. (e) Schedule op Duties. AVe recommend that the schedule of duties set out m Appendix B to this report be adopted, subject to the qualifications therein contained. (/') Miscellaneous Recommendations and Observations. In the course of taking evidence and overhauling the tariff schedules a number of subsidiary matters were raised on which we desire to record an opinion. " 1 Wherever possible, the principle of simplicity in tariff construction should be followed. For this reason we are of opinion that except for temporary revenue requirements the levying of additional duties by way of percentual or fractional surtaxes on existing duties is undesirable in that it necessitates increased calculations, and so complicates the administration from the point of view of the public and the "Department. Our view is that this system should be abolished as soon as circumstances will permit. . 2 As a general rule ad valorem duties are preferable to specific duties. lUe main objection to specific duties is that they vary in weight, automatically increasing in weight as prices fall, and decreasing in weight as prices rise. In periods of marked, price fluctuation this may effect very serious alterations m the real rates

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of duty, which could not have been contemplated at the time the duty was imposed. Specific duties also are regressive in their incidence, and bear with special severity on the cheaper grades of commodities, and therefore 011 the poorer classes of our people. We endorse the following passage from the Report of the 1927 Tariff Commission : " The Commission considers that the objectives sought to be achieved by the New Zealand Tariff, and the relative administrative difficulties of operating the two systems of duties under conditions existing in relation to imports into the Dominion are such that, on broad grounds, ad valorem duties are to be preferred for the following reasons : — " (a) Duties on this basis vary in actual amount directly in relation to changes in price-levels and according to the quality of the particular goods imported. " (b) In consequence, the measure of protection and the amount of revenue derived from the Tariff tend to fluctuate in a proper relation with general economic conditions." (Report of 1927 Tariff Commission, p. 6.) We find ourselves in agreement with the following passage from the written evidence presented to the Commission on behalf of the Auckland Chamber of Commerce : — " In the existing tariff there is a wide range of similar items on which specific duties have remained stable despite considerable alterations in world prices. The Auckland Chamber of Commerce advocates the abolition of specific duties in these and similar instances, and the substitution therefor of ad valorem duties, on the grounds that the specific duties are inelastic and fail to reflect falls or rises in world market prices. A specific duty may be reasonable when imposed ; but when values fall it may become excessive, and when values rise the specific duty may prove inadequate. With ad valorem duties this would not be the case, and frequent tariff alterations would be obviated." Admittedly there are many cases where, for administrative convenience or owing to the special circumstances or competitive situation of a given commodity, specific duties are. preferable. As a general principle the ad valorem basis seems more desirable, and should be employed whenever there is no definite reason to the contrary. For analogous reasons, we think that combined alternative specific and ad valorem duties of the " double-barrelled" typ " 2d. per lb. or 20 per cent, ad valorem, whichever rate returns the higher duty," are objectionable in principle, and should be imposed only in exceptional circumstances. In this connection we endorse generally the following passage from the written evidence presented to the Commission on behalf of the Auckland Chamber of Commerce : — "It is contended by the Auckland Chamber of Commerce that, when extrinsic price levels are low, the benefit of relatively lower duties on- an ad valorem basis is denied to the people of New Zealand by the unduly harsh operation of the specific duty, and that when world prices rise the relatively lower duties which would be payable under a specific schedule are denied to our people by the operation in such cases of ad valorem duties. Under the operation of dual duties a fall in the cost of living and costs of production internally in sympathy with world prices is denied to the people of this country, and, as New Zealand has to sell goods in open competition in the unprotected markets of the world, it is essential that the fall in production costs should not be retarded by an unduly harsh operation of the tariff." 3. In times of fluctuating currency values the basis of assessment of duties becomes a matter of uncertainty. In our view, Customs duties levied in any country should in principle be based on the, value of the dutiable goods converted into the currency of that country at the exchange rate ruling on the date of assessment. Economically the New Zealand pound and the British pound are separate currency units, although until recently they were at par and the point

3—H. 28.

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was of no practical importance. The old mint pars no longer operate to determine relative currency values. The evidence and data received by the Commission were, however, based on the existing system of assessing the current domestic value. Our calculations and determinations were made on the same basis. The future permanent basis of New Zealand currency has not yet been fixed. We therefore think that, in the meantime, it is desirable that the duties should be calculated under the method hitherto in force. At the same time, we think that the law should, if necessary, be altered to enable the Government to base the duties on values in New Zealand currency. 4. Section 20 of the Customs Amendment Act, 1921, reads as follows : — " Where any dispute arises as to the true meaning and application of any terms used in the Tariff and therein printed in italics, the Minister may determine such dispute in such manner as appears to him just, and his decision thereon shall be final." This section of the legislation was subject to criticism by importing interests before the Commission, and it was suggested that the law be so amended as to permit of appeals to the Court from decisions of the Minister in all cases. By the term " Court " the witnesses apparently meant the Supreme Court, from which, in the ordinary course of procedure, an appeal lies first to our Court of Appeal and ultimately to the Privy Council in the United Kingdom. The evidence did not convince us that the complaints in this connection were of a serious nature. Very few specific grievances were referred to by witnesses, and they appeared to be unimportant. The main grievance appears to arise in connection with the classification of goods under the tariff headings, and with the fact that appeals do not lie from these classifications. In our opinion the present law and practice are in the public interest, and should stand unaltered. It will be appreciated that, with the multiplicity of tariff items, and the infinitely greater multiplicity of commodities imported, the tasks of classification are difficult and complex, demand a highly technical knowledge of various commodities which can be acquired only by considerable experience, and are not matters upon which Supreme Court Judges are specially qualified by experience and training to adjudicate, and upon which we are inclined to think they would be unwilling to be asked to adjudicate. Most of the questions over which real difficulty arises involve rather fine distinctions, and for the purpose of satisfactory administration require to be settled expeditiously. The Supreme Court, if this class of case were forced upon it, would have no precedents arising out of its own experience for its guidance, and would presumably have to decide the issue on the basis of hearing a number of witnesses on both sides. This would cause very considerable delay, and possibly considerable trouble through conflicting decisions by different Judges, because the questions at issue are in the main matters of fact and not of law. It might congest the work of the Supreme Court, cause considerable uncertainty in Customs administration, and make the tariff difficult of consistent and expeditious administration. Incidentally, especially if appeals on points of classification went beyond the Supreme Court, the situation thus created might in some instances be ridiculous. The present procedure is likely to give a much more expeditious and satisfactory decision on matters of Customs classification than the Law Courts of the land. The suggestion that the Minister, in exercising his discretion under the Act, is acting as judge in his own case is a travesty of the situation. The Minister is not judging his own case, but acting as arbiter between the community as a whole and the importer, and, after taking the advice of his responsible officers, is a much more competent arbiter for this class of problem than any lay tribunal possibly could be. 5. We are opposed to making variations in tariff rates for the purpose of offsetting the protective effect of a depreciating or depreciated currency, either by the employment of a sliding scale moving in correspondence with the degree of currency depreciation, or in any other manner. It seems to us unsound in principle and based on a misunderstanding of the effect of exchange and currency depreciation upon prices. It is generally considered that currency depreciation exercises a protective effect only during the actual process of depreciation. When and to the extent that the process of depreciation has worked itself out and produced all its effects, and prices are adjusted to the new currency levels, then the exchange would no longer operate as a protective factor. The major effects of depreciation,

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we think, are soon worked out. The home price of raw materials subject to world parity immediately rises in proportion to the amount of the depreciation, and the same effect is produced in the case of imported raw materials, plant, and other commodities. At a later stage the general level of wages will probably be higher than it otherwise would have been, because the cost of living will be higher than it otherwise would have been on account of the currency depreciation, while some of the effects of depreciation will be diffused generally in ways that elude specific identification, but how soon and to what extent this will happen cannot be definitely ascertained in advance. Admittedly, with long-period charges on industry, such as the cost of fixed capital, long-term mortgage loans, rates, rents, and certain other elements of overhead, the period of adjustment to the new currency values may be prolonged indefinitely, but we know of no statistical method of determining how long this period would be, or what proportion of the whole it would amount to, so that no data are available for determining what the compensating effect upon the tariff rates should be. Any tariff compensation would be arbitrary in character, or at all events devoid of a definite statistical basis. Our opinion is that within a comparatively short period the depreciating process produces the major range of its effects. If this is so, then a reduction in our tariff rates by a given percentage to compensate for the raising of the exchange would do serious injustice to our manufacturers, and would remove some if not all of the protection which they are intended to enjoy under the existing tariff. 6. We are of opinion that it is undesirable and impracticable to make the grant of tariff protection subject to an undertaking that the prices of commodities produced by the protected industry shall not be raised. Circumstances quite outside the control of the parties giving such undertakings may make it impossible to carry them out, notably alterations in the ownership and control of the concerns affected, changes in productive or distributive organization and technique, and currency fluctuations either as the result of local conditions or initiated from abroad. 7. With respect to the General Tariff we have in most cases suggested that the margin of preference be left at the present level. So far as many commodities are concerned we think that these rates of duty are too high and should, subject to the Ottawa Agreement, be reduced as soon as circumstances permit. We, however, recognize that the last few years have brought great changes in the sphere of international trading relationships. Nations in their endeavours to obtain markets for their products are willing to make concessions by tariff adjustments and by other means. New Zealand, dependent as she is for her exports upon her primary products, is in urgent need of new markets for her goods, especially in the more highly industrialized countries of the world. We think, therefore, that the General Tariff rates should be reduced on the goods of countries which are willing to make concessions on our products. Another matter concerning the General Tariff that formed the subject of representations to the Commission was the question of imposing or increasing duties thereunder on raw materials required by the industries of New Zealand. As a general rule we do not favour this. We think that our industries should be able to obtain their raw materials at as low a cost as possible. 8. Many representations were made to the Commission asking that higher duties should be imposed on certain goods imported from the Dominions than from the United Kingdom. We have not, generally speaking, made recommendations with respect to these matters because trade between New Zealand on the one hand, and Canada, Australia, and South Africa on the other, is regulated by Agreements or Arrangements. We think that questions of the kind now being dealt with should be settled by negotiations between the Governments concerned. 9. We think that attention should be drawn to Article 12 of the Ottawa Agreement under which goods imported from the non-self-governing Colonies and Protectorates of the British Empire enjoy the same measure of tariff preference as is accorded to the products of the United Kingdom. In the event of industrialization proceeding at a rapid rate in some of the Eastern dependencies, the low production costs there might enable goods to be landed in New Zealand at very low prices. This might prove an embarrassing problem at some future time. 10. Many representations were made to the Commission with respect to the importation of Japanese goods into New Zealand. It was stated by some witnesses

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that at the prices at which certain classes of Japanese goods could be landed in the Dominion, it was impossible for locally manufactured goods and for goods imported from the United Kingdom and other countries to compete. On the other hand, some witnesses indicated that owing to various factors certain Japanese goods were now losing the market to other countries. The question as to Japanese goods is one that presents itself for solution not only in New Zealand but in other countries. The total trade between Japan and New Zealand during the last ten years is set out in Return No. I in Appendix C. These figures show (1) that New Zealand has a considerable export trade with Japan ; (2) that although during the lastthree years the average value of imports is less than during the two preceding triennial periods, it had not fallen to the same extent as imports from most other countries ; and (3) that during 1933 the value of goods landed in New Zealand from Japan increased by about 25 per cent, over that for 1932. Another table showing the values of the principal articles imported from Japan during the last ten years is set out in Return No. 2in Appendix C. It will be seen that during the period in question we have imported from Japan considerable quantities of apparel, cotton, silk, and artificial silk piece-goods, and oak timber. Even during 1933 they formed over 50 per cent, of the total importations. The Commission fully recognizes that these figures represent value and not volume of imports. In our view the matter is not one that can satisfactorily be dealt with by means of the tariff, but is more appropriate for negotiations between the Governments of the two countries. 11. In the course of our investigations our attention was drawn to the effect of admitting many lines of goods under the existing tariff item 448. Generally speaking, this affects only articles of relatively small value but in some cases it appreciably increases the protection which has been granted. Sometimes also protection appears to have been afforded to industries of minor importance. We suggest that the decisions which have already been made under this item should be reviewed at a convenient time. 12. The Commission is of opinion that Section 125 of the Customs Act, 1913, as amended by the Customs Amendments Acts, 1914 and 1921, should be repealed. The method of determining duty set out therein creates grave administrative difficulties and imposes an abnormally high rate of protection on the articles affected. In witness whereof we have hereunder set our hands and seals this twentyninth day of March, in the year one thousand nine hundred and thirty-four. Geo. Craig, Chairman. J. B. Gow, B. E. Murphy, >Members. G. A. Pascoe, J

APPENDIX A.—Gazette NOTIFICATIONS OF SITTINGS AND PROCEDURE. CUSTOMS TARIFF COMMISSION, 1933. Wellington, 15th May, 1933. It is hereby notified for public information that the Tariff Commission proposes to visit various places in New Zealand for the purpose of taking evidence from persons desiring to make representations respecting the Customs Tariff. Any person desiring to make such representations in person should advise the Chairman of the Tariff Commission at the above address as to the article or articles in respect of which it is wished that the Customs Tariff should be maintained or altered. It is essential that the place or places at which such evidence can be tendered should be stated as soon as possible, as the itinerary of the Commission must be arranged at an early date. Where any association, organization, or other body representing any particular industry, trade, or commercial interest is in a position to tender evidence of a satisfactory and comprehensive character, and desires to do so, such evidence would be preferred. The Commission would, however, reserve the right to require evidence from any member of such association, organization, or body.

20

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It is desired that where personal evidence is to be given before the Commission respecting any industry, the person intending to appear should previously supply, if possible, written information along the lines set out in the Schedule hereto. _ Due notice will be given in the New Zealand Gazette, and in the principal daily newspapers published in the district, as to the time and place at which the Commission will sit in each of the various centres which it will visit, but it is unlikely that sittings will be held except at Auckland, Wellington, Christchurch, and Dunedin. . ~ As the Commission is to report on or before 30th September, 1933, it will be necessary for those interested to indicate as soon as possible the matters upon which they desire to make representations. All evidence of the kind indicated in the Schedule hereto or other detailed evidence respecting costs of production will, if the witness so desires and subject to the approval of the Commission, be regarded as confidential. . . It is important that, as far as possible, all the evidence tendered to the Commission should relate to specific articles or classes of articles, and that where it includes matters of fact such as the landed cost, manufactured cost, selling prices, cost of transport of goods, or rates of wages, whether in New Zealand or elsewhere, such evidence should be supported by the authorities or other documents on which the evidence is based. Any company, firm, or person desiring that the existing tanft on any class of goods should be maintained, increased, or reduced should give evidence before the Commission, as, in the absence of such evidence, the Commission may come to a conclusion which would be contrary to the interests of such company, firm, or person, and which might be other than the conclusion which would have been arrived at if such evidence had been tendered. Geo. Craig, Chairman. SCHEDULE. Information to be supplied in writing by Person desiring to give Evidence before the Tariff Commission. 1. Full name and address of person, and of person, firm, company, or association (if any) for whom he is acting. 2. Place and nature of business of such person, firm, or company. 3. Article or articles with respect to which it is desired to give evidence. 4. Rates of duty at present in force and alterations (if any) desired. 5. Reasons in full for desired alteration (if any). 6. Whether the person, firm, or company is a manufacturer actually manufacturing or producing the article or articles in New Zealand, the United Kingdom, or elsewhere, or whether the person, firm, or company is intending to produce or manufacture the article or articles in New Zealand. ■7. In the case of an established industry in New Zealandfa) Average number of employees (showing male and female separately) employed in the business of manufacturing the article or articles during the preceding three years, and the average wages paid thereto. (6) Average number of hours per week worked by such employees. (c) Capital of such business during each of the last three years under the following headings :— £ (i) Value of Plant and Machinery (ii) Value of Buildings (iii) Value of Land used in the Business (iv) Working Capital (v) Other Division of Capital Total £ (d) General management and distribution charges, including salaries of general manager, office staff, travellers, &c. (average during last three years only). (e) Repairs and maintenance of buildings, plant, machinery, &c. (average during last three years only). (/) Rents, rates, and taxes (average during last three years only). (g) Value during each of the last three years (at factory selling-prices) of articles produced at factory. (h) The principal materials (raw, partly manufactured, or completely manufactured materials) used during each of the last three years in the process of manufacture, showing nature of the same, country of origin thereof, and price delivered at factory. (i) Approximate proportion which the total New Zealand output of the article or articles in question at present bears to the total requirements of New Zealand. (j) Countries from which the keenest competition arises, and any available information as to details of landed costs and wages paid to employees in such countries in the particular industry. (k) Names and addresses of other New Zealand manufacturers of this article. 8. In the case of an established industry in the United Kingdom or elsewhere outside New ZealandInformation similar to that indicated m paragraph 7 above, but with any modifications necessitated by the circumstances.

21

H.—2B.

9. In the case of a'prospective industry — (a) Does the applicant undertake, if sufficient protection is granted by Parliament, to commence the manufacture of the article or articles in New Zealand ; and, if so, within what period ? (b) Average number of employees (showing males and females separately) proposed to be employed, and the average wages that would be paid to them. (c) Amount of capita] proposed to be invested in the industry under the following headings : — £ (i) In Land and Buildings (ii) In Plant and Machinery (iii) Working Capital, &c. Total .. .. .. .. .. .. £ (d) The principal materials proposed to be used in the process of manufacture, showing nature of same, country of origin thereof, and price delivered at factory. (e) The proportion that the cost of labour will bear to the factory cost of the finished article or articles.' (/) Estimated value of the annual requirements of New Zealand in the article or articles. (g) Estimated value of the annual output of the proposed factory. (/<) Countries which at the present time supply the New Zealand market, and any available information as to details of landed costs and wages paid to employees in such countries in the particular industry. 10. Any other information in support of request.

CUSTOMS TARIFF COMMISSION, 1933. Wellington, 25th October, 1933. It is hereby notified for public information that, except in very special cases, the Customs Tariff Commission, 1933, does not intend to hear evidence after 9th November, 1933. It should be noted that the Commission may conclude (a) that the position with respect to any particular article under the tariff is as set out in the information already received, or to be received before the conclusion of the hearings, and (b) that where no information has been or will be received by the Commission with respect to any article no person, firm, or company is interested in the maintenance, reduction, increase, or abolition of the existing exemptions thereof from duty or the rates of duty thereon. It is therefore necessary that any person, firm, or company who desires to give evidence should communicate with the Chairman of the Commission not later than the 6th proximo. Geo. Ckaig, Chairman.

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APPENDIX B—SCHEDULE OF DUTIES.

THE CUSTOMS TARIFF OF NEW ZEALAND

Notes. The headings of the respective classes are used solely for convenience of classification, and do not in any way affect the interpretation of the Tariff. The term agriculture as used in the Tariff includes horticulture and viticulture ; the term " iron " includes steel, or steel and iron combined ; the term " specific duties means duties imposed according to a specified quantity, weight, size or number ; the term " wine " includes medicated wine or wine mixed with food, and such spirituous beverages and fluid or semi-fluid foods containing not more than 40 per cent, of proof spirit as may be so decided by the Minister. Steam engines, gas engines, oil engines, electric or other motors, and parts of the foregoing, are not included in the expression " machines, machinery, machine tools or appliances," as used in the Tariff. The abbreviation " n.e.i." means " not elsewhere included." The words underlined are those which the Commission considers should be printed in italics —see Section 20 of the Customs Amendment Act, 1921. (Note.—The underlined words appearing in the Report have been printed in italics.) In the notes included in the " Remarks " column primage duty has been disregarded.

23

Xtem British Preferential Tariff. , General Tariff. Tariff Items. Remarks. Column No. 1. Column No. 2. Class I.—Animals, Agricultural Products, Foods, and Groceries. 1 Live animals, including cattle and horses . . .. Free j Free. 2 Animals, food for, of all kinds, n.e.i., including horse and Free 20 per cent, ad val. We are of the opinion that stock foods should be obtaincattle spices and condiments, proprietary or otherwise ; able at the lowest possible cost and therefore recommend mixed bird-seed that the duty under the British Preferential Tariff on the goods included under item 2 be abolished. The question as to the duty on linseed-meal cake is dealt with under item 394. 3 Chaff .. .. .. .. .. .. Free Free As chafl is imported practically from Australia only, and as under the existing Agreement with that country j chafl is admitted free of duty, we think that no good purpose is served by retaining the existing duties under the British Preferential and General Tariff. 4 Grain and pulse, unground and unmanufactured, viz. :— (1) Maize .. .. .. .. .. l s . 6d. per cental Is. 6d. per cental A majority of the Commission is of the opinion that the question as to the existing position of the duties on whole and ground maize is anomalous. In the tariff of 1927 it was provided that a duty of 2s. per cental should be imposed on whole maize but that ground or crushed maize should be free of duty under the British I j Preferential Tariff.

H.^2B.

24

I j r. J British Preferential Tariff, j General Tariff. 111 Tariff Items. I Remarks. iNo - | Column No. 1. j Column No. 2. Class I.—Animals, Agricultural Products, Foods, and Groceries —continued. Grain and pulse, unground and unmanufactured, viz. — We think that if a duty is imposed on whole maize continued. the duty on ground or crushed maize should, in accordance with the usual practice, be higher than on the whole maize. We are of opinion, however, that the existing duty on whole maize is too high, and recommend that it be reduced to Is. 6d. per cental, that the rate on ground and crushed maize under the British Preferential * Tariff be fixed at 2s. per cental, and that the duty under the General Tariff should be at the rate of 3s. per cental. (2) Wheat .. .. ' ... .. .. I Is. 3d. per bushel Is. 3d. per bushel See remarks appended. (3) Barley — (a) To be used in the manufacture of beer or to be ! 2s. per cental 2s. per cental Representations were made to the Commission that the used otherwise than as stock food 1 exemption of barley for stock food should be abolished. (b) To be used as stock food, on declaration by the Free Free In view, however, of the desirability of stock foods importer that it will be so used, and on such being obtainable at the lowest possible cost, we are of conditions as may be determined by the j of opinion that the existing exemption should be Minister | maintained. (4) N.e.i. .. .. .. .. • • 2s. per cental 2s. per cental 5 Grain and pulse, ground or manufactured, viz. (1) Barley flour, prepared .. . . .. • • 2s. 6d. per cental 2s. 6d. per cental (2) Bran or pollard . . . . . . . • Free Free (3) Maize, flaked . . . . .. .. .. 5s. per cental 7s. per cental (4) Maize, ground or crushed but not otherwise manu- 2s. per cental 3s. per cental See remarks under item 4 (1). factured, n.e.i. (5) Malt, whole or ground ; rice malt .. .. j 5s. per cental 7s. per cental I (6) Oats, or oats in admixture with other grain .. ! per lb. fd. per lb. (7) Pearl barley .. .. . . . • • • Jd. per lb. fd. per lb. (8) Peas, split . . .. . . . . .. |d. per lb. fd. per lb. (9) Wheat-flour, including wheat-meal and similar I £5 15s. per ton of £5 15s. per ton of j See remarks appended. preparations of wheat ! 2,000 lb. 2,000 lb. (10) N.e.i. .. .. .. .. .. ! 2s. 6d. per cental 2s. 6d. per cental

H.—2B.

Wheat and Flour.— Statement by Majority of Commission. The Commission received a large voiume of evidence with respect to the wheat and flour duties. Wheat-growing is conducted chiefly in the South Island, usually, we understand, in connection with mixed farming. It was stated in evidence that there are approximately 6,500 wheat-growers in the Dominion. For many years the rates of duty levied on these products were specific ones, but in 1927 these were replaced by the sliding scale of duties, the basis of which is that the rates rise and fall as prices outside the Dominion fall and rise. The object of these duties was to afford to the grower, after allowing for certain modifying factors, a reasonably stabilized price for his wheat, and to keep the price of bread as far as possible within reasonable limits. This system of levying duties has had some peculiar effects. The fact that the higher is the value for duty, the lower is the amount payable on importation, introduces some unusual difficulties. With regard to importations of flour, the amount payable in most instances depends on the f.o.b. export cash price and not on the current domestic value of the goods. Generally speaking, the latter value is definitely determinable, but the greatest difficulty has been experienced in ascertaining the f.o.b. export cash price of flour. The change in method of collecting duty has introduced grave difficulties into the administration, both from the points of view of the Customs Department and the public. After considering the information available, we are of opinion that the existing system cannot long continue to be capable of administration on an ordinary commercial basis. are satisfied that the system must break down unless authority is given to the Minister of Customs to determine the duty payable practically on each shipment. "We could not take the responsibility of recommending such a course with respect to commodities like wheat and flour, and think that the existing system should be abandoned. In considering what alternative action should be taken we would mention the following : (1) It seems unlikely that New Zealand will ever again be in the position of a wheat exporting country, and therefore if wheat-growing is to continue on an extensive scale, the gristing of locally grown wheat must be encouraged. (2) To protect the wheat-grower in New Zealand it is necessary to protect both wheat and flour, since importations of either affect the grower in disposing of his product. The protection should, we think, encourage the importation of wheat rather than that of flour. (3) If duties are to provide protection to the grower over the whole of the wheat and flour consumed in the Dominion, it is necessary that the duties should be fixed at a point high enough to ensure protection at the centre (viz., Auckland) farthest from the productive area of wheat. The result is that higher duties have to be charged over the whole of New Zealand than are necessary to protect the grower for wheat or flour consumed in the South Island. (4) The sliding scale of duties has had the effect of diverting portion of the import, trade from Australia to Canada and the United States of America, where prices are generally higher. (5) In considering the duties which are to be levied we think that regard should be had to the duty on wheat and flour imported from Australia, from which country shipments would normally have come but for the sliding scale. (6) The average rates of duty collected on wheat and flour imported from Australia since 1928 are shown hereunder, together with the average home consumption values of wheat and the average export values of flour :—

4—H. 28

25

Wheat. Hour. Year. " 7- " ' J? ** T ' v\ » • Average Current Average Rate of Average f.o.b. Export Average Rate Domestic Value. Duty. Selling-price. of Duty. s. d. | s. d. £ s. d. £ s. d. 1928 .. .. .. .. .. 56 I 13 11 12 8 424 1929 ■ ■ -• •• ■ • • ■ 5 3 1 6 10 17 3 4 17 9 1 930 •• •• •• 4 5J 2 3J 9 8 11 6 6 1 l g 31 • ■ • ■ •■ •• • • 2 9 4 0 6 16 1 8 18 11 I 932 • • ■ • • • ■ • •■ 3 31 2 4f 6 9 6 6 17 6 1 0 33 .. .. .. .. .. 38 20 795 5 17 7

H,— 2B.

