#For The Record

Amalgamation of Northern and Southern Nigeria

The Principal Medical Officer in his annual report for 1917 says that the transfer to Kaduna has already been justified, and that the change has produced a distinctly beneficial effect on health, which he has no hesitation in saying will become more and more marked with further develop­ment. The Senior Sanitary Officer writes in similar terms. The rainfall is 52″higher than almost any other place for which records are kept in the Northern Provinces.

Sir J. Eagleaome and the General Manager were eager to make this the headquarters of the railway.   The large European workshop and running staff would thus be withdrawn from the temptations of a coast port, and a bracing climate would be substituted for the enervating atmosphere of Lagos.   Situated at the junction of the two main trunk lines, the General Manager could control both.   Coal for the power-station, for workshops, and lighting could be brought here from Udi in trucks, which, having conveyed bulky produce to the Coast, would otherwise be returning almost empty, and therefore at less cost than it could be conveyed to Lagos.   There is abundant space, and the quality of the water for engine purposes is very good.

The railway location known as ” the Junction “is on the left, or South, bank of the river, which here forms a right-angled bend with steeply inclined banks. Twenty-eight fine houses of cement blocks have been erected. The “Capital ” on the northern bank, which falls gradually to the river, is some three miles distant, on the top of the rise.

The central position of this site, its advan­tages of climate, and the presence of the Railway and West African Frontier Force Headquarters, recommended it strongly to me as the proper site for the seat of the Central Government or Nigeria, The Governor-General will spend his time at both Capitals, and require a residence at each-From this central site it will be easy for him, and for Heads of Central Departments, to visit either the South-Eastern, or the South-Western portion of the Protectorate by railway, or the South-Central by the branch line to Baro on the Niger, and the waterway of that river, while being in equally close touch with the North.  Lagos, however, will remain the chief trade centre. I hope that the time may not be distant when this move can be effected, and the Southern Capital relieved of its present congestion.

The strictest economy was practised in the move. The old buildings at Zungeru were carefully dismantled, and every sheet of roofing and every sound plank which could b& extracted was used for outhouses at the new Capital. This process was arrested when, shortly after the completion of the Cameroon war, Nigeria was afforded an oppor­tunity of sending troops to East Africa. Zungeru with its permanent barrack accommodation, its European and native hospitals, and its remaining bungalows, at once became the largest training centre, thereby not merely saving the Imperial Government a very large sum of money, but expediting the despatch of drafts, and ensuring the health of officers and men. On the return of the troops, and the formation of the “Service Brigade,” it continued to serve the same useful purpose.

Almost the only permanent brick structure of any value at Zungeru was the prison and this I propose to convert into a lunatic asylum for the whole of Nigeria, which is most urgently required. A central leper asylum will also be established here, and a Native Medical Officer will supervise both. The situation of Zungeru on the railway, half-way between Lagos and Zaria, and its excellent health statistics in spite of the heat, which was so trying to Europeans renders it well adapted for the purpose.

Nigeria affords an immense field for British trade, and though it has developed at an extraordinary rate, it is capable of indefinite expansion.   In 1900 its total value was about 3 1/3  millions sterling, by 1913 it had more than trebled, and in 1918, in spite of the severe set-back caused by the War, it had reached 17 millions, the highest ever recorded. The exports consist of raw materials, the principal of which are oil and oil seeds, hides, skins, cotton, cocoa, rubber and tin-ore.  The imports are manufactured goods, textiles, hard­ware, &c., with salt and kerosene.    Formerly the largest import consisted of trade gin for sale to the natives.   Nigeria  has  the  great  advantage of  being   many  thousand miles nearer to the “United Kingdom than most of the other countries of the Empire India, Malaya, Ceylon, &c. from which tropical produce is exported.   Lagos, which in the ” Times Atlas of 1895 is shown as 33 days from Liverpool, is now less than half that time, and the magnitude of its trade, and the number of passengers, already justify a direct service which should not take more than 12 or 13 days.    Nigeria has an enormous wealth and variety of pro­ducts, a large and fairly industrious population, good communications by water and by railway, and the conditions of life and health are not worse than those of other tropical countries, and have rapidly improved.

