manganese ore, 245,000 tons. All of these represented substantial increases over 1935 outputs. Copper and tin are also taking an increasingly important place in the list of South Africa's base minerals, in view of the trend toward strengthening national defense and the desire of the Government to have key industries independent of outside sources of supply.

The rise of the manganese production during 1936 marked the culmination of several years of effort to exploit commercially the Postmasburg deposits in the Cape Province. After various reorganizations and consolidations of the original companies, a combination is now mining the product, and, with the cooperation of the South African Railway, the ore is being exported to the United Kingdom, the European Continent, and the United States.

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Important advances were made during 1936 in the production of steel products at the State-fostered steel works at Pretoria. addition to rails, axles, and rods, the Pretoria plant is now turning out plates up to 1 of an inch in thickness and 4 feet in width, galvanized sheets, and wire. The steel industry in South Africa is protected by special duties levied on the basis of minimum c. i. f. prices. Marketing arrangements were made during the year with the British and Continental steel cartel, with a view to assuring the local industry of a minimum outlet sufficient for economic operation.

Activity continued in the various other lines of manufacturing in the Union, all stimulated by the active buying tone reflected from prosperous conditions brought about by the gold-mining industry. Engineering shops in the Rand area were particularly busy, while metal working, vehicle building (including automobile assembly plants at Port Elizabeth), furniture, footwear, and prepared foodstuffs were all actively engaged.

The expansion of manufacturing in South Africa is revealed in the record gross value of £116,200,000 for 1934-35 output, as shown in the preliminary summary of the eighteenth industrial census. As compared with the 1933-34 level, the gross output value increased by 17.9 percent, and employment showed a rise of 13.4 percent. Outstanding developments were in metal-working and engineering shops and building construction, foodstuffs, and vehicles. Salaries and wages paid rose by 21 percent.

During the past year the flotation of a number of new industrial concerns occurred as public-benefit companies, with keen interest in the share and investment stocks. A sizeable proportion of the industrial expansion was in the enlargement of existing factories, though many new plants were erected. Interest on the part of oversea companies in establishing subsidiary manufacturing branches in South Africa was again in evidence during 1936. The policy of the South African Government with respect to secondary industries continued to be one of protection through the medium of the import tariff.

Previous building records at Johannesburg and vicinity were exceeded during 1936-the value of construction contemplated in plans approved for the Johannesburg municipality alone being approximately £10,000,000, as compared with £6,717,000 for 1935.

AGRICULTURE

Greater stability and solidarity were achieved by agriculture in South Africa during 1936. Improved price levels for the country's leading agricultural products were reflected in the increased income of

farmers, which went far toward renewing confidence in the future of the agricultural industry of the country. Long-term projects for irrigation, pest control, prevention of soil erosion, etc., were started during the year. The Government continued its locust-destruction work successfully during 1936, although expenditures for locust control were substantially reduced in view of considerable improvement in the situation. Pastoral pursuits instead of crop farming are to be favored in South Africa's future agricultural policy, according to the annual report of the Secretary for Agriculture.

Wool production in the Union during 1935-36 reached a total of 238,000,000 pounds, an increase of 28,000,000 pounds over the clip for the preceding year. The 1936-37 clip is estimated at 262,000,000 pounds. The last complete selling season opened in September 1935 with prices 15 percent higher than at the beginning of the preceding season. There was a carry-over of only 11,000 bales. Keen competition resulted in a firm price trend with an average for the whole 1935-36 season of 9.9d. per pound, as against 7.6d. per pound for the preceding season. The export value for the 1935-36 clip amounted to approximately £9,500,000. In line with world demand, prices. improved further and showed a general upward trend in the 1936-37 season. Other features of the more recent selling period have been the activity of Japan and the United States in the South African wool market. Japan came strongly into the market in November and December of 1936 when normal sources of supply in Australia were disturbed as a result of a prolonged trade dispute between the two countries.

Production of both butter and cheese reached high records during the 1936 season. Efforts to encourage the consumption of dairy products within the country were continued. A new condensedmilk factory was established during the year in the Cape Province. There are now 57 creameries and 109 cheese factories in the Union. Production of corn in the crop year ended with August 1936 totaled 14,000,700 bags of 200 pounds each. There was a carry-over of 2,000,000 bags from the preceding year. Official estimates of the crop varied as the year progressed, and the price fluctuated between 7s. and 14s. a bag. Prices improved during the latter part of 1936, and this resulted in increased planting, with preliminary estimates for 1936-37 suggesting that there may again be a large surplus of the grain. The ultimate solution of the corn problem in South Africa is considered probably to lie in the direction of establishing an economic equilibrium between animal and field husbandry.

A surplus of wheat over South African requirements was produced for the first time in the Union during the year 1935-36. The total crop reached 6,059,000 bags of 200 pounds, as compared with an annual estimated consumption of 5,000,000 bags. The surplus problem is being handled for the time being by a Government withdrawal and storage scheme, which advances farmers up to 15s. a bag for first-grade wheat and compensation up to 2s. 6d. per bag in addition if the wheat is ultimately sold for less than 17s. 6d. per bag. The Government urged wheat farmers to combine their operations with some form of stock raising as a practical solution of the surplus problem.