(7) Daring the last few years, owing to the general economic conditions prevailing, world prices of wheat in the major producing countries have fallen to very low levels. It, however, seems unlikely that they will fall further. (8) On the assumption that the sliding scale of duties will be abandoned, we have considered various schemes for affording protection to the wheat-grower, but are unable to suggest any practicable and satisfactory method of dealing with the mattter otherwise than by a reversion to the system in force before the alterations were made in 1927" One of the objections raised to this is that when world prices fall, the grower will receive a relatively low price for his wheat, and vice versa when world prices rise ; but we are unable to see any reason why the wheat - farmer should not, like most other primary producers, be subject to the vicissitudes of the world pricelevel. (9) On the present low prices of Australian wheat and flour we estimate that duties of Is. 3d. per bushel on wheat and £5 15s. per ton on flour would enable the grower to obtain about 3s. lOd. per bushel f.o.b. Lyttelton. _ . , (10) On the prices in Australia during the last" few years these are high duties, and they raise in our minds the question as to the wisdom from the Dominions viewpoint of maintaining the protection for the wheat-growing industry. (11) In discussing this aspect of the matter, we think that cognizance must be taken of the following considerations, namely— wheat-growing is not a new industry applying for the first time for tariff protection, it has been in existence for very many years ; it has for a long period been accorded tariff protection, and during recent years it has at various times received assistance from the State by other means ; approximately 6,500 farmers have a vital interest in the industry , it gives employment to a large number of persons ; farmers' costs are enhanced by the existence of our general protective system ; the wheat industry is of special importance to the wheat-growing areas of the Dominion. Our view is that in accordance with our accepted national policy respecting the tariff, protection should continue to be accorded to the wheat-growing industry. . . We therefore suggest that duties at the rate of Is. 3d. per bushel on wheat and £5 15s. per ton on flour be imposed, but that the matter be reviewed if world conditions materially change. We show in the Appendix various particulars respecting wheat and flour. . In considering this question, there is an aspect of the matter to which we would draw attention. The evidence shows that there are about fifty flour-mills m New Zealand, yet according to the information supplied to us, two mills in the Auckland District grist over 25 per cent, of the flour consumed in the Dominion. The milling side of the industry appears to be overcapitalized, and this consideration, in conjunction with the conditions under which the duties are levied, appears to result m the price-fixing arrangements which we understand now obtain among the majority of millers in the South Island respecting the sale of flour. We have not gone fully into the matter, as we are satisfied that there are no tariff means by which the position could be dealt with, bat we suggest that it should receive consideration.

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APPENDIX. (1) Return showing for the Last Ten Years the Acreage sown and Total Yield of Wheat in New Zealand, the Quantity of Wheat and Flour imported, and the Average Rates of Duty collected.

(2) Return showing the Quantity of Wheat and Flour imported from various Countries during the Last Ten Years.

(3) Return showing the Average Rates of Duty payable on Wheat and Flour imported from each Country since 1928.

27

Wheat produced in New T , Zealand. Imports. Average Rate of Duty paid. Year. ; ■ > . —— s Wheat and w , . Acres sown. Yield. Wheat. Flour. Flour in Terms ī> e , : i t, rU r: ot Wheat. Per Bushel " Per Ton ' Bushels. Bushels. Tons. ! Bushels. £ s. d. 1924 .. 173,864 4,174,537 3,548,340 1 3,548,402 Nil 2 10 0 1925 .. 166,964 5,447,758 2,253,740 8,205 2,647,628 Portion, Is. 2-4d. ; 3 0 0 bālāiiCG free 1926 .. 151,673 4,617,041 1,697,384 26,891 2,988,152 Portion, Is. 2-4d.; 3 0 0 balance free s. d. 1927 .. 220,083 7,952,442 737,081 14,324 1,424,633 13 3 14 1928 .. 260,987 9,541,444 761,055 9,500 1,217,055 13 2 10 7 1929 .. 255,312 8,832,864 254,491 9,774 723,677 14 2 10 6 1930 .. 235,942 7,239,556 280,137 9,538 737,961 19 3 13 7 1931 .. 249,014 7,579,153 188,794 11,321 732,202 3 6| 7 11 2 1932 .. 268,756 6,582,698 1,361,387 13,009 1,985,819 1 7§ 3 10 0 1933 .. 302,531 11,054,972 366,741 11,152 902,037 0 llf 2 2 2|

Wheat. Flour. p i j United j [ « . , j [ United a en ar Australia. ! Canada. States, Other. Totals. *L en ar Australia. Canada. I States, ' Other Totals Year " ! America.! | Year " | America.] Bushels. Bushels. Bushels. Bus. Bushels. Tons. Tons. Tons. Tons. Tons 1924 .. 3,548,340 .. .. .. 3,548,340 1924 .. .. .. .. l 'l 1925 .. 2,241,700 11,900 128 12 2,253,740 1925 .. 8,087 117 1 8 205 1926 .. 1,588,397 74,606 34,373 8 1,697,384 1926 .. 26,537 302 50 2 26 891 1927 .. 729,838 7,230 10 3 737,081 1927 .. 12,157 2,153 13 1 14 324 1928 .. 746,596 14,450 .. 9 761,055 1928 .. 3,546 5,731 221 2 9,560 1929 .. 158,074 96,417 .. .. 254,491 1929 .. 3,676 5,795 303 .. 9 775 1930 .. 122,175 157,850 2 110 280,137 1930 .. 3,379 5,323 835 1 9,538 1931 .. 56,108 130,673 2,001 12 188,794 1931 .. 5,819 5,071 931 .. 11 821 1932 .. 1,223,722 137,665 .. .. 1,361,387 1932 .. 3,620 7,012 2,377 .. 13 009 1933 .. 162,574 204,155 .. 12 366,741 1933 .. 1,480 5,944 3,728 .. 11,152

Wheat. Mour. v Australia: Canada: Vpar Australia: Canada: I United States, Year " Per Bushel, j Per Bushel. 1'- Ton. Per Ton. s. d. s. d. s. d. £ s. d. £ s. d. £ s. d. 1928 .. 1 3 0 9f .. 1928 .. 4 2 4 1 13 0 1 5 10 1929 .. 1 6 0 9| .. 1929 .. 4 17 9 1 1 6 1 12 3 1930 .. 2 3i 1 4 .. 1930 .. 6 6 1 2 4 3 2 9 1 1931 .. 4 0 3 4| 2 3 1931 .. 8 18 11 687 578 1932 .. 2 4f 1 6 .. 1932 .. 6 17 6 2 14 6 1 3 6 1933 .. 2 0 0 111 . 1933 .. 5 17 7 2 1 6 0 17 10|

H.—2B.

Professor Murphy desires to add the following memorandum :— While I endorse the proposals of my colleagues as preferable to the existing sliding-scale regime, which, apart from other objections to which it is subject, has become administratively impracticable, I am of opinion that import duties on wheat and flour should be abolished as soon as is practicable, by progressive reduction over a period of years. The advantage of wheat duties to the grower is necessarily capitalized, resulting in a level of land-values higher than would prevail in the absence of such duties. As soon as the land has changed hands after this capitalization process the duty ceases to operate as an inducement to production, because it has been cancelled out in the purchase price of the land. The duties have not stabilized the industry. They have introduced an additional element of uncertainty into an industry which, because of dependence on weather conditions and the vicissitudes of world production, is speculative at best, and that additional element is uncertainty as to the future of the .tariff. This point was stressed before the Commission. The organization and interrelations of the various sections of the industry have under the sliding scale become so complicated and precarious as to constitute a national economic nuisance. The milling side is clearly overcapitalized and the industry at present is in a dangerously unstable position. This instability is likely to persist under any system of protection, owing to the complexity of the relations between the growing of wheat and its milling into flour. The routine of mixed farming in New Zealand is such that wheat will always be raised on land naturally adapted for it, and the suitable areas in New Zealand are relatively restricted. I see no national advantage in expanding this area by artificial means. There is no reason to suppose that local supplies of wheat cannot when necessary be supplemented from abroad if required. Indications point to a world superfluity of wheat for some years to come. This potential world surplus, if realized, will incidentally make a policy of local protection to the wheat industry more costly to the community and more difficult to carry out. The only really impressive argument, in my opinion, for wheat and flour duties is that of national sufficiency. This argument is of negligible value. If we were effectively blockaded in time of war, the Empire losing command of the adjacent seas, the question of self-sufficiency in wheat or any other commodity would be immaterial to the ultimate consequences of such a catastrophe. Moreover, practically ail our wheat is grown in the South Island, while two-thirds of the population resides in the North Island. If, therefore, the North Island were cut ofE from the South Island by an effective sea and/or air blockade, the policy of subsidizing an essentially South Island industry at the expense of the whole Dominion would be of no benefit to the majority of our population. No country, in my opinion, should found its permanent tariff policy on the basis of being continuously on a war footing by complete or approximate self-sufficiency, and for a country so specialized to external trade as New Zealand it would be especially inadvisable to make the attempt. If the argument properly applies to wheat there is no reason why it should not be extended to many other commodities. The views expressed above apply in my opinion to all cereal production in New Zealand.

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29

1 I I British Preferential Tariff. General Tariff. jt Tariff Items. | Remarks. Column No. 1. Column No. 2. Glass I.—Animals, Agricultural Products, Foods, and Groceries —continued. 6 ; Hops . . . . .. .. .. 6d. per lb. Is. per lb. 7 Onions ., . . .. .. .. .. £1 per ton. £1 10s. per ton. The average f.o.b. prices of onions imported from tlie United States of America and Japan during 1930, 1931, and 1932 were as under :— Imported from £ s. d. 1930 .. .. U.S.A. 8 15 0 1931 .. .. U.S.A. 7 13 0 1932 .. .. Japan 7 12 0 Based on these figures the landed cost without freight, exchange or other charges, but with duty of £1 10s. would be— £ s. d. 1930 . . .. .. 10 5 0 1931 .. .. .. 9 3 0 1932 .. .. .. 9 2 0 The Commission has been advised that a value of £4 10s. per ton at time of harvesting would be regarded as a payable price for a fair average crop of New-Zealand-grown onions over a series of years. Hence it is considered that the rate of duty under the General Tariff should be reduced to the figure stated. 8 Potatoes .. .. .. .. . .. £1 per ton £1 per ton 9 Seeds, viz. :— Canary-grass seed, hemp-seed, linseed, lucerne-seed, maw- Free Free seed, millet-seed, sorghum-seed, unmixed Solid wort .. .. . . .. .. 6d. per lb. 6d. per lb. 11 Vegetables, viz. :— (1) Preserved peas in tins or similar containers including 20 per cent, ad val. 45 per cent, ad val. or After considering the evidence available to the Commist.he weight of any liquid 2|d. per lb., which- sion we are of the opinion that duty under the British ever rate returns the Preferential Tariff should be fixed at 20 per cent, ad val. higher duty (2) Fresh, dried, or preserved, n.e.i. .. .. 20 per cent, ad val. 45 per cent, ad val. Representations were made to the Commission respecting the duty on certain goods coming under this item. It is not considered that any alteration in the existing rates is warranted. 12 Aerated waters, and beverages, n.e.i. .. .. .. 20 per cent, ad val. 40 per cent, ad val. 13 Mineral waters, being beverages, aerated or otherwise .. 20 per cent, ad val. 20 per cent, ad val. 14 Chicory .. .. .. . . .. .. 2d. per lb. 4d. per lb. The Commission is of opinion that the rate of duty under j the British Preferential Tariff can be reduced to 2d. | per lb. without adversely affecting the New Zealand growers or manufacturers.

H.—2B.

30

' ■■ 1 co-el ® OT3 ® ' J..; I s BiSS S5>H t "SCO ■ # o ® a ffl s -3 a i>>'£ £ w -°i §n o ® p a o® =s .3 J? S — £ .3 K S gft !>-> o ., ® SoS a 21.3 N s|°| S b|-g ft S ® ® S< ® £^.2® -S 2 © 03a3_j!^ a:: '^"^ O r2yH hfl O 3 © *d d .jf! «+H • .2.2 3 s y rt <N o_2 08 o S *3 \h-3 "3 2 43 » o g ,-d "d d o ° d 03 H g 5 oS° 8 -2 43 d 'g d P <N _ffi ,-\g £ g~£ Sf£ d^ I rt .s -g I -s^-g-s-s^ S » - ā fl o §.3 3 8 * 8 -S B a -sin Jkg^iia! ||3l Z&lii ir^t & J*?jj 1 §^g53«| |'| * § S I § 'I o * t III? liiiti _i d 1-1 M rd 03 M fll P S <3 Ti M % °' a b § g § a * Ugsix* I |>|ds |!-§:i •>s> P „, d M *+-< o -+-> d . d 03 O „d d h + 1 R "S 2 IS ""0 _92 22 O CJ-rH(D.y.TH y dtOO) LP T} ° hf) -rHdO!-g03O 1 g i .a &.a a, 8 3 a -S H H "1 co • - - —— w _ ~ A ; ■ M f ti . . _i r-J H --H r-H 03 C3 "73 g £ $ i> O . > N . O -g £ H -3 p2 1« £ £ s9 % £ * B S S B S §3 -a | t t Islfea' §.ft •g i 5 a S.s ftftS £gg ftft(^ft| a» ..'■d'd fH r 6 r ri M g g lo 2 2 "® h^i ® o WH|«COS '-iio S i £ 10 t- . <^,7, OuQpn ft o >0 O 2 !2 O co w — — •—•—-— —-—— ———-———•——— : • ' : ~ H a' g • • _; r-H | . g g > . t £ "s "s ;£j ;2 jQ 1i £ 1 « ®® -B 1 "S 0, 53 a, § fegg (S ! a s s s s II 3i" ft ft i § S S 8 s 2 _M a : : : 8 "S. - ; t : : : : : t -s g S 'a & § &c.a 2 -s -"ē ° fta .SB° » "? '" a> d fe- 1J i s sB •a5pa r^\i! > o 00 s 'a s > .a it 8 © .a ° -3 ® OH c8 p TS cS 3 h ® «1 a d • o I ® " : ®^Sgfe>§_ ; :: r r: : : w - , « H •• OS-J <~o O cā g 3 P § 5 o += t> .3 2 £ 'T* © iO « Co cq O ® O© -2 9 P°S P-RCCRPhm p I : Ss-5 ::■ Si § llltU" I : : l : : ! 11 sJ §£ -a I-|!|.b8 I i J « O g g - -g ffi 13 s o rtf « H -gi $ § 1 a s I : „ | g o :: | M J 7 "3 11 .3 : :.g « ®®gs=s.-sgr iS'g 'S Cô 0 d - 03 PJ-P o i « 00 1 2 I d s -p s 5 o go d°ā Ph °'s I cL © p 3 »-rd ' " 'S -2 P 5-4 - 1 ! ,-d .SK-d |.3 M COOK. >~j_p CO I—1 . ,_p -4-3 0 d _, So d oq o jd gg~~ S8 • .-sZh-b ® Is gs.s ,H d g'g g 8 8 cLS- No j §®s 06 66 6 & S MO SS S2 2 SS ?q

H.—2B.

31

30 Candles n.e.i. .. .. . . .. .. lfd. per lb. 2fd. per lb. (Note. —Candles n.e.i., in packages of a net weight of 8 oz. or less, shall be charged as half-pounds ; in packages of a net weight exceeding 8 oz. but not exceeding 16 oz., as pounds ; and so on for packages of greater weight.) 31 Cocoa or cacao butter, coconut butter, and other vegetable Free Free butters or fats 32 Confectionery including medicated confectionery, liquorice 20 per cent, ad 45 per cent, ad val. This industry is carried on very efficiently in New Zealand. n.e.i., and sugared or crystallized fruits After considering the evidence submitted to the Commission, including the production costs in New Zealand and the United Kingdom, we arc of opinion that the rate of duty under the British Preferential Tariff should j be reduced to 20 per cent. adrVal, 33 j Lard, stearine, and refined animal fats, n.e.i. .. .. 20 per cent, ad val. 45 per cent, ad val. 34 j Stearine, on declaration that it will be used only in the fd. per lb. Id. per lb. manufacture of candles, matches, soaps, leather, or other articles approved by the Minister 35 | Fish, viz. :— (1) Anchovies, salted, in.casks or other containers capable Free Free of holding 28 lb. net or over (2) Fish, fresh, smoked, dried, pickled, salted, preserved 10s. per cwt. 15s. per cwt. by cold process, or preserved by sulphurous acid, n.e.i. (3) Fish, potted, and preserved, n.e.i., including any lfd. per lb. 3d. per lb. The rate of duty under item 35 (3) is, for practical purposes liquor, oil, or sauce a revenue duty, and it is considered that the duty on (Note. —The term " fish " is used in the Tariff potted and preserved fish imported from the United in its widest sense, and includes shell-fish, crust- Kingdom should be at the same rate as that on preaceans, and other foods obtained from the fisheries.) served salmon, viz., lfd. per lb. The Commission considers that a duty of Id. per lb. on 36 Fruits, dried —viz. :— dried apples under the British Preferential Tariff should (1) Currants, dates, figs, prunes .. .. . . Free Free be sufficient for the industry. The importations during (2) Raisins .. . . . . . . . . Free Id. per lb. recent years have been negligible. So far as the Com(3) Apples . . . . .. . . . . Id. per lb. 3d. per lb. mission is aware, no other fruits are likely to be dried (4) N.e.i. .. « .. .. . . . . Free 2d. per lb. I in New Zealand, and to keep the cost of these commodities at as low a figure as possible to the consumer we are of opinion that they should be admitted free J under the British Preferential Tariff. 37 Fruits, fresh —viz. :— (!) Apples and pears .. .. .. .. Id. per lb. lfd. per lb. (2) Apricots, cherries, grapes, medlars, nectarines, pas- 2d. per lb. 2d. per lb. sion-fruit, peaches, plums, quinces, tomatoes (3) Lemons .. . . . . .. .. Id. per lb. 2d. per lb. (No duty exceeding Id. per lb. shall be levied on any lemons on and from 1st December up to and including 31st May.) (4) Blackberries, currants, gooseberries, raspberries, and fd. per lb. fd. per lb. strawberries (5) Bananas, grape-fruit, mandarins, and oranges .. Free Id. per lb. (6) N.e.i. .. .. .. .. .. Free Free

H.—2B.

32

.a * 2«-3«s r s-Spi P s£ £ k 1 1 *s M 1J3 H fS 1 I Hf. isSJS lib l||s Ji*r ■B 05 fl ffi _®. S 08 to 2 3 T! TS z i^iigj§ g ;»* 1.-1 i^i^. 1 - l*llLl°^Ie§a§ g aJ 'S&2 gg.IaiIa.N-āI^I « 53-3 PH-a^a^-ā.a^ &-1A l?!S 1 s -a g a ■? a §* • * * <* 3 &&&< S "I u a -I si I -s" ||' a • § - a j t e d- s ph s t"i 02 _ __ — . .- —- —— — : ~*~ | , > fl £ -r m - h S® 2 a> CO S S Q~i oo 2 ~. vi — : ' Eh W' g 'S q -73 * =3 9 J? ■a (£ is "S sS 1 d S 5 2 2 S S 2 | I i ■ I S 1 a •n m id * - 111 "f S 'I • a • rt . § J a : : : g : * O « fe oSO„ S .a | . g p-a g %n. & s : : ,o. . >a 3 o3 >j g gji •Th w 0 u -h Co £ 2 &l so 4 s rf "& s u a ' —. m ■* .2 o 0*3 a o a rd § g_ g 03 g fl &CT3 « .1 B . « 03 ... fl*§/1h~ 8 1 111 II , --.-§«• « ft > as o* o3 m a -q os s >> -a 3 s •■§ "3 l-l -§ ft'31 l£ S- 3 g-g^J a « ph| 03 g w a g 1 . — - CO CO

H,— 2B.

5— H. 28

33

45 Jams, jellies, marmalade, and preserves .. .. Id. per lb. on the actual 4d. per lb. on the actual Representations were made with respect to the duty on or reputed weight, or reputed weight, jams, jellies, and marmalade both by United Kingdom whichever is the whichever is the and New Zealand manufacturers. After a consideragreater greater tion of the evidence, the Commission is of opinion that the rate of duty under the British Preferential Tariff should be reduced to Id. per lb. This will conform with the terms of the Ottawa Agreement and should be satisfactory to both the New Zealand industry of manufacturing jams, &c., and the dependent industry of fruitgrowing. It is considered that the | duty on preserves under the British Preferential Tariff should also be fixed at Id. per lb. 46 Jellies, concentrated .. .. .. .. .. 10 per cent, ad val. | 30 per cent, ad val. From the evidence available to the Commission we are of opinion that the duty under the British Preferential Tariff should be reduced to 10 per cent, ad val. 47 Macaroni, vermicelli, spaghetti, egg-noodles, and similar Free 25 per cent, ad val. alimentary pastes, n.e.i. 48 Malt-extract, malt-extract with cod-liver oil, and similar 2d. per lb., or 20 per 4d. per lb., or 40 per The Commission has carefully considered the evidence preparations containing.malt-extract cent, ad val., which- I cent, ad val., which- submitted by the New Zealand manufacturers and by ever rate returns the j ever rate returns the representatives of United Kingdom manufacturers. We higher duty higher duty are of opinion that the rates of duty at present in operation should remain. 49 Meats, potted or preserved .. .. .. .. 20 per cent, ad val. 45 per cent, ad val. 50 Milk or cream, preserved, evaporated, or dried, and includ- 20 per cent, ad val. 40 per cent, ad val. Considerable evidence was obtained with respect to this ing any of the foregoing in combination with casein, product. The Commission is of opinion that duty under sugar of milk, or other milk product the British Preferential Tariff should be reduced to 20 per cent. ad. val. 51 ; Mustard .. .. .. .. .. .. Free 2d. per lb. 52 | Nuts, and preparations thereof, viz. :— (1) Almonds and nuts, all kinds, shelled or unshelled, Free Free n.e.i. (2) Almond-, or nut-, pastes, m«,als, and similar prepara- Free 3d. per lb. tions, n.e.i., not being animal foods (3) Desiccated coconut, sweetened or unsweetened .. Free Free (4) Walnuts, shelled or unshelled .. .. .. 2d. per lb. 2d. per lb. 53 Capers, caraway-seeds, caviare, cayenne pepper, curry- 20 per cent, ad val. 20 per cent, ad val. powder, curry -paste, olives, ground turmeric 54 Candied peel, and drained peel .. .. .. 2d. per lb. 4d. per lb. Evidence was received with respect to these commodities. After considering the information available, the Commission is of opinion that the duty under the British Preferential Tariff should be reduced to 2d. per lb. 55 Matches and vestas, viz. :— (1) Wax, in boxes containing not more than 60 matches 9d. per gross of boxes Is. 9d. per gross of The manufacture of wax matches has been carried on in or vestas boxes New Zealand for many years; the manufacture of (2) Wax, in boxes containing more than 60 matches or Is. ljd. per gross of 2s. 7§d. per gross of wooden matches has only recently commenced. The vestas, but not more than 100 boxes boxes industry is an efficient one. Evidence produced to the

H.—2B.

34

British Preferential Tariff. General Tariff. Tariff Items. Kemarks. No. Column No. 1. Column No. 2. Class L—Animals, Agricultural Pkoducts, Foods, and Groceries —continued. | Matches and vestas, viz. —continued. . . • _ ! (3) Wax, in boxes containing over 100 matches or vestas, Is. 6d. per gross of 3s. 6d. per gross of Commission shows that the manufacturers are making for each 100 matches or vestas or fraction thereof boxes boxes relatively large profits and it is considered that it is m contained in one box f the interes of the general community that the duty (4) Wooden, in boxes containing not more than 60 9d. per gross of boxes Is. 9d. per gross of should be reduced. We are of opinion that the matches or vestas ' boxes industry can function satisfactorily if the lower duties (5) Wooden, in boxes containing over 60 matches or Is. 6d. per gross of 3s. 6d. per gross of are adopted. No representations were made to vestas, for every 100 matches or Vestas or fraction boxes boxes the Commission by United Kingdom manufacturers thereof contained in one box °f matches. (6) Matches or vestas, of any material other than wood or wax, in boxes, shall be charged with a duty corresponding to the duty payable on wooden matches (7) Matches, or vestas, n.e.i. .. • • • ■ 2d. per 1,000 matches 4d. per 1,000 matches (Boxes made of gold, silver, metal, wood, or or vestas or vestas other material, of permanent value when empty, shall be charged as jewellery or fancy goods, in addition to the duty payable on any matches contamed therein ) ... PipVlps ' .... 20 per cent, ad val. 40 per cent, ad val. After an examination of the evidence, the Commission is satisfied that the rates of duty should be reduced to 20 per cent, under the British Preferential Tariff and to 40 per cent, under the General Tariff. These duties should enable the industry to be efficiently carried on in New Zealand. The imports during recent years have been relatively small. 57 Sauces ; chutney ; soy, and catsup, in vessels of 10 gallons 2s. per gal. 6s. per gal. The industry is an efficient one, and the Commission is of capacitv and under that it can compete with the imported comr " modit.y if the rates of duty are reduced to the hgures stated. 58 Soy, and catsup, in vessels exceeding 10 gallons capacity Free Free 59 Passover bread; altar bread .. .. • • Free Free 60 Egg pulp and white or yolk of eggs, whether desiccated, 25 per cent, ad val., or 45 per cent, ad val., or liquid, frozen, or other, also any similar preparation of 4d. per lb., which- 8d. per lb., whiche gg ever rate returns the ever rate returns the higher duty higher duty

H.--28.

35

61 Provisions, viz. :— (1) Soups; spaghetti and similar alimentary pastes, 10 per cent, ad val. 35 per cent, ad val. Representations were made to the Commission by United cooked, whether or not in combination with other Kingdom manufacturers with respect to the duty on food substances; custard-powder, egg-powder, custard-powder and soup squares. The Commission, blanc-mange powder after receiving the information available, is of opinion (2) N.e.i. .. .. .. .. .. 20 per cent, ad val. 45 per cent, ad val. that the duty on these and similar products under the British Preferential Tariff should be reduced to 10 per cent, ad val. and that a similar rate of duty should be levied on spaghetti and similar alimentary pastes, cooked, whether or not in combination with other food substances ; also egg-powder and blanc-mange powder. It is considered that the rate of duty on other provisions covered by the tariff item should remain as at present. 62 Rice, dressed or undressed ; rice-meal refuse and rice-meal Free Free 63 Soap, all kinds ; soap-powder, extract of soap, dry soap, 20 per cent, ad val. 45 per cent, ad val. Representations were made to the Commission with soft-soap, liquid soap, soap solutions ; washing or respect to the duty on soap. The industry of manucleansing powders, crystals, pastes or liquids, n.e.i. facturing this commodity is an efficient one. It utilizes a large quantity of New Zealand material and employs a considerable number of persons. After considering the evidence, we are of opinion that the duty under the British Preferential Tariff should be reduced to 20 per cent, ad val. 64 Salt .. .. .. ., .. .. Free 25 per cent, ad val. The Commission has gone into the question as to the rate of duty to be charged on salt under the General Tariff. | This article is largely used in the dairy and other industries, and it is considered that a preference of 25 per cent, ad val. should be a sufficient margin for United Kingdom manufacturers. 65 Spices, unground, viz. :— (1) Cinnamon, cloves, ginger, mace, nutmeg, pepper, and Free 10 per cent, ad val. vanilla (2) .e.i. .. .. .. .. .. Free Free 66 Spices, ground, n.e.i., including pepper, pimento, and olive- Id. per lb. 2d. per lb. The Commission has fully examined the evidence and it is stones, ground considered that duty under the British Preferential Tariff should be reduced to Id. per lb. The importations during recent years have been relatively small. 67 Confectioners' moulding-starch ; potato flour ; rice flour ; Free Id. per lb. No representations were made to the Commission with arrowroot; sago ; tapioca ; maizena ; cornflour respect to articles included under tariff item 67 (1). These duties were imposed to encourage the packeting of goods in New Zealand. The Commission is of opinion that such duties imposed on essential foodstuffs are not in the best interests of the public. We are accordingly of opinion that the duties under the British Preferential Tariff on these products should be abolished. An application was received for the imposition of a duty of Jd. per lb. on ground rice in bulk. The Commission considers that this request should not be granted.

H.—2B.

