A.—4.

VII.—DIRECT TAXES. The principal direct taxes payable in the Territory are.a graduated salary tax and a building tax, the receipts under these for the year under review and the previous year being set out below :—

In addition, there are the usual motor-vehicle licenses, water rates, and other similar fees. VIII. —INDIRECT TAXES. The principal revenue of the country is derived from Customs duties (see the annual report on " Trade, Commerce, and Shipping "), store, and other taxes as set out in the Revenue Ordinance 1929, and port and shipping fees defined in the Port Control Ordinance 1932. Stamp duties are also collected in accordance with the provisions of the Stamp Duty Ordinance 1932. Imports in 1938 were 78-949 per cent, of the value of exports, as compared with 76-004 per cent, in 1937. IX.—TRADE. The trade figures for the calendar year 1938 showed a decrease of 28-28 per cent, from those of 1937. The value of imports decreased by £71,596 and the exports by £103,831, the result being that the total trade figure of £444,877 was only some £14,600 above that of 1936. It would appear that the exceptional rise in total trade in 1937 was abnormal and could not be expected to be sustained. The London price of copra maintained the steady decline which had characterized the end of the last calendar year, and at one stage reached the depressing depth of £8 15s. per ton. This price was not sufficiently attractive for Native production to be maintained, and consequently a considerably reduced crop was available for export, only 11,241 tons being shipped, as compared with 13,340 tons in 1937. The ruling London market quotation for cocoa further declined from its figure of £40 per ton at the end of 1937. Rather ironically, there was a fine crop on the trees during the major part of 1938, with a record export of 1,647 tons. The financial yield, however, was reduced by £11,469. During January of 1939 rainfall of exceptional severity was experienced and ruined the major portion of the crop on the trees, whilst the accompanying floods in many cases washed out large areas of young replanted trees. It is certain that production for the coming year will be considerably affected by this setback. The export of bananas proved to be a stabilizing and valuable factor in the economic situation. A record total of 205,715 cases (7,347 tons), of an f.o.b. value of £77,143, was shipped to New Zealand. The quantity of rnbber exported dropped to 49 tons (£3,293), as compared with 61 tons (£5,505) in 1937. The London market price during the year varied between s§d. and 8-|d. per pound. The following return shows the principal imports and the total value of the exports, imports, and total trade of the Territory for recent years : —

14

Received. L : 1937-38. 1938-39. I £ £ (a) Graduated salary tax, from £1 on £200-£300 to £30 over £1,500 .. 339 471 (b) Building tax, 1 per cent, per annum of capital value of European 2,552 2,670 buildings

Exports. Imports. Calendar Year. Copra. Cocoa. Bananas. Total Total Trade. Value. Total Value - Tons. Value. Tons. Value. | Tons. Value. I i || £ £ £ £ £ £ 1927 11,665 242,672 792 48,216 .. .. 335,978 304,369 640,347 1928 .. 15,989 319,259 959 69,507 815 11,219 422,175 326,553 748,728 1929 .. 12,941 205,330 677 46,286 1,916 24,640 293,938 288,849 582,787 1930 .. 12,285 166,221 1,007 61,294 3,424 44,259 284,515 275,355 559,870 1931 .. 11,062 109,220 620 35,284 3,044 39,022 194,447 164,950 359,397 1932 .. 10,879 108,698 825 49,712 2,383 20,016 183,028 150,902 333,930 1933 .. 11,526 101,347 899 41,813 2,928 26,999 173,837 150,856 324,693 1934 .. 8,948 60,654 1,027 29,498 3.437 35,796 128.117 92,784 220,901 1935 .. 12,501 108,695 576 19,639 3,893 38,146 189,298 135,757 325,055 1936 .. 13,014 156,873 1,065 46,607 4,573 46,737 263,255 167,020 430,275 1937 .. 13,340 199,747 1,253 71,138 6,706 70,446 352,436 267,868 620,304 1938 .. 11,241 103,529 1,647 59,699 7,347 77,143 248,605 196,272 444,877