not merely as regards the direct customs duty payable, but in the further fact that " from the inland taxation, too, which presses so heavily on Chinese traders his goods are exempted by payment of transit dues,' not exceeding a nominal 2 per cent. ad val.” 1

Whenever distinctions are thus drawn between one group of individuals and another in respect to tariff advantages, whether in the rate of duty or in the regulations to which they are subject in the conduct of trade, it is almost impossible to prevent the favoured group from using their privileges as objects of pecuniary value to be traded in with the less favoured group. This was the case in 17th century England,) and is the case to-day in 20th century China. In the Naviga-l tion Act, 12 Charles II., cap. 18, clause IX. recited that "for the prevention of the great frauds daily used in colouring and concealing of aliens goods," a large number of articles and goods imported from certain named areas were to be accounted foreign if imported in other than British ships. Precautions had to be taken in the pre-cited Act of 1784 "the better to prevent the said mayor and citizens from being fraudulently injured" by goods imported on aliens account from being entered as British. In China to-day, says Mr. Morse, "it would be unreasonable to expect that no foreigner would be found ready, for a consideration, to lend a corner of his flag to cover the nakedness of the poor Chinaman. Among the foreigners resident in China there is the same proportion of good, bad, and indifferent as among the same class in the home lands, and the mal-practice is common; but while the abuse of the flag provides a decent income to many among them, it causes great injury to the legitimate commerce of the countries from which they come, and disorganises the methods of administration, right or wrong, just or unjust, of the land in which they live.'

We now come to a group of differential duties, which, in view of their importance and the detail with which they require to be treated, can best be dealt with in a separate chapter. Our next task will, therefore, be to discuss colonial and other preferential duties.

1 Op. cit., p. 190. Chin Chu, The Tariff Problem in China, pp. 104-114. See also China National Defence League Pamphlets: The World Peace and Chinese Tariff Autonomy.

2 Morse, op. cit., p. 191.

NOTE I. TO CHAPTER VII.

SINCE this chapter was written further measures have been undertaken, or have been attempted, in connection with dumping and unfair competition generally.

1. Japan.-An amendment to the Japanese Tariff Act of 1910 came into force on the 1st August of this year. Art. V. of the said Act is amended by the addition of an antidumping clause, which enacts that "if any important industry in this country is threatened with injury on account of the import of goods sold at an unfair price or the sale at an unfair price of goods already imported, such goods may be charged with duties not exceeding the fair price of the goods, within the limits specified by" the commission set up to look into cases of dumping, in addition to the duties leviable under the Tariff Act. "In respect of goods specified under the provisions of the foregoing clause, which, having been already imported, are the property of, or in the possession of, a dumper' or his agent, the surtax may be levied on such dumper or his agent, in accordance with the provisions of the foregoing clause, such surtaxes will be collected in accordance with the regulations for the collection of the national taxes." 1

2. A very elaborate attempt to regulate dumping is contained in the abortive anti-dumping Bill which the British Government, in pursuance of its election pledges, introduced in the House of Commons in November, 1919, but which was not proceeded with. The Bill dealt with a variety of subjects, but, so far as our present purpose is concerned, the two points of interest are the regulation of dumping and the attempted restriction upon imports from countries with a depreciated. currency.

(A) Dumping.—The cases in which Part II. of the Act were to apply were defined as being the importation into the United Kingdom in substantial quantities and systematically

1 B.T.J., 9/9/20, p. 327.

2 For the full text of the Act, see the B.T.J., for 27/12/1919, p. 640, et seq.

of goods, or the offering of goods, or the apprehension that such sale or importation of goods is about to take place, if the importation or offer for sale is "at prices below the foreign value as defined by this Act." But the Act made it a condition that the production or manufacture of similar goods in the United Kingdom is or is likely to be thereby adversely affected."

Though the Act does thus not cover the case of dumping where there is no British industry which could be injured by the importation, it did cover the cases of (a) goods produced in different countries (Art. 5 (3)), and the case of (b) goods imported in parts for the purpose of being assembled or made up in this country (Art. 6).