36

I British Preferential Tariff, j General Tariff. v m | Tariff Items. ! | Remarks. • Column No. 1. Column No. 2. Class I.—Animals, Agricultural Products, Foods, and Groceries —continued. 68 Starch n.e.i. .. .. .. .. .. Id. per lb. 2d. per lb. The evidence obtained by the Commission with respect to this article satisfies them that the duty under the British Preferential Tariff should be reduced to Id. per lb. 69 Sugar, of Number 22 colour, or over (Dutch Standard) ; ljd. per lb. ljd. per lb. invert sugar and invert syrup 70 (1) Sugar n.e.i. ; treacle, golden syrup, maple-sugar, and Id. per lb. Id. per lb. maple-syrup (2) Molasses .. .. .. .. '... j Free Free 71 Treacle or molasses, mixed with bone-black in proportions j Free Free to the satisfaction of the Minister 721 72 > Sugar of milk .. .. .. .. .. Free 25 per cent, ad val. The industry of manufacturing sugar of milk is an import- ° J ant one from the point of view of the dairy industry since it is made from whey, a residual product from the manufacture of cheese. Competition comes from foreign sources. It is considered that sugar of milk, under the existing items 72 and 73, should be admitted free under the British Preferential Tariff and that a duty of 25 per cent, ad val. should be imposed under I the General Tariff. Class II. —Tobacco. 74 Cigarettes n.e.i. .. .. .. .. .. 25s. 6d. per 1,000 25s. 6d. per 1,000 75 Cigarettes, exceeding in weight 2| lb. per 1,000 .. 10s. 6d. per lb. 10s. 6d per lb. 76 Cigars, including the weight of every band, wrapper, or 12s. per lb. 14-s. per lb. attachment, to any cigar 77 Snuff .. .. .. .. .. .. 12s. per lb. 12s. per lb. 78 Omitted. j 79 Tobacco, cut, n.e.i. .. .. .. .. .. 6s. lOd. per lb. 6s. lOd. per lb. 80 Tobacco n.e.i., including the weight of every label, tag, or 6s. 8d. per lb. 6s. 8d. per lb. , Cigarettes and tobacco — other attachment . ' See statement appended. 81 Tobacco unmanufactured, entered to be manufactured in Free Free New Zealand in any licensed tobacco-factory, for manufacturing purposes only, into tobacco, cigars, cigarettes, or snuff 82 Tobacco for sheep-wash, or for insecticide, after being Free i Free rendered unfit for human consumption to the satisfaction of the Minister ! J

H,— 2B.

*1 Tobacco and Cigarettes.-— The Commission has given consideration to the tobacco growing and manufacturing industries. The existing duties serve the dual purpose of assisting both these industries. The import duties on tobacco leaf, tobacco and cigarettes are as under :—

The following are the excise duties :— Tobacco, cut .. . . 4s. Ofd. per lb. Other tobacco .. .. 3s. 10|-d. per lb. Cigarettes— Not exceeding in Tobacco, fine cut, suitable for the manu- Cigars and snuff .. .. .. ss. 6d. per lb. ~ weight 2| lb. the facture of cigarettes .. .. 9s. 2d. per lb. " thousand . . 235. 4d. per thousand. Exceeding in weight 2f lb. the thousand .. 9s. 4d. per lb. The following particulars respecting the industries are interesting :—

37

Rate of Duty. Tariff Item. Goods. - — I British Preferential Tariff. General Tariff. 74 Cigarettes n.e.i. .. .. .. .. 33s. 9d. per 1,000 33s. 9d. per 1,000. 75 Cigarettes, exceeding in weight 2f lb. per 1,000 .. 13s. 9d. per lb. 13s. 9d. per lb. 78 Tobacco, fine cut, suitable for the manufacture of , 13s. 3d. per lb. 13s. 3d. per lb. cigarettes 79 Tobacco, cut, n.e.i. . . .. .. .. 6s. lOd. per lb. 6s. lOd. per lb. 80 Tobacco n.e.i., including the weight of every label, 6s. 8d. per lb. 6s. 8d. per lb. tag, or other attachment 81 Tobacco, unmanufactured, entered to be manu- 2s. 6d. per lb. 2s. 6d. per lb. factured in New Zealand in any licensed tobaccofactory, for manufacturing purposes only, into tobacco, cigars, cigarettes, or snuff

Imported Leaf Tobacco. New-Zealand-grown Leaf Tobacco. Tobacco, Cigars, and Cigarettes Amount of Revenue entered for Home Consumption. lost through ProCalendar , tection afforded to j _ 1 j the Industry of (Quantity Quantity used in Delivered, to XJsed in T . , ATr7 _ i 7 growing Tobacco in imported. Manufacture. Manufacturers. | Manufacture. Imported. New Zealand made. Totals. New Zealand. lb - lb - lb. lb. lb. lb. lb. £ 1928 .. .. 1,138,455 749,523 714,255 382,266 3,678,186 1,119,791 4,797,977 38,848 1929 •• •• 1,402,644 1,095,362 794,152 543,483 3,469,160 1,557,204 5,026,364 55,006 1930 .. .. 2,300,853 1,827,967 809,793 722,249 2,713,487 2,372,312 5,085,799 87,251 1931 1,916,310 1,909,178 951,216 921,290 1,826,770 2,827,730 4,654.500 141,376 193- .. 1,739,139 1,964,116 1,636,739 950,090 1,534,204 2,934,214 4,468,418 124,699 I 93 ' 3 •• 2,121,824 2,200,850 2,400,497 1,170,663 1,201,626 3,279,766 4,481,392 153,650

H,— 28

Tobacco is at present grown chiefly in the Nelson province. According to the information supplied to the Commission, the number of growers in that district is at present about 650. There are a number of growers in other districts. The figures are not available, but we have assumed that the total number in New Zealand does not exceed 800. On these figures it would appear that the concession in duty works out at about £192 per grower. It is generally recognized that tobacco-leaf will continue to be imported for use in manufacture in New Zealand. Hence the possibility of the extension of the industry would appear to be limited. The existing duty on tobacco-leaf is at the rate of 2s. 6d. per lb. If this rate had been in force during the last four years it would, according to the statistical particulars of importations, have been equivalent to an ad valorem duty of over 130 per cent. Notwithstanding this protective duty, the average prices received by the growers, according to the information supplied to us, during the last four years have been as under :— Flue cured .. .. Is. lid. per lb. Air dried .. .. Is. 6d. per lb. This difference is, we understand, absorbed partly by reduced prices of tobacco made in New Zealand containing local leaf and partly by increased profits to the manufacturers. Of the two principal manufacturers the annual accounts of one only are published. These show that very large profits have been made. So far as can be seen there does not appear to be any reasonable prospect of the exportation of tobacco-leaf taking place on a profitable basis. The Commission, after considering the matter fully, has come to the conclusion that under existing conditions the industry of growing tobacco as at present conducted is not an economic one and cannot be satisfactorily dealt- with by any means within the tariff. If it is considered that assistance should be continued for the industry it is thought that this should be afforded by some method outside the tariff. The recommendations made relate, therefore, only to the duties on imported tobacco, cigars, and cigarettes, and the manufacture of the same from imported leaf and have been arrived at after consideration of all the evidence and information available. The existing duties on cigarettes are considered to be too high from the revenue producing point of view. The following figures show the quantity of manufactured tobacco and cigarettes which have been entered for home consumption during the last six years :—

It will be seen that, whereas in 1928 and 1929 cigarettes formed about 37 per cent, of the total quantity shown above, in 1932 and 1933 they represented only about 23 per cent, of the total. The duties on cigarettes were increased in 1930 and we are of opinion that they should now be reduced to the rates recommended. It is considered that a large amount of revenue has been lost to the Dominion through the development of the practice by private persons of rolling their own cigarettes from tobacco which has been entered as cut tobacco. An attempt was made to overcome this by imposing a higher duty on fine cut. tobacco suitable for the manufacture of cigarettes than on ordinary cut tobacco. This, however, has not proved effective, and we think that an attempt should be made to meet the difficulty by imposing a special duty on cigarette papers at the rate of ljd. per 60 cigarette papers under the British Preferential Tariff and at lfd. per 60 cigarette papers under the General Tariff. It is considered that the manufacture of cigarette papers in New Zealand is not a suitable one for this country and it is suggested that an excise duty should be imposed on such papers at the same rate as on imported cigarette papers under the British Preferential Tariff.

38

Tobacco, Manufactured. Cigarettes. . Total Tobacco and Calendar Year. , j - - — 7 Cigarettes. Imported. New Zealand made. Total. Imported. New Zealand made. Total. ~~ ~ ' ' ' i lb. lb. lb. lb. lb. lb. lb. 1928 .. 2,273,438 743,554 3,016,992 1,377,795 370,044 1,747,839 4,764,831 1929 .. 2,195,156 967,033 3,162,189 1,248,577 583,924 1,832,501 4,994.690 1930 .. 1,716,990 1,611,643 3,328,633 977,120 754,952 1,732,071 5,060,704 1931 .. 1,189,608 2,209,083 3,398,691 628.845 614,511 1.243,356 4,642,047 1932 .. 1,032,955 2,412,416 3,445,371 497,080 518,003 1,015,083 4,460,454 1933 .. 788,408 2,618,753 3,407.161 408,195 657,310 1,065,505 4,472,666

H.—2B

39

j, British Preferential Tariff. General Tariff. ». Tariff Items. Remarks. Column No. 1. Column No. 2. ' I Class III. —Spibits, and Alcoholic Beverages. 83 Ale, beer of all sorts, porter, cider, and perry, when con- 2s. 3s. The minimum excise duty on beer brewed in New Zealand taining more than 2 per cent, of proof spirit; per gallon, is Is. 6d. per gallon. The Commission considers that a or for six reputed quart bottles or the reputed equivalent tariff protection of 6d. per gallon is required under the in bottles of a larger or smaller reputed capacity British Preferential Tariff. 84 Spirits, viz. :— (1) Cordials, bitters, and liqueurs, when exceeding the 40s. per liquid gal. 40s. per liquid gal. These are revenue duties and the Commission considers strength of 40 per cent, of proof spirit, but not that for this reason they should be maintained, exceeding the strength of proof At the same time, they consider that the allowance, (2) Cordials, bitters, and liqueurs, when exceeding the 40s. per proof gal. 40s. per proof gal. which is at present limited to 16-5 for under-proof strength of proof spirits, should be reduced to 25. Since this allowance (3) Spirits, and spirituous mixtures, the strength of was fixed the strength of case spirits imported into which can be ascertained by Sykes' hydrometer New Zealand has been considerably reduced. or other similar instrument, viz. (a) Rum .. .. .. .. .. 40s. per proof gal. 44s. per proof gal. (b) Other kinds . . .. .. .. 40s. per proof gal. 40s. per proof gal. (No allowance beyond 25 under proof shall be made for spirits or spirituous mixtures of a strength less than 25 under proof.) (4) Spirits, and spirituous mixtures, sweetened, n.e.i., 40s. per liquid gal. 40s. per liquid gal. when not exceeding the strength of proof (5) Spirits, and spirituous mixtures, sweetened, n.e.i., 40s. per proof gal. 40s. per proof gal. when exceeding the strength of proof (Note. —Spirits, and spirituous mixtures, in bottles or jars in cases, shall be charged as follows — viz. : 2 gallons and under 'as 2 gallons, over 2 gallons and not exceeding 3 as 3 gallons, over 3 gallons and not exceeding 4 as 4 gallons, and so on for any greater quantity contained in any case : provided that with the sanction of the Collector the foregoing provision need not be applied to absolute alcohol, spirits of wine, spirits for scientific, medicinal, perfumery, or toilet purposes, or to trade samples.) (6) Spirits, and spirituous mixtures, containing more 40s. per liquid gal. 40s. per liquid gal. than 40 per cent, of proof spirit, but not exceeding the strength of proof, in combination with other ingredients (7) Spirits, and spirituous mixtures, exceeding the 40s. per proof gal. 40s. per proof gal. strength of proof, in combination with other ingredients

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British Preferential Tariff. General Tariff. Tariff Items. i Remarks. • Column No. 1. Column No. 2. Class III. —Spirits, and Alcoholic Beverages —continued. 85 Spirits for fortifying New Zealand wines, when removed 18s. per proof gal. 18s. per proof gal. to a storeroom approved by the Collector, and under conditions prescribed by the Minister 86 Perfumed spirits including Cologne water .. .. : 70s. per liquid gal., or 90s. per liquid gal., or 25 per cent, ad val., 50 per cent, ad val., | whichever rate re- whichever rate re- | turns the higher duty turns the higher duty 87 Spirits denatured to the satisfaction of the Minister but | 6d. per liquid gal., not Is. per liquid gal.,^| wholly or partly denatured before importation including the denatur-j not including the As denatured spirits are necessary for industrial purposes, ing material (if any) ! denaturing material it is considered that when denatured in New Zealand added after importa- (if any) added after they should be admitted free, and that a corresponding tion importation reduction should be made in the duty on imported 88 Spirits wholly denatured in New Zealand under prescribed Free Free denatured spirits. conditions J 89 Alcohol, and denatured spirit, for use in museums, uni- Free Free versities, hospitals, and similar institutions, or for other scientific or educational purposes, in such quantities and for such purposes and under such conditions as may be approved by the Minister 90 Wine containing not more than 40 per cent, of proof spirit, viz. :— (1) Sparkling, all kinds ; per gallon, or for six reputed 10s. 15s. The Commission is of opinion that the rates of duty on quart bottles, or the reputed equivalent in bottles such wines as are admissible under the British Preferof a larger or smaller reputed capacity ential Tariff should be at the same rates as Australian (2) Other kinds ; per gallon, or for six reputed quart 4s. 6s. wines and that, when convenient, the rates on South bottles, or the reputed equivalent in bottles of a African wines should be increased to the same basis, larger or smaller reputed capacity 91 Wine of any kind containing more than 40 per cent, of 40s. per liquid gal. 40s. per liquid gal. ! proof spirit Class IV. —Drugs ; Chemicals ; Surgical, Dental, and Scientific Apparatus. 92 \ Acid, acetic, n.e.i. ; acetic anhydride .. .. .. Free 20 per cent, ad val. No representations were made to the Commission by New 93 f Zealand manufacturers for the maintenance of the present duties. As acetic acid is a raw material for New Zealand industries, it is considered that it should be admitted free under the British Preferential Tariff. 94 Vinegar ; acetic acid containing not more than 15 per cent. 3d. per gal. 6d. per gal. From the evidence obtained by the Commission they are of acidity of opinion that the duty under the British Preferential Tariff should be reduced to 3d. per gal.

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95' Acids —viz., inorganic acids, n.e.i. ; also benzoic, carbolic, Free [ Free citric, formic, gallic, lactic, oleic, oxalic, picric, pyrogallic, j pyroligneous {crude), salicylic, tannic, and tartaric acids 96 Anti-incrustation, boiler, and other similar compounds .. Free Free 97 Bacteriological products, iucluding viruses, sera, serum Free Free extracts, vaccines, antigens, and preparations containing such substances, as may be approved by the Minister 98 Baking-powder ; yeast, and similar preparations ; yeast 10 per cent, ad val. 30 per cent, ad val. After considering the evidence available to the Commisfoods sion, we consider that the duty under the British Preferential Tariff should be reduced to 10 per cent. 99 Chemicals, and chemical preparations, n.e.i., including 20 per cent, ad val. 45 per cent, ad val. photographic chemicals n.e.i. I 100 Chloroform ; ethyl ether ; other general or local anaes- Free 20 per cent, ad val. thetics, as may be approved by the Minister ; . creosote refined ; camphor, creosol, guaiacol, iodoform, menthol, mercurochrome, naphthols, resorcin, thymol, thymol iodide, and such other substances specially suited for use as antiseptics as the Minister may approve 101 Cream of tartar ; cream-of-tartar substitutes —viz., acid Free 20 per cent, ad val. calcium phosphate, acid phosphate of soda, pyrophosphate of soda, mixtures of the foregoing with one another or with any other substance, and similar cream-of-tartar substitutes ! 102 Crude distillates of coal-tar or wood ; creosote, crude or com- Free Free mercial; tar 103 Dextrine n.e.i. .. .. .. .. .. Free Free 104 Disinfectants n.e.i., including coal-tar acids in combination j Free 10 per cent, ad val. with alkalis to form solutions which will give saponaceous j disinfectants upon the addition of water ; sheep-dip ; j weed- and scrub-killing preparations j 105 Drugs and chemicals, viz. :— Acetone ; amyl alcohol; butyl alcohol; bromine ; | Free Free calcium carbide ; carbon bisulphide ; carbon tetrachloride and other chlorides of carbon ; chlorinated hydrocarbons n.e.i. ; catechu ; chlorinated lime ; j cochineal; formic aldehyde, and solutions thereof ; ; fusel-oil; gall-nuts ; hydrogen peroxide ; iodine ; j liquorice in blocks of 7 lb. net and over, or soft liquorice | extract in bulk in vessels capable of containing 7 lb. | net or over ; phosphorus ; pyridine ; quinine, and salts of quinine ; saffron ; strychnine, and salts of strychnine ; sulphur ; turmeric, ungrouna; woodnaphtha, commercial; nicotine and its salts 106 | Drugs, chemicals, and other substances, as may be approved Free Free by the Minister, entered to be warehoused in a manufacturing warehouse for the purpose of making therein, according to approved formulae, medicinal preparations, perfumery, toilet preparations or similar articles 107 Drugs, chemicals, and other substances, as may be enume- Free Free rated by the Minister, specially suited for use as culture media, stains for use in microscopic work, or as indicators for chemical analysis or scientific investigation

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British Preferential Tariff. General Tariff. Tariff Items. Remarks. 1No - Column No. 1. Column No. 2. Class IV. —Drugs ; Chemicals ; Surgical, Dental, and Scientific Apparatus —continued. 108 I Drugs, crude, not powdered, and unsuited for use as foods, j Free j Free ] or in the manufacture thereof —viz., barks, woods, twigs, | leaves, herbs, flowers (except hops), roots, corms, gums, resins, balsams, inspissated juices (including opium), j seeds, fruits, fruit-rinds, pitch, cantharides, ergot 109 Drugs, crude —viz., carrageen or Irish moss .. .. Free ' Free 110 Dyes, manufactured ; non-spirituous solutions of natural Free 10 per cent, ad val. or artificial colours or dyes, for colouring confectionery or beverages, and not being culinary- or flavouringessences 111 Dyeing-materials n.ē.i. .. .. .. .. Free j Free 112 Essences, culinary or flavouring, containing more than 40s. per liquid gal. 40s. per liquid gal. 40 per cent, of proof spirit 113 Essences, culinary or flavouring, n.e.i. .. .. 20 per cent, ad val. | 45 per cent, ad val. 114 Essences, synthetic —viz., amyl acetate, amyl butyrate, Free 20 per cent, ad val. amyl caprionate, amyl formate, amyl isovalerate, benzal- I dehyde, ethyl acetate (acetic ether), ethyl benzoate, ethyl butyrate, ethyl formate, methyl benzoate, methyl sali- • cylate, oenanthic ether ; and similar acids, alcohols, aldehydes, esters, ethers, ketones, phenols, or other similar substances, suitable for the manufacture of culinary or flavouring essences or perfumes, as may be approved by the Minister 115 Essential oils .. .. .. .. .. Free Free 116 Gases, liquefied or compressed, viz. :— (1) Anhydrous ammonia .. .. .. .. Free 4d. per lb. Representations were made to the Commission respecting (2) Carbon dioxide or carbonic acid gas .. .. Id. per lb. 3d. per lb: the protection to be granted on anhydrous ammonia. In (3) N.e.i. .. .. . • • • .. Free Free view of its importance to the industries of New Zealand, it is not considered that the duty should be increased. Representations were also made by the manufacturers that the duty on carbon dioxide under the British Preferential Tariff should be increased. After considering the evidence available, we are of opinion that the industry does require additional protection. 117 Glycerine, crude or refined .. .. .. .. Free 20 per cent, ad val. 118 Gums and resins —viz., arabic, benzoin, dammar, tragacanth, Free Free and Indian gum ; shellac 119 Insecticides, and fungicides, for agricultural uses; tree- Free Free washes; powdered pyrethrum flowers or Dalmatian powder, powdered hellebore, and derris root, powdered, in packages of not less than 5 lb. net weight; concentrated extracts of pyrethrum and of derris root, also mixtures of such concentrated extracts

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120 j (1) Insulin: preparations made from animal glands or Free Free tissues as may be approved by the Minister (2) Preparations made from liver, pancreas, pituitary Free 20 per cent, ad val. gland, or thyroid gland, in combination with other substances (3) Vitamins, vitamin concentrates, and mixtures of such Free 20 per cent, ad val. substances 121 (1) Medicinal preparations (except wines) containing 50 per j 20 per cent, ad val. 45 per cent, ad val. cent, of proof spirit or less ; medicinal preparations, drugs, druggists' sundries, and apothecaries' wares, n.e.i. ; also aerated-water makers', cordial-makers', and brewers' drugs, chemicals, and other sundries, n.e.i. (2) Medicinal preparations n.e.i., packed in heremetically Free 20 per cent, ad val. sealed glass vessels of a capacity not exceeding J fluid ounce 122 Medicinal preparations (except medicated wines) containing 9d. per lb. Is. 9d. per lb. more than 50 per cent, of proof spirit 123 Metal-workers' surface and case hardening compounds; Free Free soldering, brazing, and welding compounds 124 Metallic elements n.e.i.; oxides, hydroxides, inorganic salts Free Free i j n.e.i., acetates, and oxalates of aluminium, ammonia, j antimony, arsenic, barium, bismuth, boron, cadmium, calcium, cerium, chronium, cobalt, copper, gold, iron, lead, lithium, magnesium, manganese, mercury, nickel, platinum, potassium, radium, silicon, silver, sodium, strontium, tin, zinc, and of the other metallic elements ; metallic soaps n.e.i. 125 Mixtures of drugs and chemicals, with each other, or with other substances, and drugs or chemicals in tablet form, or which have been subjected to any other process of manufacture may, at the discretion of the Minister, be classed as medicinal preparations n.e.i., or as chemicals n.e.i., or under any other item of the Tariff which appears to him suitable 126 Naphthalene, crude, or refined .. .. .. Free I 20 per cent, ad val. 127 Omitted. 128 Rennet, in tablet form, or in liquid form in containers having 20 per cent, ad val. 45 per cent, ad val. "") ! Representations were made to the Commission both by a capacity of 1 pint or under ; rennet in powder, in small United Kingdom and New Zealand manufacturers of packages suitable for retail sale rennet. The former, also importers' representatives, asked that the article be admitted free of duty under the British Preferential Tariff, while the latter requested J>; that the present rate on bulk rennet be increased and that the existing rate under item 128 be retained. 129 Rennet n.e.i. .. .. .. . . . . ; 10 per cent, ad val. 20 per cent, ad val. After studying the evidence available, including production costs, we are of opinion that the duties should remain on their present basis. This New Zealand industry is of value to the dairying industry and utilises J 1 a product of the Dominion in its manufacture.

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. —, ■; : — i : — J,— ■■■■.■■ ; : ; : 1 - : : , r ~ ,, , » , _ British Preferential Tariff. General Tariff. | Tariff Items. | Remarks. : Column No. 1. Column No. 2. Class IV. —Drugs ; Chemicals ; Surgical, Dental, and Scientific Apparatus —continued. 130 Saccharin, in the form of tablets, pilules, granules, or cachets,] 20 per cent, ad val. 45 per cent, ad val. each containing not more than J grain of saccharin in | combination with at least 10 per cent, of alkali 131. Saccharin n.e.i., including substances of a like nature or use, Is. 6d. per ounce 2s. 6d. per ounce~ and substances capable of conversion thereinto 132 Sheep-, and cattle-fefe .. .. . . .. Free Free 133 Soda-crystals . . .. .. .. ■ ■ Free Is. per cwt. There is a relatively high freight protection on soda crystals and the Commission is of opinion that no duty is required under the British Preferential Tariff. The importations during the last few years have been negligible. 134 Surgeons', physicians', dentists', and opticians' appliances, instruments and materials, viz. :— (1) Appliances (including splints) for wear, even if Free Free medicated, ■peculiarly adapted to correct a deformity of the human body, to afford support to an abnormal j condition of the human body, or to reduce or alleviate such condition, or to substitute any part of such body ; stump. socks ; crutches ; ear trumpets ; ear tubes, j and audiphones, for the partially deaf (2) Surgical and dental instruments, also operation chairs i Free 20 per cent, ad val. Representations were made to the Commission with specially suited for dentists' use ; dentists' spittoons, respect to the duty on dentists' chairs and dentists' self-flushing types; opticians' trial cases, frames, j spittoons. The chairs and spittoons now used by spectacles, plain spectacle-cases, test cards and dia- dentists are not of a class made in New Zealand and grams ; also such other instruments and appliances should, we think, be admitted free of duty under the peculiar to surgeons' dentists' or opticians' use as British Preferential Tariff. may be enumerated in any order of the Minister (3) Surgeons', physicians', and dentists' materials, viz.. Free 10 per cent, ad val. antiseptic dressings, gauzes, lint, tow, cotton-wool, poroplastic felt, adhesive plaster including medicated remedial plaster or plasters, spongio-piline, bandages, catgut, and sterilized and other sewings, artificial teeth, tooth crowns, celluloid blanks, base plates, denture-strengtheners, guttapercha stick, points, and pellets, amadou absorbent, porcelain powder, enamel, inlays, modelling composition, investment compound, cement and. absorbent paper ; also such other materials peculiar to surgeons' physicians' or dentists' use as may be enumerated in any order of the Minister *

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135 Scientific and philosophical instruments and apparatus — Free. 20 per cent, ad val. viz. :—assay balances ; chemical balances, sensitive to 2 milligrammes or less ; laboratory retorts, laboratory flasks, and other instruments, and apparatus, peculiarly suited for chemical analysis and assay work ; assay furnaces ; retorts, dishes, and other apparatus, of fused silica or platinum, for use in chemical manufacture, or in a laboratory ; microscopes, telescopes, and magnifyingglasses ; also such instruments, and apparatus, specially suited for scientific and philosophical purposes, as may be approved by the Minister Class V.—Textiles, Clothing, Drapery, etc. 136 ! Not used. 137 | Apparel, clothing and hosiery, viz. :— (1) Made to the order, or measurement, of residents in 40 per cent, ad val. 65 per cent, ad val. The question as to the duties on the goods covered by New Zealand, and intended for the individual this tariff item is dealt with under item 183. use of such residents, whether imported by the residents themselves or otherwise; uniform clothing made to measurements sent from New Zealand (2) Oilskin clothing and men's, women's, boys', and 20 per cent, ad val. 42J per cent, ad val. girls', overcoats made wholly or principally - of leather, rubber, or water-proofed material (3) Men's and boys' overcoats, n.e.i., suits, coats, 25 per cent, ad val. 47§- per cent, ad val. trousers, waistcoats, and similar articles (4) Shirts, collars, cuffs, pyjamas, and similar articles .. 20 per cent, ad val. 42-J- per cent, ad val. (5) Neckties .. .. .. . . .. 20 per cent, ad val. 42£ per cent, ad val. (6) Corsets, brassieres, and similar articles .. .. 20 per cent, ad val. 42J per cent, ad val. (7) Braces, suspenders, garters, belts, and similar articles 20 per cent, ad val. 42| per cent, ad val. (8) Gloves, and mittens, other than those composed 20 per cent, ad val. 42J per cent, ad val. wholly or frincipally of rubber or asbestos (9) Socks, or stockings, made wholly or 'principally of silk or artificial silk — Up to and including 31st December, 1936 .. 25 per cent, ad val. 47| per cent, ad val. Thereafter .. .. .. .. .. 20 per cent, ad val. 42§ per cent, ad val. (10) N.e.i. . . .. .. .. .. 25 per cent, ad val. per cent, ad val. 138 \ Bags and sacks of textile or felt, all kinds, printed or un- 15 per cent, ad val. 35 per cent, ad val. No representations were made to the Commission with 139 / printed ; filter-bags and sheaths respect to the duty on these articles. The importations during recent years have been negligible. After considering the information obtained, the Commission is of opinion that the duty under the British Preferential Tariff on goods included under items 138/9 should be reduced to 15 per cent, ad val. 140 Corn-sacks, wool-packs, and wool-pockets; bags or sacks Free Free of jute hemp or hessian ; bags or sacks of New Zealand tow or flax

