A Case for Import Tariffs

The emphasis in the 1930s had shifted from curtailing the production, or fixing minimum prices voluntarily, to persuading the Government to impose an import tax and restrict import- based competition. Although the Government had imposed an Abnormal Importations Act 1932, it had left ‘loopholes’ that allowed the importation of sacks, bags and yarns. A special ‘Fiscal Sub-committee’, with Sir William Handerson as its Chair, was established in the AJSM whose remit was to liase with the industry’s efforts in this regard in YEAR. In order to make their case, representations were made to the Board of Trade (BoT). The thrust of their argument was that limiting imports would result in savings of ‘unemployment payments’ and help generate local employment.93 Manufacturers were also requested to educate their customers about the need to ‘buy United Kingdom jute goods’ on similar lines.94 The committee also sought the influence of local leaders including Sir Nairne Sandeman, Mr Dingle Foot and Miss Horsbrugh, all of whom were Members of Parliament. Help was also sought from Mr James Prain, the owner of a small sized firm involved in the sack and bag market, who was now on the Tariff Consultative Committee which was set-up by the Associated Chamber of Commerce.95

The committee’s efforts soon paid off, as the BoT invited them for further discussion on the matter.96Sir Wm Handerson, Geoffrey Cox, of Jute Industries, and Frank Cathro, the secretary of AJSM, led this deputation. It was emphasised that although the initial tax on imports was a step in the right direction, it did not address the central issue concerning the industry, i.e. imports of sacks, bags and related yarns from India. The BoT commissioner, Mr Ashley,

92_{Ibid 7}th_{June 1926}

93_{DUA MS 84/5/2/8 Minutes of Meeting, Fiscal Sub-committee 9}th_{November 1931} 94

ibid

95_{Ibid 3}rd_{December 1931} 96_{Ibid 14}th_{December 1931}

expressed their inability to do anything with regards to imports from Empire countries.

97

Although Mr Ashley did not commit to any immediate action, the representatives of the jute trade were pleased to learn that the BoT was keeping a ‘day to day’ watch on the entire imports situation.98

In order to help the industry make a stronger representation, the Chairman suggested appointing Sir Archiband Crawford K.C, who he understood to be in ‘close touch’ with Mr Ashley at the BoT.99Mr Crawford was also representing the Rope, Twine and Net Trade and the Flax trade in making their case for import tariffs. It was thought that he could help the industry in formulating its strategy in this respect. What was also important was that he was based in London and so was able to keep a close watch on the proceedings, something that the committee found it difficult to do from Dundee. However, the BoT was against any K.C representing an industry. Therefore, Mr Crawford was given an official position in the Association by being appointed the ‘London director’ on a fee of £500 per year plus all expenses.100 This proved to be quite useful, as, soon after his appointment, Mr Crawford was able to arrange meetings with key people and help prepare the case. He suggested that in order to make a strong argument, the industry needed to clearly demonstrate the differences in cost of production between Dundee and other countries and their inability to work under the present 20% import duties.101 The trade also continued to use the influence of local M.P Miss Horsbrugh, to raise the issue in the national parliament.102

In 1932, the ‘Ottawa Conference’ offered the industry another opportunity to make its case. The conference was a meeting of representatives from the British Commonwealth held to negotiate bilateral agreements which would provide limited imperial preference to Commonwealth goods. The jute industry was assured by the BoT that it would be allowed to make a representation at the conference. It was agreed that that the industry would be represented by Sir William Walker and the Secretary, Frank Cathro. The industry’s position was that it wanted the duties to be no less then 40% on yarns and Hessian piece goods, 50% on

97_{Ibid 16}th_{December 1931} 98_Ibid

99_{Ibid 7}th_{April 1932} 100

Ibid 25thApril 1932; 29thApril 1932

101_{Ibid 6}th_{May 1932} 102_{Ibid 13}th_{May 1932}

sack and bag piece cloth and 75% on sacks and bags.103With this aim, a delegation led by Mr Earnest Cox (Chairman of the Sub-committee), Sir Wm Henderson (Chairman of the Association), William Walker (representative to Ottawa) and Frank Cathro visited the Indian and the BoT representative in London before the conference. They argued that while other industries were looking to reduce import duties in the Empire countries, the jute industry’s case was ‘opposite’ as it wanted to protect the domestic trade from the Indian competition.104 However, it became apparent that they faced a ‘political difficulty of no easy character’.105 Moreover, the delegation learnt that the Government’s representatives were only going to play the role of facilitators and it was left to the industry representatives to conduct the actual negotiations with their counterparts.106In their last effort to muster domestic support before the conference began, the committee decided to get in touch with the representatives of the cotton industry to exchange views, seek the support of trade unions and make a press release to draw attention to the ‘seriousness’ of the situation.107

From the records, it is not clear as to what exactly transpired during the meeting at Ottawa, but from Sir Walker’s telegraph it is amply clear that the conference was anything but a success for the Dundee jute industry, as it was not able to secure any further restriction on imports:

