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It is unfortunate that the Tobacco Act does not contain a concise definition of " unmanufactured tobacco." In England and in Australia leaf coming in in strips is regarded as unmanufactured leaf, but there is an additional impost in the United Kingdom of 2d. per pound as against the duty paid on unmanufactured leaf coming in unstripped. Since 1908 there has been a distinction in the Federal tariff in respect of " unstemmed tobacco, unmanufactured, entered to be locally manufactured," and " stemmed or partly stemmed, or in strips." The latter has been cha.rged 6d. per pound higher duty. From the minutes of evidence attached hereto it will also be seen that tobacco has been coming in in grades. Experts admitted to the Committee that blending is a paramount factor in cigarettemanufacture, and it appears that a cigarette contains many blends—much more so than cut tobaccos. It is abundantly clear from the wide difference in the price of leaf f.o.b. American ports, the prices paid by the National Company, and the statements submitted by the Customs Department, the report of Messrs. W. R. Thompson, D. F. Ratief, and D. E. A. Gutsche, entitled " Tobacco-growing in the United States," and issued by the African authorities, that the prices quoted " in blends " represent blending for manufacture abroad. Your Committee naturally was interested to know the proportion of New Zealand leaf used by the manufacturing companies. The National Tobacco Co., Ltd., according to the evidence tendered and adduced, is not only a larger buyer of domestic leaf than the British-American companies, but also uses a much larger percentage of New Zealand leaf in the manufacture of their smoking-mixtures than their competitors. In reply to a question by Mr. Barnard as to what proportion of New Zealand leaf was used, in their brands containing a blend of local tobacco, Mr. Smith replied : " Well, might I, without giving the exact figures, say that it is less than 30 per cent, in the case of ' Silver Fern ' 'mild, less than 60 per cent, in the case of ' Silver Fern ' cut plug, and less than 25 per cent, in the case of ' Twelves.' " And at a subsequent meeting Mr. Smith disclosed to the Committee, confidentially, the ratio of local leaf to foreign in " Twelves." Mr. G. Husheer, managing director of the National Tobacco Co., in evidence, stated : " The proportion of foreign leaf used by us in the blending of our product varies according to the character of the crops every year, but it ranges from 25 to 40 per cent.," and that " the average of imported leaf of the various brands is about 30 per cent." It was also disclosed in evidence before your Committee that the Dominion Tobacco Co. has adopted the national emblem for their " Silver Fern " brand, and also for their " Twelves " cigarettes. It does not appear fair to either the local grower or the general public that a smoking mixture containing a low domestic-leaf ratio in the blend should be described as " a blend containing the choicest selected New-Zealand-grown. leaf" ; nor, again, should such brands be described as " the Dominion tobacco " in trade signs and advertisements, when the more correct association of the word " Dominion " is with the Dominion Tobacco Co., Ltd., as the manufacturers, and not with the proportion of Dominion-grown leaf used in such smoking mixture. " To produce a cigarette containing any large proportion of New Zealand leaf is, in our opinion, completely impossible at present," was the considered opinion tendered on behalf of the BritishAmerican companies by Mr. R. B. Smith, managing director. The popularity of the products of the National Tobacco Co. was admitted by W. D. and H. O. Wills (N.Z.), Ltd., to the Committee. There is a demand from the New Zealand public for New-Zealand-manufactured tobacco-leaf, and it is a commonplace that much of the New Zealand tobacco is to-day made up into cigarettes by individual smokers. From the minutes of evidence it will be seen that, according to statements made before the Committee by the Secretary of the Stores Control Board, and also by the Department of Industries and Commerce, Messrs. W. D. and 11. O. Wills (N.Z.), Ltd., this year submitted a tender to supply the Mental Hospitals Department and the Prisons Department with 100 per cent. New Zealand tobacco in 5 lb. packets. The amount of the tender was for approximately 8 tons. Incidence of Customs Acts Amendment Act, 1930. As a result of the recent alteration in the law effected bv the passing of the Customs Acts Amendment Act, 1930, the duties that are now levied are as follows :—•

1. Impost Duties. Item ! British Preferential General Tariff No j Tariff Items. Column"No. 1. CoS No f." Class II. —Tobacco. 74 Cigarettes n.e.i. .. .. .. .. .. .. 33s. 9d. per 1,000 33s. 9d. per 1,000. 75 Cigarettes exceeding in weight 2£ lb. per 1,000 .. .. .. ] 3s. 9d. per lb. 13s. 9d. per lb. 70 Cigars, including the weight of every band, wrapper, or attachment 15s. per lb. 15s. per lb. to any cigar 77 Snuff .. .. . . .. .. ,. .. 15s. per lb. 15s. per lb. 78 Tobacco, fine out, suitable for the manufacture of cigarettes . . 13s. 3d. per lb. 13s. 3d. per lb. 81 Tobacco, unmanufactured, entered to be manufactured in New Zea- 3s. per lb. 3s. per lb. land in any licensed tobacco-factory, for manufacturing purposes only, into tobacco, cigars, cigarettes, or snuff 2. Excise Duties. (a) On tobacco (cut) .. .. .. .. .. .. One shilling and eightpence the pound. (b) On tobacco, fine out, suitable for the manufacture of cigarettes .. Nine shillings and ninepence the pound. (c) On other tobacco .. .. .. .. .. ... One shilling and sixpence the pound. (d) On cigars and snuff .. .. .. .. .. .. Five shillings and six-pence the pound. (e) On cigarettes— (i) If manufactured by machinery .. .. .. .. Ten shillings the pound. (ii) If made by hand .. .. .. .. .. Eight shillings and sixpence the pound.