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I " I " [ I ! British Preferential Tariff. General Tariff. | Tariff Items. j | i Remarks. Wo - Column No. 1. Column No. 2. Glass Y.—Textiles, Clothing, Drapery, etc —continued. 141 Battery-blanket not exceeding 3 feet wide, material for Free 10 per cent, ad val. filter-cloths, and plush or other cloth, on declaration that it will be used only for mining or gold-saving purposes 142 Boot and similar laces, of any material other than leather 20 per cent, ad val. 45 per cent, ad val. 143 Braids, and bindings, all kinds, n.e.i. ; cords, n.e.i., of wool, 20 per cent, ad val. 45 per cent, ad val. cotton, silk, imitation silk, artificial silk, or of combinations of these materials with one another or with any other material 144 Brattice-cloth of jute or hessian . . . . .. Free 15 per cent, ad val. 145 Bunting, in the piece . . . . . . . • Free 15 per cent, ad val. 146 Buttons, crochet, and similar . . .. . . .. Free Free 147 Buttons n.e.i. .. .. . ■ ■ ■ . ■ Free Free 148 Collar check, similar material plain, and horse-cover-lining Free 10 per cent, ad val. material, in the piece, of such quality as may be approved by the Minister 149 Cotton, raw . . .. .. .. . • Free Free 150 Cotton and other waste, engineer's .. . . .. Free 10 per cent, ad val. 151 Drapery n.e.i. .. . . . . . . .. 20 per cent, ad val. 45 per cent, ad val. 152 Elastics, all kinds, including boot and brace elastics ; Free 10 per cent, ad val. elastic threads and cords ; plain tape of cotton, linen, or jute ; webbings, all kinds, including elastic ivebbings ; dressmakers' beltings, including cotton petershams, whether plain or circular woven, or reinforced ; woven looping and labels, for boots ; labels, and hangers, woven, for clothing and other textile articles, including hanger material, plain or otherwise, n.e.i. ; chain coat-hangers ; woven bandings, bands, tapes, and similar articles (not including arm-bands and hat-bands), with printed, woven, or embroidered lettering, trade name, or trademark, suited for use with boots or other apparel 153 Feathers, ornamental, including ostrich-feathers n.e.i. ; 20 per cent, ad val. 45 per cent, ad val. artificial flowers leaves or sprays; natural flowers, leaves, and sprays, dyed, painted, or similarly treated 154 Omitted. 155 Felt piece-goods, n.e.i., not including felted textiles .. Free 10 per cent, ad val. 156 Felted textiles, in the piece, on declaration that they will Free 10 per cent, ad val. be used only for such manufacturing and industrial purposes as may be approved by the Minister

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157 Flags, viz.: — (1) The Union Jack or any flag of which the Union Free 20 per cent, ad val. Jack is part (2) N.e.i. . . .. . . . . .. 20 per cent, ad val. 40 per cent, ad val. 158 Flock . . . . .. . . .. . . Free 20 per cent, ad val. No representations were made to the Commission by New Zealand manufacturers for the retention of duty on flock. The information obtained by the Commission is to the effect that duty is not required under the 159 | Floor coverings, viz. British Preferential Tariff. (1) Floor-mats and floor-rugs, of wool or containing 20 per cent, ad val. 45 per cent, ad val. wool or other animal fibre, having an area not Representations were made to the Commission by United exceeding 60 square feet Kingdom and New Zealand manufacturers with respect (2) Linoleum, cork carpets, rubber flooring, and floor 20 per cent, ad val. 45 per cent, ad val. to the duty on floor-rugs covered by this item. The mats of similar materials, exceeding 2-30 milli- Commission is of opinion that the duty under the metres in thickness British Preferential Tariff should be reduced to 20 per (3) Linoleum, and similar floor covering, n.e.i., including 20 per cent, ad val. 45 per cent, ad val. cent, ad valorem. We also think that when financial mats, matting, and floor-rugs, of similar material conditions permit the duty under the British Prefer(4) Carpets, floor coverings, floor rugs, mats, and 20 per cent, ad val. 45 per cent, ad val. ential Tariff on floor coverings included under the matting, other kinds existing tariff item 159 (3) should, in the interests of the general community, be abolished. In addition, we consider that, from the point of view of the revenue, the duty on the goods covered by tariff item 159 (4) should be reduced to 20 per cent, under the British Preferential Tariff. 160 Furs and other similar skins, and articles made therefrom, The Commission understands that in 1931 the duties on vlz - : — fur skins and furs were fixed at the present rates for (1) Fur skins, green or sun-dried . . .. .. Free Free revenue purposes. It is considered that from this (2) Furs, and other similar skins, dressed or prepared, 15 per cent, ad val. 15 per cent, ad val. point of view more satisfactory results would be obtained but not made up in any way if the tariff were now adjusted to the rates recom(3) Furs or imitation furs wholly or partly made up into 25 per cent, ad val. 47f per cent, acl val. mended. It is considered that the duties proposed apparel, rugs, or other articles ; fur trimmings and afford reasonable protection to the New Zealand imitation fur trimmings industrv. 161 Haberdashery n.e.i. . . .. .. .. 20 per cent, ad val. 45 per cent, ad val. 162 Hair, natural, or imitation, curled, waved, or made up, in 25 per cent, ad val. 50 per cent, ad val. any way to make it suitable for wear 163 Hairpins, hatpins, safety pins, and toilet pins .. .. j 20 per cent, ad val. 45 per cent, ad val. 164 Hats, and caps, in any stage of manufacture, including 20 per cent, ad val. 45 per cent, ad val. Representations were made to the Commission by both hat-hoods n.e.i. importers and New Zealand manufacturers respecting the duty on hats. The evidence has been examined and we are of the opinion that the rates should be fixed as proposed. 165 Hat-hoods, felt, of wool or fur, or containing fur, unblocked Free Free Representations were made to the Commission that duty and unsewn under the General Tariff should be imposed on these goods. As they are raw materials for the industry in New Zealand, it is not considered that the existing position should be disturbed. The rates of duty recommended for hats and caps have been based on the assumption that this will be carried out.

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j British Preferential Tariff. General Tariff. Item Tariff i tems . Remarks. No. | Column No. 1. Column No. 2. Class Y.—Textiles, Clothing, Dbapeby, etc. —continued. 166 I Hatmakers' materials —viz., hatters' ribbons, galloons, or Free Free linings, when cut up, or otherwise, under such conditions as the Minister may prescribe ; leathers, ventilators, cork fronts for hats 167 ! Kiln-cloth, of horsehair or similar material, also kiln-cloths Free Free made up from such material 168 \ Lace, laces, and ribbons, n.e.i. .. • ■ • ■ 20 per cent, ad val. 45 per cent, ad val. j 169 Leather cloth, and oil baize, plain or fancy, in the piece .. Free 15 per cent, ad val. Representations were made to the Commission that duty on leather cloth under the General Tariff should be increased to 25 per cent. As these goods are raw materials for industries in New Zealand, the Commission is of opinion that the existing preference margin should be maintained. 170 Millinery of all kinds, including trimmed hats, caps, and 20 per cent, ad val. 45 per cent, ad val. No representations were made to the Commission with bonnets ° respect to the duty on goods included under this item. From the information obtained the Commission has come to the conclusion that the rate of duty under the British Preferential Tariff should be reduced to 20 per cent, ad val. 171 Wadding; pins n.e.i. ; knitting-pins; needles, viz., — Free Free sewing, darning, and knitting ; crochet hooks ; hooks and eyes for apparel 172 Printers' blanketing on declaration that it will be used only Free 10 per cent, ad val. in printing 173 Rugs n.e.i., not suited for use as floor-coverings .. 20 per cent, ad val. 45 per cent, ad val. 174 Sewing cottons, silks, threads, and twists ; crewel, flourish- Free 10 per cent, ad val. ing, embroidery, darning, knitting, and crochet threads, or silk, artificial silk, imitation silk, linen, or cotton, or mixtures of the same, plain or fancy ; gold and . silver embroidery threads ; mending yarns, of wool, or containing wool, not exceeding 45 yards in length 175 ' Silk for flour-dressing, in the piece .. .. .. Free Free 176 Oiled silk, in the piece .. .. .. ■ ■ Free 10 per cent, ad val. 177 | Staymakers' corset-fasteners, corset-shields, corset steels, Free Free and busk-protectors 178 Tailors' trimmings —viz. :— (1) Haircloths and imitation haircloths .. . . Free Free (2) Silesias, veronas, Italian cloths, and other lining- Free 15 per cent, ad val. materials, of such descriptions as may be approved by the Minister

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179 Tarpaulins, tents, sails, rick- and wagon-covers .. 10 per cent, ad val. 30 per cent, ad val. ! No representations were made to the Commission respecting this industry. According to the Annual Statistics the importations during the last three years were — 1931, £329 ; 1932, £217 ; 1933, £71. The Commission has come to the conclusion that the duty should be reduced and fixed at 10 per cent, ad val. under the British Preferential Tariff and at 30 per cent, ad val. under the General Tariff. 180 Textile piece- goods of cotton, linen, jute, hemp, other vege- Free 15 per cent, ad val. table fibre, silk, imitation silk, artificial silk, or of combinations of these materials with one another, or with any other material (except wool or hair), whether plain, hemmed, whipped, or similarly worked, and plain tablecloths, tablenapkins, towels, quilts, sheets, and similar plain articles, which have been manufactured wholly from such piece- goods merely by cutting, hemming, or any similar operation 181 Cotton piece-goods, viz. :—tubular woven or knitted cotton Free | Free cloth specially suited for use as meat wraps ; cheese bandages or caps 182 Textile piece-goods —viz., dress nets, curtain nets, embroidery 20 per cent, ad val. 45 per cent, ad val. nets, and similar nets, lace curtain material, and veilings, all kinds 183 Textile piece-goods, including textiles of wool, or containing wool, viz. :— • i j j (1) Moquette and tapestry, of wool, or containing wool .. 15 per cent, ad val. 40 per cent, ad val. See statement appended. (2) N.e.i. .. .. ■ ■ ■ • • • 20 per cent, ad val. 45 per cent, ad val. 183. Textile Piece-goods, Apparel, Clothing, and Hosiery. The Commission has investigated as fully as possible the position of the textile, clothing, and hosiery manufacturing industries. These industries are among the largest engaged in manufacturing in the Dominion. They utilize a considerable quantity of New Zealand wool, but this, of course, forms only a relatively small proportion of the total New Zealand clip. According to the figures published in the Official Year-book it appears that over the period of the last six years the wool acquired by the local mills averages about 2J per cent, of the total New Zealand production. _ Many "persons are engaged in these industries and much capital is employed. The Commission is satisfied that the group (jontams some very eihcient units. Dealing first with the woollen mills, the Commission would offer the following observations _ . . (1) The position of the industry in New Zealand is, owing to our relatively small population, in several respects different from that in many other countries. In New Zealand we find that of the total number of mills several are making a variety of goods and one of the questions for consideration is whether this is in the best interests of the Dominion and, if so, whether it should be supported by a protective tariff. . t . * . ■ From the information we have been able to obtain we are of opinion that a condition antecedent to the satisfactory centralization of the mamitacture of certain products of the mills in particular factories is the establishment of a wool-top making industry in New Zealand. At the present time each local mill has, we understand, to purchase the whole wool fleece and utilize it to the best advantage, whereas we are advised that in many other countries tops are available to the textile manufacturer, who can readily purchase the grade and quality he requires. The question as to whether or not an efficient wool-top making industry in New Zealand could be satisfactorily established is a difficult and involved one, and the Commission has not been able to obtain sufficient evidence to satisfy it upon the point. We find that, broadly speaking, the articles which are manufactured in the New Zealand mills are the following: Clothing-tweeds and worsteds, flannel, blankets, woollen and worsted yarns, rugs, and socks, hose and underwear. _ ... We find also that practically all the mills manufacture the first three groups and we are unable to satisfy ourselves that, m the circumstances at present existing m New Zealand, the concentration of the manufacture of particular articles included in these groups in certain mills is practicable or would be in the best interests of the Dominion.

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The manufacture of woollen and worsted yarns is necessary for the manufacture of woollen textiles and the volume of rugs made in the Dominion is now relatively small. We regard the manufacture of socks, hose, and underwear as industries separate from but ancillary to the operations of the woollen mills. After reviewing the foregoing aspects of the matter we are of opinion that the development of the industry in New Zealand up to the present has, on the whole, proceeded on satisfactory lines and we are unable to state that, under existing manufacturing and marketing conditions, if greater specialization had taken place the industry would have been carried on in a more efficient or satisfactory manner. (2) Another matter to which the Commission has given considerable attention has been the demand by the community for textiles containing wool but not made wholly or essentially from virgin wool. It will be remembered that under the tariff of 1927 concessions were made on raw cotton and cotton yarn presumably to encourage the manufacture of union piece-goods in New Zealand. The Commission is informed, however, that with the exception of the admixture of a certain amount of silk the products of the mills are confined to all wool fabrics. According to the statistical information in our possession it appears that during the last five years for which particulars are available the quantity of fabrics made from wool mixed with other materials and known as " woollens " or " worsteds " exported to New Zealand from the United Kingdom are as under :— v Quantity. Value. v Quantity. Value. * ear ' Sq. Yds. £ * ear " Sq. Yds. £ 1928 .. .. .. 1,354,064 193,203 1931 .. .. .. 1,249 245 144,266 1929 .. .. .. 1,504,934 213,087 1932 .. .. .. 1,625,438 158,568 1930 .. .. .. 1,381,991 195,786 (Note.—These values represent the f.o.b. values in the United Kingdom.) Our view is that if the woollen manufacturing industry is to receive protection for all articles containing wool imported into the Dominion it should be prepared to consider seriously the manufacture of all grades of goods for which there is a public demand and which are of sufficient volume to enable production on a satisfactory basis to take place. We are of opinion that if, after a period of (say) two years the woollen mills are unable or are not prepared to manufacture such textiles the protection accorded on these goods should be withdrawn. With respect to all wool products, we find that during recent years greater quantities of these lines are being imported than are manufactured locally. The Commission recognizes that in some cases there are special reasons for these importations, but we think that with respect to these goods there is still a large field for the development of the industry. The Commission, of course, recognizes that the manufacturers should be in the best position to judge as to the collaboration which is necessary among themselves to ensure the greatest possible diversity of production on economic lines and as to the means by which this can be achieved. After reviewing the whole matter and considering all the factors involved we are of opinion that tariff protection at 20 per cent, under the British Preferential Tariff should be accorded to piece-goods made wholly from wool and that in the meantime the duty on piece-goods not made wholly or essentially from virgin wool should be fixed at the same rate. Apparel and Hosiery.— With respect to the apparel and hosiery manufacturing industries we would point out that these are of special importance in the employment of female workers. The industry is a very comprehensive one embracing as it does a wide range of articles. We would offer the following comments with respect to certain classes of these goods :— (1) As regards men's and boys' overcoats, suits, and parts thereof, we are of opinion that, with the exception to be mentioned hereafter, the industry is sufficiently protected if the duty under the British Preferential Tariff were reduced to 20 per cent, ad valorem. Owing to the development of manufacturing in New Zealand the proportion of the value of such clothing made locally as compared with that of the clothing exported from the United Kingdom to New Zealand has considerably increased during the last few years for which statistics are available. The following are the figures which approximately represent the position with respect to (1) overcoats and (2) men's and boys' suits, coats, vests, and trousers :— 1929. 1930. 1931. 1932. (1) Overcoats— £ £ £ £ Manufactured in New Zealand during the year ended 31st March .. .. .. Not available. 138,000 249,356 Exported from the United Kingdom to New Zealand during the calendar year .. 173,035 159,108 97,496 61,005 (2) Men's and boys' suits, vests, and trousers— Manufactured in New Zealand during the year ended 31st March .. .. .. 679,314 680,612 480,990 573,479 Exported from the United Kingdom to New Zealand during the calendar year .. 110,295 97,560 40,369 19,383 (Note.—The figures shown as exports from the United Kingdom are f.o.b. values in that country. The values of goods manufactured in New Zealand represent factory selling prices in the Dominion.)

50

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There is, however, one aspect of the matter that should, we think, be considered. A considerable quantity of what may asr low grade clothing is at present manufactured in the Dominion from certain imported textile materials of inferior quality containing wool We are satisfied that if the duty on this c clothing is reduced to 20 per cent, under the British Preferential Tariff and the existing rate retained on the materials the manufacture of such clothm could not be successfully carried on here. The demand for this clothing shows that it is required by the community. The fabrics m question form a portion of those to manufacture of which, the Commission thinks, urgent consideration should be given by the woollen mills. To enable this question to be gone into and to avoid undue complexities in administration we are of opinion that the rate of duty under the British Preferential Tariff on these classes of clothing should for a of (say)i years be fixed at 25 per cent, and that the question of reducing the rate to 20 per cent, ad valorem should then be considered m the light of the conditions exist 0 at With respect to silk and artificial silk socks and stockings, the local industry has recently been handicapped by the purchase of expensive plant to manufacture the goods which changing fashion demands, with the probable obsolescence of much of the machinery hitherto used We are satisfied that the mtehj if s one j , reasonably assured of sound opportunities for success. When the necessary adjustments have taken place we are of opinion that the duty under the Brit s Tariff should be reduced to 20 per cent, ad valorem, but in the meantime we think that for a period of at least two years the rate should be ~xed at 25 per ce . o>d valorem (3) With respect to the other articles included under this tariff item we recommend that the rates suggested be adopted. Strong representations were made to the Commission regarding the volume of clothing imported as end of season goods at jobbed P™es We have gone very fully into this matter and have taken evidence at all the centres visited and are satisfied that the quantity of such goods imported from abroad is decreasing and is negligi e as compared with the total volume consumed.

51

British. Preferential Tariff. I General Tariff. Ttpm ! m •££ ti i Kemarks. -V? : Tariff Items. I „ No. j Column No. 1. j Column No. 2. Class Y.—Textiles, Clothing, Drapery, etc. —continued. 184 1411 articles n.e.i., made of textile, felt, or other piece-goods, 20 per cent, ad val. j 45 per cent, ad val. | Kepresentations were made on behalf of manufacturers m | or of any combination of the same, wholly or partly made ! the United Kingdom and by New Zealand manufacturers up or' manufactured, and not being apparel or clothing with respect to the duty on handkerchiefs. The Com- ? , „ ,1 J mission regards the existing duties on handkerchiefs as , either wholly or partly made up a reV enue one and does not regard the industry of manufacturing handkerchiefs in New Zealand from imported piece goods as of sufficient importance to warrant special consideration. 185 : Umbrellas, parasols, and sunshades .. .. • • 20 per cent, ad val. 45 per cent, ad val. j 186 : Umbrella makers' materials —viz., textile piece-goods Free Iree approved by the Minister, and on such conditions as he may prescribe; sticks; runners; notches; caps; ferrules ; cups ; ribs ; stretchers ; tips ; rings ; running and capping leathers ; prevents ; splicing - tubes ; annealed wires up to 4 inches in length ; springs ; tassels ; plated metal bands ; fasteners or bands made up of elastic or webbing with all or any of the following attachments — ring, button, or tassel

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Item I British Preferential Tariff. General Tariff. No. Tariff Items - ! Remarks. Column No. 1. Column No. 2. Class Y.—Textiles, Clothing, Dbapeey, etc. —continued. 187 Union textiles n.e.i., in the piece, the current domestic Free 10 per cent, ad val. value of which does not exceed that specified by the Minister, when cut up and made into shirts, pyjamas, or underclothing, under such conditions and regulations as the Minister may prescribe (Note. —Until otherwise notified by Minister's Order, published in the Gazette, the current domestic value above referred to shall be deemed to be Is. per yard.) 188 Upholsterers' materials —viz. :—hair-seating and imitation Free Free hair-seating ; gimp ; curled hair ; tufts ; studs ; cord tips ; cord-knot holders ; blind or shade pulls, suited for the manufacture of blinds 189 Upholstery n.e.i. .. .. .. .. .. 15 per cent, ad val. 40 per cent, ad val. No representations were made to the Commission with respect to the duty on upholstery. These goods have a considerable freight protection and the importations are relatively small. The Commission, after considering the information obtained, is of opinion that the duty under the British Preferential TarifE should be reduced inn 15 per cent. Waterproof material in the piece, having within, or upon Free 15 per cent, ad val. Representations were made to the Commission that the it, a coating of rubber duty on this material under the General Tarifi should be increased to 25 per cent. These goods are a raw product for New Zealand industries, and the Commission is of opinion that the existing position should be ■ ■ maintained. 191 Yarn —viz., coir, flax, jute, and hemp .. .. .. Free Free 192 Yarns of cotton, silk, artificial silk, imitation silk, or mix- Free 10 per cent, ad val. tures of the same 193 Yarns n.e.i. .. .. .. .. .. 20 per cent, ad val. 45 per cent, ad val. Representations were made to the Commission that the duty on these yarns should be reduced to 10 per cent, under the British Preferential TarifE. The industry of manufacturing woollen yarns in New Zealand is an efficient one, and the Commission, after reviewing, the whole matter, is of opinion that the existing duties I should be maintained.

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( Class VI. —Leather, Leather Manufactures, Grindery, and Rubber Goods. 194 Belts, and belting, n.e.i., for driving machinery ; conveyor Free 25 per cent, ad val. I belts, and belting of rubber, textile, fibre, or combinations of these materials ; cordage or rope on declaration that it will be used only for driving machinery 195 Boots, shoes, shoettes, sandals, clogs, pattens, slippers, and Free 20 per cent, ad val. Representations were made to the Commission both by goloshes namely, children's 0 to 9 inclusive United Kingdom and New Zealand manufacturers with respect to the duty on boots and shoes. The industry as carried on in New Zealand contains some very efficient units' employing a large number of workpeople and using a considerable quantity of local materials. The Commission, after considering the evidence obtained and the production costs both in United Kingdom and New Zealand, is of opinion that to comply with the Ottawa Agreement the duty on I I boots and shoes under the British Preferential Tariff 196 Boots, shoes, clogs, pattens, slippers, shoettes, sandals, 20 per cent, ad val. 45 per cent, ad val. should be reduced to 20 per cent, ad val. goloshes, overshoes, and other footwear, n.e.i. [ Requests were also made that the range of boots and j shoes to be exempted under item 195 should be modified. The Commission considers that in the interests of the general community the existing exemption under the British Preferential Tariff of children's boots and shoes should be maintained, and that to enable the New Zealand industry to function efficiently the range of exemption should not be extended. According to the information supplied to the Commission, the manufacture of slippers is carried on at a few factories only. Certain of the manufacturing units can be classed as efficient ones. It is considered that the rates of duty on slippers should be the same as those on boots and J shoes. 197 Gumboots, half-knee, knee, or thigh, with soles either of Free 25 per cent, ad val. leather or of rubber, and measuring not less than 9 J inches from the lowest point reached by the line of the top of the upper to a horizontal surface on which the boot is placed 198 Grindery, viz. :— (1) Boot-protectors .. .. .. .. Free 20 per cent, ad val. (2) Boot shoe and slipper heels, knobs, and soles, of j Free 20 per cent, ad val. rubber (3) Cork soles, and sock soles, except those composed ; Free 20 per cent, ad val. wholly or partly of leather (4) Heel plates, and toe plates .. .. .. 1 Free 20 per cent, ad val. Heel plates, and toe plates —No representations were made to the Commission respecting this item. We do not consider that the making of these articles is an industry which should be assisted by a protective tariff. (5) Nails, pegs, rivets, and tacks, peculiar to use in boot- Free Free making I (6) Shoemakers' binding and beading .. .. Free Free

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British Preferential Tariff. General Tariff. T , _ T Remarks. Item Tariff Items. 9 No. Column No. 1. Column No. 2. Class VI— Leather, Leather Manufactures, Grindery, and Rubber Goods —continued. j Grindery, viz. :—continued. „ I (7) Shoemakers' wax, and heel balls . • • • ree (8) Wooden heels, plain, or covered with leather, textile, Free j ree or celluloid, and with or without tops of leather or metal and leather (leather tops not to exceed \ inch in thickness) j (9) Grindery n.e.i. • • • • • • • * Free rree 199 Hose, tubing, or piping, flexible, of canvas, rubber, metal, Free ; 25 per cent, ad val. or other material (except leather), armoured or otherwise, n.e.i. 200 qualities approved by the Free 10 per cent, ad val. j The Commission has gone, fully into the tanning industry, 0) under conditions preyed W W TFttSSZJTZfc goods. It utilizes a considerable quantity of New Zealand hides and skins and affords employment to a large number of persons. We offer the following observations with respect to certain kinds of leather :— W >, PT .. 20 per cent, ad val. j 40 per cent, ad val. ! Chamois leather—Representations were made by United {A) onamois ieariiei ..... Kingdom and New Zealand manufacturers concerning the duty on chamois leather. We have considered the information obtained and have come to the conclusion that the existing duty of 20 per cent, ad val. under the British Preferential Tariff should be maintained. (3) Goat-skins, and kid-skins, however dressed ; persiam; Free Free application was made (4) nm iMhal C kangaroo-skins, and wallaby-skins, 1 5 per cent, ad val. 10 per cent, ad val. for the imposition of dnty on goat- and kid-skurs to (4) ttiae leameis Kangaiuo > J r assist an industry which has only recently been comcrust or rough tanned, u u .... menced. The skins have to be imported, and owing to (5) Hog-skms .. • ■ - • • • • • -p t ,ji vers i ty 0 f ra nge required by manufacturers (6) Leather, japanned, or using such leather the Commission does not think that leather specially suited for it is in the best interests of New Zealand that protection work, as may be approved by he Minister, and appHcation under conditions 3 - wag algo made for t j le i m p 0S iti 0 n of duty under the General Tariff on these leathers and on japanned and enamelled leathers. From the information supplied to the Commission they have come to the conclusion that, as these leathers are raw material for industries in New Zealand, and as certain qualities, grades, &c., required for manufacturing in New Zealand cannot be satisfactorily obtained from the United Kingdom, the existing position should be maintained.