A record quantity of sugar, 418,000 tons, was produced in South Africa during 1935-36. Estimates for 1936-37 are for a production of 440,000 tons, with most recent indications suggesting that even this figure may be exceeded. The quantity of sugar exported during the 1935-36 season was 212,000 tons-more than 50 percent of the crop

for that year. The United Kingdom took the bulk of these exports, although Canada came into the market for considerable quantities. An experiment was begun near the end of the crop year for increasing internal consumption of sugar in South Africa by putting out a second grade at a maximum retail price of 2%1⁄2d. per pound.

Export shipments of all classes of citrus fruits for the April-November period of 1936 totaled 155,100 tons, as compared with 136,400 tons during the same months of 1935. The first consignments of oranges to the United Kingdom realized about the same prices as in the preceding season, 17s 11d. per box. After a decline as a result of competition from American and Brazilian sources, prices recovered in July, and a successful season was anticipated. Grapefruit prices were weak and disappointing.

There was a substantial increase in exports of deciduous fruit varieties, with the exception of pears, from South Africa during the 1935-36 season. Exports of deciduous fruits amounted to 91,300 tons in 1935-36, an increase of 20,300 tons over the total for the preceding year. The United Kingdom continued to be the largest market for these South African products.

The Union's agricultural marketing problem-no less complicated and intricate than a year ago-is based primarily on the small domestic market resulting from the small white population and the low consuming power of the natives. The absence of large concentrations of urban consumers, except in the city of Johannesburg, and the scattered location of population are factors contributing to the difficulties of organized distribution. Protection of domestic production in the various oversea countries in which the South African product must necessarily compete and the low cost of production in some other export markets are among the handicaps encountered in the development of the trade. South Africa is approaching this complicated marketing problem in two directions by trying to reduce the cost of production of agricultural products and by establishing an organized marketing system with such assistance and guidance as can be supplied by the Government.

FOREIGN TRADE

Foreign-trade figures for 1936 show new high records, with the combined import and export values passing for the first time the £200,000,000 mark. The declared value of imports, £86,299,000, exceeded that for the former peak year of 1929 by £2,844,000 and was 14.6 percent above the total for 1935.

Automobiles (including chassis and parts for assembly) ranked first on the list of imports. American-type cars continued to maintain their predominant position in the South African market. Receipts of gasoline, and lubricating and fuel oil reached new high records. Among other items figuring substantially in the increased import trade in South Africa were foodstuffs, cotton piece goods, machinery and implements, and wearing apparel.

Exports reached £114,192,000 in 1936, as against £102,370,000 for the preceding year. Exports of South African primary products were maintained at generally higher levels than during the preceding year. Gold bullion shipments, which accounted for 69 percent of the total, rose approximately 15 percent. Wool, the next item in importance, about equaled the figure for 1935. The substantial improvement in

the oversea diamond market brought exports of South African stones, both rough and cut, well above 1935 shipments.

Exports from South Africa to the United States gained principally in the items of hides, skins, wool, and base minerals. Bunker coal supplied to the ships diverted to South African ports from the Suez route provided a demand greater than for some years.

TARIFF DEVELOPMENTS

A Customs Tariff Commission, appointed to inquire into the tariff policy of the Union, made its report during 1936, and, based thereon, a bill amending the Customs Tariff Act was enacted. The use of tariff protection for encouraging the development of national industries still remains a part of the country's tariff policy.

Following the enactment of the three-column bargaining tariff in 1935, the Government has been endeavoring by bilateral trade agreements to increase foreign outlets for South African manufactured products and primary produce, and discussions to that end took place during 1936 with a number of countries. Agreements have been concluded with the United Kingdom (also affecting British colonies and protectorates), Canada, the Irish Free State, Australia, France, Belgium, and Italy. Negotiations have been proceeding with a view to agreements with India, the Netherlands, Germany, Poland, and Czechoslovakia.

GOVERNMENT FINANCE

Expenditure from public revenue in South Africa during the fiscal year ended March 31, 1936, amounted to £36,520,000, and revenue totaled £39,675,000, thus leaving a surplus of £3,156,000. Government income has increased greatly since the extra taxation of gold mines following the suspension of the gold standard at the end of 1932. Payments to the public treasury during 1935-36 by the mining industry, including receipts from mining leases, gold profits, surtax and excess-profits duty on gold mines, was £20,071,000, or more than half of the entire revenue collected by the Government.

The public debt of the Union on March 31, 1936, stood at £231,087,000 having been reduced by the repayment of £23,029,000 in the fiscal year then closed.

Union of South Africa Foreign Trade, by Countries-Continued

In a general sense the year 1936 is considered to have marked the end of the depression period in Australia. By the close of 1935 the ground lost in many lines of economic life had already been regained; by the close of last year this characterization applied to most branches of business. Expansion in commercial and industrial activity was notable, though it was perhaps not so extensive as in 1935, owing to the degree of recovery already gained and apprehension as to the financial situation, especially in the earlier part of the year. In the latter regard there was some feeling that gold and foreign-exchange reserves might again prove to be inadequate to finance the high level of import trade in addition to servicing the national debt in the event of unfavorable seasons. At the same time, bankers in Australia began mildly to restrict their financing of business, owing to the very high ratio of business loans to bank deposits. The tightness of credit was also reported to have restricted public-works expenditures.

Such apprehension as existed, however, was largely dispelled in the latter part of the year by the relatively high export prices for wool and other produce, and, in retrospect, very satisfactory commercial progress in 1936 appears to have been achieved. For instance, agricultural production was relatively good, and improved prices were realized. Both export and import trade increased. The volume of manufactured output reached a record level. There was a further expansion in construction activity. Transportation volumes gained. The year was relatively free of labor difficulties, and employment