Amalgamation gave a great impetus to trade in United Nigeria.   The railway systems were unified, the fiscal frontier for the levy of the surtax on salt for the North was abolished, the marine transport on the River Niger with separate depots was now controlled by a single department, all Customs stations on inland frontiers (with the excep­tion of Illo and Yola, which were ports of entry under the Niger Navigation Order in Council) were abolished, the northern law imposing licences on traders was repealed. These were some of the outward manifestations of the new spirit of mutual co-operation which amalgamation rendered possible.

The year 1914 opened (as will be shown in the Section on finance) with prospects of great development and prosperity.    This was arrested by the outbreak of war, but before the “War ended, as will be seen in the following para­graphs, a great recovery took place, and (as the Niger Company reports to its shareholders) a “very promising trade with America ” developed.   While, in 1913, Germany took £3,885,000 of the total trade (exclusive of specie) (the exports to that country being nearly the same as to the United Kingdom), and America only £300,000 (no exports), in 1917 the trade with Germany was nil, und the United States had increased to £1,812,000, of which £1,118,000 were exports. In 1913 Nigerian trade with the Empire was about 8J million pounds out of 13£ million.   In 1917 it was over 12 million out of nearly 14 million, and of the £2,200,000 which was done with foreign countries £1,812,000 was taken by America.

Soon after the outbreak of war all Germans were deported, their stocks, and later their immovable properties, were sold by a Receiver acting under the orders of the Supreme Court. In view of the very considerable value of these properties, the Receiver, acting as Trustee, held “it right that they should be widely advertised and that the sales should take place in London. The conditions, as in other Colonies, imposed no restriction on sale to Allies or Neutrals. This gave rise to considerable controversy in Parliament. The estates realised very large sums, and were, I think, in all cases secured by British purchasers, to whom fell the entire trade hitherto carried on by the Germans. The enormous prices paid for these properties was believed to have resulted in giving a fictitious value to land at Lagos.

The disturbing effect of the War differed in the early and later periods. They were caused in the first year by the Cameroon Campaign, in which Nigeria bore a large part; by local outbreaks among the primitive tribes caused by rumours that the British were about to leave Nigeria rumours traced in some cases to German agency, in others due to the withdrawal of Political Officers and troops for the Cameroon Campaign or lent to the Imperial Government; and finally by the action of the British Banks which refused credits, and by the sudden dis-appearance of the German firms. In the later years of the War, the demand for oleaginous produce and the opening of the American market for hides, skins and other produce went far to re-establish trade, and the chief disturbing elements were the shortage and even more the uncertainty of shipping, the high ocean freights and the diminution and high prices of all imports. The shipping entering Nigerian ports fell from 884,740 tons in 1913 to 409,146 in 1018. To this, at the close of the War, may be added a very serious deficiency of coin for which a Note issue did not compensate.

With the successful completion of the Cameroon Campaign, the quelling of the local unrest, and the growing stability of the produce market, conditions, however, again tended towards prosperity.

Fearing, as they stated, the loss of their Markets, the principal firms formed agreements in England, with the double object of reducing the price paid to the native producer to the lowest possible limit, and of assuring to him the stability of this minimum price, even if it should involve a temporary loss to themselves.   By omitting, how­ever, to take the local Government into their counsels, or even to inform it of the course upon which they had embarked, misunderstandings inevitably arose.

With the loss of the Hamburg market which had absorbed the bulk of the palm kernels before the War, there was a temporary fall in prices, but it soon became evident that the produce of Nigeria was essential to the prosecution of the War, and that the United Kingdom was able to take the whole output. Prices rose quickly and surpassed those which had been offered before the war, and though the home prices were presently controlled, much larger profits were made on imports from causes which I shall presently explain. Large profits accrued later instead of the losses which the merchants had anticipated,, but they had to incur many risks.

Shipping was uncertain, control prices and freights might at any time be altered, and exports restricted. Since their motives for forming the combine had not been made public they were, not unnaturally, accused of unfairly exploiting the native producer, to whom they were giving only bed-rock prices. When the reasons by which the merchants had sought to justify the formation of these ” Combines ” had ceased to exist, they were continued on the grounds that staff and unnecessary expense were thereby saved.