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Leather, viz.: —continued. (7) Sole leather, being bends each weighing 14 lb. net or | 3d. per lb. 5d. per lb. ! Sole leather in bends weighing 14 lb. or over, and leather over ! j n.e.i. — Several applications were made for the modifica(8) Leather n.e.i. ; belts (not being apparel), and belting, j 15 per cent, ad val., 25 per cent, ad val., j tion of the existing duties on these items. Arguments wholly or partly composed of leather j or 3d. per lb., which- or 5d. per lb., which- 1 were produced for and against altering the present ever rate returns ever rate returns the | position under the tariff of leather sole bends. A the higher duty higher duty j detailed examination of the industry showed that the (9) Parchment or vellum made from skins .. .. Free ; 20 per cent, ad val. | manufacturers have formed an Association among themselves to utilize the services of a trained expert on the staff of the Department of Scientific • and Industrial Research. The Commission is satisfied that certain tanneries are efficiently conducted and are producing high grade leather at a reasonable cost. We think that the maintenance of the existing duties under the ; British Preferential Tariff is in accordance with the principles contained in the Ottawa Agreement. 201 Leather board, or compo, composed of skivings, split Is. per lb. Is. per lb. leathers, leather scraps, or the same mixed with other material, cemented and pressed together, cut into shapes or otherwise 202 Leather laces; vamps, and uppers; leather cut into 20 per cent, ad val. 45 per cent, ad val.Various representations were made to the Commission shapes ; clog and patten soles ; leather leggings j with respect to the goods covered by these tariff items. >- After considering the information obtained we are of 203 I Leather manufactures n.e.i. .. .. .. .. 20 per cent, ad val. 45 per cent, ad val. opinion that duty under the British Preferential Tariff J should be reduced to 20 per cent. 204 Portmanteaux ; trunks ; bags of leather or of leather 20 per cent, ad val. 45 per cent, ad val. No representations were made to the Commission respectcloth ; attache-cases, suit-cases, and similar receptacles ing this industry. On the information in possession of (not including basketware, wickerware, or receptacles the Commission it is considered that protection at the made of similar materials) rate of 20 per cent, under the British Preferential Tariff should be accorded to these goods. 205 Rubber, manufactures of, viz. :— (1) Articles composed wholly or principally of rubber, viz. :— (а) Water beds and cushions, ice bags and caps, Free 20 per cent, ad val. air beds, air cushions, urinals (б) Hot water bags and hot water bottles .. Free 20 per cent, ad val. (2) Rubber gloves, n.e.i. .. .. .. .. Free 20 per cent, ad val. (3) Rubber or guttapercha solutions and cements .. Free 10 per cent, ad val. (4) Rubber tiring suited for use on perambulator- wheels Free 10 per cent, ad val. (5) Rubber tires, viz. :—bicycle, tricycle, perambulator, Free 20 per cent, ad val. and similar, and inner tubes of rubber for pneumatic tires, not exceeding If inches in diameter j

H.—2B

56

British Preferential Tariff, j General Tariff. Item Tarifi Items. „ „ Eemarks " No. 1 Column No. 1. Column No. 2. ! Class VI. —Leather, Leather Manufactures, Grindery, and Rubber Goods —continued. ,.•»« - — »p- - - - «p- »«■ - afiKStt tssatt for pneumatic ires, n.e.i. should, as far as possible, be at the same rates as those levied on motor vehicles under item 389. (7) Rubber tire repair outfits for bicycles, cycles, and Free 10 per cent, ad val. motor vehicles, consisting of rubber solution, sheet rubber, and such other articles as may be enumerated by the Minister , , . (8) Rubber valves and teats for feeding-bottles, and Free 20 per cent, ad val. rubber teats for use in feeding animals _ _ 206 Saddlery, harness, whips, and whip-thongs .. . . 20 per cent, ad val. 45 per cent, ad val. 207 Tanners', curriers', and bootmakers' inks and stains .. Free Class VII.— Glass, China, Earthenware, Stone, and Cements. 208 Bottles and jars, emptv plain glass, not being cut or ground feeding bottles with or without attachments Zealand materials, gives considerable employment, and ■ ™ P " . is efficiently conducted. It has been m operation since {) exceeding one fluid ounce.. | 20 per cent, ad val. 45 per cent, ad val. 1922 and supplies a large proportion of the require(h\ K Free 25 per cent, ad val. ments of the Dominion. A close survey of the whole (0) iN.e.i. .. •• •• I position, including production costs, shows that, in terms of the Ottawa Agreement, the duty under the British Preferential Tarifi on the goods included under item 208 (2) (a) should be fixed at 20 per cent, ad val. 209 Bottles and jars, viz. :— , . Plain empty stone bottles ; plain empty earthen jars, Free 20 per cent, ad val. up to 3 inches in diameter at the mouth, whether wickered or not 210 Jars, or other dutiable vessels, containing free goods or Free -Piee goods subject to a specific rate of duty, and being ordinary trade packages for the goods contained in them

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211 Bricks, fireclay, and refractory materials, viz.: — I ■J^ e j )r " 5 k s • " " " " ree P er cent - a( * va " - Applications have been received by the Commission with /o\ „1° H'®' 1 ' . '• I ,ree Free respect to the duty included under this tariff item. (3) Refractory materials n.e.i., viz. : Canister, silica clay, Free Free Considerable numbers of firebricks are made in New silica bricks, magnesite bricks, and similar bricks Zealand. An examination of the position shows that blocks or linings, specially suited for use in furnaces there is a relatively large freight protection. In view retorts and similar articles 0 f this and of the terms of the Ottawa Agreement, we (4) fireclay ground n.e.i. .. .. .. .. Free 25 per cent, ad val. consider that the existing duty under the British Preferential Tariff on firebricks and fireclay ground should , be abolished. 212 Building materials, viz. :— (1) R° 0 fi n g tiles, ridging, and finials, glass, and earthen.. 10 per cent, ad val. 30 per cent, ad val. Applications were received by the Commission with respect (2) sheets, plain or corrugated, roofing slates and tiles, Free 15 per cent, ad val. to duty on the goods included under item 212 (1). ridging, and finials, composed of cement and After a consideration of the evidence the Commission asbestos or of similar materials considers that the existing duty under the British ,,, w . , it Preferential Tariff should be maintained. (Ô) riaster-pulp sheets, plasterboard, and similar 10 per cent, ad val. 35 per cent, ad val. The Commission has given consideration to the question n\ r>. . as to the duty to be charged on the goods included (4) Roofing-slates n.e.i. .. . . .. .. Free Free under item 212 (3). An examination of the evidence, including the production costs in New Zealand, shows that the industry can be efficiently carried on if the duty under the British Preferential Tariff is reduced to n 10 per cent, ad val. 213 Cement, Portland, and other structural, or building cement 8d. per cwt. Is, 2d. per cwt. The manufacture of cement has been carried on in New Zealand for many years. It utilises a large quantity of local materials and employs a considerable number of persons. The Commission regards it as an efficient in- * dustry. Cement is a product that enters largely into public works, building construction, farm work, and many other forms of industrial activity. It is therefore important that it should be obtainable at as low a cost as possible, consistent with the satisfactory functioning of the manufacturing industry. The evidence shows that, generally speaking, the industry is able to earn relatively large profits. The Commission is of opinion that the manufacture could be efficiently carried on with lower costs to users if the duty under the British nl . r „ ■ . Preferential Tariff were reduced to 8d. per cwt. ware, earthenware, and poreelamware, viz., bowls, 20 per cent, ad val. 45 per cent, ad val. This is a duty for revenue purposes reimposed in 1931. cups saucers, plates jugs, dishes, tea-pots, and such The Commission is of opinion that the duty under the similar articles, suited for table use, as may be approved British Preferential Tariff should be abolished as soon as by the Minister financial conditions permit.

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I British Preferential Tariff. General Tariff. Item Tari g items. j Remarks. No. j Column No. 1. Column No. 2. Class VII. —Glass, China, Eakthenwabe, Stone, and Cements —continued. 215 Chinawarc, earthenware, porcelainware, and stoneware, 20 per cent, ad val. 45 per cent, ad val. This item includes sanitary earthenware with respect to n e j. which representations were made both by United Kingdom and New Zealand manufacturers. The Commission is of opinion that this is a suitable industry for New Zealand, utilising a considerable amount of local material. After an examination of the evidence, including production costs, the Commission is satisfied that the existing duty under the British Preferential Tariff is in accordance with the Ottawa Agreement and should be maintained. 216 Drainage-pipes, drainage-tiles, conduit-pipes, and chimney- Free 25 per cent, ad val. The Commission is of opinion that, with the relatively pots of earthenware, concrete, or similar materials high freight protection on these goods, they can be economically manufactured and satisfactorily sold in * competition with imported goods without any duty under the British Preferential Tariff. 217 Eyes, artificial .. .. ■ • • • • • Free Frefr 218 Flooring, wall, hearth, and garden tiles .. .. 20 per cent, ad val. 45 per cent, ad val. Representations were made to the Commission both for an increase in and abolition of the duty on the goods included under this tariff item. After considering the evidence we are of opinion that the duties should be left on their present basis. 219 Glass, sheet, common window or plate, whether polished, Free 10 per cent, ad val. coloured, bent or otherwise, cut to any size or shape, n.e.i. 220 Glass, plate or "sheet, in sizes not exceeding 20 superficial Free Free feet, only on declaration that it will be used in the manufacture of bevelled or silvered glass 221 Glass plates (engraved) for photo-lithographic work .. Free Free 222 Glass, bevelled, silvered, or with rounded or polished edges ; 15 per cent, ad val. 40 per cent, ad val. No representations were made to the Commission by New mirrors, and looking-glasses, framed or unframed Zealand manufacturers of these articles. The principal raw materia], namely, sheet glass, is all imported and is admitted free. From the information obtained the Commission is of opinion that the rate of duty under the British Preferential Tariff should be reduced to 15 per cent, ad val. 223 Glass cloches or bells specially suited for horticultural pur- Free Free poses 224 Glass rods, tubes or tubing, plain .. .. .. Free 10 per cent, ad val. 225 Glassware n.e.i. ; globes, and chimneys, for lamps, n.e.i. ; 20 per cent, ad val. 45 per cent, ad val. lamps, lanterns, and lampwick, n.e.i. 226 Lamps, miners' safety, and glasses therefor ; lamps peculiarly Free Free Applications were received for the imposition of duty adapted for use on harbour beacons and lighthouses, also under the General Tariff on miners' safety lamps and on appliances peculiar to such lamps ; side lights, and head lighthouse apparatus. As these goods are necessary for lights, especially suited for the use of ships the preservation of life in mines and the safety of shipping, the Commission does not consider that any alteration should be made. ĪÊWmk 1 :» 1' of . ■ H w 1 i ' i

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/ 227 Lenses, all kinds, unmounted, and without attachments .. Free 20 per cent, ad val. An application was received for an increase of the General Tariff rate on these goods. In our opinion a preference margin of 20 per cent, on this class of goods is sufficient. 228 Plaster-of-Paris .. .. .. .. .. Free Free An application was received for the imposition of duty at the rate of 10 per cent, under the General Tariff. As this is a raw material used extensively for industrial purposes, it is considered that the exemption should continue. 229 Stone, viz. :— (1) Marble, in the rough, or rough-sawn, not dressed or Free Free The Commission does not consider that any useful purpose polished is served by maintaining a duty under the British Pre(2) Granite, or other stone, n.e.i., in the rough, including Free 10 per cent, ad val. ferential Tariff on the goods included under item 229 (3). scabbled from the pick On the evidence in our possession we have come to the (3) Granite, or other stone, n.e.i., rough-sawn, not dressed Free 10 per cent, ad val. conclusion that the duty under the British Preferential or polished Tariff on goods covered by items 229 (4) and (5) should (4) Granite, or other stone, and imitation stone, n.e.i., be reduced to 20 per cent, ad val. viz. :—• (а) Dressed or polished .. .. .. 20 per cent, ad val. 40 per cent, ad val. (б) Articles n.e.i. made therefrom or from cement 20 per cent, ad val. 40 per cent, ad val. (5) Marble dressed or polished and articles n.e.i. made 20 per cent, ad val. 20 per cent, ad val. from marble (6) Slates specially suited for the manufacture of billiard- Free Free tables 230 Stones, mill, grind, oil, and whet .. .. .. i Free Free 231 Watch glasses and similar articles .. .. .. i Free 20 per cent, ad val. Class VIII. —Fancy Goods, Musical Instkuments, Spobting Goods, and Photographic Goods. 232 Antiques and works of art, as may be approved by the Free Free Minister, and on conditions prescribed by him provided that he is satisfied that such articles were produced or manufactured at least one hundred years prior to the date of importation 233 Artists' materials —viz., academy boards, canvas in the Free 25 per cent, ad val. piece or on stretchers, oiled paper and drawing-paper in blocks, colours, palettes, and palette-knives 234 Camera covers and cases .. .. .. .. 20 per cent, ad val. 45 per cent, ad val. 235 Cards, playing .. .. .. .. .. 6d. per pack Is. per pack An application was received for a reduction in the duty on these goods. It is considered to be a revenue one, and we are of opinion that the existing rates should be maintained. 236 Cigarette-papers entered to be warehoused in any licensed Free Free tobacco-factory for the manufacture therein of cigarettes 237 Clocks, time-registers, and time-detectors .. .. 20 per cent, ad val. 45 per cent, ad val. Various applications were made for the reduction or abolition of the duty on clocks. These goods are not made in New Zealand and the Commission regards the duties as revenue ones.

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T j British Preferential Tariff. General Tariff. 111 Tariff Items. : Remarks. • Column No. 1. Column No. 2. Class YIII. —Fancy Goods, Musical Instruments, Sporting Goods, and Photographic Goods —continued. 238 Clocks specially suited for use in timing flights of pigeons .. Free Free 239 Fancy goods, and toys ; sporting, gaming, and athletic 20 per cent, ad val. 45 per cent, ad val. This item covers many lines of goods of which only relarequisites, n.e.i., including billiard requisites n.e.i. ; fishing- tively a small portion is made in New Zealand. The tackle n.e.i., including artificial flies and other baited Commission regards these duties as revenue ones but hooks ; walking-sticks ; combs, hair and toilet thinks that the existing rates should be reduced by 5 per cent, ad val. 240 Films for cinematographs and similar instruments .. Free Free 241 Greenstone, cut and polished, unmounted .. .. 20 per cent, ad val. 20 per cent, ad val. 242 Jewellery ; plate, gold or silver ; platedware .. .. 20 per cent, ad val. 45 per cent, ad val. Various applications were received for reduction of duty on the goods included under this tariff item. The Commission regards the duties as revenue ones and thinks that the rates should be reduced by 5 per cent, ad val. 243 Lay figures, busts, and dress stands .. .. .. 20 per cent, ad val. 45 per cent, ad val. An application was received for the maintenance of the existing duties on the goods covered by this tariff item. After considering the evidence, the Commission considers that the duties should be retained. 244 Magic lanterns, cinematographs, and similar instruments, 20 per cent, ad val. 45 per cent, ad val. Various applications were made to the Commission respectincluding accessories peculiar thereto n.e.i. ing certain of the goods included under this tariff item. After surveying the evidence, the Commission considers that the existing position should be maintained. 245 Medals —viz., war medals, humane societies', and similar, Free Free also such miniatures of the same as may be approved by the Minister ; old coins 246 Mouldings in the piece, and panels, suited for use in picture- 20 per cent, ad val. 45 per cent, ad val. frames or furniture-making, in building construction, or for similar purposes 247 Musical instruments, and parts, viz. :— (1) Band instruments entered by or for any band or Free Free According to the evidence obtained by the Commission musical society duly registered and incorporated thefe are no goods of the classes included under this under the Incorporated Societies Act, 1908, on tariff item at present made in New Zealand. "We are declaration by a responsible officer of such band or of opinion that the existing position with respect to the society that the said instruments will remain the items included under paragraphs (1), (2), (3), (6) and property of the band or society and will not be sold (7) should be maintained but that the rates under or otherwise disposed of without payment of the paragraphs (4) and (5) should be reduced by 10 per duty otherwise imposed under the Tariff cent, ad val. (2) Musical instruments, imported for exclusive use by Free Free bands which are approved by the Defence Department, and under such conditions as the Minister may prescribe (3) Organs, viz., great organs and similar organs .. Free Free (4) Pianos ; player pianos, organs n.e.i., harmoniums, and 10 per cent, ad val. 35 per cent, ad val. similar instruments

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(5) Musical instruments n.e.i. .. . .... | 10 per cent, ad val. 35 per cent, ad val. (6) Organ pipes and stop-knobs ; metal piano frames ; Free Free articles for the manufacture or repair of organs, harmoniums, pianos, or player-pianos —viz., action work, player mechanism, and keys in frames or otherwise (7) Strings of metal wire, catgut, or similar material, Free Free specially suited for musical instruments 248 (1) Phonographs, gramophones, graphophones, and similar 10 per cent, ad val. 35per cent, ad val. The Commission is of opinion that the duty on the goods instruments, including accessories peculiar thereto, included under this tariff item should be reduced by n.e.i. 10 per cent, ad val. (2) Voice recording and reproducing appliances specially Free 25 per cent, ad val. An application was received for the exemption of dictasuited for office- use, also record -shaving appliances phones and similar instruments. We think that these for use therewith goods should be placed on a similar footing to typewriters and similar articles for office use. 249 Records for phonographs, gramophones, and for similar Free 25 per cent, ad val. instruments « 250 Tuning-forks, and other appliances, peculiarly suited for Free 20 per cent, ad val. use in tuning musical instruments 251 Paintings or pictures, painted or drawn by New Zealand Free Free students, within five years of the time of their departure from New Zealand for the purpose of undergoing a period of tuition abroad for the first time, upon evidence to the foregoing effect being produced to the satisfaction of a Collector of Customs 252 Paintings, statuary, other works of art, curios, and other Free Free articles approved by the Minister, for display in public | museums, the buildings of public institutions or art associations registered as corporate bodies, public parks or other public places, on such conditions as may be prescribed by the Minister 253 Paintings, pictures, drawings, engravings, and photo- 20 per cent, ad val. 45 per cent, ad val. graphs, n.e.i., framed or unframed ; picture or photograph frames or mounts (Note. —No painting, drawing, or photograph, in any medium, shall be assessed at a value for duty exceeding £5, provided that if the Collector is of opinion that duty on the frame of any such painting, drawing, or photograph, is being, or is likely to be intentionally evaded or avoided by this provision, he may require that duty shall be charged separately on such frame.) 254 Photographic cameras .. .. .. .. 20 per cent, ad val. 45 per cent, ad val. Applications were received for reduction of duty on some articles included under this item. None of these goods is made in New Zealand. The Commission regards the duties as revenue ones. 255 Photographic goods n.e.i. .. . . .. .. 20 per cent, ad val. 45 per cent, ad val. 256 Photographs, unframed, of personal friends, not for pur- | Free Free poses of trade /

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British Preferential Tariff. General Tariff. Item Tari g Items. 1 Remarks. No. i Column No. 1. Column No. 2. Class VIII. —Fancy Goods, Musical Instruments, Sporting G-oods, and Photographic Goods —continued. 257 Precious stones, and semi-precious stones, cut or uncut, if 5 per cent, ad val. 5 per cent, ad val. unmounted or unset 258 Sensitized surfaces, and albumenized paper, plain, not Free 25 per cent, ad val. being postcards or other stationery 259 Slides for magic lanterns .. .. ... .. Free Free 260 Statues, statuettes, casts, and bronzes •• 20 per cent, ad val. 45 per cent, ad val. 261 (1) Tobacco pipes, pouches, and cases, cigar and cigarette 20 per cent, ad val. 45 per cent, ad val. The Commission regards the duties levied on these goods holders and cases as revenue ones and thinks that the duty should be reduced by 5 per cent, ad val. (2) Cigarette papers n.e.i. .. .. • • • • l|d. for every 60 cigar- lfd. for every 60 cigar- This matter has been dealt with under Class II. ette papers ette papers 262 Toilet preparations, and perfumery, n.e.i., including per- 25 per cent, ad val. 50 per cent, ad val. The Commission regards the duties on the goods included fumed oil under this item as revenue ones. The increased duties imposed in 1931 have, in our opinion, encouraged industries for the manufacture of various lines of toilet preparations, &c., which are not considered to be compatible with Article 7 of the Ottawa Agreement. We therefore think that the duties should be reduced to the old rates, viz., 25 per cent, under the British Preferential Tariff and 50 per cent, under the General Tariff. 263 Trophies, prizes, flags, medals, medallions, badges, and Free Free other decorations, which have been awarded or presented or which are to be awarded or presented to persons in New Zealand and which have been donated by persons resident abroad ; trophies and prizes won abroad ; medals, badges, flags, and similar articles, approved by the Minister, imported by New Zealand branches of the Navy League, St. John Ambulance Association, or similar patriotic ambulance or other societies 264 Watches .. .. .. - • • • • • 20 per cent, ad val. 30 per cent, ad val. Representations were made to the Commission that the duties under the General Tariff should be reduced. These goods are not made in New Zealand. The duties are therefore revenue ones and we think that the existI ing rates should be maintained. Class IX— Paper and Stationery. Many of the items included in this class aflect the printing and stationery manufacturing industries of New Zealand. The Commission received a large volume of evidence respecting these industries. They are, generally speaking, efficiently conducted and give employment to a very large number of persons. We consider that the duties imposed on several classes of goods are higher than are necessary to maintain the industries on an efficient basis. After an examination of the mass of information in our possession we are of opinion that the rates recommended should be adopted. Special reference is made below to certain items included in this class. 265 Albums, all kinds .. .. .. .. • • 20 per cent, ad val. 45 per cent, ad val. 266 Bookbinders' materials —viz., head-bands, tacketing-gut, Free Free marbling-colours, blue or red paste for ruling-ink

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267 Articles made of cardboard, papier-mache, or similar material, viz. :— (1) Flower-pots, table and household utensils, n.e.i. .. 20 per cent, ad val. 45 per cent, ad val. (2) Cream-mugs, honey-jars, and similar receptacles, Free Free Cream-mugs, &c. — printed or otherwise According to the evidence in the possession of the Commission, the goods included under this tariff item are not made in New Zealand. Requests were received for the imposition of duty under the General Tariff. As the articles are used in packing perishable goods and primary products in New Zealand, it is considered that they should be obtainable at the lowest possible cost. The Commission does not, therefore, recommend that the request be granted. 268 Cardboard boxes, and paper boxes, complete ; paper n.e.i., 20 per cent, ad val. 45 per cent, ad val. and cardboard, cut or shaped, for wrappers, boxes, or other receptacles 269 Cardboard, pasteboard, wood-pulp board, corrugated board, Free Free Various requests were made to the Commission respecting fibre board, strawboard and similar board, of size not less the goods covered by this tariff item, including the than 20 inches by 15 inches or the equivalent and weigh- following — ing not less than 1J oz. per sheet of 20 inches by 15 inches («) that duty at the rate of 20 per cent, ad val. should or the equivalent; cloth-lined board of size not less than b e imposed under the General Tariff on such materials 20 inches by 15 inches or the equivalent; millboard, of when they were to be used for certain purposes. As size not less than 15 inches by 15 inches or the equivalent these goods are all, generally speaking, raw materials for the industries of New Zealand, the Commission is of opinion that the existing position should be maintained. (6) that duty should be imposed on wood pulp and fibre wall-board. These materials are not made in New Zealand and are essential for certain building purposes. The Commission does not think that duty should be levied. 270 Cardboard, pasteboard, wood-pulp board, corrugated board, 20 per cent, ad val. 45 per cent, ad val. millboard, fibre board, straw-board, and cloth-lined board, n.e.i. 271 Celluloid, and similar materials, plain, in sheets or rolls, Free Free unprinted, n.e.i. 272 Crayons, all kinds .. .. .. .. .. Free, 25 per cent, ad val. 273 Directories of New Zealand, or of any part thereof ; covers 20 per cent, ad val. 45 per cent, ad val. for directories 274 Not used. 275 Not used. 276 Handbills n.e.i., circulars, programmes, playbills, printed 6d. per lb. Is. 6d. per lb. posters, trade catalogues, price-lists, and fashion-plates (Note. —This shall not apply to trade catalogues or price-lists of the goods of firms or persons having no established business in New Zealand or to cut samples mounted in books or on folders or cards or to colour cards provided that such books, folders, or cards, are issued by and bear the name and overseas address of the firm or person whose goods are represented therein.)