In analysing the working of the provisions, it is best to start with the conception of the foreign value of the goods. This was defined to be the price calculated in sterling "which at the date of the issue of the certificate to be issued by the proper officer as aforesaid was being charged for goods of that class or description in similar quantities for consumption in the country of production or manufacture, after deducting any excise or other internal duty leviable in that country, or, if no such goods are sold for consumption in that country, the price which, having regard to the prices charged for goods as near as may be similar when so sold or when sold for exportation to other countries, would be so charged, after deducting any such duty as aforesaid, if the goods were sold in that country."

The reader will notice that the foreign value is to be calculated in sterling. It was necessary consequently to give the authorities power to settle the rates at which foreign money. was to be converted into English, and this power of conversion was given by Art. 5 (4) of the Act. The foreign value is the basic point.

We must now distinguish between the cases of import on or after sale, and the case of import before sale-that is, import on consignment.

The Board of Trade was given power to issue orders providing that such goods as the order might apply to should not be imported unless

(1) The foreign exporter made a sworn statement stating the value and the origin of the goods.

(2) Such statement was certified by the proper

officer "—i.e., a British consular officer abroad, or, in the British Dominions, a person authorised by the Board.

(3) A declaration was made by the importer as to whether the goods have been imported on or after sale, or merely on consignment.

(4) The goods being imported on or after sale, the purchaser offered such evidence as the Board required as to the import price and the commissions, discounts, rebates, or other advantage of any kind whether direct or indirect; obtained by the purchaser in respect

of the sale."

(5) The goods being imported on or after sale, the "importer before the clearance of the goods pays to the commissioners such sum as in the opinion of the commissioners is equal to the amount by which the foreign value of the goods exceeds the import price thereof."

Once such an order had been issued, the conditions of import on consignment were—

(1) Conditions I to 3 above.

(2) A declaration of the name and address of the person "at whose order and disposition the goods were held."

(3) The payment by the vendor to the Board of a "sum equal to the difference between the price at which the goods are sold and the foreign value of the goods,' or, the provision of satisfactory proof that the lower prices at which the goods were being sold were due to depreciation of quality or other causes which the Board might validly accept.

It being quite impossible to carry out this part of the Act without powers of investigation, the Act gave the Board power to demand from the consignor that he comply with any requirements" as to storage, inspection, returns as to sales, production of books and documents, and the furnishing of information which may be made to him by the Board." Further, reasonable powers of entry, and the right to "inspect all books and documents relating to the business carried on by any such person" was conferred on officers appointed by the Board.

Those readers who are familiar with American practice

will recognise that here we have inaugurated the American system of Special Treasury Agents. So far as the American precedent serves, it is quite clear that the practice of demanding sworn consular invoices is an insufficient safeguard, and that the only resource is an inquisitorial system such as that demanded by the Act.

(B) When we turn to that part of the Act which deals with depreciated currency, we must again first begin with a statement of the conditions under which the Act applies. The Board might prohibit the importation "of any class or description of goods manufactured or produced" in a country, if it was satisfied

"that there has been such a depreciation in the sterling value of the currency of any foreign country as, not being adequately compensated by increased cost of production in that country, is causing or is likely to cause sales in the United Kingdom of the products or manufactures of that country to take place in substantial quantities at prices substantially below those at which similar articles manufactured in the United Kingdom can be sold, and that action under this provision is otherwise desirable." (Art. 9 (c)).

The Government was given power to grant licences without payment, or on payment of a sum at a uniform ad valorem rate determined from time to time, and for periods of not less than three months in each case . ." (Art. 10 (4).)

The powers conferred on the executive authority by this Act were obviously very wide and it was thought better to associate an advisory committee, known as the Trade Regulation Committee, with the departments concerned. The committee was to be composed of ten persons nominated by the House of Commons, who had to be members of the House, the Parliamentary and Permanent Chiefs of the Board of Trade, and one Treasury representative. Draft orders were to be submitted to this committee by the Board of Trade, and were not to be proceeded with unless approved, except in emergency cases, but such emergency orders were to be provisional, and only to continue in operation for twenty-one days, and no longer. The committee might approve the draft order, with or without modification, as they thought fit. Finally, any question or matter arising out of the adminis