Owing to the uncertainty regarding shipping and the need for rapid despatch of-vessels, storage accommodation at Lagos or on the railway now became a matter of the first importance.   In its absence consignees could not take delivery of produce railed from the interior, and trucks remained loaded, with a consequent congestion, and shortage of rolling stock.    The Government wag thus forced to intervene so far as rail-borne produce at Lagos was concerned, and a committee was appointed to allocate shipping space in proportion to visible stocks.    Sixty per cent, of available freight was assigned to rail-borne produce and 40 per cent, to the island trade, 60 per cent, of the former was given to the combined firms, who settled among themselves as to its distribution, and 40 per cent, to non-combined exporters. This system has worked well, and the government 1ms found no reason to alter the proportions.

In round figures, six-teeth of the exports from tin; Port of Lagos arc brought from the interior by rail, and four-tenths are brought by canoes from the districts accessible by the network of creeks and rivers connected with the Lagos lagoon. With the allocation of shipping space by the shipping company for this Lagoon trade the Government did not interfere.

The War at first caused a considerable congestion of produce at Nigerian ports, which deteriorated owing to lack of storage and material for erecting it, while capital was locked up. Latterly, however, the demand for oleaginous produce caused the Ministry of Shipping to send out extra vessels, and this, with the expanding American market, actually resulted m the total value of exports exceeding any previous records. Exclusive of tin ore and gold dust, the value of native produce exported in 1913 was £6,200,000 (having risen from just over 3 million in 1908). In the next three years of war it fell, but in 1917 it had reached a total of £6,985,000. Inclusive of tin-ore the figures are:

I have explained that British merchants engaged in the export trade made large profits at the beginning of the War (though their risks were great), and latterly on the import trade, from which substantial sums accrued to the Imperial Exchequer in the form of Excess Profits Tax.   In these profits the local Government has not attempted to participate, except to the extent of imposing moderate export duties on palm oil, kernels, and cocoa in 1916, to which hides, skins, and ground-nuts were added in 1918.   They realised little more than one-third of the revenue lost by the cessation of the spirit trade and with the introduction of direct taxation into the Southern Provinces they could be abandoned, unless retained to pay the interest on the £6,000,000 War Debt assumed by Nigeria on behalf of the Imperial Government,   Whereas in 1913 Customs duties were 512 per cent, of the total revenue, they formed only 363 per cent, of the estimated revenue in 1918.   Trade has thus been relieved of 15 per cent, of indirect taxation.   Export duties tend to improve the quality of the exports, since the lowest priced pays equally with the best.

The large profits made by exporters before prices were con­trolled and sea-freights raised, due to the low price paid to the producer by the combined firms, brought in a large number of native speculators chiefly in the Lagos Lagoon trade some of whom made large fortunes.   They raised some controversy regarding the amount of shipping space allotted to them by the shipping company a matter with which Government had nothing to do since their goods were not rail borne while the British merchants complained of their immunity from the Excess Profits Tax and Income Tax.

I am informed that prior to the War merchants looked for their profits almost entirely to the import trade, and the native producer got the benefit of any rise in price in the home market.  As the export market became steadier it was natural that the specu­lative profits on exports should cease, and trade resume a more normal course.   This has to some extent happened especially at Lagos but even there the price of oil was in 1917 £117s. below pre-War prices, and £3 18s less in 1918.   For kernels it was £3 2s. 6d less per ton in 1917 and £3 10s. 10d in 1918.   For cocoa it was 20s. 6d less per cwt in 1917 and 27s. 8d in 1918.   This decreasing price to the producer is much to be regretted, while the price of imports continues to rise.   Without a fuller knowledge than is at my disposal regarding the cost of marketing, freight, insurance, and profit realised, I am not able to form an opinion as to its necessity, but I am assured that no more than a working margin was left to the merchant.

These conditions do not apply, to the Northern Provinces, for the staple products of which, ground-nuts, hides and skins, prices are paid greatly in excess of those obtainable a few years ago.   Moreover, the natives of the North are not so dependent on imported goods as those of the South.   The Hausa of Zaria or Kano when faced with inflated prices, or (as has recently occurred) the absence of the cheap class of cloth lie desires, no longer exports his raw cotton hut reserves it for his own looms. This was evident at the Zaria ginnery in 1017 to the detriment of the Cotton Association, and Manchester. It is earnestly to be hoped that interference with the economic laws of supply and demand will soon be no longer necessary.