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! British Preferential Tariff. General Tariff. »f nl Tariff Items. ! Remarks. ■^ 0 - Column No. 1. Column No. 2. I Class IX. —Paper and Stationery- —continued. 277 Ink powders, and ink pellets, n.e.i. .. .. .. 20 per cent, ad val. 45 per cent, ad val. 278 Ink, printing, black, in packages containing not less than Free 20 per cent, ad val. 1 cwt., the current domestic value of which does not Many representations were made to the Commission with exceed 7d. per lb. _ _ respect to the duty on inks. The industry of manufac279 Ink, printing, n.e.i. ; stencilling and similar inks ; showcard 15 per cent, ad val. 40 per cent, ad val. turing inks in the Dominion is relatively a small one. or poster colours in liquid form V According to the evidence submitted to the Commis280 Ink n.e.i., including writing, drawing, and marking ink .. 20 per cent, ad val., or 45 per cent, ad val., sion they are of good quality. After a consideration of 2s. per gallon, which- or 4s. per gallon, the evidence in our possession we are of opinion that ever rate returns the whichever rate re- the existing duties and exemption should be mainhigher duty turns the higher tained. duty J 281 Maps, charts, plans, and similar articles .. .. Free Free 282 Envelopes and bags, paper, n.e.i. .. .. .. 25 per cent, ad val. 50 per cent, ad val. 283 Envelopes and bags of celluloid or similar material .. Free 25 per cent, ad val. 284 Paper, viz. :—Bleached sulphite or similar paper, on de- Free Free claration that it will be used only in the manufacture of twine or imitation wickerware 285 Carpet-felt paper, and paper-/efe n.e.i. .. .. Free 20 per cent, ad val. 286 Paper on declaration that it will be used only in the maim- Free Free facture of cartridges (not including paper for wrapping cartridges or other goods) 287 Emery-paper, emery-cloth, and glass-paper, cut into shapes, Free 25 per cent, ad val. in rolls, or in sheets 288 Filter-paper, and filter-papers; filter-pulp .. .. Free Free 289 Monotype-paper, in rolls, suitable for use with monotype Free 20 per cent, ad val. machine 290 Paperhangings .. .. .. .. .. Free 25 per cent, ad val. 291 Paper-lace, embossed, and similar material, suitable for Free Free use in the manufacture of cardboard boxes 292 Paper-pulp, for the manufacture of paper .. .. Free Free 293 Printing-paper and writing-paper, in rolls not less than Free Free 10 inches wide, wholly or partly carbon-coated on one side, on declaration that it will be used only in the manufacture of counter-check books 294 Paper seed-pockets, printed, or lithographed, specially Free 20 per cent, ad val. suited for packing seeds 295 Paper, imprinted —viz.: —true vegetable parchment; Free Free glazed transparent greaseproof paper greaseproof imitation parchment paper and similar paper of such qualities as may be approved by the Minister 296 Paper (other than wrapping paper) waxed, unprinted; Free 20 per cent, ad val. also such paper printed and then waxed

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297 Paper, celluloid, or similar materials and wrappers made ] 20 per cent, ad val. 45 per cent, ad val. from such materials, printed, lithographed, or ruled, n.e.i. 298 Wrapping-paper, printed or unprinted, viz. :— (1) In sheets of size not less than 20 inches by 15 inches ! or the equivalent or in rolls not less than 10 inches wide — (a) Of substance not lighter in weight than \ ounce '! 6s. 6d. per cwt. 10s. 6d. per cwt,. The Commission received a large amount of evidence and per sheet of 20 inches by 15 inches or the j went fully into the question as to the duty which equivalent ' should be imposed on wrapping paper. No representa(b) N.e.i. .. .. .. .. .. ! 6s. 6d. per cwt., or 10s. 6d. per cwt., or tions were, however, made by United Kingdom manu20 per cent, ad val., 45 per cent, ad val., facturers of such paper. whichever rate re- whichever rate re- The industry of paper making has been carried on in turns the higher duty turns the higher duty New Zealand for many years and at present employs (2) In sheets of size less than 20 inches by 15 inches or j 20 per cent, ad val." 45 per cent, ad val. a considerable number of persons. It is a large user the equivalent or in rolls less than 10 inches wide I of New Zealand fuel and power, although the (except such rolls specially suited for industrial or principal raw material is imported. We are of similar purposes in such widths not exceeding opinion that the existing duties should be maintained. 2 inches as the Minister may determine) 299 Paper of qualities and sizes approved by the Minister, on Free Free declaration that it will be used by orchardist3 only in wrapping fruit 300 I Paper, viz. :— ' (1) Carbon and similar copying paper .. . . Free 20 per cent. adval. Representations were made to the Commission respecting the duty on carbon paper. After going into the matter, we are of opinion that the industry of cutting and ! packeting carbon paper is not one suited to New Zealand. We think that the existing duty under the British Preferential Tariff —item 300 (1) (&) —should be abolished. (2) N.e.i., including tin-foil paper, and gummed paper n.e.i., — (a) In sheets of size less than 20 inches by 15 inches 20 per cent, ad val. 40 per cent, ad val. or the equivalent (b) In sheets of size not less than 20 inches by Free 10 per cent, ad val. "Representations were made (a) that the duty under the 15 inches or the equivalent General Tariff should be increased to 20 per cent., (c) In rolls less than 10 inches wide except such 20 per cent, ad val. 40 per cent, ad val. and (b) that certain kinds of printing paper of foreign rolls specially suited for industrial or similar origin should be admitted free. purposes in such widths not exceeding With respect to the former, the view taken by the 2 inches as the Minister may determine " Commission is that paper covered by this tariff item is (d) In rolls n.e.i. .. .. .. ■ • ' Free 20 per cent, ad val. raw material for the stationery manufacturing and printing industries and that higher duty should not be levied. As regards the second request, a duty of 10 per cent, was imposed as a result of the Ottawa Conference, and in view of this the Commission could not recommend a variation of the same. 301 Printed books papers music or advertising-matter, n.e.i. .. Free Free 302 Religious tracts handbills and folders .. .. .. Free Free 303 Show-cards, and calendars, all kinds, including glacier 20 per cent, ad val. 45 per cent, ad val. stickers suited for exhibition on windows

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Item British Preferential Tariff. General Tariff. jvfo Tariff Items. Remarks. Column No. 1. Column No. 2. Class IX. —Paper and Stationery —continued. 304 Stationery, and paper, manufactured —viz., account-books, 20 per cent, ad val. 45 per cent, ad val. scribbhng-books, letter-books, copying letter-books, counter books, guard books, copy-books with headlines on each page, drawing-books, sketch-books, diaries, birthday-books, scribbling, and letter blocks; bookcovers ; book-markers : invoice, and statement forms, cheque, and draft forms ; tags ; labels, all kinds ; printed window-tickets; blotting-pads; Christmas, New Year, birthday, Easter, and other booklets and cards, n.e.i. ; printed, lithographed, ruled, or embossed stationery, n.e.i. 305 Stationery n.e.i. ; cards, printers' menu, programme, 20 per cent, ad val. 45 per cent, ad val. calendar, Christmas, and similar, of cardboard, celluloid or similar material, edged, or having embossed or printed thereon such words as " Menu," " Calendar," " Christmas Greetings," but otherwise unprinted, and suited to be completed in New Zealand 306 Sunday school and day school lesson sheets and cards ; Free Free Sunday school tickets, and reward cards, being scriptural or religious motto cards, and having no reference on them to Christmas, New Year, Easter, or birthdays Class X. —Metals and Machinery. 307 Ball bearings, and roller bearings, not being ball or roller Free 15 per cent, ad val. bearing plummer or hanger blocks; steel balls, and rollers, suitable for ball or roller bearings 308 Beekeepers' tools, implements, and apparatus —viz., metal Free Free Application was received for the imposition of duty on fittings for beehives, bee-smokers, wax-extractors, queen- comb foundation. As this is a raw material for the use cages, comb foundation, foundation machines, honey- of beekeepers it is not considered advisable that duty knives, honey-extractors, queen-rearing outfits, wax- should be imposed. presses, tools peculiar to bee-keepers' use, gloves of textile soaked in oil, and rubber gloves, specially suited for beekeepers' use, and such other articles, appliances, and implements, peculiar to use in beekeeping, as may be approved by the Minister 309 Bellows n.e.i. . . . . .. .. .. 20 per cent, ad val. 45 per cent, ad val. 310 Bolts, and bolt ends, up to 24 inches in length, including Free 20 per cent, ad val. insulator bolts, n.e.i. ; nuts, blank or screwed ; metal threaded screws, screws for wood ; set-screws, engineers' studs, taper pins, and split pins ; rivets and washers 311 Buckles, and similar articles, wholly of metal (other than Free 25 per cent, ad val. precious metal) even if covered with leather or cloth 312 Castors suited for furniture .. .. . . Free 25 per cent, ad val.

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313 Chain, and chains, metal (other than key, watch, bracelet, Free 20 per cent, ad val. pendant, eyeglass, and similar chains, and chain made of precious metal), plain, or with hook, swivel, or ring attached, n.e.i. 314 Chain-belting (not being conveyor chain or belting), loose- I Free 25 per cent, ad val. link, and other 315 Clips, tags, rings, and similar articles, for the identification Free Free An application was received for the imposition of duty on of live-stock, poultry, fish, and other animals ; metal the goods included under this tariff item. As the labels with names of trees plants or shrubs stamped or . articles are essential to the primary and other industries, cast thereon, specially suited for use in botanical gardens, we do not consider that a protective tariff would be public parks, and similar places advisable. 316 Cocks, metal, low pressure, not exceeding \ inch in internal Free Free diameter, and lubricators, on declaration by a manufacturer that they will be used by him solely in the completion of articles in New Zealand 317 Culverts of galvanized corrugated iron (of 10 to 18 Bir- Free Free mingham wire gauge), iron gates for the same, and fluming of plain or corrugated galvanized iron (of 10 to 18 Birmingham wire gauge), on declaration by an official of a duly constituted local government body that they will be used only on public works 318 Cylinders for compressed gases .. .. . • Free Free 319 Eyelets n.e.i. .. .. .. .. .. Free Free 320 Filters, and appliances specially suited for the chemical Free ! 20 per cent, ad val. treatment of water, as may be approved by the Minister, on declaration by an official of a duly constituted local government body that they will be used only in purifying water-supplies 321 Firearms and fittings therefor, viz. :— (1) Rifles, -22 calibre ; rifles, -303 calibre (including Free 25 per cent, ad val. service fittings therefor) ; rifles, n.e.i., of such calibres as may be authorized by the Minister of Defence (including service fittings therefor) (2) Sights for military rifles, of such patterns as may be Free 25 per cent, ad val. approved by the Minister ; cleaning rods specially suited for use with rifles of -22 calibre, or with rifles of such calibre as may be authorized by the Minister of Defence (3) Firearms n.e.i. .. .. .. .. 20 per cent, ad val. 45 per cent, ad val. 322 Cartridges, cartridge cases, and materials for the manufacture thereof, viz. :— (1) Cartridges — {a) Shot, 10 to 24 bore .. .. 3s. per 100, or 30 per 5s. per 100, or 55 per A considerable amount of evidence was obtained by the cent, ad val., which- cent, ad val., which- Commission with respect to the articles included under ever rate returns the ever rate returns the this tariff item, especially from the local manufacturers higher duty higher duty of cartridges, &c.., in Auckland. We are of opinion that the existing duties should be maintained. (b) Shot, n.e.i. .. .. .. .. 25 per cent, ad val. 50 per cent, ad val. (c) Ball, -22 calibre .. .. .. .. Free 25 per cent, ad val. (d) N.e.i. .. .. .. .. . - 20 per cent, ad val. 45 per cent, ad val.

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Tt prn British Preferential Tariff. General Tariff. £J 0 Tariff Items. Remarks. Column No. 1. Column No. 2. Class X.—Metals and Machinery —continued. Cartridges, &c. —continued. (2) Cartridge cases — (a) 10 to 24 bore .. .. .. Is. 6d. per 100, or 2s. 6d. per 100, or 30 per cent, ad val., 50 per cent, ad val., whichever rate re- whichever rate returns the higher duty turns the higher duty (b) N.e.i. .. .. .. . . .. 25 per cent, ad val. 45 per cent, ad val. (3) Parts of cartridge-cases, including tubes for the mami- 30 per cent, ad val. 50 per cent, ad val. facture of cartridge-cases ; gun-wads, all kinds (4) Shot and bullets .. .. .. .. 10s. per cwt. 20s. per cwt. (5) Metal cups for the manufacture of cartridge-cases .. Free Free 323 Percussion caps; detonators .. .. .. Free Free 324 Guns, tools, and ammunition, specially suited for use in Free 20 per cent, ad val. whaling 325 Fire engines ; chemical fire - engines ; chemical fire - Free 20 per cent, ad val. extinguishers, including such chemicals n.e.i. for charging the same as may be approved by the Minister ; fire-hose, and couplings therefor, portable fire-escapes, fire-ladders, also fire-reels, on declaration that they will be used only by fire-brigades; and such other articles (including firemen's helmets) peculiar to use by fire-brigades or in fire extinguishing, as may be approved by the Minister 326 | Fishhooks, unmounted and without attachments .. Free 25 per cent, ad val. 327 Galvanized-iron manufactures, n.e.i., made up from galvan- 20 per cent, ad val. 45 per cent, ad val. Representations were made to the Commission with ized iron, or from plain sheet iron and then galvanized ; respect to the protection to be accorded to the industry japanned or lacquered metalware ; furniture, cabinet- of manufacturing furniture, cabinetware and shelving ware, and shelving, specially suited for office shop or specially suited for office or warehouse use. In this warehouse use, made up from sheet metal not exceeding connection it was urged that there were advantages 0-080 inch in thickness through the importation of certain parts from the United Kingdom for use in New Zealand in the manufacture of the completed articles. This was to be arranged under an agreement between the manufacturers in the two countries by which the New Zealand manufacturer undertook to take from the United Kingdom manufacturer materials representing a certain percentage of the New Zealand works cost of certain articles. On the evidence before the Commission we do not regard such arrangements as being in the best interests of the industrial and economic welfare of the Dominion. Some of the objections which might be raised are the following :—

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» (a) The New Zealand manufacturer may be limited in the source of his supply of parts. (6) It might be necessary for the local manufacturer to purchase from abroad articles which could have been economically produced in New Zealand, (c) A portion of the saving of the cost of manufacture in the United Kingdom compared with manufacture in New Zealand would be discounted by a second profit having to be taken on the imported parts during the final manufacture. (d) If, under such an arrangement, the United Kingdom manufacturer is restricted in the selling of the complete articles, the effect would be to reduce competition in this market. (e) If, consequent upon such an arrangement, the imported parts were exempted from duty, the following difficulties might arise :— (i) The admission free of articles which might have been economically made in New Zealand. (ii) Different agreements might involve a variation in the list of articles admissible free. In the particular case in question the evidence shows that the industry of manufacturing steel filing cabinets cannot be profitably carried on in New Zealand except by levying a duty at the rate of 25 per cent, ad val. under the British Preferential Tariff as well as exempting from duty the imported parts. The Commission considers that an industry requiring such a relatively high protection under the circumstances stated is not in the best interests of the Dominion and should be regarded as an uneconomic one, especially in view of the limited market for goods of this nature. On these grounds a recommendation cannot be made in favour of a protective duty. It is considered that these, along with other articles of office equipment, are reasonably subject to a revenue duty which the Commission thinks should be fixed at 20 per cent, under the British Preferential Tariff. It is considered that the other articles which are covered by the existing Tariff item 327 and which are of a class economically made in New Zealand are sufficiently protected by a duty of 20 per cent, under the British Preferential Tariff. 328 Implements and fittings specially suited for use in straining Free 10 per cent, ad val. or stretching fencing wires 329 Incubators for poultry-raising .. .. .. Free 20 per cent, ad val. No representations were made to the Commission respecting this matter. It is considered that, in the interests of the poultry industry, incubators should be admitted free under the British Preferential Tariff.

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British Preferential Tariff. General Tariff. Tariff Items. Remarks. No - Column No. 1. Column No. 2. Class X.—Metals and Machinery —continued. 330 Iron drums, empty, not exceeding 10 gallons capacity .. Free 20 per cent, ad val. 331 Lawn-mowers .. . - • ■ • • • • 20 per cent, ad val. 45 per cent, ad val. 332 Adding and computing machines and instruments ; account- Free 25 per cent, ad val. ing and book-keeping machines ; cash registering machines, not including recording paper ; combined adding and typing machines ; typewriters (including covers); duplicating machines and apparatus, n.e.i. ; addressing machines 333 Agricultural implements and machinery, viz. :— (1) Cultivators ; harrows ; ploughs ; drills ; seed and 10 per cent, ad val. 35 per cent, ad val. Considerable evidence was received by the Commission fertilizer sowers or distributors combined or sepa- with respect to the industry of manufacturing agriculrate ; lime sowers ; seed or grain cleaners, and tural implements and machinery at present carried on cellular seed or grain separators in New Zealand. The protection on this class of goods is relatively low, and it is considered to be in the interests of primary producers that such an industry should be maintained in the Dominion. We recommend that there should be no alteration in the existing duties. (2) N.e.i., including ploughs, cultivators, and seed drills, Free Free Representations were made to the Commission that duty hand-worked, combined or separate ; ploughs, should be levied under the General Tariff on certain imsingle furrow mouldboard, not exceeding 266 lb. plements and machinery covered by this item. Implenet weight; also the following parts of ploughs or ments of these classes are not made in New Zealand, harrows, viz. —mould-board plates unbent, steel We are of opinion that it is not in the best interests of share-plates cut to pattern, skeith-plates, plough the Dominion that such a duty should be imposed, beam forgings, and discs for harrows or ploughs 334 Dairying machinery, and appliances, viz. :— (1) Churns, power driven, including butter-workers ; Free 20 per cent, ad val. butter-packers, butter-pounders, and cheese-presses (2) Dairying machinery n.e.i., including coolers but ! Free Free Application was made to the Commission for the imposinot including coil pipes or similar articles ; ma- tion of duty on foreign cream separators. These machinery specially suited for use in the manufacture chines are of vital importance to the dairy industry. It of dried milk, casein, sugar of milk , or other milk 1 is admitted that on a previous occasion separators manuproduct; also the following articles on declaration j factured by the firm in question were found not to be that they will be used only in dairy factories, or in entirely satisfactory. New models have now been inthe manufacture of dried milk or other milk troduced which may prove to be equal to the foreign products, viz., vacuum-pans vats or tanks,, lined article. The Commission is of opinion that the new with glass porcelain or enamel, milk - pasteurizers machines should be in use for some considerable period (not being coil pipes or similar articles) ! j before it can be definitely affirmed that they are in all respects satisfactory. We think that, in the meantime, the existing position should be maintained.

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335 Engines, viz. (a) Specially suited for use on cycles and motor vehicles 15 per cent, ad val. 45 per cent, ad val. See remarks under item 205 (6). (b) Specially suited for use on tractors or traction engines, Free 20 per cent, ad val. on declaration that they will be used only on such tractors or traction engines 336 Engines (including necessary controlling-gear therefor) Free 10 per cent, ad val. specially suited for flying machines, on declaration that they will be used solely in the manufacture or completion of the same 337 Engine governors and turbine governors .. .. Free 25 per cent, ad val. 338 Machinery or appliances, electrical, viz. :— (1) Machinery or appliances peculiar to the generation Free 25 per cent, ad val. Representations were made to the Commission requesting of electricity, to the transformation of pressures of a modification of the duties and exemptions provided for electric currents, or to the conversion of one type of under this heading. Certain of these goods form parts electric current to another ; electric motors ; slide of articles at present admitted free under the British " rails for electric generators or electric motors Preferential Tariff, and protection was desired on the (2) Switchboards, fuse boards, and distribution boards Free 25 per cent, ad val. ground that they were made in New Zealand. The or boxes for electric circuits ; shunt or voltage re- Commission does not consider that the goods in question gulators ; starters or controllers for electric motors ; are of sufficient importance to warrant protection. Re--rheostats, and resistances n.e.i. including reactance quests were also made that certain articles at present or choking coils, for the reduction or control of covered by paragraph (10) should be admitted free electric currents, condensers, relays, electro-magnets, under the British Preferential Tariff. These articles switches, wall-plugs and shoes or sockets therefor, are not made in New Zealand, and the Commission circuit breakers, circuit makers, cut-outs, fuses, wire regards them as reasonable items for revenue purposes, or cable connectors and similar articles, and ter- Many representations were made with respect to the minals ; lightning arresters for the protection of duty on wireless broadcast receiving sets. A leading electrical apparatus local manufacturer did not request protection from sets (3) Carbons or electrodes for arc lamps, for electric Free 25 per cent, ad val. manufactured in the United Kingdom. A large number furnaces, or for electric welding of persons is at present employed in the industry, but (4) Electrical appliances peculiar to electro plating, Free 25 per cent, ad val. in view of the rapid changes in models manufactured electro-chemistry, electro-metallurgy, surgery, tele- abroad, the technological research which has to be undergraphy, telephony including wireless broadcast taken, the limited market in the Dominion, and the fact receiving sets not mounted in cabinets but not in- that certain essential parts have to be imported, the eluding cabinets or parts of cabinets for such sets ; Commission is doubtful whether it is an industry suited X-ray tubes and electrical vacuum tubes not suit- to New Zealand conditions. We are of opinion that, able for purposes of illumination to comply with the Ottawa Agreement, wireless broad(5) Electric locomotives ; trolly-poles or collectors for Free 25 per cent, ad val. cast receiving sets manufactured in the United Kingelectric tram-cars or electric locomotives ; frogs, dom should be admitted free. The existing duty of crossings, and line-ears, for overhead conductors 35 per cent, ad val. should, we think, be maintained on for electric railways or tramways ; rail bonds with the foreign sets. terminals attached (6) Metal poles or towers, specially suited for use in Free 25 per cent, ad val. electrical transmission-lines (7) Insulated cable and wire ; carbon in block, sheet, or Free 25 per cent, ad val. rod ; mica, vulcanite, insulating-tape, and other insulating materials n.e.i., not including insulatingpiping or tubing, or insulating fittings for pipes

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I British Preferential Tariff. General Tariff. j Item Tari g items. Remarks. No. Column No. 1. Column No. 2. Class X. —Metals and Machinery —continued. Machinery or appliances, electrical —continued. (8) Sparking-plugs for oil engines Free 25 per cent, ad va . (9) Wireless broadcast receiving sets mounted m cabinets Free 35 per cent, ad val. (10) Nei .. • • • • • • • • 20 per cent, ad val. 45 per cent, ad val. 339 Incandescent filament electric-lamp bulbs, not being peculiar to surgical use, and having, at the marked voltage, a power consumption— Not exceeding 8 watts .. • ■ • • • • Id. P er P er Exceeding 8 watts and not exceeding 80 watts .. 2d. per bulb 6|d per bulb Exceeding 80 watts and not exceeding 180 watts .. 3d. per bulb Is. 3d. per bulb Exceeding 180 watts — _ oJ , For the first 180 watts .. •• •• •• 6d. per bulb Is. 3d. per bulb For each additional 100 watts or fraction thereof .. 3d. per bulb 7Jd. per bulb 340 i Electric lamps n.e.i., not being peculiar to surgical use . . 10 per cent, ad val. 35 per cent, ad val. 341 1 Omitted. , , , 342 Measuring, counting, testing, indicating, and recording iree 20 per cent, ad val. machines, instruments, and appliances, n.e.i. ; drawing instruments ; compasses, not being watch-chain pendants Q a (rds fYb&tj&y'S *' (1) Having a maximum capacity not exceeding 450 cubic 10 per cent, ad val. 30 per cent, ad val. Considerable evidence was received by the Commission feet with respect to gas meters. Ihe industry of making ™ . ' | Free 20 per cent, ad val. these goods for domestic use is being efficiently carried w ' on in the Dominion. Employment is given to a considerable number of persons, and we think that an article satisfactory to purchasers is being produced. After a consideration of the evidence, including the production costs, the Commission is of opinion that, under the Ottawa Agreement, the industry is entitled to protection at the rate of 10 per cent, under the British Preferential Tariff. The larger types of gas meters including station meters, are not being made in the Dominion, and the Commission considers that these should be admitted free under the British Preferential Tariff. 343 ! Machinery peculiar to mining gr gold-saving, n.e.i. (not Free 25 per cent, ad val. including dredging machinery or screens for same) ; grizzly bars ; ore-crushing rolls ; ore-feeders ; stamper batteries, and steel shoes and dies for same ; concentrators ; battery-screening, woven punched or drilled, also similar screening on declaration that it will be used only for gum washing ; also the following machinery and engines on declaration that they will be used only for mining (including quarrying) purposes, viz., air compressors (not including the motive power for driving the same), fuel economizers, capstan engines, winding engines (including drums therefor), pumps

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344 1 Power driven spray pumps including outfits therefor, as I Free Free may be approved by the Minister, specially suited for j agricultural uses 345 Pumps peculiar to use in dairying or in the manufacture ; Free 20 per cent, ad val. of dried milk or other milk product (except vacuum j pumps suited for use with milking-machines and any other pump which the Minister is satisfied could have been made economically in New Zealand) 346 Pumps for raising or distributing liquids, n.e.i. ; vacuum- ' 20 per cent, ad val. 45 per cent, ad val. Representations have been made to the Commission with pumps, including those suited for use with milking- respect to the duty on pumps. Various types of pumps machines are made in New Zealand. We consider that the industry is an efficient one. After considering the evidence we are of opinion that pumps of the classes made in New Zealand should be protected by a duty under the British Preferential Tariff of 20 per cent, ad val. and that, subject to considerations of revenue, other classes of pumps should be admitted free of duty under the British Preferential Tariff. 347 Sheep-sliearing. and horse-clipping-machines .. .. j Free 10 per cent, ad val. 348 Traction engines and tractors ; portable steam engines on j Free 10 per cent, ad val. wheels, with boilers of locomotive type ; road-rollers, j self propelled 349 Weighing machines, scales, and balances, n.e.i. .. .. 1 Free 25 per cent, ad val. Several representations were made to the Commission asking that the existing duty under the British Preferential Tariff on the goods included under this item be abolished. No representations were made by any New Zealand manufacturers. These articles are used extensively for commercial and industrial purposes, and the Commission is of opinion that, subject to revenue considerations, these goods should be admitted free of duty under the British Preferential Tariff. 350 Omitted. •351 Machinery, machines, machine tools, and appliances, viz.: — ; (1) Anvils, forges, and hearths, viz. :—blacksmiths', and Free 25 per cent, ad val. similar (2) Blacksmiths', braziers', assay, and treadle-power Free 25 per cent, ad val. bellows (3) Boring and well-drilling machinery ; rock drills, and Free 25 per cent, ad val. diamond drills ; coal cutters (4) Blowers, and fans, viz. :—Exhaust, blast, and Free 25 per cent, ad val. ventilating ; vacuum cleaners (5) Card clothing suitable for use in woollen mills and Free 25 per cent, ad val. paper mills (6) Crucibles .. .. .. .. .. Free 20 per cent, ad val. (7) Grinding machines, emery, and similar ; emery and Free 25 per cent, ad val. similar wheels

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! British Preferential Tariff, i General Tariff. " em Tariff Items. i ! Remarks. No - Column No. 1. Column No. 2. Class X.—Metals and Machineby —continued. Machinery, &c. —continued. (8) Grinding mills, grinding pans, ball mills, tube mills, Free 25 per cent, ad val. ; bone crushers, corn mills, coflee and spice mills, food chopping, mineing, and similar machines (9) Sewing machines .. .. .. • ■ Free Free (10) Knitting and kilting machines .. .. .. Free 25 per cent, ad val. j (11) Peculiar to metal-working, wood-working, stone- Free 25 per cent, ad val. working, or glass-working 352 Machinery, machines, machine tools, engines, and appliances, Free 25 per cent, ad val. as may be approved by the Minister, peculiar to use in manufacturing, industrial and similar processes (Note. —The Minister may refuse to approve the entry of any article under this item if he is satisfied that the same could have been made economically in New Zealand.) -353 Machinery, machines, engines, and other appliances, n.e.i., viz. :— (1) Gas heating and gas cooking appliances ; valves, 25 per cent, ad val. 50 per cent, ad val. Gas heating and gas cooking appliances Representations cocks, and similar articles, of brass or other copper- were made to the Commission with respect to the duty a ll 0 y on gas heating and cooking appliances. The industry of manufacturing these articles is carried on efficiently in New Zealand and a considerable number of persons is employed. After considering the information available, we are of opinion that the existing rates should be maintained. Yalves, cocks, &c. —Several applications were received by the Commission with respect to the duty on these goods. The industry of manufacturing these articles is carried on efficiently in New Zealand. After reviewing the whole position, the Commission considers that the existing duty under the British Preferential Tariff should be maintained. This industry gives employment to a considerable number of persons. (2) Hvdro extractors .. .. .. .. Free 25 per cent, ad val. Representations were made to the Commission with respect to hydro extractors. Owing to the limited demand, it is considered that the industry is not suited to New Zealand conditions. We are of opinion that these articles, which are used by other industries in the Dominion, should be admitted free under the British Preferential Tariff.

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I I (3) Gas compressing machines, viz. :—ammonia com- | 10 per cent, ad val. 25 per cent, ad val. pressors (4) Electric cooking and electric heating appliances .. Free 25 per cent, ad val. Several representations were made to the Commission with respect to the duty on the goods covered by this item. The industry of manufacturing these goods is carried on I to a certain extent in the Dominion, but after examining all the evidence obtained we have come to the conclusion that it is not one to which, under the Ottawa Agreement, protection should be afforded. From the revenue aspect the Commission would point out that the installation of electric cooking and heating appliances in the Dominion, through the consumption of current, directly or indirectly increases the revenue. On this account we think that all these appliances should be obtainable at the lowest possible cost. For the above reasons we recommend that the duty | under the British Preferential Tariff be abolished. (5) Stone crushing machines, viz. :—jaiv crushers .. 10 per cent, ad val. 35 per cent, ad val. Representations were made to the Commission with respect to the duty on jaw crushers, which are used in crushing metal for road making and other constructional work. After considering the information available, we have come to the conclusion that the rate of duty under the British Preferential Tariff should be reduced to 10 per j cent, ad val. (6) Concrete mixers .. .. .. .. 15 per cent, ad val. 40 per cent, ad val. : The Commission has received representations with respect to the duty on concrete mixers. These articles are made satisfactorily in New Zealand. From the evidence available we are of opinion that duty under the British Preferential Tariff should be reduced to 15 per cent, ad val. (7) Other kinds .. .. . . .. .. 20 per cent, ad val. 45 per cent, ad val. Oil engines —Representations were made by United Kingdom and New Zealand manufacturers of oil engines. The local manufacturers requested that a duty of 20 per cent, under the British Preferential Tariff should be imposed. According to the evidence in the possession of the Commission, the article produced in the Dominion is satisfactory and the industry is an efficient one. We are of opinion that duty under the British Preferential Tariff should be fixed at the rate of 20 per cent, ad val. Insulators —Representations were made to the Commission with respect to the duty on electric insulators. These articles (except those for very high voltages) are made satisfactorily in the Dominion. After a consideration of the evidence, we are of opinion that the duty under the British Preferential Tariff should be reduced to 20 per cent, ad val.