“Sailing Duchess York Twelfth. Tell Sir William, Earnest Cox Mondau and Sime afterwards if they agree. Long interview Business Advisors Tuesday. Situation then difficult. Had meeting Runciman, Horace Wilson Friday. Told us stated position very clearly. President recognises force our statements. Gravity admitted. Said had it been any other country India. Our view Trade sacrificed for Empire politics and Indian officialdom. Suggest publicity. Cabled Horsbrugh similarly.”108

After the Association’s failed efforts to persuade the Government to restrict imports into the US, an argument was made by members to liase with the local Member of Parliament to put

103_{Ibid 20}th_{May 1932} 104_{Ibid 17}th_{June 1932} 105_{Ibid 24}th_{June 1932} 106 Ibid 107_{Ibid 27}th_{June 1932} 108_{Ibid 9}th_{August 1932}

pressure on the Government to restrict imports into the country. 109 However, Mr Crawford pointed out that MPs alone could not bring about any change through debate in the House of Commons. He suggested that it required the ‘influence’ of some ‘important’ persons, such as the Chancellor of the Exchequer or the President of the Board of Trade.110A ‘press campaign’ in all major cities, including Dundee, London and Glasgow, was launched to publicise the industry’s plight. However, it did not have much effect on the BoT. The Board argued that if fresh negotiations were started for the jute industry, it would have to also ‘reopen’ negotiations on other trade agreements that had been concluded with India, which the board was unwilling to do.111

Nonetheless, the industry, through the AJSM, continued to explore ways of restricting imports into the domestic market. For example, the possibility of imposing export duty on raw jute to the continental countries and imposing a quota on imports into the UK were explored. However, with regard to imposing duty on the export of raw jute from India, Sir Crawford, after some consideration suggested that the ‘wisest thing was to concentrate on the home market side of the question’.112

After some investigation the committee learned that the Ottawa Agreement could be terminated on a six-month’s notice. While the industry was warming to the idea of terminating the agreement, Sir Crawford suggested that it would be a mistake’ to ‘rush the position’. He suggested that it would be ‘preferable to steadily and quietly undermine the Government’s resistance’.113 Following on his suggestions, Sir Crawford continued to do ‘propaganda work among MPs’. By now Sir Crawford had become an integral part of the industry’s ‘campaign’ and when the issue of continuation of his contract came, the committee argued that it ‘would be a mistake’ to terminate his agreement in the ‘middle of campaign’.114 The aim was to meet anyone in the political circle who would be sympathetic to the cause of domestic industry. With this aim, the industry’s representatives, led by Mr Earnest Cox, Sir Wm Henderson, Frank Cathro and Archibald Crawford, met the members of the conservative ‘Ginger Group’

109_{Ibid 30}th_{August 1932; 16}th_{September 1932} 110_{Ibid 10}th_{October 1932} 111_{Ibid 14}th_{October 1932} 112 Ibid 6thFebruary 1933 113_{Ibid 17}th_{February 1933} 114_{Ibid 23}rd_{March 1933}

and later the Parliamentary Empire Committee, which has Sir Nairne Steward Sandeman as member of its committee. However, these meetings did not lead to any concrete measures. While the Empire Committee expressed its ‘sympathies’ with the industry’s situation, it was unable to recommend any action for the next three years (which was also duration of the Ottawa Agreement). They felt that although some pressure may be applied to the Government before the end of the agreement, the Government was unlikely to enter into new negotiations before that.115

With little assistance coming from the political leaders, the industry got in direct touch with the Indian High Commissioner. However, he too expressed his inability to do anything personally and suggested the industry open channels of communication directly with the Indian industry. However, the Commissioner suggested that in return for any agreement by the Indian industry to self impose a quota on exports to UK, the Dundee industry would have to grant their Indian counterparts a preference over all Continental competitors in any future trade negotiations.116 But making such guarantees was not in the hands of Dundee firms and therefore this possibility did not materialise.

4.3.3 Research

During this inter-war period, there was a gradual recognition of the importance of R&D, however, little emphasis was placed on the development of alternative fibres to regain Dundee’s leadership in the market. This is illustrated in a special ‘research sub-committee’, formed by the Dundee Jute Spinners and Manufacturers Association in 1934 to explore various research related options. In its report, the committee indicated its preference for an association with the Indian industry in their ongoing efforts to establish a research facility.117 However, there was little enthusiasm on the Indian side to the Dundee proposal and it was evident when they decided to establish a laboratory in London rather then in Dundee (the centre of jute production in the UK). After this, there was little willingness on Dundee’s part to build an independent research facility. At the last meeting of the research sub-committee, the ‘idea of a

115

Ibid 15thJune 1933

116_{Ibid 7}th_{August 1933}

research scheme’ was depreciated and the wording ‘testing and standardisation’ was suggested in place of ‘research’ and collaboration with the Dundee Technical College was proposed for this purpose.118

To summarise, this section examined three major collective strategies employed by the Dundee jute industry during the inter-war period: the curtailment of yarn production in the 1920s, restricting imports through import tariffs in early the 1930s and research during the 1930s. It also underlined the constraints faced in each of the strategies. The next section examines individual firms and their response to growing international competition by analysing their strategic repositioning attempts and the capabilities developed.