The importation of trade liquor, which had been checked in the first year of the War by a heavy increase in duties, decreased  when the spirits became increasingly difficult to obtain as shipping grew scarcer.  Its place  in the purchase of produce had of course to be taken by other imports.    In proportion as the borne industries became more and more concentrated on the output of war-material, textiles, hardware, and other staple imports rose steadily in price, to which higher freights had to he added. Merchants had in any case no option but to put up prices, for their stocks could with difficulty be replaced, and had they run out the purchase of produce must have ceased.   Though the volume of commercial imports fell by over 6,000 tons in 1917, their value increased by £634,0,00 (including specie)   Most of the articles in chief demand increased from 150 per cent to 300 per cent. The import of kerosene (increase SO per cent.) fell from four million gallons in 1013 to two and a half million in 1917, but the value remained about the same, and vegetable oils, so urgently required in England, began to replace it as a luminant.    Salt is stated to have increased 220 per cent, in price, but in the absence of other commodities the imports rose from £62,734 in 1913 to £281,700 in 1917.

The native, unable to pay these prices, preferred to accept cash and to await a decrease.   This withdrawal of cash from circulation, and the impossibility of obtaining adequate supplies from the home mints, has in turn- caused much anxiety.   This of course cannot continue indefinitely, and the supply of imported goods to pay for raw produce is of vital importance.

Much has been said about giving a fair price to the native producer, and the merchants have addressed the Secretary of State on the subject with reference to the control price in England. But it is, of course, futile to discuss the price the producer receives for his produce, while ignoring the price he has to pay for his imported purchases. So long as these are restricted, their price must rise, and his position can only be bettered by unrestricted imports and unfettered competition without artificial control. It may, I hope, be anticipated that, now that British industries have resumed a more normal course, these prices will rapidly fall as a result of competition.

The fact that exports of produce instead of decreasing actually increased so largely, may be attributed to the fact that the native had to collect so much more in order to pay for such necessaries as he could not do without, while hoarding the remainder of his cash, partly also perhaps because he considered himself fortunate to obtain for his produce prices which con­trasted not very unfavourably with those he received at the outbreak of war.

In the supply of local foodstuffs, alike to Europeans and to the native clerks and artisans, control prices were impossible.   For these the producer has naturally demanded more, so as to enable him to purchase the highly-priced imports he needed.   The result has been a great increase in the cost of living, both to Europeans and to the native staff.   The Government was thus compelled to grant a war bonus, which formed a new and heavy charge on the revenues.   Local victualling of ships, and the assembly of large bodies of troops for service overseas, no doubt added to the scarcity and price.

Already prior to the War I had taken steps to decrease Government expenditure by replacing imports by local material, and by manufacturing locally such articles as were within the compass of local skill. The enormous increase in cost of imported building materials and other neces­saries,  caused by the War, acted as a great stimulus to this policy. Of Nigeria it could be said with equal truth, as it has been said of India by the Industrial Commission, 1916-18, that she is “rich in raw materials and in industrial possibilities, but poor in manufacturing accomplishment. Her labour is inefficient, she relies almost entirely on foreign sources for foremen and supervisors, and her educated people have yet to develop a right tradition of industrialism.” It has been a pernicious tradition of West Africa to order everything doors, window frames, and even bricks and tiles from England. As a result, not only has industrial development been arrested, but the materials with which the country abounds have been unexplored. With industrial education I shall deal in another paragraph. The coalfield at Enugu soon rendered the Government independent of imported supplies of coal.   The imports fell from 84,600 tons £100,000) in 1913 to 25,744 (£83,730) by commercial firms only in 1917.   These will, I hope, be locally supplied in 1&18 (see paragraph 135 ef seq.).   The exploitation of local timber and the erection of sawmills and drying sheds have already made us equally self-sufficing in this matter, with an output of one-quarter million cubic feet of timber, or 1,800,000 sup. ft. of planking

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Amalgamation of Northern and Southern Nigeria

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