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t, British Preferential Tariff, j General Tariff. , T Tariff Items. I Remarks. Column No. 1. j Column No. 2. Class X.—Metals and Machinery —continued. 354 Artificers' tools, n.e.i., not including brushes or brushware ; Free [ 25 per cent, ad val. and the following tools —viz., axes, hatchets, spades, shovels, forks, picks, mattocks, hammers, scythes, sheepshears, reaping-hooks, scissors (not less than 10 inches in length), butchers' and other cleavers and choppers, hand-saws, saw-blades machine or hand 355 Bill-hooks, bush-hooks, slashers, and hedge-knives Free 25 per cent, ad val. Representations were made to the Commission with respect to the goods included under this item. They are made in the Dominion but the employment given by this industry is relatively small. We consider that, in view of the importance of these articles to the farming community, the duty under the British Preferential Tariff should be abolished. 355a Tanks, rectangular, of sheet iron, of capacity not less than Free 25 per cent, ad val. These are usual containers for certain classes of goods 200 gallons, if imported containing good? imported into New Zealand, and we are of opinion that they should be admitted free under the British Preferential Tariff. 356 Hardware, hollowware, and ironmongery n.e.i.; manufac- 20 per cent, ad val. 45 per cent, ad val. The Commission offers the following observations respecttured or partly manufactured articles of metal, and ing the undermentioned articles falling under this manufactured or partly manufactured articles of metal tariff item :— in combination with any other material, n.e.i. Petrol pumps —The Commission received representations with respect to the duty on petrol pumps. These articles are made to some extent in New Zealand, but the Commission does not consider it an industry to which protection should be applied. We regard the duty on the goods as a matter of revenue and recommend that the existing position be maintained. Piston rings and pistons —Representations were made to the Commission with respect to the duty on piston rings and pistons. The manufacture of these goods is carried on in New Zealand and we regard the industry as an efficient one. After considering the evidence we are of opinion that the existing duties on piston rings should be maintained and that pistons should be admitted on the same basis as at present. Enamelledware — It was requested that enamelledware made in foreign countries wholly or partly from British steel or iron should be admitted at a lower rate than the General Tariff —the rate to depend upon the percentage of British material. The granting of this request could I not be recommended by the Commission.

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356 (1) Porcelain enamelled oast iron baths .. .. 25 per cent, ad val. 1 50 per cent, ad val. Representations were made to the Commission with respect to the duty on these baths. The industry of manufacturing these goods is carried on efficiently in the Dominion and we think it desirable that it should be maintained. We are satisfied that, in accordance with the Ottawa Agreement, the duty under the British Preferential Tariff should be increased from 20 to 25 per cent, ad val. This we accordingly recommend. 356 (2) Builders' and cabinetmakers' hardware, viz.: —hinges Free 20 per cent, ad val. Among the articles included under this heading are (not being gate hinges) suited for doors, box-lids, or similar cabinetmakers' and builders' hardware. The existing articles ; locks, lock sets, and keys for locks ; metal ! duties on these goods increase building costs and impose escutcheon plates ; handles, pulls, catches, clips, slides, | restrictions on certain manufacturers in the Dominion, and similar articles, suited for use on drawers and i J We are of opinion that, subject to revenue consideracabinets ; handles and bolts for doors tions, the articles mentioned should be admitted free under the British Preferential Tariff. 357 Metal, viz. :— (1) Copper, iron, lead, tin, and other metal, in billets, Free Free Representations were made to the Commission with blooms, ingots, or pigs respect to pig iron. The manufacture of pig iron has been carried on in New Zealand for some years. The Commission is of opinion that, notwithstanding considerable assistance from the Government by way of bounty and otherwise, the industry has failed to establish itself on an economic basis. The only operating concern is now in liquidation. We do not think on the available evidence, that the industry can be regarded as reasonably assured of sound opportunities of success. We think that, to enable an iron industry to function satisfactorily, it must be capable of continuous operation and be able to use the by-products commercially. The present consumption of pig iron in New Zealand is too small to permit of this being done. We do not think that it is in the best interests of New Zealand that a protective duty should be placed on pig iron, and therefore recommend that the existing position be maintained. Pig iron is the foundation raw material for the engineering industry of the Dominion. We are of the opinion that the dumping duty at present levied on pig iron imported from Australia and India should be removed. (2) Aluminium, brass, copper, lead, tin, and other metal, Free 10 per cent, ad val. n.e.i., in bars or rods (except cast bars or rods of copper alloy) (3) Gold, platinum, silver, or other precious or rare Free Free I metals, viz., bar, foil, leaf, plate, sheet, strips, or wire, plain

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British Preferential Tariff. General Tariff. Tariff Items. | Remarks. "°- Column No. 1. Column No. 2. Class X,— Metals and Machinery —continued. Metal —continued. (4) Iron, galvanized or plain black, viz., angle, tee, bar, Free 20 per cent, ad val. The Commission received an application requesting the bolt, channel, rod, and rolled girders ; iron girders imposition of a protective duty on iron and steel bars expanded, but otherwise unworked imported from British dominions. At present such bars are being manufactured by one company in New Zealand from imported steel and local steel scrap. They are producing only a portion of the shapes and sizes consumed in the Dominion. We think that until the local consumption of steel warrants a basic iron industry from which a range of steel products can be made protection is not desirable. Iron and steel bars form an essential raw material for the engineering and building industries. (5) Iron, viz. :— (a) Sheet, plate (including rolled chequered plates), Free 20 per cent, ad val. or hoop, -plain, whether black, polished, gal- (except hoop 6 inches vanized, plated, tinned, or otherwise coated in width or over) with metal, n.e.i. (b) Corrugated sheet iron .. .. .. Free 20 per cent, ad val. (6) Metal n.e.i., viz. :—foil, leaf ; hoop, plate or sheet, Free 10 per cent, ad val. Application was made for a protective duty on sheet lead plain, whether in the rough, polished, enamelled, imported from Australia. The industry of manufacturgalvanized, plated, tinned, or otherwise coated ing sheet lead from ingots is not regarded by the with metal Commission as an economic one in New Zealand. The labour cost is relatively small and the geographical situation of the works makes delivery uneconomical as compared with the landing costs of imported sheet lead. (7) Shafting, plain rolled, or plain turned, but otherwise Free 20 per cent, ad val. unwrought (8) Sheet, perforated or cellular .. .. .. Free 20 per cent, ad val. I (9) Solder .. .. . ■ ■ ■ ■ ■ Free Free (10) Wire, metal, plain, n.e.i. ; barbed fencing-wire ; Free 10 per cent, ad val. Application was made for a protective duty on barbed wire cut to lengths, looped, twisted, or plain, suited ! wire imported from Canada and Australia. The for baling and similar purposes industry of manufacturing barbed wire from imported plain galvanized wire is not, on account of the relatively small labour costs, regarded by the Commission as an economic one. Further, barbed wire is essential to the primary industries and it is desirable that no increase should be made in farmers' costs by the imposition of such a duty. Application was also made for an increase in the rate of duty on foreign plain and barbed wire. For the I reasons last stated, we are of opinion that the request should not be granted. (11) Metal cordage, not being gold or silver .. Free 20 per cent, ad val.

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358 Metallic and similar capsules .. ... .. Free 25 per cent, ad val. 359 Nails or tacks, of copper, brass, and composition, n.e.i. ; Free 20 per cent, ad val. nails or tacks, n.e.i. ; coopers' and similar hooks and tacks ; staples 360 Nails or tacks, iron, exceeding 1 inch in length, n.e.i. ; also Free £2 per ton The Commission received representations with respect to dog-spikes ( ] u ty on iron nails. This industry has been established in New Zealand for about twenty-two years and no doubt came into existence under the shelter of a „ fi1 . _ revenue duty then in force. The raw materials for the .Nails, lead-headed, and galvanized cup-headed roofing nails Free 20 per cent, ad val. - industry have to be imported and the value added in New Zealand is relatively small. The Commission does not consider that the industry of manufacturing nails in the Dominion is one suited to the conditions here and that, therefore, the duty under the British „ ao _. . . J Preferential Tariff should be abolished. ■Mi .Pipes, piping, tubes, and tubing (except coil pipes), viz. :— (1) Rain-water, soil, and similar pipes (including cast iron, Free 20 per cent, ad val. Various representations were made to the Commission having a thickness of metal not exceeding 5/16 with respect to the duty on iron and steel pipes. After inches) ..... a consideration of the evidence, we are of opinion that, (2) Cast iron, not exceeding 9 inches in internal diameter, Free 20 per cent, ad val. under the conditions in which it is at present carried on, n - ej - . the industry of manufacturing these pipes in New /'in 11 ?' e-1 ' '' . '" • ■ • • 20 per cent, ad val. Zealand is not one which is reasonably assured of sound ( ) Wrought iron, screwed; boiler tubes flanged or Free 20 per cent, ad val. opportunities for success. Our opinion is that this w ln^ a ? • • . industry should be ancillary to a basic iron and steel (5) Wrought iron or wood, not exceeding 6 inches in Free 20 per cent, ad val. industry. The manufacture cannot at present be u -t er r l diameter carried on without a duty. The demand for these (6) Wrought iron or wood, n.e.i. .. .. .. Free 20 per cent, ad val. pipes is not continuous but intermittent. The making of steel pipes in New Zealand is at present carried on chiefly by two manufacturers. [Certain words having reference to the financial position of the manufacturers omitted as being confidential. ] Such pipes are required for developmental work, and it is essential that they should be obtainable at the lowest possible cost. We therefore recommend that the duty under the British Preferential Tariff should be abolished. (7) Lead or composition .. .. .. .. Free 3s. 6d. per cwt. No application was made to the Commission with respect to the goods covered by this tariff item. From the information in our possession we are of opinion that, owing to the relatively small number of men employed, the small added value in New Zealand, and the fact that the raw material has to be imported, this article should not receive a protective duty.

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British Preferential Tariff. General Tariff. Item Tariff Items . Remarks. No. Column No. 1. Column No. 2. Class X.—Metals and Machinery —continued. 362 Pipes, piping, tubes, and tubing (except coil pipes) | continued. (8) Omitted. (9) Omitted. ! (10) N.e.i. • • • • • • • • • • | 20 P er cent ' a ' (11) Knees, bends, elbows, junction or inspection boxes including covers therefor, and other fittings n.e.i. for pipes, piping, tubes, or tubing — . . . (a) Of brass or other copper-alloy ■ ■ ■ ■ Free 20 per cent, ad val. ripe fittings of this nature are not manufactured m JNew | . Zealand according to the most modern methods of fabrication, and the selling prices of locally made fittings are very much higher than those of imported lines. It is not considered that it is in the best interests of New Zealand that the existing duties on these goods should be maintained. We therefore recommend the duty at present levied under the British Preferential Tariff should be abolished. (b) Of cast iron, for pipes, piping, tubes, and tubing, j Free 20 per cent, ad val. No representations were made to the Commission with exceeding 3 inches in internal diameter j respect to the goods included under this tariff item. We are of opinion that such goods should be admitted on the same footing as the pipes with which they are to be used. (12) Knees, bends, elbows, junction or inspection boxes including covers therefor, and other fittings, n.e.i., for any of the above-mentioned pipes, piping, tubes, or tubing, shall be classed under the same item of the Tariff as the pipes, piping, tubes, and tubing, for which they are fittings. •363 Printers' type and materials, viz. :— (1) Printing-type, and printing-materials, n.e.i., suited Free 20 per cent, ad val. only for the use of printers ; zinc plates or copper plates for photo-lithographic work (2) Stereotypes, electrotypes, matrices, half-tone and 20 per cent, ad val. 45 per cent, ad val. line blocks 364 Propelling-screws, metal, including only bosses and blades Free 20 per cent, ad val. 365 Rails for railways or tramways, including lay-outs, points, Free 20 per cent, ad val. and crossings, for the same ; rail-fastenings —viz., fishplates, creep-clips, tie-irons, bearing-brackets, bedplates, cast-iron chocks, and bored iron bars 366 Road-graders .. . • ■ • • • • ■ Free 20 P er cent - ad vaL 367 Omitted. '

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368 Saddlers' ironmongery (except bits and stirrup-irons), Free 20 per cent, ad val. hames, and mounts for harness ; gag-bits, and drenchingbits 369 Ship-chandlery n.e.i., including anchors .. .. Free 20 per cent, ad val. 370 Signalling-apparatus, automatic and. other, as may be Free 20 per cent, ad val. approved by the Minister, suited for use in connection with ships, railways, and tramways, or for mining, and similar purposes 371 Springs, coil, volute, and spiral (other than upholsterers' Free 20 per cent, ad val. spiral sofa-springs) 372 Thermostats for making incubators for poultry raising .. Free 20 per cent, ad val. 373 Tinware, and tin manufactures, n.e.i. .. .. .. 15 per cent, ad val. 40 per cent, ad val. Representations were made to the Commission with respect to the duty on tinware, including milk and cream cans, tins and canisters. The industry is efficiently conducted, employs a large number of persons, and has a large output. The manufacturers have improved the quality of their output so that it reasonably meets all modern requirements. After considering the evidence, we are of opinion that the industry can function satisfactorily if the duty under the British Preferential Tariff is reduced to 15 per cent, ad val. At present certain tin stampings, parts of tins and tinware for manufacture in New Zealand are admitted free of duty under the British Preferential Tariff. Representations were made to the Commission that the exemption of these articles should be discontinued on the ground that they are now made in New Zealand. Our view with respect to this matter is that where protection is afforded for the manufacture of a complete article and parts of the same are made locally, it is anomalous to admit such parts free of duty. We therefore suggest that duty at the rate charged on the complete articles be levied on these stampings, &c. 374 Welded and flanged boiler furnaces, plain or corrugated ; Free 25 per cent, ad val. expansion rings, furnace flues, and unflanged end plates, for boilers 375 Window sashes, or frames, metal .. .. .. 20 per cent, ad val. 45 per cent, ad val. Representations were made to the Commission with respect to the duty on window sashes and frames. These goods have been manufactured at various centres in the Dominion for a number of years. The industry is carried on efficiently, and during normal times employed a considerable number of persons. After reviewing the information received, we are of opinion that the duty under the British Preferential Tariff should be reduced to 20 per cent, ad val.

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. British Preferential Tariff. General Tariff. J 3 ™ Tariff Items. Remarks. °" Column No. 1. Column No. 2. ; VP! I Class X.—Metals and Machinery —continued. 376 | Wire netting, metal wove wire (not including wove wire for Free 20 per cent, ad val. Representations were made to the Commission with mattresses), metal gauze, electrically welded wire fabric ; respect to electrically welded fabric. It would appear expanded metal lathing and fencing ; also metal lathing that duty was imposed on this fabric when exceeding in combination with earthenware or with such other sub- A inch in diameter to assist the manufacture of woven stances as the Minister may approve, when specially fabric. The electrically welded article is not at present | suited for building construction made in the Dominion. From the information obtained the Commission is satisfied that the latter fabric and j plain steel rods, laced or unlaced, are much more suiti able for building construction than the woven fabric. We are therefore of opinion that to keep building costs as low as possible all electrically welded fabric should be admitted free under the British Preferential Tariff. Class XI. —Vehicles. 377 Air-pressure brakes suited for use on locomotives or on Free 15 per cent, ad val. vehicles of any kind 378 Bicycles, tricycles, and motor-cycles, fittings for —viz., spokes, Free 15 per cent, ad val. in the rough or finished ; and the following articles when not plated, japanned, enamelled, or varnished —viz., drop forgings, stampings, wood or metal rims (not bored), forks, stays, handle-bars, and seat-pillars, unbuilt, bracket shells, fork- and stay-ends, fork-tips, bridges, crowns, and lugs 379 (1) Bicycles, tricycles, and similar vehicles, also parts of 10 per cent, ad val. 40 per cent, ad val. same, n.e.i. (2) Motor-cycles, and similar vehicles, and parts thereof 15 per cent, ad val. 45 per cent, ad val. The question as to the rate of duty which should be n.e.i. ; side cars for motor-cycles charged on motor and other cycles is dealt with under item 389. 380 Flying-machines .. .. . . .. .. Free 10 per cent, ad val. 381 Carriages, carts, drays, wagons, perambulators, and the 20 per cent, ad val. 45 per cent, ad val. like vehicles, not including motor vehicles 382 Cars, wagons, and trucks, railway and tramway. . .. 20 per cent, ad val. 45 per cent, ad val. 383 Carriage shafts, poles, spokes, and felloes, dressed ; bent 20 per cent, ad val. 45 per cent, acl val. carriage timber n.e.i. 384 Carriage- and cart-makers' materials —viz., shafts, poles, Free Free spokes, and felloes, in the rough ; hubs other than those | for motor-vehicles, motor-cycles, or cycles

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389. Motor-vehicles. Many representations were made to the Commission with respect to the duty on motor-vehicles. Apart from the question of preference, the essential matters at issue resolve themselves into two questions, viz., (1) whether a protective duty should be imposed on imported motor-car bodies to assist the manufacture of such bodies in the Dominion, and (2) whether a revenue duty should be imposed on motor-vehicles. With respect to the first question, the protection at present accorded to the manufacturers of motor-bodies is very high. Notwithstanding this, according to the information obtained by the Commission, the number of complete passenger motor-cars imported into New Zealand during the six years ended 31st March, 1933, was 64,314 ; during the same period the number of bodies built in New Zealand was 7,554. The total body duty paid on imported complete cars was over £1,100,000. Owing to the rapid changes in design and improved methods of construction, and the difficulty experienced by local body builders in meeting these conditions, we are of opinion that the industry of manufacturing these bodies is not one which is reasonably assured of sound opportunities for success. We are therefore of opinion that the existing body duties should be abolished. With respect to the second question, the Commission is of opinion that, owing to the importance of the transport industry, it is desirable that the cost of vehicles to the public should be reduced to a minimum. The industry at present contributes largely to the revenue by way of petrol duty, &c. If, therefore, revenue conditions permitted we are of opinion that motor chassis and motor-vehicles should be admitted free of duty under the British Preferential Tariff. It is assumed that at the present time effect cannot be given to this, and we therefore suggest that a duty of 15 per cent, should be charged under the British Preferential Tariff. One member of the Commission thinks that the rate of duty under the General Tariff should be 35 per cent, and not 45 per cent. Assembly of Motor-cars in New Zealand.— Representations were made with respect to the assembly of motor-cars in New Zealand from completely knocked down imported parts and local materials. This appears to be an industry suited to conditions in the Dominion. Figures which have been produced to the Commission show that, owing to freight and other savings, this industry can be economically carried on without special protection. Method of levying Duty.— A request was made that the duty on motor-vehicles should be determined on a weight basis. The Commission have investigated this matter and find that so many anomalies would arise that they could not recommend it. Motor and other Cycles.— The Commission is of opinion that, for administrative purposes, the rates of duty on motor-cycles should be the same as those on motorvehicles. This does not apply to self-propelled cycles, and the Commission thinks that the rate of duty under the British Preferential Tariff on these goods should be left at 10 per cent, ad valorem.

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385 Axles, axle-arms, axle-boxes, and axle-caps, other than those Free 25 per cent, ad val. peculiar to motor-vehicles, motor-cycles, or cycles; bogies and trucks for railway or tramway cars ; also power-bogies for locomotives propelled by internal combustion engines 386 Undercarriage springs, n.e.i., suited for the manufacture Free 25 per cent, ad val. or repair of vehicles, including locomotives 387 Metal fittings, mountings, and trimmings, n.e.i., suited for Free 15 per cent, ad val. the manufacture or repair of vehicles 388 Wheels, and tires, for locomotives or railway or tramway Free 25 per cent, ad val. vehicles, whether affixed to axles or separate | 389 Motor-vehicles n.e.i... .. .. .. .. j 15 per cent, ad val. 45 per cent, ad val. See remarks appended.

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Item British Preferential Tariff. | General Tariff. No. Tariff Items. j Remarks. Column No. 1. Column No. 2. ■ Class XII. —Greases, Oils, Paints, Polishes, Waxes, etc. 390 Blacklead, grate- and stove-polishes, -pastes, and -liquids.. 10 per cent, ad val. 35 per cent, ad val. No representations were made to the Commission, except from one company, which, has recently started and is manufacturing in a relatively small way, with respect to the goods included under this tariff item and those under item 393, but on the information in possession of the Commission we are of opinion that the rates of duty on these goods under the British Preferential Tariff should be reduced to 10 per cent, ad val. 391 Graphite, and plumbago, in powder, or flake form .. Free Free 392 Greases, viz. :— (1) Skip-greases, being crude greases, suitable for greasing Free Free skips, skids, and truck-axles, and for the like uses, of qualities approved by the Minister (2) Grinding-compounds, composed of greases mixed Free 10 per cent, ad val. with abradant substances (3) Lubricating-greases, and other solid lubricants, n.e.i. ; 20 per cent, ad val. 45 per cent, ad val. petroleum greases, and mixtures of the same with other substances, n.e.i. 393 Leather-dressing, belt-dressing, and harness composition ; 10 per cent, ad val. 35 per cent, ad val. See remarks under item 390. fat-black and similar preparations in packages of less than 5 lb. net weight; leather revivers, and polishes, n.e.i. ; blacking, boot-polishes, and preparations, dry or liquid, put up for renovating or cleaning boots and articles of apparel and clothing, n.e.i. ; metal-polishes ; furniture, floor, and linoleum polishes, not being varnishes 394 Oils in vessels capable of containing 1 gallon or more, viz. :— (1) f-ki n s ee d-oil; linseed-oil in admixture with any other Free 6d. per gallon Linseed-oil —See statement appended. /2){ °il or oils i n suc h proportions as may be deter- [_ mined by the Minister (3) Vegetable oils n.e.i. . . .. .. .. Free Free (4) Fish oil n.e.i., penguin, mutton-bird, whale, seal, | Free Free and dugong oils (5) Turpentine; turpentine substitutes composed of Free Free volatile mineral oils, or of volatile mineral oils in combination with turpentine or other volatile vegetable oils (6) Crude petroleum, crude residual oil, once-run shale Free Free Requests were made to the Commission for a duty on crude oil, and crude distillates of petroleum mineral oil on the ground that it was displacing coal and gas. This oil is used for industrial purposes and in connection with certain manufacturing processes is much more satisfactory and economical than coal, coke or gas. We are of opinion that it is not in the best interests of New Zealand industries that duty should be imposed.

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394 (1) and (2). Linseed-oil, &c. nr.™ Re P re . sen * atio^ s ™ ade tc ! Commission with, respect to the industry established in New Zealand for the manufacture of linseed-oil and linseed-oil cake One company m New Zealand has undertaken the manufacture of these products and has been in operation since 1921. Duty at the rate of 6d. per gallon under the British 7,?°!, ,° n } m f °i ! n 1921 ; . tils was mcreased !927 with respect to such oil (other than refined oil) to 9d. per gallon: The duty on linseedf,,un er ,eri is referential Tariff has remained at 20 per cent, ad valorem since the company has been in operation. It was claimed that one of tht icsults tL !l COmpany 8 aC V ii eS W °, ? tO , enc °urage primary producers to grow linseed. The following figures taken from the official statistics show, as far as available the acreage sown annually m linseed, the yield therefrom, and the imports and exports since 1917

The production of linseed-oil in New Zealand and the quantity imported since 1921 are as under : Yp Hr Production. Imports. Production. Imports, too, Gallons - Year - Gallons. Gallons. •• 105 ' 774 368,536 1928 .. .. ..153,013 407,296 •• •• 94,454 299,817 1929 .. .. .. 191,962 391.146 •' •• 187,957 378,399 1930 .. .. .. 197,315 321,252 189,248 402,504 1931 144,535 335,435 '• •• 140:398 408,060 1932 .. .. .. 69,984 251,262 " •• •• 200, 170 579,401 1933 .. .. .. 38,476 266,718 1927 .. .. .. 196,439 318,717 - iqowwft 168 will be seen that the existence of the industry has not stabilized the production of linseed and that, notwithstanding the increase in the tariS _ pnm' rpri WK+r n ®™ 10 ? dl,rln § the ' last few years has not kept pace with the importations. The costs of production in New Zealand are very high of refined considerable § C ° ndltl ° nS in botll countries " Tte manufacturers have not so far undertaken the production thk ! mnng y e r ce t0 V osit j on ° f Ihe omitted as confidential .] After considering the matter, the Commission is of opinion that S S0 ° f " «* »«-— * *•»<* d»ty under the Britieh Preferential T.rifi on the good, t> n ™ r Z JjMeed-oafee, th<j Commission regards the manufacture of this product as complementary to that of the oil, and as it is a valuable stock-food we think that the duty thereon under the British Preferential Tanfi should be removed.

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6ar ' I Acres sown - j Yield. j Imports. | Exports. J Year. Acres sown. j Yield. Imports. ! Exports. j Tons. Tons. Tons. Tons. 1 Tons. Tons. 0 0 '• " }'f:l Not available. 184 .. 1926 .. .. 8,143 2,361 j 1,509 294 jqiq '■ '• Ha Not available. 81 571 1927 .. .. 4,933 1,929 ! 501 275 jqon •' 3,890 Not available. 5 1,540 j 1928 .. .. 5,213 1,563 500 103 i qoi " " n'fi«o ■■ 038 I 1929 •• ■■ 2.800 1,161 I 2,206 260 1922 " " ?'«sn t'Tl '• 2,971 1930 '• •• 7 ' 757 3 ' 519 •• 291 1923 " " in'M •• 912 1931 •• 12 ' 200 4,367 .. 262 Toof " " 10,645 5,133 .. 1,338 ; 1932 .. .. 1,765 638 ! .. 197 1925 •' " c'fi7q Hoc 1,298 649 1933 •• 333 135 I 518 118 XJZ0 •• •• 6,679 2,135 4 324 j —

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! I British Preferential Tariff. ! General Tariff. Item | Tariff Items. i j Remarks. No. I ] Column No. 1. j Column No. 2. 1 ■ 1 J - Class XII,— Greases, Oils, Paints, Polishes, Waxes, etc .—continued. 394 Oils in vessels capable of containing 1 gallon or more, viz.: —(continued.) (7) Motor -spirits .. .. ■ ■ • • • • lOd. per gallon lOd. per gallon (8) Coal tar naphtha n.e.i. ; benzol, toluol, and xylol, Free Free crude or refined, n.e.i. (9) Refined mineral oils, n.e.i., not exceeding in specific Free Free gravity 0-880 at 60° F. (10) Oil n.e.i., including mineral lubricating oil .. 6d. per gallon Is. per gallon (11) Mineral oils mixed with vegetable oils ; also mineral 6d. per gallon Is. per gallon or vegetable oils mixed with fish oils or with oils of animal origin, n.e.i. (12) Mineral oil specially suited for medicinal purposes as Free Free may be approved by the Minister 395 Oils in vessels having a capacity of less than 1 gallon, viz. :— (1) Linseed-oil; linseed oil in admixture with any 20 per cent, ad val. 40 per cent, ad val. other oil or oils, in such proportions as may be determined by the Minister (2) Motor- spirits .. .. .. ..20 per cent, ad val., 20 per cent, ad val., or lOd. per gallon, or lOd. per gallon, whichever rate re- whichever rate returns the higher duty turns the higher duty (3) Vegetable oils n.e.i. . . . . .. . • 20 per cent, a/d val. 20 per cent, ad val. (4) N.e.i. .. .. • ■ • • • • 20 per cent, ad val. 40 per cent, ad val. 396 (1) Cod-liver oil .. .. .. .. ■ ■ Free Free (2) Fish liver oil n.e.i., in vessels having a capacity of Free 20 per cent, ad val. less than 1 gallon i (3) Oils, other than fish-liver oils, containing vitamins in Free 20 per cent, ad val. proportions equal to or greater than those of codliver oil 397 | Paints, colours, varnishes, and similar materials, viz. :— . . (1) White-lead ground in oil .. .. .. Free 3s. per cwt. Representations were made to the Commission by United Kingdom and New Zealand manufacturers with respect to the duty on white lead in oil. This material is prepared in New Zealand from imported dry white lead. From the evidence produced we find that the added manufacturing cost in the Dominion is relatively small. White lead in oil is the base from which paints for use on wooden houses and other structures are prepared and should, in our opinion, be available at the lowest possible cost. We are of opinion that this industry is not suited to New Zealand conditions and that the goods should be admitted free of duty under the British Preferential Tariff.

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I (2) Paints, and colours, ground in liquid, n.e.i.; paints 15 per cent, ad val. 30 per cent, ad val. Various applications were made to the Commission with mixec rea y or use , enamel paints ; ships anti- respect to the duty on goods covered by these tariff COm P OS1 1011 ' 'P amt ' t^ n.e.i. ; driers, items. These goods are manufactured in New Zealand t, ' ' . . chiefly from imported materials. After a consideration arms ie,s , acquei Brunswick black; japans; 15 per cent, ad val. 30 per cent, ad val. of the information available we are of opinion that the lithographic varnishes, printers' ink reducer; duty under the British Preferential Tariff on these ere me, go -size liquid stains for wood; goods should be reduced to 15 per cent, ad val. me a ic pam s, an liquid medium for mixing with Request was made that a minimum specific rate of esanie, pe il ying- lquids n e.i. suited for water- duty should be imposed on paste and mixed paints to proo g concre e, plaster, and similar surfaces, or prevent the importation of low grade paints. The or use as pam ,, jused gums for the manufacture Commission is of opinion that this is not a matter which , n t} 0 es ... should be dealt with by means of the Customs tariff, repara ions or removing paint and varnish .. 15 per cent, ad val. 30 per cent, ad val. If the necessity exists for such control, it is considered that it should be achieved by means of legislation which would affect both locally made and imported (5) Putty and woodfillers .. .. .. Free £1 10s. per ton Representations were made to the Commission with respect to the duty on putty. Owing to the limited demand in New Zealand for this product, it is not considered that the industry is suited to conditions here. We therefore recommend that the duty under the , fi > p • , . . British Preferential Tariff be abolished. ( ) am s an co ours, dry, n.e.i. ; barytes ; whiting, Free Free Requests were made for the imposition of duty under the anc c a , a somme, distempers, and similar General Tariff on the goods included under tariff item prepara ions, in powder form 397 g 00 d s are the raw material for industries in New Zealand, the Commission is of opinion 398 Waxes viz request should not be granted. (1) Mineral, vegetable, Japanese, and beeswax., n.e.i. .. Free Free (2) Bottling wax . . .. .. .. .. Free Free (3) Waxes mixed with colouring-matter only, on declara- Free Free tion that they will be used for manufacturing purposes only m- 1 ■ Class XIII. —Timber, Woodenwaee, Furniture, and Wickerware. limber, viz. :— 4on p r°" S! r01 unwor ked .. .. .. .. ;p ree jf ree Timber —See statement appended. 400 ; Palmgs, split .. 2s. per 100 2s. per 100 trn • p° S f S ' SP , + ' • 8s - P er 100 8s- 100 4-m Wif' i'V- 1 " " " " '■ 4s. per 100 4s. per 100 403 ; Laths, and shingles 20 per cent, ad val. 30 per cent, ad val.

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Before the above-mentioned duties on timber under the General Tariff under items 404 and 405 can be brought into force it may be necessary, in view of the Trade Agreement between Canada and New Zealand, to come to an arrangement respecting them with the Government of Canada. 399-405. Timber, &c. The Commission has received a considerable volume of evidence with respect to the timber industry. This industry is an important one to New Zealand, and employs a very large number of persons. Owing to reduced activity in the building trade through the existing economic conditions, the consumption of timber in recent years has been greatly diminished. We have investigated the production costs of a great number of mills and find great disparity in these costs, not only in different districts but in those of mills situated in the same district. The evidence shows that the production costs in some countries exporting timber to New Zealand are on a much lower scale than those in this country. These higher costs appear to be due to a variety of causes among which are the following :— (a) The relatively lower quantity of timber per acre in the New Zealand stands as compared with those in some other countries. It is stated that 15,000 ft. B.M. to the acre is a good average " stand " m New Zealand, and that stands below 4,000 ft. B.M. per acre have been sold for milling, whereas in British Columbia stands of 50,000 ft. B.M. per acre are common, and this quantity is frequently exceeded. (b) The weights of New Zealand timbers are relatively higher than those of the timbers usually imported. This has an effect in increasing production costs. (c) There are various physical disabilities in New Zealand as compared with some other countries, such as rougher and more broken terrain and denser undergrowth in the timber forests. There is, in addition, a lack of uniformity in the size, shape, and quality of the logs which renders it impossible to adopt purely mechanical processes in milling. (d) Owing to relatively small quantity of standing timber per acre in New Zealand, the utilization of our timber will tend to drive the production to stands less favourably situated for transport than formerly. To the extent that this takes place it will still further increase production costs. (e) The relatively high transport costs in New Zealand on milled timber. These and other facts give the Commission cause to doubt whether the industry can be regarded as an economic one from the point of view of the needs of the Dominion for lower timber costs.

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British Preferential Tariff. General Tariff. ■J?" 1 Tariff Items. Remarks. Column No. 1. Column No. 2. Class XIII. —Timbeb, Woodenwabe, Fubnitube, and Wickebwaee —continued. 404 | Timber rough sawn or rough hewn —viz. :— (1) Ash, hickory, lance wood, lignum vitae, and the Free Free timbers the botanical names of which are Swietenia species, Juglans species, Juniperus virginiana (red cedar), pinus lambertiana, pinus strobus and pinus monticola, also oaks, balsa wood, and such other similar species or kinds of timbers as the Minister may from time to time approve (2) Other kinds, in pieces having a length of not less 4s. per 100 sup. ft. 6s. per 100 sup. ft. than 25 feet, and having a minimum cross sectional area of not less than 150 square inches (3) N.e.i. .. . • ■ • • • • • 6s. per 100 sup. ft. 8s. per 100 sup. ft. 405 Timber sawn dressed .. .. . . . . 12s. 6d. per 100 sup. ft. 14s. 6d. per 100 sup. ft.

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In view, however, of the amount of capital invested in the industry, the number of persons engaged therein, and of the importance of the industry to transport organizations, the Commission could not, under the existing conditions, recommend a drastic reduction of the existing duties. The following are the rates of duty which have been in force in New Zealand on the chief varieties of imported soft woods since 1921

(Notes.-—-In 1932 the duties on foreign timber of the above classes were increased by 2s. per 100 sup. ft. Surtax of one-twentieth of the duty has been omitted from these figures.) We show in an appendix hereto figures setting out during the last ten years (a) the total production of timber in New Zealand, and (b) the quantity and value of dutiable rough sawn and dressed timber (other than hardwood) imported into New Zealand, the amount of duty collected during those years, and the equivalent ad valorem duties represented by such duties. From these figures it will be seen that the importations of timber have, during these years, never exceeded 20 per cent, of the total production of New Zealand and that there has been a large increase in the ad valorem rates of duty represented by the protection which has been granted. The Commission understands that under the local regulations in force in some North Island districts heart timber is specified for certain essential building purposes. This, of course, increases the difficulty of disposing of the 0.8. timber in those districts, which must tend to increase the price of heart timber. The Commission is impressed with the necessity of keeping building costs at the lowest possible level consistent with the reasonable development of important industries in New Zealand which depend upon building activities. We are satisfied that the timber industry can function satisfactorily if the duties are reduced to those recommended. With respect to Japanese and other oak timbers used chiefly in the manufacture of furniture, the Commission considers that they should be admitted free of duty. We do not regard them as competitive with local timber. The volume of imports indicates that this timber is required for manufacturing purposes in the Dominion. If the duties proposed on rough sawn and dressed timber are adopted the Commission considers that it will not be necessary to retain the existing duties on logs.

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Rough Sawn Timber. Years. In Pieces having a Length of Dressed Timber. not less than 25 ft., and having a Minimum Cross- Other Kinds. sectional Area of not less than 150 Square Inches. 1921-1927 .. .. ., 2s. per 100 sup. ft. 2s. per 100 sup. ft. 4s. per 100 sup. ft. 1927-1930 .. .. .. 3s. per 100 sup. ft. 5s. per 100 sup. ft. 7s. 6d. per 100 sup. ft. 1930 .. .. .. 7s. 6d. per 100 sup ft.. 9s. 6d. per 100 sup. ft. 19s. per 100 sup. ft.

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Class XIII.—Timber, Woodenware, Furniture, and Wickerware—continued. Timber. —(a) Production in New Zealand.

Timber. —(b) Imports into New Zealand. Rough Sawn.

Sawn Dressed, including Butter, &c., Boxes.

Note—Where the rates of duty were altered during a year, the amount of duty payable has been computed at the rates in force during the major portion of the year.

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1923-24. * 1924-25. , 1925-26p 1926-27. 1927-28. 1928-29. 1929-30. 1930-31. j 1931-32. 1932-33. !_ I i L I Thousands of Super. Feet (B.M.) Kauri 19 743 22,892 22,766 18,475 15,874 10,743 10,471 8,943 6,891 5,41C R imu 181 094 195,573 195,452 170,498 156,314 156,240 163,293 124,999 71,082 76,192 Kahikatea 65,572 75,635 65,490 53,736 56,790 58,505 49,009 43,161 47,99? Matai " " 24 326 23,948 26,141 19,381 15,207 15,753 17,972 13,917 7,475 8,161 Totara " " 18*904' 18,509 14,109 14,179 10,728 8,611 9,046 9,468 5,344 6,347 Beech 6 529 6,836 8,701 8,596 7,923 9,846 10,225 7,681 5,757 5,78] Pinm radiata! !! 7 386 7,706 7,072 6,668 7,695 9,168 10,382 12,740 13,405 14,676 Others .. ■■ 2,388 3,059 3,348 2,388 2,306 3,063 2,510 2,711 1,077 1,70c Totals .. 317,069 344,095 353,224 305,675 269,783 270,214 282,405,229,468 154,192 166,265

Canada. United States of America. Japanese Oak. SU Fee fi t° ial Value - Duty Payable. 1 Value ' Duty Payable. ' Value, j Duty Payable. £ £ £ £ £ £ 1924 9 339 549 79,636 9,339= 11-7% 6,066,129 76,135 6,066= 8% 1,418,088 54,401 1925 llW541 90,462 11,046= 12-2%13,581, 835 131,510 13,582=10-3% 2,349,634 71,493 1926 " 11'597 756 89,870 11,598= 12-9%16,641, 685 166,073 16,642-10% 2,200,651 56,697 1927 9'632'l79 62 927 9,632= 15-3% 15,386,466 139,453 15,386=11% 1,686,130 46,064 1,686— 3-7°/ ( 1928 " 6' 978' 326 44 093 15,533= 35-2% 17,301,638 155,442 40,645=26-2% 1,892,578 47,614 4,731= 9-5°/ 199Q " 7' 477' 295 47 357 16,596= 35% 20,468,848 193,846 48,497=25% 2,353,889 60,439 5,885= 9-7°/, 1930 " 5'673'989 36' 311 12,603= 34-7% 16,353,038 148,713 38,703=26% 2,250,232 60,086 5,625= 9-3°/ 931 " 2 217 052 9 178 10;452=113% 1,817,613 16,972 8,393=49-4% 647,977 14,793 3,078=20-8°/ 1939 " l'165 299 7 763 5,143= 66-2% 329,695 4,873 1,732=36% 889,922 12,907 4,227=32-7°/ 1933:: 1^272'751 8!061 5 >63= 71-5% 535,057 5,657 3,077=54-4% 1,029,761 13,265 5,919=44-6°/

Canada. United States of America. Norway, Sweden, and Baltic Countries. Superficiat Value Duty p aya bl e . SU |eet.° ial Value ' Duty Pa y abIe ' Value ' Duty Pa y able " £ £ £ £ £ £ 1924 1 906 646 27 835 3,813= 13-8% 164,120 2,011 328= 16-3% 1,307,864 20,086 2,616=13% 1995 3 280 014 37'296 6,560= 17-6% 2,368,046 25,540 4,736= 18-5% 4,110,672 62,120 8,222—13-2°', 1926 :: 4 549 122 49 093 9,098= 18-5% 5,638,876 53,622 11,278= 21-3% 1,917,172 25,657 3,834=14-9°/ 1927 . 2 959 233 31 792 5,918= 18-6% 3,014,865 38,476 6,030= 15-6% 2,333,145 33,528 4,666 13-9 C^ 1928 3'oi9'982 30'682 11,324= 36-9% 4,755,190 52,793 17,832= 33-8% 2,212,802 31,667 8,334=26-3°/ 1929 !! 3'380'927 35,842 12,678= 35-2% 3,351,697 36,703 12,657= 34-5% 3,234,110 43,742 12,129=27-7°/ 1930 .. 3!672'725 35,816 13,773= 38-4% 5,020,415 44,609 18,828= 42-2% 4,697,405 63,577 17,616—27-9^ 1931 '879'227 7 884 8,353=105-9% 500,961 4,432 4,755=107-3% 2,912,408 38,542 27,668=71-8°^ 1932 " 175 123 1M7 1 663=114-9% 10,287 146 95= 65-1% 1,481,140 19,145 14,771=77-2°/ IMS!: 59 'Ē>47 478 565=118-2% 2,072 101 20= 20% 1,784,803 24,121 18,740=77-7°/

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- I - p I | British Preferential Tariff. General Tariff. , Tariff Items. Remarks. ■No- ! Column No. 1. Column No. 2. Class XIII. —Timber, Woodenware, Furniture., and Wickerware —continued. 406 ! Basketware, wickerware, imitation wickerware, and similar j 30 per cent, ad val. I 55 per cent, ad val. I ware ; wicker, bamboo, and cane furniture, and imitaI tions of the same ! ... . 407 j (1) Furniture, and cabinetware, n.e.i. and other than metal, 15 per cent, ad val. j 40 per cent, ad val. I The quantity of furniture and cabinetware imported mto including chairs of wood with wicker, bamboo, or cane I New Zealand is relatively small, and it is considered that seats ■ billiard-tables I with freight protection duties at the rates stated will, be sufficient to enable the industry to be, carried on satisfactorily. (2) Doors, and sashes, wooden, plain or glazed; mantel- 25 per cent, ad val. 50 per cent, ad val. Various representations were made to the Commission pieces, other than stone with respect to the duties on wooden doors. Comparatively few doors have recently been imported into New Zealand. After examining the information obtained, it is considered that duty should be fixed at the rates recommended. 408 Handles, broom, mop, hoe, rake, and similar, viz. :— i j (1) Hickory . . .. .. .. .. Free 20 per cent, ad val. The Commission is of opinion that as hickory handles are essential for certain agricultural purposes they should be admitted free under the British Preferential Tariff. (2) Other kinds .. .. .. .. . . 20 per cent, ad val. I 45 per cent, ad val. 409 Handles, wooden, for tools, n.e.i. .. .. .. Free j Free 410 Horse-boxes, and other stock-boxes, imported with the Free Free stock for which they have been used on the voyage 411 Oars and sculls, all kinds .. .. .. .. Free Free 412 Poles of hardwood, dressed or shaped, specially suited for Free Free electric power transmission lines ; 413 Sieves, hair .. .. .. . . .. Free 20 per cent, ad val. j 414 Woodenware, and turnery, n.e.i.: veneers; plywood; 20 per cent, ad val. 45 per cent, ad val. This item covers .many-different classes of goods, and the 1 saddletrees; wooden tackle-blocks " 1 Commission regards it as essentially a revenue one. Class XIY. —Miscellaneous. 415 Articles n.e.i., suited for the use of the blind, deaf, or dumb, Free Free as may be approved by the Minister 416 Apparatus, appliances, articles, and materials, for educa- Free Free t.ional purposes, as may be approved by the Minister, and under conditions prescribed by him 417 Boats, launches, yachts, and other vessels, and all fittings 20 per cent, ad val. 45 per cent, ad val. therefor, n.e.i., imported in any vessel 418 Handles of bone, celluloid, or base metal, for the manufacture Free j Free of shaving-brushes or toothrbmshes j

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92

British Preferential Tariff. General Tariff. Tariff Items. Remarks. No. Column No. 1. Column No. 2. Class XIV. —Miscellaneous —continued. 419 Brushes, brushware, and brooms, viz. :— . . . (1) Carpet-sweepers and floor-polishers or -scrubbers, in- Free 25 per cent, ad val. Various representations were made to the Commission corporating revolving brushes or mops with respect to the duty on brushes. The industry o (2) N.e.i. including knots or tufts for brushmaking .. 25 per cent, ad val. 50 per cent, ad val. manufacturing brushes is carried on extensively m New ' Zealand and we are of opinion that certain units are efficiently conducted. With respect to tooth brushes, requests were received both from United Kingdom and New Zealand manufacturers, and costs of production in each country were received. After a consideration of all the information obtained, it is considered that the existing position should be maintained. 420 Candlewick .. .. . • • ■ ■ • Free Free 421 Cements n.e.i., powders for adhesives, n.e.i., and liquids for 20 per cent, ad val. 45 per cent, ad val. use with the same, put up for household use ; mucilage, starch paste, and similar prepared adhesives, in packages of less than 1 gallon 422 Clay birds or clay targets .. .. .. • • Free 20 per cent, ad val. 423 Cordage, and twine, suited for use as fishing-lines, and twine Free 20 per cent, ad val. suited for use in the manufacture of netting and nets, of qualities approved by the Minister . . . , 424 Hawsers having a circumferemce of 12 inches or over .. Free 20 per cent, ad val. Various representations were made to the Commission with respect to the duties on cordage, rope and twme. the industry of manufacturing these goods has been carried on in New Zealand for many years and is efficiently con425 Cordage, rope, and twine, n.e.i : 20 per cent, ad val. 40 per cent, ad val. y ducted. A relatively large quantity of local material is used in the industry and a considerable number of persons is employed. After a consideration of the eviI dence obtained, we are of opinion that the existing 1 J position should be retained. 426 Cork, cut; bungs; fishermen's cork floats .. .. Free Free 427 Plain unornamental stoppers of every description for bottles, jars, and casks, viz. :— (lj Crown seals .. .. . • • ■ • ■ 20 per cent, ad val. , 45 per cent, ad val. (2) N.e.i. .. •• •• •• Free 15 per cent, ad val. 428 Engine-packing . . .. • ■ • ■ • • Free Free 429 Explosives n.e.i. ; powder, sporting ; blasting powder and Free ; Free meal 1 430 Fireworks n e.i. . •. • • ■ • • • 20 per cent, ad val. 45 per cent, ad val.

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93

431 Gelatine, glue, isinglass, and size .. .. .. 20 per cent, ad val., or 40 per cent, ad val., or Various representations were made with respect to the 2d per lb., whichever 4d. per lb., whichever duty on gelatine and glue. The industry of manufac rate returns the rate returns the turing these products is carried on in New Zealand in an higher dutv higher duty efficient manner and is an important one since it utilises " waste products of various industries for which other avenues of use are not available. We have considered the information obtained and have come to the conclusion that the existing duties should be maintained. 432 Agar agar Free Free 433 Heirlooms not exceeding in value £100, on such conditions Free Free as may be approved by the Minister 434 Manures .. .. .. • • • • ■ • Free Free 435 Natural-history specimens, and such ethnological or similar Free Free specimens as may be approved by the Minister 436 Nets, and netting, n.e.i. . . . . . . . . Free 20 per cent, ad val. 4-37 Official supplies, uniforms, flags, and such other articles as Free Free may be approved by the Minister, for the official use of Consular officers, Trade Commissioners, or other accredited representatives of any British or foreign Government 438 Passengers' baggage and effects, which are not intended for any other person or persons or for sale, viz. — (1) Wearing apparel and other personal effects which have Free Free been worn or are in use by persons arriving in New Zealand (2) Implements instruments and tools of trade occupation Free Free or employment of any passenger, not exceeding £100 in value, which have been in use by such passenger for twelve months prior to his embarkation (3) Household or other effects which have been in use Free Free ! for twelve months prior to embarkation by the persons or families bringing them to New Zealand, ; not exceeding in value £100 for each adult passenger, and £50 for each child, provided that the total value of household or other effects so imported does not exceed in value £300 for the members of any one family Provided that if such passengers' baggage and effects are not imported within five years from the date of the arrival in New Zealand of the persons or families by whom they have been used they shall be admitted under this heading only with the approval of the Minister. 439 Regalia, emblems, certificates, almanacs, and banners, Free Free being the property of any society or branch registered under the Friendly Societies Act, 1909

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British Preferential Tariff. General Tariff. Tariff Items. . | Remarks. ®°* Column No. 1. Column No. 2. j I Class XIV. —Miscellaneous —continued. 440 j Returned empties identified as such to the satisfaction of a Free ! Free Collector of Customs 441 | Eocket life-saving apparatus and such other life-saving Free Free apparatus, n.e.i., as may be approved by the Minister ; diving-dresses, and dresses and other apparatus suited | solely for use in poisonous gases or smoke, with appliances peculiar to use therewith 442 Roofing-material n.e.i., including paper felts water-proofed Free 15 per cent, ad val. with tar, bitumen, or similar material 443 Sausage skins, and casings, including brine or salt . . 3d. per lb. 3d. per lb. 444 Shipbuilders' models of vessels, suited only for exhibition ; Free Free models of inventions, as may be approved by the j Minister 445 Ships' rockets, blue lights, and danger signals .. .. Free Free 446 Stained glass windows . . .. • • • • Free Free 447 Tanning-materials, crude . . . . . . .. Free Free 447a Asphalt and bitumen .. .. -. ■ ■ Free 10 per cent, ad val. A request was made to the Commission for the imposition of duty under the British Preferential Tariff on asphalt and bitumen. As these raw materials are used in the Dominion for constructional purposes, the Commission is of opinion that the request should not be granted. 448 Articles and materials, specified by the Minister, and on Free Free, or at such rate Application was made for the imposition of duty at the such conditions as he may prescribe, suited for, and to be not exceeding 25 per following rates on cheese colour which is admitted free used solely in, the fabrication or repair of goods within cent, ad val. as the of duty under this item :— j New Zealand. All decisions of the Minister in reference Minister may, in Under the British Preferential Tariff, 10 per cent, to articles classified under this heading shall be any case, direct ad val. published in the Gazette ' Under the General Tariff, 20 per cent, ad val. The applicants commenced the manufacture of this article in 1930, since when the output has increased each year. The principal materials used in manufacturing are imported. As cheese colour is essential for the dairy industry, we think that the existing position should be maintained. 449 All articles n.e.i. .. .. .. .. .. Free Free, or at such rate of duty not exceeding 25 per cent, ad val. as the Minister may, in any case, direct

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EXCISE DUTIES.

95

Goods. Rate of Duty. Remarks. Alcohol used in manufacturing-warehouses in the production of — Perfumed spirit .. .. .. .. 36s. per proof gallon Toilet preparations . . . . .. 34s. per proof gallon Culinary and flavouring essences . . .. 20s. per proof gallon Medicinal preparations (excepting medicated 4s. 6d. per proof gallon wine or wine mixed with food) containing more than 50 per cent, of proof spirit Medicinal preparations (excepting medicated Free wine or wine mixed with food) containing not more than 50 per cent, of proof spirit Beer— (a) Where the specific gravity of the worts used Is. 6d. in the production of the beer does not exceed 1,047 : per gallon of beer (b) Where the specific gravity of the worts exceeds 1,047, the duty per gallon shall be Is. 6d., increased by for every unit of specific gravity above 1,047 [Note. —The specific gravity of distilled water at 60° Fahrenheit is taken at 1,000, and the specific gravity of worts is considered in relation thereto.] Tobacco, cut .. . . . . . . 6s. 5d. per lb. Other tobacco .. . . . . . . 6s 3d. per lb. Cigars and snuff .. .. .. .. 6s. per lb. Cigarettes— • Not exceeding in weight lb. the thousand . . 21s. per thousand Exceeding in weight 2| lb. the thousand . . 8s. 6d. per lb. Cigarette papers .. .. .. .. l|d. for every 60 cigarette papers Motor-spirits manufactured in New Zealand .. Duty at the rate for the An application was received for the time being prescribed exemption from excise duty of benzol, by the British Pre- a by-product in the manufacture of ferential Tariff in re- gas. The quantity likely to be made respect of goods in- in New Zealand under existing concluded in tariff item ditions is relatively small compared 394 (7) with the total quantity of motorspirits consumed in the Dominion. We think that the question of reducing or remitting the duty on such spirits should be postponed until either the production of crude petroleum in New Zealand on a commercial basis takes place or until, through technical and scientific advancement, it is found possible to obtain petrol on a large scale from the utilization of coal. Sugar, whether of Number 22 colour or over Id. per lb. (Dutch, standard) or not Invert sugar and invert syrup .. .. Id. per lb. Treacle, molasses, golden syrup, maple-sugar, and Free maple-syrup

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APPENDIX C.

RETURNS: TRADE WITH JAPAN. Return No. 1.

Return No. 2. —Main Items imported from Japan.

Approximate Cost of Paper.—Preparation, not given ; printing (1,425 copies), £142 ins.

Authority : G. H. Loney, Government Printer, Wellington —1934.

jPrice Is* 9'L]

96

1924. 1925. 1926. 1927. 1928. I 1929. 1930. ! 1931. 1932. 1933. . _ £ £ £ £ £ £ £ | £ £ £ Total exports to Japan .. 330,736232,213162,832251,547 657,915 428,577154,741267,899 236,799354,462 Total imports from Japan .. 496,835 693,632582,352 591,963576,495625,714565,264304,532 434,746:541,346 ! i I '] JS ■

l 1924. 1925. I 1926. 1927. 1928. | 1929. J 1930. 1931. | 1932. j 1933. £ £ £ £ £ £ £ £ £ £ Hosiery ,. .. .. 780 788 1,288 1,447 2,612 2,249 1,418 2,557 3,193 7,055 Apparel n.e.i. .. .. 14,632 22,101 23,371 22,501 24,969 29,146 28,587 18,214 24,558 43,698 Boots and shoes .. .. 109 331 760 990 764 665 1,420 7,590 22,224 52,442 Drapery n.e.i. .. .. 4,071 5,659 4,070 2,403 2,602 2,498 2,042 1,559 1,861 5,406 Cotton piece-goods .. .. 78,656153,307 30,533 35,879 44,730 26,198 24,543 15,800 21,907 47,187 Silk and artificial silk piece-goods 269,553311,921323,720377,832368,160377,624302,785148,667 209,211184,910 Hardware n.e.i. .. .. 18 256 644 127 175 615 301 1,153 2,525 9,174 Rough sawn oak .. .. 54,401 71,493 56,697 46,064 47,614 60,439 60,086 14,793 12,907 13,265 Chinaware .. .. .. 934 4,922 10,222 7,088 5,658 8,450 9,061 8,558 10,212 26,287 Glassware n.e.i. .. .. 2,433 3,016 1,720 1,112 1,112 2,651 3,701; 2,414 3,589 7,817 Fancy goods .. .. 14,089 18,999 19,816 15,572 16,795 16,545 17,338 12,474 11,198 31,389 Sulphur .. .. 7 5 31,645 26,110 60,867 15,775